The second agenda item is our third evidence-taking session on the Long Leases (Scotland) Bill. I welcome our first panel of witnesses, which comprises Iain Strachan, principal solicitor for the City of Edinburgh Council’s legal and administrative services, and Bill Miller, from the council’s city development department; Richard Brown, managing director of City Property (Glasgow) LLP; Andy Young, head of asset management at Glasgow City Council; and Andrew Ferguson, a solicitor at Fife Council and vice-president of the Society of Local Authority Lawyers and Administrators in Scotland, which, in accordance with the standard acronyms that apply in this building, is known as SOLAR.
Good morning, gentlemen. My questions are directed at the City of Edinburgh Council representatives. Will you place on the record why, in the city council’s view, Waverley market is not part of the common good of the city of Edinburgh?
As the committee no doubt knows, Waverley market was initially used as the city’s fruit and vegetable market and, as such, was held on the common good account. Acts of council in 1937 and 1938, being resolutions approved at council meetings, deal with the transfer of the fruit and vegetable market at Waverley market to a covered-in marketplace that was to be constructed at land on Cranston Street and East Market Street.
May I interject at that point, Mr Strachan?
Of course.
You will get a chance to come back in, Mr Strachan.
Mr Strachan, your account was helpful. The City of Edinburgh Council’s position seems to be based on a fair degree of certainty. However, given that many aspects of the area are uncertain, as you said, can you be absolutely certain of your position? Are you depending on counsel’s opinion in 2007?
That is his view—
Has it merit?
I suppose that it has some merit; equally, our view has merit. As you see, there is doubt and a lot of greyness—
Do you mean greyness in the 1930s or in general?
I am talking about the attempt to be certain whether the site has common good status. The issue has been looked into in great detail in the council. We took independent advice, which backed up our view, so ultimately that was the view that the council came to. I suppose that we got separate assurance that our view had merit and was correct. Of course, Mr Wightman is entitled to his own view and interpretation of things.
I think that that is as clear as we are going to be on the issue.
Did you want to share more information with the committee, Mr Strachan?
I just wanted to give more background for the view that I expressed. Even if the transfer of the actual market did not of itself remove the common good status, the original purpose of the site—its use as a market—disappeared when the market was transferred to the new location. We know for a fact that that change took place; it is also detailed in the Edinburgh Corporation Order Confirmation Act 1958 and the Edinburgh Corporation Order Confirmation Act 1964, in which Waverley market is included under the definitions of public halls, and as such is capable of being let out and used for such purposes as the corporation sanctions, which I understand is generally recognised as being incompatible with common good status. Further, the 1958 and 1964 confirmation acts make no reference to Waverley market having common good status.
At the end of the day it is not the committee’s job to make a determination on the issue one way or the other, so there is a limit to how far we can go. However, pursuing the matter a little further, I put to you the proposition that certain types of common good land can be inalienable. Such a category is not linked to markets per se, as opposed to general property that is held, but I think that—if I can put it this way—it conveys a kind of property status. Given that none of the other acts that you mentioned seems to refer to common good, it strikes me that, putting to one side prescriptive arguments and so on, common good status cannot really be taken away as a by-blow of something else. Can that argument not be made?
That could well be true. There is no point in reiterating either what I have already said or our view on the matter, but on the question whether the site is alienable or inalienable my view would be that, even if the site had retained common good status, any such inalienability would have been lost long ago by virtue of the fact that the use had been provided elsewhere, there had been no public use for a substantial period of time and so on. I am not sure that that answers your question, but the point is that its status had certainly shifted.
I understand that. Moving the focus of our discussion away from Edinburgh slightly, I wonder whether Mr Ferguson is able to tell us under which circumstances land might lose common good status.
We are considering the long leases aspect of common good land. Can any of the witnesses give us additional guidance on the extent to which ultra-long leases of common good land and property exist or might exist in Scotland? We have heard about the dispute over Waverley market, and one other case has been mentioned in correspondence. Does Mr Ferguson have an overview of the matter, or does Mr Brown have a Glasgow perspective? To elaborate slightly, there has been a suggestion that the parks in Glasgow would generally be common good property, even if they are not in the register as such. Will Mr Brown give us an indication of what might have been discovered in the context of the bill?
We have examined the situation in Glasgow and determined that the bill potentially affects two areas of parkland where ultra-long leases are in place. Those areas are deemed to be in the common good account.
Will you identify which they are, for clarity?
There are some areas of ground in Pollok park.
Specifically Pollok park?
Yes.
What about more generally across Scotland? Has anything turned up that anybody knows about?
Because there is little evidence, SOLAR has done a trawl round the local authorities, and the conveyancing working group also considered the bill. Local authorities generally thought that the bill would catch very few instances—the number is extremely small.
For clarity, what sort of leases of what sort of ground to what sort of people are we talking about in Pollok park?
We are talking about areas of ground around the edge of the park that were part of the original transaction. Pollok & Corrour Ltd—Nether Pollok Ltd previously—which goes back to the Pollok and Maxwell families, has a lease over such areas including the cricket club. I think that there is also a lease to the police. There are sublets in place below those leases, but they were retained by Pollok & Corrour and were sublet for their original purposes—they were originally the playing fields and whatever. The leases from Glasgow City Council back to Pollok & Corrour are for 999 years.
So they are not commercial-type leases.
No. In effect, Pollok park is in the common good, so the leases would be affected by the reversion under the bill.
There has been a directive from the Scottish Government to councils to try to clarify what land is in the common good. I think that the success of that exercise has been variable across Scotland. Is it fair to say that it is quite tricky to get a clear view of what is common good land and what is not? Indeed, it involves quite a lot of bureaucratic and administrative work to go through ancient titles and find out.
The short answer is yes. To give you an example, in Fife, we tried to undertake a review of all former burgh titles throughout our land holding. Fife Council is quite a big authority, so we had to comb through several thousand titles and assess them against a variety of criteria. We also carried out a six-month consultation with local communities to try to find out whether they had local historical knowledge. Often, they had knowledge of pieces of ground and their extent or historical extent.
I presume that, in essence, you have to look at most of, if not all, the titles before 1975 and also some of the ones that have been moved about since then. Is that broadly right?
It is unlikely that any of the post-1975 titles would be part of the common good. The only possibility is—this scenario was mentioned in previous evidence—that, technically, a district council or a unitary authority may be able deliberately to place something into the common good. I know that there is discussion about that in a couple of cases. However, Fife Council took the view that unless one of those special cases was involved—and we were not aware of any—district council and regional council titles could be disregarded. Obviously, in every former burgh there is a jigsaw of titles, some of which come from the burgh and some of which come from district or regional councils, so there has been a sifting process.
I presume that the two city councils, Glasgow and Edinburgh, have a substantial number of properties that potentially fall into this category. How comprehensive have been the efforts that you have been able to make? How comprehensive is the end result in your registers?
I can answer that question—I will come back to it. To go back to your first question, in Edinburgh only two properties fall under the bill, as they are on long leases or ultra-long leases. One of them is—
Let me interrupt you. We are trying to identify not only long leases. There are two ways of looking at the matter. There is common good ground with long leases. Are you saying that there are only two long leases?
Generally, in the City of Edinburgh Council, only two leases fall under the terms of the bill; one is common good and the other is Waverley market. As you know from the evidence that you have just heard, Waverley market may or may not be common good.
What is the other one?
It is a small piece of land off one of the closes in the High Street; it is part of a development site and was probably part of the close at one time.
The issue is how comprehensive the register is and whether you are satisfied that that is the whole lot.
I go back to what Mr Ferguson said. Two or three years ago, Mr Wightman wrote to the City of Edinburgh Council—in fact, I understand that he wrote to all councils—and asked for details of the common good. He also sent the council a list of properties that the council did not necessarily have on the common good register, but which he felt were common good. Following that correspondence, the City of Edinburgh Council carried out a very thorough investigation. I thought that the process would be straightforward but I must admit that it was very complicated and time consuming. For some of the properties that he mentioned—particularly in the old town—we had to go back to the charter of King David in the 12th century to find out when we became the owner.
Will Mr Young comment on the comprehensiveness of the Glasgow register?
Glasgow City Council has gone through exactly the same process that Mr Miller has described. We, too, have a common good register. Unlike him, I cannot give you the number of entries off the top of my head, unfortunately, but the register contains property as well as other common good assets such as statues, gold chains and so on. Our approach is exactly the same as that of the City of Edinburgh Council. We deal with common good issues when we are developing land, when we receive inquiries about it or when we are looking to build a school or whatever. We go through the title check at that point.
It is a complex and perhaps doubtful process, particularly—dare one say it—given the propensity to lose bits of trams, which has been in the news recently. That is a low blow, is it not?
I do not think that we seriously expect an answer to that. Let us move on.
Good morning, gentlemen. I want to continue the questioning on the current subject, but I will change tack slightly. Before I do that, I want to establish something in my mind and in the committee’s mind. In general, we would expect the common good nature of property to be attached to the land—if it is land, rather than a gold chain—rather than to the activity that goes on there. In other words, pace the comments about the market, the bit to which common good attaches is not generally the market but the many tracts of land that we are talking about. I am looking at Mr Ferguson to see whether he agrees with that general statement. Is that the case?
That is an interesting question, which I could probably take several hours to answer properly. In short, the common good nature of some land arises from its use from time immemorial. Most commonly, it is a town common, a common area or a park that has been used for a recreational purpose, which is what gives it its common good nature. Other common good properties such as buildings—town halls and so on—have been dedicated to a public purpose, which is what gives them their common good nature. The third major category is where the title deeds specifically say that something is going to the common good. The common good nature of assets is a mixture of usage and dedication to a specific public purpose. Whether that means that something stops being common good if that usage stops is an interesting question, but I am not sure that I know the full answer to it.
Thank you. That has clarified in my mind that the issue is even more complicated than I thought it was when I came here this morning. It has got worse over the past couple of weeks.
Despite the fact that only a small number of properties would be covered by it, Glasgow City Council would seek an exemption for common good properties. As Andrew Ferguson said, most of the properties are common good by usage; I am thinking mainly of parks, but also of public buildings. We would not want to see the alienation of that land by reference to a lease that was generated hundreds of years ago, although, in our case, the leases were generated in the 1960s. It would be fairer on the general population to retain those properties within the public domain and the public authority.
Does everybody share that view?
The City of Edinburgh Council agrees.
It is clear from the policy memorandum what the bill is meant to attack. You heard from Mr Wightman that there can be many different reasons why common good properties were given out in lease, and I think that we are agreed that a common good exemption makes sense in that context.
On the basis that you all seem to be agreed on that, does anybody have any concerns about the human rights aspect, in the sense that an exemption would seem to give councils an advantage over other landowners? Does anyone who wears a legal hat worry about that sort of thing?
If you are inhibited from saying, you can just make the point that you would prefer not to answer the question.
I get the impression, convener, that the witnesses do not want to answer.
Whether exemption would impact on human rights is an area of law that is certainly outwith my specialism. I would not like to comment on the human rights legislation.
To be honest, I have not specifically considered any European convention on human rights implications. I look at the matter from a local authority perspective, in terms of trying to protect the assets of the residents of the city of Edinburgh. Equally, we would not want to find ourselves in a position where there were such issues. I have to confess that it is not an area of law that I know a great deal about, so I cannot really comment.
That comes as no great surprise. I will extend the question. If we were to make that exemption—let us not worry about the human rights issues—would it mean that, in every case, a council would have to assert that a piece of land was common good in order for an ultra-long lease not to convert? Are you comfortable that you would end up having to take to the court any ultra-long leases that you or tenants found and say that the land is common good land, which would be the implication in making the exemption?
In Edinburgh—even if the Waverley market is part of the common good—our assessment is that the bill would affect only two leases, so I would have thought that that is probably reasonable. It does not sound as if the process would be overly onerous for us. There are cost implications, but equally, I guess, we are the guardians of the common good. That is just my personal view.
Right. There is, however, another side to the issue. When you want to alienate land, the moment a citizen says, “This is common good land”, you will have to go to court to prove that it is not common good before you can go through the alienation.
Are you talking about the law as it stands?
No. Well—you are right; I might be talking about the current law.
Yes—but that relates only to long leases in which the tenant’s interest might be converted into ownership, so there is an appointed day on which such leases automatically convert unless the tenant exercises the right to say otherwise. Once the act is in force and we know what it requires, we will double check our estate and say, “Right, here are the leases that might be affected. We think that that one is common good and we want to do something about it.” By the sound of it, that is not going to be overly onerous for us. We will have to be willing to bear the cost, but I think that we are saying that we will be comfortable with the situation on the basis that there will not be an overly onerous effect on us because we will be talking about few, if any, properties.
Thank you.
When it looked at the conversion of ultra-long leases, the Scottish Law Commission felt that there should not be any exemptions for commercial leases, but the bill has taken a different view, in that any ultra-long lease that involves an annual rent of more than £100 will be exempt. What is the panel’s view on the opposing positions of the SLC and the bill in that regard?
I suppose that there are two elements in that. As we mention in our submission, if we wish to exclude commercial leases—which I understand was the reason behind the inclusion in the bill of the £100 limit—we must honestly recognise that in a number of property transactions, when a landlord grants a long lease they are, in essence, selling or getting rid of their interest. Landlords choose to do it that way because they want the benefits of the law of landlord and tenant and the protections or rights that it provides, which title conditions might not provide.
Mr Brown, do you want to comment?
I agree with Iain Strachan’s comments. In a number of cases, the use of a long lease can be beneficial to both parties. When such a lease is entered into by a willing landlord and a willing tenant, a commercial agreement is struck between the parties, sometimes to allow a specific use or to enable specific development to take place. Under the bill’s provisions, long leases that are of more than 175 years, but which involve a passing rent of more than £100 per annum, will be exempted.
You both quoted examples from your council areas. One of the examples that was drawn to our attention in evidence from Brodies LLP was that a number of recent commercial leases would fall within the terms of conversion in the bill. That is because there is a variable rent, which is not caught by the bill. Brodies and others have said that that is not appropriate. Do you agree?
That is a similar point to one that we have both made. The only difference is that the Brodies case was the example of a passing rent of £1 with an equity share in terms of tenant income. That is just another way of approaching a long-term commercial lease: the terms can be varied to suit both parties. Whether it is an up-front grassum with a low passing rent or a low passing rent with a continued equity share of the profit of the businesses of the tenant or tenants, I would certainly ask the Justice Committee to consider that as an exemption, because it could have an impact on future commercial transactions.
I agree. I took from a previous evidence session that it was recognised that the drafting in the bill as introduced could do with a bit of tweaking to take account of some of the practical issues that Brodies raised.
The final question, which is from Cathie Craigie, is exclusively for the City of Edinburgh Council.
Richard Brown and Iain Strachan have addressed some of the points that I wanted to put. However, last week we heard evidence from representatives of the legal profession that it is normal to pay money up front to acquire a tenant’s interest in a long lease. What we have been discussing is exactly the same; these are exactly the type of leases that the bill is designed to cover. There is a difference of opinion there. Perhaps the lawyers are representing the other side, rather than the public side. I do not know whether you had an opportunity to read last week’s evidence.
I saw the comments and I appreciate that Professor Gretton said that the Scottish Law Commission feels that the bill should apply to all leases and there should not be any carve-out of commercial leases, just as the Title Conditions (Scotland) Act 2003 and the Abolition of Feudal Tenure etc (Scotland) Act 2000 did not seek to distinguish between commercial and non-commercial situations.
The City of Edinburgh Council’s submission states:
A traditional example might be a situation in which we have given someone a development ground lease, let them an area of land and taken a grassum up front, and are going to take a share of the rental income. We would probably try to control what the site is used for or the manner in which it is to be developed, because of the site’s location or our interest in it. We would have the reversionary landlord’s interest because, ultimately, we feel that it should come back to the city, whether in 200 years or some other time.
I agree with what has been said—a lease offers more control. One of the other things to remember is that the length of commercial leases is sometimes dictated by the tenant, in effect. The landlord might wish to grant a shorter long lease but, when the tenant seeks to raise funding, a lending institution insists on a longer term. That is why leases that could have been shorter are extended, for example, from 99 years to 125 or 175 years.
At the end of 2010, the Government asked all Scottish local authorities to identify all the ultra-long leases that they had and to respond before the end of January 2011—it was to do with work on common good funds. Have the councils of Glasgow, Edinburgh and Fife responded?
The City of Edinburgh Council has responded. As my colleague said, the only area of common good land that we felt would be affected by the bill was an area of ground up by the High Street.
I would have to double check, but nothing came to me. Glasgow City Council operates a slightly different model, in that it has an arm’s-length property company of which I am the managing director, so I am not sure whether the issue has been passed to the council or whether the council has responded directly. I will check up on that.
Fife Council had three possible sites, of which two were shopping centres, which have the type of commercial lease that we have just been talking about.
Putting aside common good issues, I want to find out whether, from the councils’ point of view, the idea of getting the land or property back at the end of hundreds of years of lease is important. Bearing in mind that that is a pretty limited right, how significant is it to keep property in the public domain? The underlying purpose of the bill is to stop that sort of thing happening and to allow compensation for the property. Is that a significant issue for councils?
For Glasgow City Council, the issue is more about the perception that such assets remain in the control of the council and, in effect, the public, than it is about the reality. That is more where we are coming from, rather than from the aspiration that in 250-odd years we will get the asset back. By definition, getting the asset back is part of the overall control, if that is not too much of a circular argument.
So, there is not really a substantial benefit, although there are perceived benefits.
Local authorities in some form or other have been here for an awful long time. The authority will get assets back eventually. We have only one commercial long lease, but it is in a very prominent site, so from that focused perspective, the council wishes to control that asset and anticipates its coming back. However, as a general rule, I guess that considering what will happen in 250 or 500 years is about perception rather than expectation, shall we say.
That is helpful.
Gentlemen, we have had a helpful evidence session. The committee is most grateful for your attendance—thank you very much indeed.
I welcome Professor Robert Rennie, professor of conveyancing at the University of Glasgow. He is sitting in splendid isolation, but that makes him particularly welcome. We will go straight to questioning, which will be opened by Dave Thompson.
The Scottish Law Commission’s survey in 2000 revealed that most long leases were granted for periods of less than 125 years or more than 999 years. The duration of a qualifying lease in the bill is 175 years, which ties in with the approach in the Abolition of Feudal Tenure etc (Scotland) Act 2000. Our witnesses at last week’s meeting seemed to be content with 175 years, on the basis of consistency, although Professor Gretton said that, on reflection, he thought that he might have been happier with a qualifying duration of 225 years. What is your view on that?
I would stick with 175 years, for reasons of consistency. There is little difference between the approaches. I cannot imagine that a change to 225 years would involve many leases that would not otherwise be involved.
On a more esoteric subject, under section 1(4)(b), leases that are
I suspect that it is a notional point. In general, we are talking about wayleave agreements with statutory undertakers, which do not normally lease the land through which the pipes run. There is a complicated legal argument about who owns pipes and whether pipes that run through land accede to the land’s ownership or remain in the ownership of whoever controls them. I think that that is why there is lease of access to pipes rather than lease of the ground itself, which would suggest that the undertaker did not own the pipes. I am happy with the provision as it is.
It does not cause a problem with leaving the pipes where they are. No one can take them away, for reasons of land ownership rights.
No.
Professor Gretton thought that section 1(4)(b) is potentially problematic, because it will exempt a type of lease that the law of Scotland does not recognise—that is, a non-exclusive right of possession of another person’s land in relation to pipes and cables. What is your view on that?
That is a very technical, academic argument. The provision probably reflects how wayleave agreements have been set up in the past. Professor Gretton was right to say that we do not recognise lease of access as such; we recognise leases of land. However, in commercial leases, we find leased rights of access, which pertain to the main body of the lease. I think that the point is an academic rather than a practical one.
During the past few weeks I have been bemused by wayleaves and the idea that a lease for access might not exist. You said that that is an academic issue, but I have a great deal of respect for academic issues, because they might ultimately matter. Should we be worried about that area of law? I am talking in general; I am not suggesting that we suddenly amend the bill. Is the law on subterranean leases sufficiently confused that we should be worried about it, or is it just an area in which it does not matter that darkness reigns?
Some of the agreements are called wayleaves—that is an English term; the Scottish term is servitude. In the Title Conditions (Scotland) Act 2003, special provision was made for servitudes of the nature that we are discussing, because there had been doubt about whether there could be a servitude for an overhanging cable, for example—the 2003 act clarified that there can be such a servitude right. I would have thought that a wayleave agreement was more common than a lease of an access right—I have not seen such a lease.
Coming back to the basic point, should we be worried about this area of law or would it not be wise even for Parliament to go there?
I do not think that it is such a big issue that it warrants in-depth research by the Scottish Law Commission or anyone else.
It has been suggested that, instead of dealing with this through exemptions, leases could be converted into servitudes. However, according to the Scottish Law Agents Society, the difficulty with that proposal is that there is no benefited land to which the right to enforce the servitude can attach. Is that a problem or does the proposal constitute a possible solution? Does wayleave, which is an expression in English law, have any definite legal standing in Scots law that would cover the matter?
Scots law does not recognise servitudes in gross—in other words, a servitude for the benefit of everyone—while English law recognises easements in gross, “easement” being the English term for a servitude. In Scots law, you have to have a benefited property and a servient or burdened property. That can lead to problems with laying pipelines, although the law has coped in that respect. For example, I have done a number of opinions for Scottish Water in cases in which a pipeline starts at a certain point and runs through various properties and the question that arises is what the benefited property is for Scottish Water—after all, it might not be this, that or the other house but a reservoir 100 miles away. Generally speaking, though, you can identify in agreements a benefited property somewhere. It is possible to convert leases into servitudes as long as a benefited property exists, but it must be identified—and that is not always easy.
Would it be sensible, then, simply to tweak what is meant by a servitude or are such matters best dealt with through exemptions?
I suspect that exemption is probably the best approach. It is all very well putting things in bills saying, “This or that will be a servitude,” but, at the end of the day, you will still be stuck with your own definition of a servitude. Anything that you put in the bill will have to fit in with existing definitions or you will have to alter the law of servitude.
If some new technology became available and I wanted, for example, to add to current cables to take a bigger load or to widen a pipe, would that cause problems in practice and how would they be determined? Could I widen a pipe under my existing rights or would I have to go back to the landlord and say, “Look, I need to widen the pipe. Can we get a new agreement? Obviously, I’ll give you more money”?
It would very much depend on the agreement. In general, though, these are standard agreements and will, for example, state what is known as a working width. In most cases, they will allow access for improvements, repairs, widening and so on to be carried out, provided, of course, that you do not go outwith the width of the servitude or wayleave area.
With regard to the original point, is there any need to widen the exemption in section 1(4)(b) to deal with any issues arising from pipes, cables and so on?
I do not think so.
Do you have any views on the Scottish Rural Property and Business Association’s suggestion that the scope of the exemption be extended to cover ultra-long leases granting non-exclusive rights of access along private roads?
In general, I am against having too many exclusions and exceptions in the bill. The bill has been well thought out over a number of years and the mischief that it is trying to solve is the use of long leases, which, although not as prevalent in Scotland as they have been in England, have nevertheless caused considerable difficulty.
I turn to the issue of commercial leases. You will be aware that the Scottish Law Commission took the view that there should be no exemptions in relation to conversion. The Government has taken a different view; section 1(4) provides that ultra-long leases with an annual rent greater than £100 should be exempt. What is your view on the opposing positions that the Scottish Law Commission and the Government have taken?
I agree with the Scottish Law Commission. In addition, a cut-off point of £100 is far too low. Generally, commercial leases of this type begin with a grassum—a lump-sum payment—that reflects the capital value of the land. Many long leases were granted at a time when local authorities were unable to sell without getting consent from the secretary of state, so they opted for a sale by another means by granting a long lease, taking the money up front and charging a nominal rent. One hundred pounds per annum is by no stretch of the imagination a commercial-type rent for a commercial property. I am against any exemptions, but I think that it is crazy to have an exemption level as low as £100.
You have made your position clear. You said that, generally, you are opposed to any exemptions and mentioned the specific example of cases in which grassum or premium payments have been made up front, with a lower rent being fixed. The City of Edinburgh Council has expressed concern about that issue. Do you have any sympathy for its position?
The leases were agreed on commercial terms at the start. If a grassum was paid, it will have been set at capital value. If the rent after that is nominal—I regard £100 per annum as nominal—I see no reason why the lease should be exempt from the provisions of the bill.
Do you take a similar position on the example that Brodies has cited to us? It believes that some recent acquisitions in which a variable rent was used would be excluded from the exemption. Do you think that any of the points that Brodies makes are valid?
I would need to look at the lease that Brodies is talking about. We cannot pass bills that cater for each lease that happens to be in a particular area or town. If the bill catches something, it catches it. I would need to be convinced that there was an enormous problem across the commercial leasing sector. There is no evidence of that.
I would like to draw you a little on that point. If I may paraphrase your evidence, you are clearly of the view that £100 is a pretty derisory figure. Would you like to suggest an amount that might be appropriate?
I am against any exclusions from the provisions of the bill.
If we do not go down that road, what figure do you suggest?
I am not sure that it is right to set a figure. You might want to have a formula, with rent set at X per cent of capital value at the time. Of course, that would mean adding to the bill another schedule and a lot of words to specify that A equals this and B equals that and is divided by C. I am not convinced that there is a wide problem right across the commercial market.
It could be a recipe for difficulty.
That is why £100 is perhaps the right figure, rather than A multiplied by B and so on.
I suppose that I am looking at it in more commercial terms. I am saying that the local authority got its money—it got its grassum up front. That sum was equivalent to the price. Therefore, why should it be exempt from a technical piece of legislation that does no more than give the land to the people who paid the value for it at the start? You are asking about the public interest. I am not convinced that such leases were granted for that reason—I think that they were granted because of technical difficulties, with local authorities not being able to sell at the time.
I am struggling to understand the logic of the argument. There seem to be ancient or long-standing leases for which there is a nominal rental. As we understand it, there are also more modern commercial leases for which, as well as a grassum at the beginning, there is a substantial on-going rental, perhaps with a variable element. I cannot quite see what the mischief is that needs to override the freely arrived-at contract between the parties in the case of such valuable commercial leases that have been set up in a relatively modern arrangement.
Would those be leases over 175 years?
We understand from evidence that some of them have been.
I would want to know how many leases fall within that category and have not been coupled with a capital grassum price at the start that reflected the value of the asset. In the case of a long lease over 175 years with 100 years still to run, in circumstances where the rent was commercial—albeit that that would be unusual—there is the question whether a tenant would want to convert their lease or to apply the exemption and contract out because of the enormous capital sum that might have to be paid under the compensation provisions.
That is an option.
That is the other side of that coin.
Section 69 makes special provision for the situation that could arise where a renewable lease such as a Blairgowrie lease is not renewed, even though the lease contained a provision with a requirement for it to be renewed annually. Is section 69 unfair to landlords, or is it an appropriate protection for tenants under those leases?
I can see an argument from landlords saying that it is unfair. Blairgowrie leases are very much out on their own. I have seen a number of them. They run on 99-year cycles, and the wording is different in different leases—they are not all the same. Some of them will suggest that the lease is automatically renewed; others specifically state that the tenant has to give notice of renewal before the expiry of the lease, but they do not say what will happen if the tenant does not give notice.
Thank you. That is fairly straightforward.
Good morning, professor. Do you think that giving landlords the opportunity to preserve sporting rights as a separate tenement, as is provided for under section 7, is a desirable policy and workable in practice?
I had this argument during the abolition of feudal tenure. There was a similar right for a former feudal superior to reserve the sporting rights that had pertained to the superiority title. I argued that, because it was recognised that sporting rights were not a separately owned entity, they could not be a separate tenement. I lost that argument and, under the Abolition of Feudal Tenure etc (Scotland) Act 2000, we have an anomalous notion of sporting rights as a separate tenement. I am using the word “tenement” in the old-fashioned sense of a landed interest, not a tenement in the Edinburgh sense of the word. You must accept that, if we have a separate tenement under the Abolition of Feudal Tenure etc (Scotland) Act 2000 that allows former feudal superiors to reserve sporting rights, we must have a similar right in the Long Leases (Scotland) Bill, which mirrors the 2000 act in a lot of respects. I am, therefore, satisfied with that provision.
Thank you. As someone who was brought up in a tenement in Maryhill, I am grateful for the definition. I never saw myself as somebody with a landed interest.
The thought had not occurred to me, either.
In my view, the bill is ECHR compliant—it is Strasbourg-proof. This type of bill is not uncommon in European jurisdictions. Indeed, there have already been challenges to legislation of a similar type in Austria and in England. As you will probably know, the leasehold system of tenure is far more developed in England than here, largely because Edward I abolished feudal subinfeudation in about 1292 because the barons were too powerful by virtue of their own subfeus. In England and Wales, leasehold title proliferated as a means of controlling land whereas, up here, we controlled land through the feudal system.
As I am sure you are aware, the Scottish Law Commission and the Scottish Government considered whether there should be a separate conversion scheme for the remaining residential ground leases that do not fall into the conversion scheme. The SLC and the Government concluded that they would not pursue the issue any further or include such a measure in the bill. Do you have a view on whether it is desirable to give protection to tenants under residential ground leases that do not qualify under the conversion scheme?
No.
That was a quick answer.
You cannot be clearer than that.
Professor Rennie, I draw your attention to the written submission from Peterhead Port Authority, which I hope you have seen and which makes the point that part of the south breakwater at the port is leased on a very long term for a nominal—and probably not collected—rent. The authority says that the principal purpose of the breakwater is weather protection, which is necessary for the operation of the port. It states that the lease is not one
I have not seen the lease, so one is taking at face value the comment that none of the conditions in the lease can be converted. There is provision in the bill for the conversion of leasehold conditions into real burdens where the landlord has adjoining interests in the land to protect. Is Peterhead Port Authority saying that it does not have in its ownership any surrounding land to which it could reallot the enforcement rights? That seems odd to me.
It seems odd, but I simply quoted the submission. You challenge the assertion on proximity grounds.
Yes. If the port authority owns one bit and has leased another bit and it wants to control the activity in that second bit to which the leasehold conditions apply, it will reallot those and say, “We will now enforce those conditions as real burdens, and this is the benefited property.” That has happened with feudal tenure. The submission states simply that the conditions are not appropriate for conversion, so I would certainly want to delve into that. I mean no harm to Peterhead, but the problem seems to arise only in Peterhead and nowhere else, and we do not in my view legislate for one-off things. If we did, we would get into having a schedule of exempt bodies, which could be port authorities, local authorities, the Scottish ministers, conservation bodies and so on. Where would we stop?
As there are no more questions, I thank Professor Rennie for attending and for providing his evidence in an understandable and frequently amusing form. That was very much appreciated.