Report on Abolition of the Feudal System :Part 4 page2

Report on Abolition of the Feudal System

Converted neighbour burdens: division of dominant tenement

4.48 Under the general law, where the dominant tenement in a real burden is divided, both parts of the former whole become dominant tenements in their own right. If further subdivision then takes place, each subdivided part becomes a dominant tenement in turn. This occurs automatically, and does not require a clause in the conveyance of the subdivided part.⁶⁹ Such multiplication of dominant tenements would not be acceptable in the case of converted neighbour burdens. Prior to conversion the dominant tenement was the superiority, and superiorities are indivisible.⁷⁰ This prevented the vassal from being faced with multiple superiors all of whom would require to be approached for a minute of waiver. Feudal abolition should not make the position of the former vassal worse.⁷¹

4.49 We suggest therefore that in cases where a dominant tenement is divided,⁷² the right to enforce the burdens should be capable of attaching to one only of the divided parts. The other part would then cease to be a dominant tenement. It should be for the person carrying out the division to make the election. If the break-off conveyance is silent,⁷³ no election is made and the right to enforce would be extinguished and could not be revived. In deciding where the right should lie, parties would no doubt have regard to respective proximity to the servient tenement. While the 100-metres rule would no longer apply, electing for a part which was more distant might make it difficult to establish an interest to enforce.

4.50 We recommend that

23. (a) If land which became a dominant tenement under recommendation 22 is divided, the right to enforce the burdens should be capable of attaching to one only of the divided parts, and the other part should cease to be a dominant tenement.

(b) The same rule should apply in respect of any further divisions.

(c) The right should attach to the part which is nominated for that purpose in the conveyance by which the division is effected; and if no part is nominated, the burden should be extinguished.

(Draft Bill, clause 20(2), (3))

Maritime burdens

4.51 While the sea bed is for the most part owned by the Crown, some parts have passed into private ownership and are held from the Crown as superior. By contrast, the foreshore is quite frequently in private ownership. In both cases there may be real burdens, conceived in the public interest and enforceable by the Crown as superior. Unless special provision is made, these burdens would usually be lost.⁷⁴ We suggest therefore that, on the appointed day, burdens on the sea bed or foreshore enforceable by the Crown as superior should continue to be enforceable by the Crown. These would then be real burdens in favour of a person rather than in favour of a property.⁷⁵ For convenience they may be termed "maritime burdens". Maritime burdens would not be capable of assignation. The Lands Tribunal should have jurisdiction in their variation and discharge. We recommend that

24. (a) Any real burden affecting the sea bed or foreshore and enforceable by the Crown as superior should, after the appointed day, continue to be enforceable by the Crown.

(b) Such burdens should be known as "maritime burdens".

(c) Maritime burdens should not be capable of assignation.

(d) Maritime burdens should be capable of variation and discharge by the Lands Tribunal under sections 1 and 2 of the Conveyancing and Feudal Reform (Scotland) Act 1970.

(Draft Bill, clause 54 and sched 8 para 32(2), (3))

Converting feudal burdens to conservation burdens

4.52 The need for special provision. In a small number of cases superiors may be viewed as exercising their rights, to some degree at least, in the public interest. Superiors falling into this category might include local authorities, the National Trust for Scotland, and conservation trusts. For example, in selling a building which it has recently restored, a conservation trust might wish to impose real burdens in order to prevent inappropriate alteration and to ensure future standards of maintenance. Since the trust will rarely own neighbouring land, it is likely to sell by feu disposition, and its right to enforce the burdens will then be tied to the reserved superiority. Arrangements of this kind will not survive feudal abolition, unless a special saving is put in place.⁷⁶

4.53 When we considered this issue in our discussion paper we reached the provisional conclusion that a special saving could not be justified.⁷⁷ On consultation that view was strongly challenged by the bodies most directly affected. Such bodies, it was argued, did valuable work in the conservation of buildings and the environment. Real burdens were an important means of furthering that work. If a restored building could not be preserved for the future by real burdens, there might be little point in carrying out the restoration process at all. Grant-making organisations might draw the same conclusion and decline to make funding available. Yet in the modern world conservation was more important than ever before. On balance we are persuaded by these arguments. Other countries have also shown interest in conservation burdens. A leading model is the Uniform Conservation Easement Act of 1981, which has been adopted by a number of jurisdictions in the United States.⁷⁸ In our discussion paper on real burdens we set out provisional provisions which would allow the creation of new conservation burdens in the future.⁷⁹ In this paper we are concerned with the saving of existing conservation burdens which were created through the feudal system.

4.54 The representations to us were mainly about buildings. But conservation is an issue for open land as well. Such land may be of local, or occasionally even of national, importance because of its distinctive flora or fauna. Or it may be important merely because it is open and unbuilt-on. Burdens protecting such features should also be viewed as conservation burdens.

4.55 Conservation bodies and conservation burdens. Our proposal is this. The Secretary of State⁸⁰ would be empowered to designate bodies as conservation bodies and would have a discretion whether to use this power and, if so, how extensively. A body could be so designated if and only if one of its objects was to protect or preserve for the benefit of the public the architectural, historical or other special interest of land or buildings. In the case of a trust (which is not a juristic person) the conservation body would be the trustees.⁸¹ Any conservation body which was also a superior would then be able to save a real burden by executing and registering a notice in the Register of Sasines or Land Register. The burden must itself be valid and enforceable by the superior, and must continue to be valid and enforceable up to the appointed day. The notice would (i) state that the superior is a conservation body (ii) set out its title to the superiority, and (iii) identify the burdens (including any counter-obligations)⁸² and the servient tenement to which they relate. Not all real burdens could be included. Here the criteria mirror those for conservation bodies. In order to qualify a burden must have as its purpose the preservation or protection in the public interest of the architectural, historical or other special interest of land or buildings. Registration of the notice must take place before the appointed day. This assumes that the Secretary of State will issue an initial list of conservation bodies soon after the legislation first comes into force. Subsequent additions and deletions could be made, and we would expect the list to be monitored and adjusted over time.⁸³ Following registration the feudal burden would, on the appointed day, be converted into a conservation burden, enforceable by the conservation body.

4.56 We recommend that

25. (a) Where

(i) a feudal estate of dominium utile of land ("the servient tenement") is subject to a real burden enforceable, as superior, by a conservation body, and

(ii) the real burden has the purpose of preserving or protecting, for the public benefit, the architectural, historical or other special interest of the servient tenement or any buildings thereon

(iii) the conservation body should be entitled, prior to the appointed day, to execute and register in the Register of Sasines or Land Register a notice converting such burden into a conservation burden.

(b) The notice would have to -

(i) state that the superior is a conservation body

(ii) set out the entitlement to the superiority

(iii) sufficiently describe the servient tenement, and

(iv) identify the burden, and

(v) identify any obligations on the superior which (as mentioned in recommendation 36) are a direct counterpart of the burden.

(c) The notice would take effect on the appointed day.

(d) A conservation burden would be enforceable by the conservation body in whose favour the notice was registered.

(e) In this recommendation "conservation body" means a body nominated as such by the Secretary of State by regulations; and the Secretary of State may nominate only bodies which include among their objects the preservation or protection, for the benefit of the public, of the architectural, historical or other special interest of land or buildings.

(Draft Bill, clauses 21 - 23)

4.57 Assignation. A conservation burden is a burden in favour of a person and not property.⁸⁴ There seems no reason why a conservation burden should not be assigned by its holder, provided that the assignee is another conservation body.⁸⁵ A conservation burden is incorporeal heritable property. It seems unnecessary, and probably unhelpful, to prescribe a statutory style of assignation. The assignation would be completed by registration, and intimation would not be required. In practice it would be difficult for the Keeper of the Land Register to determine whether intimation had taken place. A cedent who held on an unregistered title could deduce title, in cases where deduction of title is required under the present law.⁸⁶ No deduction of title would be required once the burden was registered in the Land Register.⁸⁷

4.58 Holder ceasing to be a conservation body. If the holder of a conservation burden ceased to be a conservation body, the burden should be extinguished. Conservation burdens have special privileges which should not be made available to a wider class.

4.59 Standard securities. A standard security over a conservation burden would be of little value. A conservation burden is not, or not usually, income-producing; restrictions on assignation restrict the market for sale; and the heritable creditor could not foreclose unless, improbably, it too was a conservation body. The temptation, such as it is, seems worth removing. It should not be possible to create a standard security over a conservation burden. This disposes of the argument that a conservation burden is extinguished on a security being called up by a creditor which is not itself a conservation body.⁸⁸

4.60 Variation or discharge by the Lands Tribunal. A feudal burden can be varied or discharged by the Lands Tribunal.⁸⁹ After the appointed day the former vassal should not be in a worse position than before. It follows therefore that the Lands Tribunal should be given jurisdiction to vary or discharge conservation burdens.

4.61 Summing up the last few paragraphs, we recommend that

26. (a) It should be possible to assign or otherwise transfer a conservation burden to another conservation body.

(b) In appropriate cases an assignation should contain a clause of deduction of title.

(c) An assignation or other transfer should not take effect until registered in the Register of Sasines or Land Register.

(d) It should not be possible to create a standard security over a conservation burden.

(e) A conservation burden should be extinguished if its holder ceases to be a conservation body.

(f) Conservation burdens should be capable of variation and discharge by the Lands Tribunal under sections 1 and 2 of the Conveyancing and Feudal Reform (Scotland) Act 1970.

(Draft Bill, clauses 24 - 27 and sched 8 para 32(2), (3))

These rules are expressed in general terms and would apply also to any new conservation burdens which might be created under the proposals contained in our discussion paper on real burdens.

One choice

4.62 Under our proposals superiors may sometimes have choices to make.

If certain conditions are satisfied,⁹⁰ the superior can register a notice converting the burden into a neighbour burden.

If the superior is a designated conservation body it can register a notice converting the burden into a conservation burden.⁹¹

If the burden reserves development value, the superior can register a notice reserving a right to claim compensation.⁹²

In many cases none of these options will be available. The real burdens will then be extinguished with the feudal system itself, and without payment of compensation.⁹³ In many other cases the superior will not take the trouble to register the relevant notice, with the same end result. Occasionally there may be a choice of options. The superior might both own a building within 100 metres and also be a conservation body or have rights to a burden which reserves development value. In such cases only one option can be selected. A superior cannot both preserve a burden and claim compensation for its extinction; or convert a burden into both a neighbour burden and a conservation burden. A choice must be made. The choice would not necessarily be final. A different option could be pursued later provided that the notice first sent is formally discharged. But this must be done before feudal abolition. After abolition it is too late to register notices.

4.63 We recommend that

27. Where a notice has been registered under recommendations 22, 25 or 41, it should not be possible to register another notice in relation to the same burden unless the earlier notice has been discharged and the discharge registered.

(Draft Bill, clause 36(1))

Notices

4.64 In these sections we consider some procedural and other matters which are common to most or all of the notices available to a superior (ie to the notices listed in paragraph 4.62 above).

4.65 Oath or affirmation. The notices contain a number of assertions by the superior, the accuracy of which will not always be easy to check. This is especially true of the notice reserving a right to compensation.⁹⁴ In those circumstances there seems value in requiring notices to be sworn or affirmed before a notary public. The oath or affirmation would be that the statements in the notice were true to the best of the superior’s knowledge and belief. This would require to be done by the superior personally, and not through a solicitor or other agent.⁹⁵ In the case of a juristic person, the oath or affirmation would be given by a person authorised by law to sign on its behalf.⁹⁶ The sanctions of the False Oaths (Scotland) Act 1933 would apply in the event that the oath or affirmation was known to be false or not believed to be true. However, a requirement to use notaries can be waived in the case of notices for conservation burdens, where the information provided is straightforward and easily verified.

4.66 Service. Service here does not assume the crucial importance which it has in some areas of law. The notice does not require the servient proprietor to do anything. It preserves existing rights. The servient proprietor is not worse off than before. A notice could be challenged, but in general⁹⁷ a challenge later is as good as a challenge now. The existence of the notice appears from a public register and will come to light, at latest, when the proprietor sells. Nonetheless we think that, wherever possible, the servient proprietor should be informed of the notice. Accordingly, we propose a general duty on the superior to send a copy of the notice. The notice should be accompanied by an explanatory note in the form prescribed in our draft legislation.⁹⁸ This explains the background to the notice and its implications for the recipient. Our first thought was that the copy should be sent by registered post or recorded delivery, so that a receipt could be produced at the time of registration. On further reflection, however, we concluded that ordinary post was sufficient, and indeed could hardly be avoided in cases where the owner lives abroad. Further, the duty to send should be waived in the exceptional case where sending is not reasonably practicable. The model notices in our draft legislation require the superior to state either that a copy was sent or that sending was not reasonably practicable. In the normal case we imagine that the copy will be sent to the servient tenement. If the name of the servient proprietor is not known, it will be sufficient to address the envelope to "the proprietor".

4.67 Separate notices and combined notices. Often a number of different properties were feued subject to the same burdens; or alternatively there was a single grant in feu followed later by division into smaller plots, whether by disposition or feu disposition. In both⁹⁹ cases the result is the same: the superior has identical rights over a number of separate properties. Nonetheless it seems clear that a separate notice should be required for each such property, if only because the 100-metres rule¹⁰⁰ must be separately satisfied in each case. However, there is no objection to using the same notice for different burdens which affect the same property.

4.68 We recommend that

28. (a) Notices (other than notices relating to conservation burdens) should be sworn or affirmed before a notary public. This should be done by the superior personally or, where the superior is a juristic person, by someone authorised to sign documents on its behalf.

(b) Except where it is not reasonably practicable to do so, the superior should, before registration, send a copy of the notice (and explanatory note) to the owner of the servient tenement by post.

(c) A separate notice should be required for each servient tenement.

(Draft Bill, clause 17(4), (5), clause 28(4), (5), clause 35 and clause 36)

4.69 Invalidity. Most notices will be valid. But a notice might be invalid for a number of different reasons. The superior’s building might be 101 metres from the servient tenement. The superior’s title might be radically defective, whether to the superiority or to the neighbouring land. The real burden might itself be invalid. The superior might be incapax, or he might fail to sign properly. Doubtless there are other possibilities. An invalid notice is not validated merely by registration.¹⁰¹ It is true that a notice will not take effect, on the appointed day, unless it has been registered. But registration is only one of the conditions that must be satisfied.

4.70 Refusal of registration. The Keeper has a discretion to refuse registration, both in the Land Register¹⁰² and, to a more limited extent, in the Register of Sasines.¹⁰³ In relation to the latter, we understand that the Keeper’s concern is limited to whether the deed presented for recording is of a type appropriate to the register and whether it is formally valid. If the deed is satisfactory on both counts, it will be accepted for recording. The Keeper does not seek out other forms of invalidity. It follows that a notice is likely to be accepted for recording without further inquiry provided that it is signed and all the relevant parts appear to be completed. Land Register practice is different. In the interests of maintaining the accuracy of the Register, all deeds are carefully examined. If necessary the Keeper calls for further information or evidence. A notice would be rejected if the Keeper was not satisfied as to its validity.¹⁰⁴ To some extent, however, notices raise issues which are novel, and there are three matters which the Keeper could not reasonably be expected to check. These are:

whether a copy of the notice has been duly sent to the servient proprietor¹⁰⁵
whether, in the case of notice converting feudal burdens to neighbour burdens, the requirement of a building within 100 metres of the servient tenement has been met¹⁰⁶
whether, in the case of a notice reserving a right to claim compensation, the statements made about development value, reduction in consideration, and the absence of a heritable security are true.¹⁰⁷

It should be made clear that the Keeper has no duty in relation to these matters. Other checks exist. The superior is on oath to tell the truth.¹⁰⁸ The servient proprietor may be expected to scrutinise any notice received and will be in a much better position than the Keeper to check the information in it. As explained below,¹⁰⁹ an invalid notice can be challenged, whether at once or later, in the event of an attempt to enforce.

4.71 If registration is refused, the superior may litigate the refusal, either in the Lands Tribunal¹¹⁰ or the ordinary courts.¹¹¹ Since a notice must normally be registered before the appointed day, special provision needs to be made for late registration in the event that the litigation is successful but does not finish until after that day. To minimise difficulties for parties relying on the register, registration should require to take place no later than five years after the appointed day.¹¹² The registration should be backdated to the appointed day, to avoid a gap during which the land would be free of the burden.

4.72 We recommend that

29. (a) The Keeper should not be required to verify -

(i) that a copy of the notice has been sent to the owner of the servient tenement;

(ii) that, in the case of a notice under recommendation 22, the dominant tenement has on it a permanent building which is in use wholly or mainly as a place of human habitation or resort, and that building is within 100 metres of the servient tenement; or

(iii) that, in the case of a notice under recommendation 41, the statements made about development value, reduction in consideration, and the absence of a heritable security are accurate.

(b) Where a notice submitted for registration is rejected by the Keeper but is subsequently determined by the court or the Lands Tribunal for Scotland to be registrable, it should be possible to register the notice at any time during a period of five years after the appointed day, and the effect of such registration should be backdated to the appointed day.

(Draft Bill, clause 37 and clause 39)

4.73 Challenges. An invalid notice may be challenged. Three methods are available.

4.74 Application to the Lands Tribunal. Notices ought to be judicially challengeable. This is particularly important in the case of compensation notices, which depend on subjective assertions which are difficult to prove or disprove in the absence of extrinsic evidence. A compensation notice is accepted for registration without a consideration of its merits. It is more likely to be invalid than any other notice. The obvious forum for a challenge is the Lands Tribunal. Accordingly we recommend that

30. (a) The Lands Tribunal should be empowered to make an order discharging or restricting a notice on cause shown.

(b) An extract of the order should be capable of registration, and on registration should take effect as respects third parties.

(Draft Bill, clause 38)

Under this recommendation an order would enter the Land Register by registration rather than by rectification, thus avoiding the protection against rectification given to proprietors in possession.¹¹³

4.75 Application for rectification. An obvious defect does not require to be declared by judicial process. Instead, in Land Register cases, a direct application can be made to the Keeper for rectification of the Register. The protection for proprietors in possession would not apply, under recommendations made earlier, and no indemnity would be due.¹¹⁴ Thus the Keeper would be free to correct the error by making the appropriate amendment to the Register.

4.76 Challenge to the burden itself. Notices (other than compensation notices) have short lives. On the appointed day the notices operate to convert feudal burdens into, respectively, neighbour and conservation burdens. Thereafter their task is done. Thus after abolition another way of attacking a notice is to attack the burden itself, whether in the ordinary courts or in the Lands Tribunal. In our discussion paper on real burdens we suggest that the Lands Tribunal should have jurisdiction to determine the validity of burdens.¹¹⁵ An application under such a jurisdiction could challenge the burden on all available grounds and not merely on the ground that the notice was invalid. Alternatively, an application could be made to the Tribunal under its existing jurisdiction for the variation and discharge of burdens.¹¹⁶

4.77 Restriction or discharge. The superior (or, after abolition, former superior) may agree to restrict or discharge a notice, whether because of invalidity or for some other reason. Only compensation notices are likely to be discharged or restricted with any frequency, and our draft legislation contains a statutory style.¹¹⁷ The other notices, in effect, expire with the feudal system. What is to be discharged or restricted thereafter is the real burden itself, and a minute of waiver can be granted in the usual way.