Official Report 277KB pdf
The next item of business is the Title Conditions (Scotland) Bill. We will take evidence from a panel comprising Lorna McGregor, a legal adviser for the Convention of Scottish Local Authorities; Andrew Fraser, the principal solicitor of North Ayrshire Council; Eric Leggat, a solicitor of North Lanarkshire Council; Malcolm MacAskill, the principal estates surveyor of South Ayrshire Council, who is representing the Society of Local Authority Lawyers and Administrators in Scotland and the Association of Chief Estates Surveyors and Property Managers in Local Government; Councillor Sheila Gilmore from the City of Edinburgh Council; and Eddie Bain, a solicitor of the City of Edinburgh Council.
Is that because you have mixed estates that you are trying to keep much of a muchness?
Yes. We are trying to knit the estates together.
If we are looking generally at the importance of the feudal system, I would like to say that the system is extensively used by local authorities for matters beyond housing. The feudal system is important for how local authorities effect their business in a variety of functions, not just in economic development, but when granting land to community groups for their use. The existing system has many useful facilities that we would like preserved, particularly in relation to clawback and development-value burdens, which we can currently use and impose.
Can you give an example of a useful facility?
An example for community groups might be when a council grants land to a canoe club for a canoe hut. The land would be granted only for specified recreational purposes and for a nominal figure—for example, £100—that would be less than the open market value of the land.
I see.
Another example of a development-value burden, where the land is conveyed for less than the best price that is reasonably obtainable, would be where the local authority wants to restrict the use of the land to preserve its amenity. Therefore, it conveys the land for less than the best consideration that is reasonably obtainable with a view to that land continuing to be used only for recreational purposes.
The adviser has just been explaining to me something that I believe is going to be picked up by Wendy Alexander later on, so I do not want to go into great detail just now.
From our perspective, it is not so much a question of control as of being able to create the kind of community responsibility that we would like. We do not see it as a means of the council keeping a control on what happens, so much as the entire community of owners, of which the council is one, being able to play that role collectively. It is important to be within that community. Under the previous set-up, we could have been in a situation where the council would be cut out of that—unless we lodged hundreds of notices all over the place. In my view, the council is not there as some special type of owner, but simply as one, or several, among many, representing the interests of the tenants in those houses. It is important to create communities that have a fair balance, but it should not be seen as the council trying to hold on to control over what is happening. Rather, councils would be sharing in a genuine partnership.
On a technical point, the Executive proposes that a deed of conditions be registered prior to the appointed day. What is your view on that? Are you aware of any practical difficulties with implementing that scheme that you want to put on the record?
The council's view is that there would be significant resource implications for us, purely in terms of manpower and the pressure of work, if that proposal got on to the statute book. We may have to take the view that, beneficial as it would be to record deeds of conditions, we simply could not do it.
What problems would that cause?
All the burdens that we have mentioned would lapse and we would no longer have our present input in mixed-tenure schemes.
Have you made the Executive aware of that?
Yes. My council certainly referred to that in our submission, not to the Executive but to the Justice 1 Committee. The proposal simply appeared in the bill.
That is interesting. Another general point that has been raised in written evidence is that, for part of the estate in private ownership to remain subject to the burdens originally imposed, there must be an indication in the title deeds of an intention to create a common scheme. However, not all deeds have been drafted that way, and some mention only the superior's right. How big a problem do you think that will be for local authorities in practice?
Will an amendment be winging its way from COSLA at some point?
We could certainly consider producing an amendment for stage 2.
On common maintenance and repair, section 28 provides a default rule that in the absence of express stipulation in the title deeds, the majority of proprietors can instruct common maintenance work.
As I understand it, the Law Society's criticism was that the requirements of the notice were far too complex. Our view is that it is important that the notice has a sufficient level of detail in it so that people who receive it are able to deal with the issue there and then without going to look at their title deeds.
That view is reflected in the City of Edinburgh Council's evidence. As the questioner has said, my understanding is that the provisions are default provisions. The City of Edinburgh Council welcomes the majority rule, but is concerned that the majority rule applies only in a default situation. If the title deeds make provision for decision making on maintenance, those provisions might be contrary to the majority rule.
Are you of the same view as the other organisations that believe that the system is far too bureaucratic? Are you satisfied that the current system is sufficient? I know you touched on that, but the issue of bureaucracy was specifically raised.
Our position on the notice is that we acknowledge that the notice has to contain sufficient detail so that those who get one are able to tell what it is they are signing. In broad terms, we are happy with the detail that has to go into the notice. However, I take on board the issues that have been raised by Mr Bain for the City of Edinburgh Council and I would not disagree with any of those either.
Are you happy that this is addressing problems such as those that occur when the roof of a tenement needs to be repaired and the majority of the people living there want the work done, but cannot get the other residents to chip in?
As the bill is drafted, we feel that it has missed an opportunity. As everyone is aware, there is a huge problem about repairs, maintenance and getting agreement.
I want to ask about the model development management scheme. There are two issues here. First, what are your views on the scheme that the Scottish Law Commission has proposed? Is it adequate or could it be improved and if so, how could be it be improved? To what extent should it be advisory and to what extent should core functions be compulsory?
I think that the witnesses have, in part, already answered that, but do they want to add anything?
We would certainly welcome a resolution to what seems to be a technical issue. I am not saying that it is not important, but such difficulties can be overcome and I am not convinced that the reservation of the power to Westminster was intended to have the sort of effect that it does on what is a small-scale business organisation.
This is emerging as a significant area in which the bill would be undermined if the scheme did not go ahead. I do not know whether in the next meeting of the committee we might write to the minister seeking early clarification of the legal issues. Were we to discover that the matter was reserved, we could make representations.
Scott Wortley is assisting me here. The issue is about incorporation. I cannot see why we cannot have a trust or an association that is not incorporated. Has that been addressed in submissions?
I cannot say that I have considered that in detail. I thought that the point that was being made was that even an association that is not incorporated is a business association, but I do not claim to be clear on that.
I might be wrong about this, but as I understand it, most of the submissions were made prior to the issue of the reservation becoming clear. That puts the committee under an obligation to seek early clarification of the reservation. If the matter is devolved, we will want to make representations about ways in which the provision should be strengthened. If it turns out to be reserved, the issue of the competence of the Scottish Parliament is one that we might also want to take up, before we get to stage 1 and stage 2.
The minister is here next week. I have no doubt—
It would be helpful to give the minister advance warning that we want to press for a resolution of the issue, given how fundamental it is to the bill.
I am sure that the minister's staff will read the Official Report. We would give your suggestion a thumbs-up but, unfortunately, it would not go on the record.
I will ask some probing questions. First, why is it necessary for local authorities, when selling off properties under the right-to-buy scheme, to be able to impose manager burdens lasting for 30 years, as opposed to the standard 10 years that is permitted for private developers?
That is due to the practicalities of the situation. Private developers sell properties fairly quickly, whereas councils have been selling properties for more than 20 years, and many more are still to be sold. That is why the 30-year rule on manager burdens will apply to councils.
So from a practical point of view, 30 years is the ideal time scale.
It is as good a time scale as any other, as far as I am concerned.
Given that the effect of sections 58(5) and 58(7) is that the manager burden runs from the time when the burden was first imposed, as opposed to from the date the act comes into force, is the 30-year period long enough?
It could be argued that in reality it is a 10-year period. If the first deed was registered 20 years ago, we are already 20 years down the line, so we have only 10 years left of the 30-year period. However, I appreciate that a figure had to be chosen. The councils would prefer the period to be longer, but others may take a different view.
So your preference would be for a period of not less than 30 years.
Yes.
I have a question on sections 77 to 79, which relate to the School Sites Act 1841—an act with which I am sure everyone is familiar. I understand that some local authorities have encountered difficulties with that legislation. Could you take us through the problems that local authorities have encountered? Are sections 77 to 79 adequate to deal with the problems?
As the committee will probably be aware, the School Sites Act 1841 provided a mechanism whereby estates in entail could transfer ground for schools. If that act had not done so, such estates would have been unable to transfer ground because of the entail. If the school ceased to be used as a school, there was a right of reversion. In many local authorities, most of the old school sites are affected by such restrictions. The schools of that age are precisely those that—
I must stop you there. I hope that I am not going to insult committee members, but I will insult myself. Could you explain the right of entail and reversion rights? It would help if that were on the record.
My understanding of an entail is that, in the 19th century, an owner could transfer either superiority or the dominium utile of a property to someone else, subject to a direction that it would pass on down a number of heirs. Restrictions provided that that entailed property could not be sold inalienably.
I love all this. I am asking for a simple explanation, but bigger words are appearing.
Let us go back to basics. Can you give us an example, and preferably a real-life one?
For example, an old school site may need to be redeveloped or it may be surplus to requirements. If its original title deeds were granted under the School Sites Act 1841, there is reversion. In other words, when the property ceases to be used as a school, it transfers back to the original owner. Local authorities have experienced a number of problems in that respect. First, the Keeper of the Registers of Scotland has not been willing to grant a full indemnity of title for the sale of any old school, even if the school deeds do not include a reference to the School Sites Act 1841.
Please explain the process in which a local authority sells an old school.
At present, if we want to sell an old school, the keeper—
I understand the bit about indemnities and the keeper. Please explain the bit about compensation. We are talking about a local authority selling a school that is surplus to requirements. Is that correct?
Yes.
What is meant by the reversionary interest?
It means that the old owner who sold the school site in the 1800s or his successors are entitled to get the site back. What usually happens in practice is that the successors try to get compensation from the local authority. The keeper will not grant a full indemnity because he is concerned that in theory the superior can always return and claim a reversion on the property.
Is the superior the original family who sold the property for a school?
Yes. The bill addresses that issue, but there is a lack of certainty at present over which schools are affected. First, as I mentioned, local authorities are concerned that the present position is so uncertain that the keeper will not grant a full indemnity for any old school site regardless of whether the original title refers to the School Sites Act 1841.
I have been told that the provisions to which you referred are in the Abolition of Feudal Tenure etc (Scotland) Act 2000. I understand that similar provisions could be imported into the bill. Is that what you are saying?
That would certainly meet many of the problems that we experience.
How widespread is the problem of title raiders?
There are two issues to take into account. First, some areas do not have many titles under the School Sites Act 1841, but in other areas, such as North Ayrshire, most schools are burdened by such title restrictions. The matter depends on how many estates were subject to entail in the 1800s. Secondly, it is simply pot luck whether there is a title raider or someone who has bought up the titles. North Ayrshire has had problems with four schools in the past two years. One of those cases went to the Court of Session and in another a title raider attempted to get a reversion over what had become a sheltered housing complex. In our area, title raiders are common, but other authorities do not have a problem.
Could the compensation mechanism in the bill make buying up titles more attractive to title raiders?
It could make that more attractive; it would certainly do nothing to stop it. The 1841 act permitted a local authority to transfer the value of a school to another educational establishment. In 1945, when the 1841 act was abolished, that provision disappeared also, which unwittingly created a windfall for people who held such restrictions. People already have more of a windfall than they had in 1841.
Is it not the case that, if someone is not content with a valuation, they can go to the Lands Tribunal for Scotland?
Yes, indeed.
Does that not mean that, when somebody is doing an evaluation in the first place, they will take into account all the other factors that you and others such as Glasgow City Council mentioned?
That forces them to take those factors into account. It also extends the period that is involved in trying to dispose of a property. Such matters take a long time to resolve, especially if they have to go through the Lands Tribunal system.
I hear what you say about schools but, in my experience, title raiders have often preyed on schoolhouses in rural areas. Someone has bought the schoolhouse in good faith from the local authority and an individual has come along and said, "Excuse me, this is actually my house." How would you sort that out?
That is not uncommon. I wonder whether you refer to a situation in which the property was not disponed, but held on a long lease. Those are two different situations.
That is possible. I know that many of the schools in the area that I represent were held on long leases.
That relates to the prescriptive period. At the moment, if a property such as a former schoolhouse has been purchased and the prescriptive period has passed, the reversion holder cannot come along and claim compensation, but the proposals in the bill seem to suggest that a further prescriptive period of five years would be added, despite the fact that the prescriptive period may have passed.
I will have to go back and find out what the Leasehold Casualties (Scotland) Act 2001 does.
We have done that one.
We have, but it obviously does not cover long leases of schools, which could be covered by the School Sites Act 1841. Is that correct?
I do not think that that would be the situation. I would be very surprised if any properties are covered by the School Sites Act 1841 and a long lease.
The schoolhouse and the school are often one and the same building. They are often conjoined.
That tends to happen in rural areas in which the school was small and the teacher lived on the premises. It is not so common now.
We will move on. Although the topic is interesting, I suspect that not many cases are involved.
Do you agree with the Executive's general approach to development-value burdens and clawback? We are interested in the decision not to preserve existing feudal burdens of that type, the way in which compensation has been dealt with and whether the amendments to the standard securities legislation are adequate.
We share the concerns that are evident in the Law Society's evidence on why the state is interfering in the area. If a property has been sold at less than market value by agreement, is it not only fair and reasonable that the seller gets a share of the uplift? Although we would like the development-value burden solution to be applied to school sites, we do not like it applied to development-value burdens.
Are you talking about the extension of borrowing powers?
We are referring to the power in the Local Government in Scotland Bill that will afford local authorities new freedoms and flexibilities. That is a power of first resort—as opposed to the previous power, which was a power of last resort—which will allow local authorities to fulfil their functions in new and innovative ways.
A separate issue about the circumstances in which local authorities act has come up in evidence from other witnesses. Members of the committee have noted that the Executive is committed to talking to COSLA about whether the bill can be amended in the interests of local authorities to cover the clawback arrangements. In evidence to the committee, Homes for Scotland suggested that it was more common for local authorities to use development-value burdens and clawback in purely commercial transactions, as opposed to "benevolent or socially aware" transactions. The evidence implies that, if that is the case, there is no reason why local authorities should receive special treatment.
Local authorities use those powers in the full range of their functions. They are particularly useful in the promotion of commercial and industrial interests, but their use is not limited to that. We accept that the power may be restricted in certain areas, and we concede that there is a restriction in the use of burdens for residential purposes. However, as I indicated, we are moving towards a different culture and working more closely with community planning partners and other public and voluntary sector providers. If we do not have a facility to promote not only economic development but the full range of local authority functions, that would stand in the way of local authorities' work with those partners. That would also jar with the policy intent behind the Local Government in Scotland Bill.
We are anxious that the issue is not viewed in a wholly financial context, because our concern is about preserving the use of land as much as it is about getting some money back for it. It is not entirely the point to translate the issue into a consideration of whether one receives compensation and to decide that, if one receives compensation, that is all right. In such a crowded piece of land as Edinburgh, there is a community interest in preserving the recreational or green-space use of land. That is precisely why we might well dispose of land for a useful function. However, we do not want to lose that use of the land in the future. In our view, getting money back is not sufficient compensation to the wider community.
Would the purchaser have to come to you for planning consent? Would the local authority be able to do anything to stop the purchaser?
There would be planning consent, but the burden has always been a stronger constraint than planning consent.
I have an adjunct to the same point that Councillor Gilmore made. I do not disagree with the welcome to clawback proposals, which would ensure that local authorities got uplift. However, there is a fundamental distinction between the development-value burden, where the rationale is the preservation of amenity, and clawback arrangements, which are essentially financial and commercial. Other witnesses might ask why local authorities should seek preferential treatment. In a scenario involving development-value burdens, local authorities can take the high moral ground by saying that they are looking for different treatment for reasons of protection of amenity or protection of the environment, rather than to secure commercial gain.
I understand the distinction.
We usually have a declaration of interests at the beginning of a meeting.
I apologise for not doing that.
My interests are given in the register of interests—they are the same as for all the other committee meetings that I attend.
Are there any further questions? I thank the panel very much. It is difficult to sit as a panel. I hope that all members of the panel have had the opportunity to put a point.
The Lands Tribunal has a variety of separate jurisdictions that broadly cover valuation and rights to land. The main jurisdiction over rights to land that relates to the bill is that to vary or discharge land conditions, which was introduced by the Conveyancing and Feudal Reform (Scotland) Act 1970. That is the existing system for the variation and discharge of land obligations.
You deal with small matters, such as a title that does not allow someone to build a conservatory, and large developments. It would be interesting to hear a little about the size and structure of the Lands Tribunal. Our evidence is that extra work may be coming in your direction. How do staff arrive at the tribunal? How did you obtain your position?
I will divide my answer between the members, whose function is deciding cases, and the administration. Our members include Lord McGhie, who is also the president of the Scottish Land Court, so his time is divided between that court and the Lands Tribunal, and Mr MacLeary, who is a full-time surveyor member. I am a part-time legal member and there is one part-time surveyor member. At present, our members add up to a complement of two and a half—one full-time member and three half-time members.
That does not sound like a lot.
It is not. There used to be more members. The tribunal has been deliberately scaled back in the past few years, because the work load has been relatively light, as most of the jurisdictions have not produced a substantial amount of cases. Surges occur, especially when the law changes. That is why a question arises from the bill. In the past few years, the number of tribunal members has been scaled back but, as a result of the bill and other acts—particularly the Abolition of Feudal Tenure etc (Scotland) Act 2000—an increase may be expected. In our paper, we have attempted to address the effect of that.
I was about to ask you how long it takes to process an application for variation or discharge of a title condition. However, that obviously depends on the circumstances. Will you give us examples of time scales from the lower end of the spectrum—for example, for an individual who just wants to build something in their garden that they could not build before—and for commercial applications?
Neil Tainsh has suggested four to six months in a normal case, by which I mean a relatively straightforward situation that does not involve any great difficulties with intimation and is not opposed.
Did you say "not opposed"?
I should point out that the four to six months time scale relates to an application that is opposed and that ends up in a formal hearing, with a further period for tribunal members to reach a decision. At the moment, an unopposed case involves a period of intimation of the application on benefited proprietors and affected persons. If no objection is forthcoming, the tribunal can produce an order discharging the condition in, say, two months.
That gives us some idea of the time scale.
We have made it clear that we are not under excessive demands at the moment. Although we have experienced surges over the years—for example, in relation to rating revaluation—the work load has not been particularly heavy over the past two or three years, which is why things have been scaled down. We noted the evidence to which you refer, but it does not really describe the present situation.
How is funding allocated to the Lands Tribunal for Scotland?
All I can say is that it is a matter for the Scottish Executive justice department.
Does someone submit a bid?
Because the tribunal occupies the same premises as the Scottish Land Court—as someone pointed out, Lord McGhie is head of both—the justice department hands down a joint budget for the court and tribunal, which funds membership of the tribunal, staff salaries and so on.
The policy memorandum will obviously say something about the financial implications of the legislation.
You asked about personnel. I have already described the members of the tribunal; perhaps I should also describe the administrative side of things. The clerk, Mr Tainsh, has a deputy clerk and an administrative assistant, which makes three people. As with the membership of the tribunal, that is a bare minimum and, given the new circumstances, it might well need to be increased.
So you are trying to put some flexibility in your budget. You will understand that I am only teasing a little. You should never close doors to extra money.
I have simply described the present situation with a view to addressing the effects of the bill and other reforms.
I think that we were all expecting you to tell us that you were terribly overworked and that you would really be struggling with your future work load. In fact, you seem to be quite sanguine about your future prospects.
I should stress, as far as the future work load is concerned, that we cannot know the numbers of applications that will be received. We have endeavoured to form a view and to weigh up the effects of the various changes on the adjudication side and on the administration side. The application of the sunset rule and perhaps variation of community burdens will give rise to an increase—perhaps substantial—in work loads. A new certification procedure will be involved, which means that there will be more work on the administration side, and applications to renew or preserve will also be involved; however, it is difficult for us to tell how many applications there will be. If we take the bill on its own, our best guess is that we could perhaps cope with a small increase in work on the administrative side and with a small increase in the commitment of members, but if that is added to other commitments, that might not necessarily be the position.
Paul Martin mentioned resources. Could things be managed by lengthening decision times? Would that be politic?
That is difficult to answer—it would depend on the number of cases. If there was a substantial increase in cases, substantial increases in the length of time for decisions might be required, which would probably be unacceptable.
So the problem is that we do not know what the future holds. Will your work load be eased by the bill's provision in section 88 that unopposed applications should be granted automatically? I presume that you would welcome that.
I make it clear that we should not comment on matters of policy. However, that provision will lead to a slight reduction in work load. Quite a lot of the current administrative work load is dealing with unopposed applications and I am not sure that that would change much. On the adjudication side, most unopposed applications are currently decided by members without a hearing. In fact, it is rare for an unopposed application to require a hearing. It is therefore unlikely that there will be much reduction in work load. However, we considered the matter while we were attempting to weigh up the bill's effects.
We should change our questions, because we expected you to call for additional resources. Professor Paisley made it clear that he thought that you would require additional staff. Do you disagree with him?
There may be a view that there will be a massive increase of work that will require a massive increase in staff, but we do not know that because we cannot know the numbers that are involved. If the bill is considered by itself, we are not sure that that will be the position.
Has any resource assessment been carried out to clarify whether there will be a personnel requirement?
With respect, when new jurisdictions are introduced, we cannot know how many applications there will be. We make our best guess, but there is total uncertainty. However, we and the Executive have considered the matter.
The Executive's view is that about £55,000 a year will be required. Would you be satisfied with that amount? That question is perhaps similar to my previous one.
It is not for me or for individual members to be satisfied about the amount. I think that it is envisaged that that money will be used for at least one more member of staff on the administrative side. We also envisage some increase in the commitment of part-time members.
We have pretty well exhausted that topic. Michael Matheson has another question.
How many cases does the Lands Tribunal deal with at present? How does your work break down into the different categories of cases?
Over the past few years, the number of applications dealing with discharge and variation of conditions has run at about 50 a year.
Have the past few years been a lean period?
The number of applications has for the past 10 years or so generally been steady at between 50 and 60 applications. As regards the other jurisdictions, tenants' rights applications have gradually diminished since the 1980s and are down to about 12 to 20 a year. Valuation appeals tend to go in cycles; the number of such appeals is currently not very high. There are roughly 10 or 12 disputed compensation applications a year. Those are the numbers on the books, but not all applications necessarily lead to a formal hearing in the same year that they are lodged. Those are the kinds of numbers that we are talking about just now.
I wanted simply to put the figures in context.
Absolutely.
At the beginning of his written evidence, Professor Paisley suggests that the Lands Tribunal should have jurisdiction over the variation and discharge of statutory agreements, such as the agreements that may be entered into between a private owner and a planning authority under section 75 of the Town and Country Planning (Scotland) Act 1997. In his oral evidence on 3 September, Professor Paisley said that, as some members of the Lands Tribunal are surveyors, the tribunal might be equipped to consider matters of public policy that might arise as a result of the proposed new jurisdiction. Is that a fair analysis of the situation?
Mr MacLeary is a surveyor and has not spoken so far. Perhaps he will answer that.
I have been keeping very quiet here.
Does John Wright wish to add anything?
No. It should be stressed that there may be questions of policy relating to whether such matters should come to a judicial body. However, that is not for us to comment on. I entirely agree with Mr MacLeary's assessment.
To the best of my knowledge, the situation south of the border worked quite well. Is that the case?
Yes. The jurisdiction of the Lands Tribunal in England arose from the Law of Property Act 1925 and has run for a long time—since after the war. This is purely anecdotal, but I have never heard any criticism of the way in which the English Lands Tribunal has acquitted its jurisdiction.
We may want to follow that up. Perhaps we could have a briefing note on the English Lands Tribunal.
Indeed we were.
It is nice to see you again. Scotland is a village. I keep bumping into people.
The two property registers that are kept under the control of the Keeper of the Registers of Scotland—the Register of Sasines and the Land Register of Scotland—will be affected by the Title Conditions (Scotland) Bill. For the new legislation to work in practice, the registers need accurately to reflect the legislative provisions. That will have important resource implications for us. We need to consider those implications in the context of the new registration events—I am talking about the various notices, such as notices of preservation, notices of converted servitude, notices of termination, and discharges of burdens. We must also consider the new rules' resource implications for existing registration events, such as dual registration for constitutive deeds. In other words, we will have to identify both the burdened and the benefited property. The same will go for positive servitudes, for which we will have to introduce new rules for putting them on the properties of the dominant and servient proprietors.
Before my colleagues ask you about resource implications, will you tell us how you are funded?
The Registers of Scotland is a self-financing trading fund. We fund our operations from the fee income that we receive for our registration services.
So when solicitors pay fees for registration, that is how you pay for the whole shebang.
Those fees pay for all the expenses of the department.
Yes—"shebang" is not quite as technical an expression as "expenses of the department". I am also hearing quiet complaints from my colleagues that the money comes first from the clients who pay the solicitors. However, having practised, I add that that money is an outlay for solicitors.
Yes. We are self-financing; we do not receive money from central Government.
You say that there will be resource implications for the Registers of Scotland, but that you are not sure of the level of those resource implications because you do not know how much business you will get. You also say that your work will not be labour intensive. Have you considered in detail what the increase in your work load is likely to be?
We have considered in some detail the type of notices that the bill would introduce. Our job of checking such notices would be fairly straightforward. I would equate them to notices of payment of improvement grants, which we can process relatively quickly and cheaply.
How long is the period to which you refer?
I refer to a 10-year period.
I presume that you will be looking for an increase in staffing levels.
No, we will not. We believe that we can tackle the implications of the bill within our existing resources. I will explain, if I may, how we will do that. At the outset of land registration—when the first county went live in 1981—we created what is known as a research area team. That consisted of a number of staff who examined common burdens deeds in advance of the registration county going live. We edited the deeds in cases where they affected 10 or more properties and used that as a template, which we could import into the rest of the development in question. For example, instead of carrying out examinations for each of 200 houses, we would do a one-off examination of the common burdens deeds and, whenever the first registration for application came in, we would transfer the standard text into that first application's title sheet.
We have heard that the Lands Tribunal does not expect too much of an increase in its work load, although its representatives were not absolutely certain about that—the tribunal will have to wait and see. There has been a suggestion that some of your staff might have to be seconded to the Lands Tribunal to help it to cope. I presume that that would affect the calculations that you have just mentioned.
We are minded to help the Lands Tribunal, with which we have a long association. Indeed, the clerk to the tribunal is a secondee from Registers of Scotland. We provided all the tribunal's clerks from the start.
Would you be able help without additional resources?
Yes.
Registration of a notice is one of the key ways under the bill by which an individual can alter his or her rights and obligations in relation to his or her property. It therefore seems to me that it is important that the registration of a notice is affordable. Can you estimate how much it would cost an individual to register one of the various notices under the bill and how that compares with the cost of registering other documents such as deeds of conditions or dispositions?
It might help if I explain that the Keeper of the Registers of Scotland is required by statute to charge for registration in the registers for which he is responsible. The authority for that is the Land Registers (Scotland) Act 1868, which, essentially, provides that the amount of fees to be fixed will be no more than is reasonably sufficient to defray the expenses that are incurred, which include the expenses of improving the system of registration. In other words, we must cover the costs of registration from fee income. The fees are set out in the Fees in the Registers of Scotland Order 1995, as amended.
You mentioned that the registration of title for Scotland should be complete by about April 2003. What will be the effect of completion? Will it mean that you can give people a greater service? Could any consumer look up who had owned a piece of ground and the burdens that were attached to it if that consumer owned or had an interest in that ground, or had an interest in purchasing or selling it?
Completion will mean that the final registration counties—Orkney, Zetland and others—are subject to land registration arrangements in terms of the Land Registration (Scotland) Act 1979. It does not mean that every property in Scotland will be registered in the land register. There are trigger events for registration, the most normal of which is a disposition for consideration of value.
Will it be possible to establish who was the last known owner?
Yes—it always is.
That is possible only if a property has been registered. Registration is not required unless you are under a security. If land were bought with cash, it would not have to be registered.
That is right. People who borrow from building societies or banks have no choice, because such organisations insist on registration.
However, the information about some land in Scotland might not be recorded and nobody will know who owned it.
That might be the case, but most properties are on the Register of Sasines or the Land Register of Scotland.
From what the convener said, I presume that you have a record for most land, even if that record is from some time back. If a house burned down or an owner went to Australia and did not register their land, you would know who the previous owner was.
Yes. We have that information in the Registers of Scotland.
Will the information be available for electronic searching?
The information is already available electronically through the Keeper of the Registers of Scotland's registers direct service, which provides information from the registers. We plan to develop electronic registration. We are talking not about paper applications stuffed into envelopes, but about electronic or digital transfer of information. If we have the legislation for that in the next two to three years, we will make significant savings. That would help us with the task of updating the registers in the 10-year transitional period.
Would not that be a great service to the public?
Our objective is always to improve our services. We have a good continuing relationship with all our customers. We ask them frequently about the standard of the service that they receive from the keeper and we monitor that.
That is enough of the love-in with the Registers of Scotland. I thank the witnesses.
Meeting suspended.
On resuming—
Excuse us for taking a short break, Mr Merchant, but these lengthy sessions are quite tough for us and we are in need of caffeine.
I encounter burdens on behalf of house owners and the superiors for whom I act. The difficulties almost always arise when someone is selling their house. A typical example would involve someone who has extended their house by, for example, erecting a kitchen extension, a sun porch or whatever, for which they had obtained planning consent or a building warrant, where necessary. When they come to sell their house, the seller's solicitor or the purchaser's solicitor will check to see whether the consent of the superior or anyone else who has a right to restrict what might be added to the house should have been obtained. Typically, title deeds contain a condition for a superior to be consulted and to give written consent before any alterations are made. Frequently, house owners do not seek that consent—because they forget to or do not know that they have to—and think that their planning consent or building warrant is sufficient.
Few of us check our title deeds. We think only of applying for planning consent and building warrants.
When people apply for planning consent, they put up a notice and the neighbours have the opportunity to object to the proposal. Would the 4m rule be covered by the planning process?
That is one of the reasons why I am strongly of the view that the 4m rule should apply equally where there are implied rights with neighbours to consent. Almost invariably, neighbours will have been notified as part of the planning procedure and will have had their say at that point. Almost always, that will take care of the situation.
Was there no opposition to the application to the Lands Tribunal?
The application to the Lands Tribunal would have been fiercely opposed by the neighbours who were objecting.
The neighbours had had notice of the planning application but had not taken the opportunity to object at that point. I am surprised that they were not barred.
Presumably, the planning application was granted after opposition.
I see, so after having opposed unsuccessfully, they got another bite at it.
Only when they finally realised that they could do, which was much later.
You are referring to the section on acquiescence.
Yes, I am talking about section 16.
Is the eight-week period reasonable? We heard evidence that there might be reasons why a party might not know about work.
I read evidence that proposed a period of 12 weeks. I do not feel terribly strongly about that. Section 16 is one of the best sections of the bill. It is absolutely excellent on dealing with neighbours who have not objected. However, it is unfortunate that it is undermined by the suggestion that, where there are deeds of conditions, everyone within the development should be able to object. We would have difficulty in applying the acquiescence provisions to anyone other than reasonably close neighbours, because the person who is taken to have acquiesced or not objected must know that something is going on. If someone is putting up a rear extension, their neighbours will know, but the other 100 people in the development might not know. That is why I feel strongly that the 4m rule should apply. Its removal from the draft bill promulgated by the Scottish Law Commission is a retrograde step from the point of view of house owners.
Does the current law present any major problem that the bill does not address?
The bill addresses all the major problems. I have doubts only about the conclusions that have been reached in certain respects. One of the areas on which a great deal of time has been spent is the question of implied conditions in title deeds. We are talking about something that is very rare—it is an esoteric subject that few people other than lawyers have thought about until now and even lawyers have hardly considered it. However, it is now in the forefront of everyone's consideration, because superiors are being done away with and people want to see whether implied rights can be transferred to neighbours. From the point of view of house sellers, that could be disastrous.
I want to look through the other end of the telescope. Highland Council has told us that its concern is with small housing schemes. It does not think that the bill will work in that respect. The right to buy might have been exercised in relation to a couple of houses, but two or three might remain in council ownership.
Let us take an example of a situation in which one requires to obtain consent from four or five people. That might be practical—I have occasionally obtained consent in such circumstances. Some developers, such as Wimpey, have a provision that says—roughly—that, if one wants to add an extension to one's house, one must obtain the consent of the neighbouring proprietors and that, if the neighbouring proprietors will not give consent, one should approach the developer, who will consider overriding that requirement. In such a situation, I have obtained a letter of consent from four or five people.
I will put to you two questions that the adviser has passed to me. As I understand it, tenants do not have the right to discharge—they have the right to enforce.
That is correct.
So the problems relating to a list of tenants would not arise in such circumstances.
Let us return to the example that I suggested. If one could obtain consent from everyone who was in a position to object, one would have to get the consent of the tenants as well as of the owners. If one could not get the consent of the tenants, one could, as the adviser suggests, obtain a discharge from the owners. However, as I have just said, each discharge could cost £200 to £300. Therefore, I do not regard the provision on discharges as being an adequate substitute.
On a different point, section 34 provides that only the owners who are within 4m need to provide a discharge. A limited number of owners are involved.
The point is the same. One still has to obtain a formal discharge from owners within 4m. A much simpler form of consent could be used. I obtained such a form of consent, which was written in three lines. It said: "We, the proprietors of the following houses, hereby agree to the three extensions that Mr and Mrs X put up on their house." They went round the houses and got the relevant signatures.
You are saying that there is a cheaper way of doing it.
That is the cheap way of doing it, but if the situation involves 100 people, one cannot get them all to sign such a simple bit of paper; one must obtain a formal discharge, with all the cost that that implies.
I understand that.
You have made it clear that you are in favour of the 4m rule. Our understanding is that the effect of section 48, in combination with section 52, is to create new implied rights to enforce in certain circumstances, where no such implied rights existed previously. Is that a good idea?
From the attitude that I have adopted so far, the committee will not be surprised to discover that I do not think that that proposal is a good idea. I can explain why, if you wish.
Perhaps you could give us a clear view on section 52. My understanding is that opinion in the legal fraternity is split down the middle on that issue. As a practitioner who has dealt with countless cases involving such matters, could you give us your expert evidence on where you think the weight and balance of advantage lie?
Section 52 deals with technical provisions regarding deeds of conditions. Stop me if I become too obscure.
Our heads will hit the desks if we lose track.
Customarily, it is the developer who puts conditions in title deeds. As he develops the development, he puts in conditions, some of which no one would argue with and which would be maintained under the bill. I am talking about matters such as people having pipes running through each other's gardens. Until the 1960s, the general practice was that each person got their individual title deed, which set out 10 or 12 pages of detailed conditions. From the 1960s onwards, it became common practice—although it had been competent for a long time before that—to record the 12 pages of conditions in a single document before any houses were sold. Each title deed was then two pages long and would say that all the conditions in the 12-page document applied.
Is your view that section 52 is unfair?
Yes, I believe that it is unfair.
Before we go on, I must apologise to members and witnesses. I have to excuse myself to go to another meeting, which always clashes with this one. The chair will be taken by the deputy convener, Maureen Macmillan.
Mr Merchant, do you think that the majority of practising conveyancers who have to deal with title conditions problems would support your view?
It is difficult to answer that question, because the provision to which you are referring has been introduced into the bill by the Executive. The profession has heard a considerable amount about the bill as drafted by the Law Commission, but has not had the opportunity to consider that specific provision. Accordingly, I can speak only from personal experience. When I talk to fellow practitioners about the provisions of the bill as it stands, they react by saying, "They wouldn't do that, would they?"
In his evidence to the committee, John McNeil of the Law Society referred to the vacuum that could be created by the abolition of feudal burdens. He pointed out that, unless new rights to enforce are created, a community that currently has a superior could be left unregulated after abolition. What is your response to that?
I understand what John McNeil is saying, but experience across Scotland is variable. There are some excellent superiors who exercise their powers in a reasonable—not to say altruistic—manner for the benefit of other house owners. However, some superiors exercise their powers in a manner that is at best whimsical and at worst designed to extract money for consents. Such practices have given rise to the whole business of reform of the feudal system. Only in a few cases would a vacuum be created. If I remove a stone from my shoe, I notice the difference, but that is not the same as creating a vacuum.
You have given us a pretty clear indication of your thinking, but I would like to wrap up this issue with a further question about section 52. When giving evidence to the committee on 3 September, the Scottish Law Agents Society said that the effect of section 52 could be unfair if people buy into developments with specific ideas about what they want to do with their property and are reassured by the fact that there are no third-party rights to enforce. You have argued along the same lines. However, people could later find that third-party rights have been created under section 52 and that their plans for their property have been thwarted. Do you think that section 52(2), which ensures that the creation of new rights occurs only after the appointed day, addresses the Law Agents Society's concerns to any significant extent?
It is a partial answer to that question. Section 52(2) states that, if someone has extended their house before the appointed day and required only their superior's consent to do so, that is all that is necessary. They will not be required retrospectively to seek the consent of their neighbours. However, if after the appointed day someone decides to extend their house, they are required to get their neighbours' permission to do so. The Law Agents Society is right to identify that as a problem for the future.
Are you saying that ordinary solicitors are not aware of the provision, because the Executive has inserted it into the bill? Have conveyancers not woken up to the fact that the provision exists?
The point is a very obscure one. To appreciate its practical implications, one must have a particular interest in the bill. I happen to have taken such an interest from an early stage. I would not underrate solicitors' interest in law reform—they have taken great interest in the bill. However, I am not aware that the major changes that the Executive has introduced—in relation to the 4m rule and the extension of implied rights to those who do not have them already—are widely known about in the profession. The profession will find out about them when the bill becomes law. People will tour the country to tell us about the problems that we will face.
It will then be too late.
I refer you to the sections of the bill that concern community burdens and the discharge by adjacent proprietors. How well will the discharge by adjacent proprietors for community burdens work in practice?
I have probably largely covered that issue already. I apologise if I have been jumping from one subject to another, but they are all interrelated. The difficulty that I foresee with discharge by adjacent proprietors is the cost.
Is that the main issue of concern to you?
First, of course, the neighbours must agree to the discharge, but the cost and delay involved could be significant. Each discharge could cost between £200 and £300. It might be slightly less if someone happened to have their titles and did not have a loan on the house, but in many developments the substantial majority have loans on their houses.
You may also have touched on my next question, but I ask you to go into it in more detail. The bill provides a further method of discharge for community burdens—discharge by a majority of affected units. What are your views on that additional method? Is it workable?
It would not be workable in the context of a house sale, where one is required to get the consent of more than half the people, serve notice on those who have not given it and then wait eight weeks to find out whether they will go to the Lands Tribunal. The purchaser would have gone by that stage.
That is helpful. Professor Paisley raised the issue that a person seeking a variation or discharge of a burden can apply to the Lands Tribunal. He expressed concern about the increased work load that that might cause. What are your views on that?
Granted that the Lands Tribunal does not know what the increase in its work load is likely to be, it is difficult for me to double-guess it. As I said, the threat of going to the Lands Tribunal has changed the atmosphere when dealing with superiors. In more than 30 years of practice, I have never had to make an application to the Lands Tribunal, although I deal with conveyancing day in, day out for superiors and house owners. One or two colleagues in my firm have had to make such an application, but it is a relatively rare, slow and—from our point of view—expensive procedure.
Section 102 deals with amendment of the Abolition of Feudal Tenure etc (Scotland) Act 2000. Do you foresee any difficulties in rural communities with the amendment of that act to enable a feudal pre-emption to be preserved as a personal real burden—in effect, a burden without a benefited property?
That is a highly technical amendment to the 2000 act. A right of pre-emption arises when somebody sells a property but reserves the right to purchase it if it comes on the market again. In other words, if somebody agrees to buy the property, the person who sold it previously may step in and acquire it instead. This has been a matter of concern to the legislature for a long time. The rights of superiors to exercise the right have been reduced since 1938, and there were further amendments in 1974. I can understand the concern that, if feudal pre-emptions ceased to be enforceable as burdens at all, the interest of those who impose such conditions could be prejudiced. I see the amendment as an attempt to remedy the problem.
I will finish by asking you three further quick questions. Should the 100m rule be retained? Does the rule present particular difficulties in the rural context? Do you agree with the Scottish Landowners Federation, which suggests that feudal superiors will not go to the time, trouble and expense of saving any but the most worthwhile feudal burdens, and will save only those where the legal advice is that there would be interest to enforce? The SLF says that, as a result, the protection that is supposedly afforded by the 100m rule is unnecessary.
This is clearly a difficult area. Any rule that is based on distance is, in essence, arbitrary. Nonetheless, an attempt is being made to identify, reasonably clearly, what the interest is to continue to enforce the burden. For what it is worth, I think that, if one were to abolish the 100m rule, that could result in the perpetuation of many feudal conditions that the Abolition of Feudal Tenure etc (Scotland) Act 2000 is trying to abolish. One already sees attempts to get round the provisions of that act, by imposing conditions that will be secured by standard securities. One should not underestimate the likelihood that some people—not necessarily the enlightened members of the Scottish Landowners Federation—might take advantage of the situation if the 100m rule, or something similar, were not in place. Although I acknowledge that the rule is arbitrary, it is probably the best in the circumstances. I support its retention.
As members have no more questions, I thank Bruce Merchant very much indeed for his most informative evidence.
I will start as we have started with previous witnesses by asking you to tell us, in general terms, a little about your organisation and the interests that you represent.
The Scottish Landowners Federation primarily represents owners of rural land throughout Scotland. It does not matter whether they are community owners, trusts or quangos, for example. We have more than 3,000 members and we represent a majority of landowners in Scotland.
In general, do your members support the Title Conditions (Scotland) Bill?
In general, they do, although there are a number of areas about which we have concerns.
I hope that we will cover all those areas, or at least most of them.
I will hand over to our legal expert.
I do not think that the SLF feels terribly strongly about the matter. However, I am a solicitor in private practice and must associate myself with much of what Bruce Merchant said about the issue. I have always regarded title burdens as for the owner and not for long or short-term tenants. No lower limit on tenancies is given, although short assured tenancies—which is a standard way of letting private residential property—now have a minimum period of six months. If I may say so, in respect of the so-called sunset rule at the other end, I notice that not just the owner can apply to put in a notice that the sunset rule should apply, but other unspecified people can do so, which is particularly inappropriate. I do not think that tenants or non-entitled spouses and probably proper life renters—although they are in a form of quasi-ownership—should be included.
Can we take it that, were the proposals with respect to tenants to go ahead, you would want the right to enforce to be restricted to tenants under longer leases? That follows from what you say.
The right to enforce is an adjunct of ownership. The current law is that the right to enforce is attached to land and that is stated in the bill. If anybody should have a right to enforce on behalf of the land—if I can put it in that way—the owner should, whoever that may be, rather than somebody in a more transitory situation.
I am grateful for your comments.
Should people be able to create burdens over their individual share?
Do you mean pro indiviso proprietors?
Yes—in timeshares, for example.
There might be a question of enforcing upkeep of the property against each other. I have the situation in mind in which one person occupies the property one week and somebody else occupies it the next week. Currently, the Keeper of the Registers thinks that many burdens that are supposedly imposed are probably not enforceable as real burdens. He is probably right, but there is an opportunity to change that. Shared ownership schemes will be increasingly common. They are a phenomenon of the past 20 years—certainly, that is the case in the rural context.
Is the matter not dealt with adequately in the bill?
The matter is not dealt with at all. I cannot point to it offhand, but the bill specifically sets out that co-owners may not enforce burdens against each other. From a conceptual point of view, we are concerned about the fundamental principle that co-owners should be in a position to split up a property or, if it cannot be split up, to have it put on the open market and for the proceeds to be divided between them.
Are you in favour of the sunset rule as a method of discharging burdens? I am referring to sections 19 to 23.
I do not think that the Scottish Landowners Federation has a problem in principle with the sunset rule, although, as I mentioned, the question arises who should be entitled to operate it.
As Malcolm Strang Steel indicated, our question on the subject is whether tenants should be able to terminate the burden.
Would you have a problem with that method?
Not in principle with the sunset rule. There has been some discussion as to whether 100 years is the right cut-off.
I was about to ask that question.
I would have said that it was right. Somebody suggested 50 years, but that is too short, particularly given the rural context, in which things change slightly more slowly than they do in the middle of the city.
Section 16 deals with acquiescence, imposing a maximum limit on what constitutes a reasonable period in which to object to the breach of the burden. Do you agree with that approach? Do you think that eight weeks is the right period to set as the maximum limit?
It is not a major concern for us, but we feel that 90 days would be more appropriate than 60 days, which is the period that is set out in the bill.
The provision is quite restricted. The draftsmen had in mind a particular type of breach of a particular type of burden. They were thinking of buildings, in which a substantial amount of expenditure can be involved. If the burden were to be enforceable, the bill sets out that
Why do you recommend 90 days?
There was a feeling that eight weeks was too short a period. Some people, although that certainly does not include farmers and landowners, are able to take long periods away. Ninety days would therefore be a more appropriate period.
I will move on to section 17. Do you approve of the reduction in the relevant period for the purposes of negative prescription?
We are quite content with that provision. If someone has not made an objection to the sort of thing that we are talking about in five years from when it came to their attention, they have had long enough to do so.
Let us turn to sections 73 to 80, which deal with pre-emption. I understand that the Scottish Law Commission considered the issue and that a minority of the consultees suggested that pre-emption should be preserved only as a matter of contract. You would prefer it to be preserved as a matter of real burden. Why should it be dealt with in that way?
Rights of pre-emption that, in effect, fall off after there has been one opportunity to pre-empt are, in most cases, a matter of contract. However, if the pre-emption is ignored, there is a benefit in retaining it as a real burden, as it can then be enforced against the subsequent owner. In most cases it is a long stop, but it is a valuable one. I have never been in that situation. If the purchaser's solicitor sees a right of pre-emption, he will want to ensure that it has been discharged in one way or another. Nonetheless, it could slip by, which is why there is a benefit in retaining it as a real burden.
Does not the provision of pre-emption have the potential to create a difficulty? Someone may be interested in a property and their solicitor may not realise that someone else is interested in the property because of the pre-emption. Has not the person who pursues the property wasted a lot of money if they find out later that there was always a preferred bidder?
The situation is no different from the normal situation in which more than one person is interested in a property. Only one person can buy the property. Because of the way in which the system operates on this side of the border, anyone who shows an interest in the property is at risk of having spent money on his survey but not being the preferred bidder.
Okay. You were present when I asked this question before. Section 102 amends the Abolition of Feudal Tenure etc (Scotland) Act 2000 and provides for a right of pre-emption that is created in a feu to be preserved as a personal real burden. What is your view on that?
That is a new concept, which deals with a situation in which there is a pre-emption in favour of a superior who does not have ground to which the pre-emption can be attached. The 2000 act makes provision for a right of pre-emption to be attached to land without any qualifications about the 100m rule, houses or anything else. The situation will be a slightly rare bird. A superior might, for one reason or another, reserve a right of pre-emption on a property in the middle of a town without retaining any land round about it. Such a provision is beneficial to the extent that there is a hanging pre-emption, where the superiority—which is the superior's only interest—has disappeared. I suspect that, if there were no such provision, there would be a risk of a claim for compensation because the superior had been deprived of a right of property that has some value.
Let me finish by asking you about the 100m rule. In your evidence, you say that you have concerns about the rule and its operation in the rural context. Perhaps you can remind the committee of the problems that you envisage arising and give us some examples.
The problem is not about the 100m; it is about having a building on the ground within 100m. If the 2000 act contained no reference to the building but contained a reference to the land being within 100m, or even, as we say in our submission, contiguous, we would not have a problem.
Thank you for that detailed exposition.
Are there any questions?
I do not think so. You covered many points in great detail. We will consider your evidence.
I accept that they would have to have land that was within 100m or even contiguous. Perhaps there should be a de minimis rule about how much land they own so that they have a chance of proving interest if and when they have to do that. Mr Swinton's superior, for example, who lived in Berwickshire and had no land anywhere near Mr Swinton's house in Dundee, did not get to first base, even under the current law. The register will be cleared of a huge swathe of burdens for people in that position. Most of the properties in Edinburgh are feued. The middle of Edinburgh would disappear.
You say that landowners would have to have a certain area of land. What figure were you thinking of?
I suggest a hectare in the light of earlier evidence about the possibility of somebody owning a strip of ground down the side of a private road in the middle of a city and being able to attach burdens to it. I appreciate that that is not desirable. That was the reason for stopping people trying to keep ransom strips.
If the property were adjacent or even 25m away—which is what the planning rules state—that would knock out a lot of people.
Robert Balfour will be aware that we have heard contradictory evidence on development-value burdens and clawback. In point 5 of his written evidence, he says that he would like the Executive to reconsider the issue. Will he expand on that?
I have specific examples of land that has been given or sold at a reduced price to the local community for open space, playing fields, community halls and so on. If all the burdens on such land are abolished so that it can be used for whatever people or, in many cases, local authorities want, we believe that the burdens should be turned into conservation burdens. That would protect the land for what it was originally intended—community halls or open spaces. Much of that land was purchased for philanthropic reasons and not to make money. Such bits of land must be protected for the community.
It is easy to confuse a development burden and the clawback provision that is common in commercial negotiations when selling land. Ms Alexander's question was on development burdens. I have nothing more to add except that they should be preserved. Money was not the first object when they were set up.
That brings us to the end of our questions. Thank you for attending and for giving us a full account of your reasons.
Meeting continued in private until 16:59.
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