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

Chapter Two - SLC Referral and findings

15. The SLC formed an advisory group and issued a Discussion Paper^[4] in May 2018. Following analysis of the responses^[5], the SLC consulted on a draft Title Conditions (Scotland) Bill in early 2019. It then published its final recommendations in April 2019.

16. The SLC concluded that whilst sections 52 and 53 of the 2003 Act were well intended, they were too difficult to apply in practice, which in turn was leading to uncertainty, delays in buying and selling property and additional costs.

17. The SLC outlined the main issues which causes concern: -

• Uncertainty - it is often impossible to know whether section 53 does or does not confer implied rights.
• Complexity – many found the provision not easy to understand.
• A lack of publicity on the burdened property’s title. (It was previously possible to determine whether implied rights existed almost entirely from the title of the burdened property alone^[6].)
• It is too generous – could extend, for example, to a whole housing estate meaning that further-away owners have title to enforce burdens^[7].
• The drafting has been criticised by a number of people, described as “not well worded”, or “vague”.

18. The SLC recommended that sections 52 and 53 of the 2003 Act should be replaced with a new provision regulating implied enforcement rights in relation to common schemes.

19. The Report contains thirteen recommendations and a draft Bill containing seven sections. The draft Bill would aim to replace sections 52 and 53 of the 2003 Act with a new scheme. The new provisions would regulate implied enforcement rights in relation to common schemes. A ‘common scheme’ is defined in a separate provision.

20. In addition, the SLC set out five rules to determine who has title to enforce burdens imposed in a pre-2004 common scheme^[8]. These would be: -

• Owners of flats in the same tenement;
• Owners of properties subject to a common scheme providing for common management;
• Owners of properties subject to a common scheme by virtue of the same deed;
• Owners of properties which share certain common property; and
• Owners of certain properties that are no more than 20 metres apart.

21. The draft Bill also makes provision: -

• Extinguishing implied rights of enforcement under sections 52 and 53 as the new provisions will be the principal provision governing common schemes.
• Sets out a preservation procedure for benefitted owners to preserve such rights before they are extinguished.
• Frees the Keeper of the Registers of Scotland (“the Keeper”) of the need to check whether the right of enforcement under section 52 or 53 is actually held.

Question 1: Are you content that sections 52 and 53 of the 2003 Act could be replaced with a single provision regulating implied enforcement rights in relation to common schemes? If not, please provide your reasons.

Question 2: Are you content with the Scottish Law Commission’s definition of “common scheme”? If not, please provide your reasons.

Question 3: Do you agree with the Scottish Law Commission’s five rules conferring implied enforcement rights in common schemes which pre-date feudal abolition? If not, please provide your reasons?

Question 4: Do you have any comments on any other of the Scottish Law Commission’s recommendations for reform?

Question 5: Are you aware of any subsequent case law or legislation which impacts on any of the recommendations contained in the Report? If yes, please provide details.

Question 6: Are you aware of change in conveyancing law practice which impacts on any of the recommendations contained in the Report? If yes, please provide details.

Question 7: Do you have any comments on the draft Bill included in the Report. If yes, please provide details.

Specific Issues

22. In addition to seeking general views on the continued applicability of the Scottish Law Commission’s recommendations we are also taking the opportunity to ask for views on a small number of specific issues

Notice Requirement^[9]

23. The leading case on common-scheme enforcement rights under the common law, Hislop v MacRitchie’s Trs,^[10] dates back to 1881 and set out the criteria which needed to be met before implied enforcement rights in favour of third-party owners would be recognised in law. One of those criteria was the need for there to be notice of the common scheme in the title of the burdened property.

24. When the SLC consulted, views were finely balanced on whether such a notice was required with 15 consultees in favour and 14 against. The SLC came down in favour of a notice requirement on the basis that: the majority of consultees were in favour; it agreed that new enforcement rights should not be created; and it provided transparency and certainty.

Question 8: Do you agree that it should be a requirement for there to be notice of the common scheme in the title of the burdened property? Please provide your reasons.

Preservation Notices^[11]

25. Section 2 of the SLC’s draft Bill sets out the preservation procedure under which those losing enforcement rights could preserve the exercise of those rights for a limited period. It involves the execution and registration of a preservation notice, which must be in a prescribed form set out in regulations made by the Scottish Ministers. The SLC asked consultees for their views on the duration of the period in which notices in respect of preserving enforcement rights be registered. In its consultation, the SLC suggested 2 years and whilst there was general support for a 2-year period a range of other periods were also suggested by consultees from 6 months to 10 years.

26. Whilst the SLC favoured a 2-year period it recommended that it was best left for the Scottish Ministers to prescribe. This is the position for preservation notices under the Abolition of Feudal Tenure etc. (Scotland) Act 2000 and the Long Leases (Scotland) Act 2012.

27. The Abolition of Feudal Tenure etc. (Scotland) Act 2000 (Prescribed Periods) Order 2004^[12] set a period of 10 years during which it would not be competent to request or order the Keeper to remove real burdens extinguished by the extinction of the superior’s rights.

28. Where a notice or agreement has been rejected for registration by the Keeper of the Registers of Scotland, the Long Leases (Appeal Period) (Scotland) Order 2014^[13] set a period of 8 weeks in which an application may be made to the Court of Session, the sheriff court or the Lands Tribunal for Scotland for a determination that they are registrable.

Question 9: Do you agree that 2 years is an appropriate period during which a notice preserving enforcement rights should be registered? Please provide your reasons.

Multiple Notices^[14]

29. The SLC noted that a concern had been raised that, in terms of Article 1 of Protocol 1 to the European Convention on Human Rights, an owner who needed to raise multiple preservation notices, for example to a large community within a housing estate, may be placed under an onerous burden. The SLC commented that this issue should be considered including the option of a special fee arrangement made with the Keeper to apply in such circumstances.

Question 10: Do you have any views on the proposal that there should be a special fee arrangement where an owner needs to raise multiple preservation notices? Please provide reasons.