Title Conditions (Scotland) Act 2003 - Section 53: consultation on the Scottish Law Commission's report

Chapter One – Introduction and Background

1. This consultation seeks general views on the Scottish Law Commission Report on Section 53 of the Title Conditions (Scotland) Act 2003 (“the Report”). In recognition that it has been 7 years since the Report was published and in line with the process the Scottish Ministers have set out to the Delegated Powers and Law Reform Committee in respect of potential Scottish Law Commission (SLC) Bills, the consultation will seek to establish:

• Whether the landscape around this area of the law has changed since the Report was published and if so whether the changes are material to the recommendations contained in the Report.
• That the consultation views received by the SLC are still broadly held.

2. The Scottish Government has had an opportunity to carefully consider the recommendations made in the Report. It welcomes the thorough and comprehensive review that the SLC has undertaken and shares the view that the reforms should bring much needed clarity to the law in this area and make it less complex. The Scottish Government is therefore supportive of the recommendations and the principles behind them.

Background: The Title Conditions (Scotland) Act 2003

3. The Title Conditions (Scotland) Act 2003 (“the 2003 Act”) implemented with modifications the Scottish Law Commission Report on Real Burdens. It was part of a series of legislative measures which abolished the feudal system and reformed Scottish land law. The majority of the substantive provisions of the 2003 Act came into force on 28 November 2004.

4. Section 53 of the 2003 Act gives implied rights to property owners to enforce real burdens against other property owners, provided that they are “related properties” and are subject to a “common scheme” of burdens. Neither “related properties” or “common scheme” are defined but section 53(2) gives possible examples of when properties are related, such as flats in the same tenement.

5. Section 53 will apply where the real burdens in the scheme were first imposed prior to 28 November 2004. i.e., the “appointed day” on which the substantive provisions of the 2003 Act came into force.

6. As the SLC explained a real burden is: -

“a perpetual condition in the title to land controlling how that land is used. A burden can be affirmative so that, for example, buildings must be maintained, or negative so that, for example, commercial use is forbidden^[1].”

They may relate to heritable property of any type, including flats, houses, and commercial properties.

7. Real burdens play a key role in regulating housing estates, blocks of flats and other communities. Real burdens are therefore important because they have the potential to impact anyone who owns a home or flat. Owners need to be clear about any restrictions on the use of their property and also who may enforce any contravention of a burden by a homeowner.

8. Section 53 did not form part of the draft Bill produced by the SLC in 2000. Rather, the policy was developed by the then Scottish Executive and added to the Bill by amendment at Stage 2 of the parliamentary Bill process.

Justice Committee Inquiry

9. In 2013 the then Justice Committee of the Scottish Parliament decided to undertake an inquiry into the effectiveness of the provisions in the 2003 Act mainly in relation to the appointment and dismissal of property factors and the recourse available to homeowners where they are dissatisfied with the services of land-owning maintenance companies. However, it also expressed an interest in views and experiences of the statutory options available under the 2003 Act to vary or remove existing real burdens, asking whether there were problems with the way section 53 operates in practice.

10. In the light of evidence submitted to the Justice Committee^[2], it concluded that

“[t]he evidence presented to the Committee suggests that section 53 was introduced as a means to ensure that housing associations could continue to enforce real burdens (particularly in relation to maintenance and common property) against owners, even where the extent of the estate or development which the burdens covered was not particularly clear.”

11. Concerns were raised and the Justice Committee Inquiry summarised these: -

• The enforcement rights created by section 53 are not limited to housing associations.
• Enforcement rights can be found to exist where no one intended them to.
• New rights may have been created where none had existed before feudal abolition, meaning that those who were not subject to burdens before 2004 could now be subject to such burdens, without their consent.
• Section 53 causes uncertainty and makes it difficult for solicitors to advise owners effectively.
• In considering whether there is anything which raises the inference that properties are related, solicitors are having to undertake extensive work in order to advise their clients.
• Even after extensive work has been undertaken, the findings on whether or not properties are related may be inconclusive.
• There are consequential cost and risk implications for both individual homeowners and developers, with the result being delays in housing transactions. All of this impacts on the wider economy of Scotland.

12. Whilst there was a view from respondents who gave evidence to the Justice Committee that, mainly for human rights reasons, repealing section 53 was not a viable option, suggestions were made to improve section 53. These included further defining key phrases and setting a geographical limit on properties which could be considered to be related.

13. The Justice Committee produced a report^[3] which noted the degree of concern expressed about the operation of section 53 but there was no consensus on how the issues should be remedied. It recommended that section 53 of the 2003 Act should be the subject of further work by the SLC and called on the Scottish Government to progress the review. Consequently, the then Minister for Community Safety and Legal Affairs referred the work to the SLC in August 2013.

14. The ministerial referral asked the SLC to:-

“Review section 53 of the Title Conditions (Scotland) Act 2003 in context of Part 4 of that Act and make any appropriate recommendations for reform.”