Burdens Section
10.49 General Conditions
10.49.1 Irritancy – First Registrations
Some deeds of conditions include an irritancy clause. Where an irritancy clause appears in a deed of conditions, its validity cannot be determined by examination of the deed of conditions alone. It is also necessary to consider the conveyance of the burdened subjects (i.e. the split-off writ granted by the granter of the deed of conditions)
That conveyance might be: -
a. An ordinary Disposition or a feudal grant such as a Feu Disposition; or
b. A Lease.
Different considerations apply for each type of conveyance. The following will influence the way in which the irritancy clause in the deed of conditions is handled, where the deed of conditions has already been recorded in the Sasine Register and the first registration is induced by the split-off deed or a subsequent transfer.
(a) Ordinary or Feu Disposition
Irritancies in respect of these deed types have been abolished as detailed in Irritancy Clause. Where the break off writs following after the deed of conditions are dispositions or feus, the irritancy clause in the deed of conditions can be disregarded.
(b) Lease
In general, landlords' rights to irritate in respect of breach of lease conditions remain valid. In the unlikely event of a Deed of Conditions containing an irritancy clause being followed by Leases of part or all of the subjects, the irritancy clause should be included in the burdens section for the tenant's interest See Leasehold Interest - Irritancy Clause.
10.49.2 Irritancy – registered titles
Where a deed of conditions is presented as a dealing against a registered title, the Keeper cannot be certain what form(s) of deed(s) may be used for subsequent transfers of part. Before taking the decision to edit out any irritancy clause it is necessary to rule out the possibility that the subsequent transfers may be leases. The terms of the deed of conditions may make it clear that the later split-offs will be dispositions or feu writs. However, if it is left open that the conditions might be intended to apply to future leases, or there is any doubt in the matter, the irritancy clause should be included in the burdens section of the parent title sheet. It should then be carried forward to the burdens section of any transfer of part title sheet where the interest created is that of a tenant.
Various builders include information in the deed of conditions that will not affect every property within a development. However, it is desirable to edit an entry for the deed of conditions that can be used in all circumstances.
Examples of this include Scottish Homes including provisions on garage forecourts and clothes poles and Wimpey developments narrating the purpose of boundary arrows, all of which may be shown on plans to breakaway deeds.
In circumstances such as these, it is important to agree future practice for mapping titles in the development with the senior plans officer for the section.
The relevant text should then be included in the burdens section entry and a note added and at the end of the entry reflecting the position. The following give styles for the above examples:
Note 2. If there are, in relation to the subjects in this Title, any clothes poles as specified in the above Deed of Conditions, each clothes pole will be indicated by the letters CP and an arrow on the Title Plan.
Note 3. If the plan to the deed inducing registration of the subjects in this Title indicates arrows to depict the boundary line in accordance with the above Deed of Conditions, these will be depicted in a similar fashion on the Title Plan.
10.50 Notices of potential liability for costs
10.50.1 Introduction
The Tenements (Scotland) Act 2004 (hereinafter referred to as 'the 2004 Act') came into force on 28th November 2004.
From a registration perspective, the major innovation is the introduction of a new form of deed that is capable of being recorded in the General Register of Sasines or registered in the Land Register of Scotland. This is the 'notice of potential liability for costs'. The 2004 Act makes provision for the registration of this notice in respect of a flat or flats in sections 12, 13 and Schedule 2.
The 2004 Act also amends section 10 of the Title Conditions (Scotland) Act 2003 (hereinafter 'the 2003 Act'), to make a similar provision allowing registration of notices against the title to burdened properties. This is also called a notice of potential liability for costs. For registration purposes, the handling of the two types of notice is the same.
These instructions set out background information on the legislation and registration requirements and procedures.
10.50.2 2004 Act notices - statutory material
10.50.2.1 Background
Section 11 of the 2004 Act provides rules for determining when a flat owner's liability arises to contribute to certain costs, such as those of common repairs or a communal insurance premium. Normally when a payment has become due, liability lies with the owner of the flat at the time and does not transmit to successor proprietors. Section 12 introduces a new rule. In addition to the present owner, an incoming owner may also become severally liable if a notice of potential liability for costs is registered in the relevant property register 14 days before the date on which the new owner acquires the flat.
10.50.2.2 Form and Content of the notice of potential liability for costs (tenement)
The notice must be in, or as near as may be in, the following form given in Schedule 2 to the 2004 Act: -
"NOTICE OF POTENTIAL LIABILITY FOR COSTS
This notice gives details of certain maintenance or work carried out or to be carried out in relation to the flat specified in the notice. The effect of the notice is that a person may, on becoming the owner of the flat, be liable by virtue of section 12(3) of the Tenements (Scotland) Act 2004 (asp 11) for any outstanding costs relating to the maintenance or work
Flat to which notice relates. [This must describe the flat in a way that is sufficient to identify it. Where the flat has a postal address, the description must include that address. Where the flat has been registered in the Land Register, the description must make reference to the Title Number of the flat or the larger subjects of which it forms part. Otherwise, the description should normally refer to and identify a deed recorded in a specified Division of the Register of Sasines.]
Description of the maintenance or work to which the notice relates. [The maintenance or work is to be described in general terms.]
Person giving notice. [The name and address of the person applying for registration of the notice ("the applicant") or the applicant's name and the name and address of the applicant's agent. Agency guidance will encourage agents to also enter here a statement that the applicant is either owner of a flat in the tenement or the manager of the tenement.]
Signature. [The notice must be signed by or on behalf of the applicant. As explained later, the Keeper requires as a condition for registration that the execution have self-proving status.]
Date of signing."
10.50.2.3 Who may register a notice of potential liability for costs (tenement)?
An application for registration of a notice may only be made by (or on behalf of) one of the following:
10.50.2.4 When notice of potential liability for costs (tenement) may be registered against more than one flat.
A notice of potential liability for costs (tenement) may be registered in relation to more than one flat so long as it is in respect of the same maintenance or work. However a single notice cannot narrate different work or maintenance applying to different flats.
10.50.2.5 How long does the effect of a notice of potential liability for costs last?
The notice will expire at the end of a period of 3 years beginning with the date of its registration, unless it is renewed by being registered again before the end of that period.
10.50.2.6 Is there a facility for discharging a notice of potential liability for costs?
The 2004 Act does not make any provision for the discharge of notices or clearing them from the register.
However, in the Land Register, a notice may be removed from a title sheet at the expiry of the period of three years in the same way that a notice of grant is removed at present.
In some cases, the costs to which a notice refers will be repaid during the three year period. Information to this effect may be drawn to the attention of the Keeper by informal letter of satisfaction or by a non statutory discharge. As there is no statutory provision permitting the discharge of notices or their removal from the register, the Keeper's policy is not to remove any notice from the register until the 3 year period has expired.
However, where the terms of a letter or non statutory discharge are sufficiently clear and it is apparent that the signatory to the letter or the granter of the discharge is either (a) the party who registered the notice or (b) acting on behalf of that party, registration officers may add a note to the relevant burdens section entry.
Consideration should only be given to adding a note to the entry for the notice when an application has been made to the Keeper. It may take the form of a Form 2 in respect of a letter or non statutory discharge or, alternatively, supporting evidence enclosed with an application for registration of another deed. In the case of the former, a miscellaneous fee of £30.00 should be applied.
10.50.2.7 What form should a note evidencing repayment of outstanding costs take?
The content of the note should briefly reflect the factual content of the letter or non statutory discharge. When creating the note, registration officers should take great care to avoid wording that suggests that the Keeper regards the debt as having been repaid. It is not necessary for the Keeper to form a view on this question and it is for any interested party to satisfy themselves as to the true position. The note is merely indicative of the content of the letter or non statutory discharge. Registration officers are reminded that all documentation pertaining to the content of the note should be archived.
Suggested styles for the note are given below, these should be adapted to reflect the content of the informal letter or non statutory discharge:-
Note: By an informal letter/non statutory discharge dated 10 February 2006, XXX, who as manager of the tenement registered the foregoing notice, stated/acknowledged [or as the case may be] that the relevant costs relating to the maintenance or work described in the above notice have been repaid.
OR
Note: By an informal letter/non statutory discharge dated 10 February 2006, XXX, being the benefited proprietor who registered the foregoing notice, stated/acknowledged [or as the case may be] that the relevant costs relating to the maintenance or work described in the above notice have been repaid.
The entering of the note referred to above is at the Keeper’s discretion. In some cases, the Keeper may decline to enter a note if he is not content that it is appropriate to do so, for example, because there is some ambiguity in the wording of the document or because it is not clear that the party who is confirming that the relevant costs have been repaid is, or is acting on behalf of, the person or company that originally registered the notice.
In the event of difficulty, all queries should be referred to the appropriate senior caseworker who will seek the guidance of Legal Services if required.
10.50.2.8 Must the Keeper ensure that the information given in a notice is accurate?
Section 13(5) of the 2004 Act states that "the Keeper of the Registers of Scotland shall not be required to investigate or determine whether the information contained in any notice of potential liability for costs submitted for registration is accurate". However, the Keeper is still obliged to ensure that the form and content of the deed meet the statutory requirements - see whether applicant entitled to seek registration.
Section 12(3) of the Land Registration (Scotland) Act 1979 is amended by the insertion of a new subsection (q) to provide that there shall be no entitlement to be indemnity where "the loss arises in consequence of an inaccuracy in any information contained in a notice of potential liability for costs" registered in pursuance of section 12(3)(a) or 13(3) of the 2004 Act or section 10(2A) or 10A(3) of the 2003 Act.
10.50.3 Registration practice - 2004 Act notices
10.50.3.1 Form and content of notice
Notices must be in, or as nearly as may be in, the statutory form. Minor variations from the style in format and layout are therefore acceptable. However, a notice will be rejected if it does not include the minimum content required by the statute - see form and content of the notice.
It should be checked (1) that the name and address (or agents' address) of the person giving notice has been completed and (2) that the property description gives a postal address as well as title number(s).
The Keeper will not check or pass any comment upon the description of the maintenance or work to which the notice relates.
10.50.3.2 Whether applicant entitled to seek registration
It must be ascertained that the person giving notice is owner of the particular flat, or of another flat in the tenement, or is manager of the tenement. The necessary confirmation may be given within the text entered in the 'person giving notice' section of the form - see form and content of notice. If so this may be accepted without further question.
However if no such confirmation is given, it must be requisitioned. The Keeper simply requires the applicant or their agent to state that the applicant is owner of a flat in the tenement or manager of the tenement. Evidence such as deeds or minutes of meetings appointing factors is not required and need not be examined. Where, following a second letter to the applicant or agent, the requisition remains unanswered, the application should be cancelled.
Settlers must:
10.50.3.3 Requirement for self-proving execution
The notice must be signed by or on behalf of the applicant. In addition, in order to maintain the integrity of registered information and consistency between Land and Sasine Registers, the Keeper requires notices to have self-proving status. This will normally mean that one witness should attest the subscription of the notice and that the name and address of that witness should be provided in the deed.
Settlers must:
10.50.3.4 Application Form and Fee
An application for registration of a notice of potential liability for costs must be accompanied by a form 2. With effect from 22 January 2007, a miscellaneous event fee of £30 is payable for each title sheet affected.
10.50.3.5 Certificates of Title not required
In terms of Rule 9(3) of the Land Registration (Scotland) Rules 1980, the Certificate(s) of Title must normally accompany all Land Register applications. However, as the Certificates will rarely be available to a party seeking to register a notice, the Keeper has decided that there is good cause under Rule 18(1) not to require the submission of the land certificate pertaining to any flat against which a notice is registered. A next application note should be created to highlight the requirement to update the land certificate when it is next submitted.
10.50.3.6 Entries in the Land Register
Registration in the Land Register will result in an entry being made in the burdens section of the title sheet for the relevant interest(s). The notice is registered only against the titles of the flat(s) identified in the 'Flat to which notice relates' part of the notice. It is not dual registered against the title of the person giving notice.
The notice should be entered in the burdens section of the title sheet in the following terms:
Notice of Potential Liability for Costs in terms of section 12 of the Tenements (Scotland) Act 2004 by [party giving notice] in respect of costs relating to maintenance or work described therein as [enter description of maintenance or work contained in the notice] in respect of [subjects*] dated [date of signing], registered [insert date of registration].
* This may be:
The complete terms of the description of the maintenance or work from the notice should normally be transcribed at length into the title sheet. Copy in certificate should not be employed. In the event of a notice containing an exceptionally long description, reference should be made to a Senior Caseworker to consider whether the description may be summarised.
10.50.3.7 First Registration of flat subject to Sasine recorded notice
In first registration, the search sheet may disclose a notice of potential liability for costs recorded in the Sasine Register affecting the subjects of the application for registration. If such a notice is still outstanding (i.e. the period of 3 years has not expired) it must be shown in the burdens section in the following style:
Notice of Potential Liability for Costs in terms of section 12 of the Tenements (Scotland) Act 2004by [party] in respect of costs relating to maintenance or work described therein as [enter description of maintenance or work contained in the notice] in respect of [description of flat*] dated [date of signing], recorded GRS (Sasine County) [insert date of recording].
* This may be:
If the relevant notice has not been submitted, the details of the notice will have to be taken from the Sasine minute. For the avoidance of doubt, Registration officers should not requisition notices that have been recorded in the Sasine Register.
10.50.4 2003 Act Notices
10.50.4.1 Background
The 2003 Act notice procedure applies to liability for costs of work or maintenance arising from the relationship between burdened and benefited proprietors in a real burden. It operates in the same way as the 2004 Act type notice to make successor burdened proprietors severally liable
10.50.4.2 Form and content of notice of potential liability for costs (Title Conditions)
The notice must be in, as near as may be, the following form given in schedule 1A to the 2003 Act: -
"NOTICE OF POTENTIAL LIABILITY FOR COSTS
This notice gives details of certain maintenance or work carried out in relation the property specified in the notice. The effect of the notice is that a person may, on becoming the owner of the property, be liable by virtue of section 10(2A) of the Title Conditions (Scotland) Act 2003 (asp 9) for any outstanding costs relating to the maintenance or work.
Property to which the notice relates: [This must describe the property in a way that is sufficient to identify it. Where the property has a postal address, the description must include that address. Where title to the property has been registered in the Land Register of Scotland, the description must refer to the title number of the property or of the larger subjects of which it forms part. Otherwise, the description should normally refer to and identify a deed recorded in a specified division of the Register of Sasines.]
Description of the maintenance or work to which notice relates:
[the maintenance or work is to be described in general terms]
Person giving notice: [The name and address of the person applying for registration of the notice ("the applicant") or the applicant's name and the name and address of the applicant's agent. Agency guidance will encourage agents to also enter here a statement that the applicant is either (1) owner of the burdened property, (2) owner of the benefited property or (3) a manager of either or both of benefitted and burdened properties]
Signature: [The notice must be signed by or on behalf of the applicant.]
Date of signing:"
10.50.4.3 Registration instructions
Whereas in the context of the 2004 Act type of notice, only an owner of a flat in the tenement or a manager of the tenement might seek registration, in the 2003 Act type of notice registration is limited to:
It must be ascertained that the person giving notice is the owner of the burdened property, the owner of the benefited property or is a manager of either or both properties. The necessary confirmation may be given within the text entered in the 'person giving notice' section of the form - see form and content of notice. If so this may be accepted without further question.
However if no such confirmation is given, it must be requisitioned. The Keeper simply requires the applicant or their agent to state that the applicant is the owner of the burdened property, the owner of the benefited property or a manager of either or both properties. . Evidence is not required and need not be examined. Where, following a second letter to the applicant or agent, the requisition remains unanswered, the application should be cancelled.
Settlers must
The form of burdens section entry will be as follows:
Notice of Potential Liability for Costs in terms of section 10 of the Title Conditions (Scotland) Act 2003 by [party giving notice] in respect of costs relating to maintenance or work described therein as [enter description of maintenance or work contained in the notice] in respect of [subjects*] dated [date of signing], registered [insert date of registration].
* This may be:
In first registration of property subject to a subsisting notice recorded in the Sasine Register, the date of recording should be shown in place of the date of registration.
In all other respects the registration instructions are the same as those for 2004 Act type notices.
10.50.5 Land Register reports
Details of a recorded or registered notice of potential liability for costs, whether in respect of tenements under the 2004 Act or title conditions under the 2003 Act, will be disclosed on reports issued by the Keeper.
10.51 Feuduty and other annual payments
This chapter deals with the following annual payments, exigible from the owners of land:
Such payments are considered to be burdens rather than charges and are thus entered in the burdens section rather than the charges section of a title sheet. This chapter does not deal with rent or tackduty (i.e. recurrent leasehold payments); teinds or stipend (the liability for payment of which is now extremely rare); contributions towards a continuing cost related to the land (e.g. burdens for maintenance of roads etc.); or payments under a heritable security or other charge.
For payments of the type dealt with in this chapter, a cumulo or total payment may be levied on a whole area (e.g. in the case of feuduty, the feu grant will specify the amount exigible from the whole feu). Where the ownership of the area from which the sum is exigible is subsequently split, the amount payable by each proprietor may be decided in one of two ways:
The distinction between allocation and apportionment is an important one; as will be seen below, the provisions relating to redemption of the requirement to make payments differ significantly, depending on whether the sum is allocated or apportioned. Settlers should therefore be aware that dispositions not uncommonly use the term ‘allocated’ with reference to feuduties etc. which are in fact merely informally apportioned. Formal allocation requires the involvement of the person entitled to receive the payment, either directly in a deed to which that person is a party or indirectly by way of a power to allocate.
Subject to the provisions of section 6(3) of the Land Registration (Scotland) Act 1979 and to the qualifications and modifications in the succeeding paragraphs, any subsisting obligation, revealed by any application for registration or the documents supporting it, for payment of any of the annual sums to which this chapter relates must be entered in the burdens section. This is the case whether the obligation is to pay the whole sum, an allocated proportion or an informally apportioned share of an original sum. Where the obligation relates to an informally apportioned share, both the apportioned amount and the cumulo sum should be disclosed.
Generally speaking, if the documents supporting an application disclose what appears to be a subsisting obligation for payment, but the applicant certifies on the application form that there are no annual monetary payments exigible from the subjects, the question should be raised with the applicant and, unless evidence of discharge or redemption is produced, the obligation should be shown in the title sheet. However, as noted below, legislation has restricted the extent to which such burdens still subsist.
10.51.1 Prohibition against new annual monetary payments
Sections 1 and 2 of the Land Tenure Reform (Scotland) Act 1974 prohibit the creation of new feuduties, ground annuals or skat (but not standard charge). Section 3 permits the reconstitution of such payments in a charter of novodamus, provided that the amount as reconstituted does not exceed the amount due prior to the Act. If a deed executed after 1 September 1974 breaches these sections of the Act, the provision for payment is ineffective but the deed is otherwise valid and enforceable. In that situation, settlers should ignore the clause in the deed purporting to constitute the payment, but should give effect to the remainder of the deed.
10.52 Redemption of existing annual monetary payments
Prior to the 1974 Act, it was possible for superiors and feuars to agree the redemption of feuduty. There was provision in the Conveyancing (Scotland) Act 1924 for the discharge of ground annuals on payment of a lump sum. There was likewise provision in the Church of Scotland (Property and Endowments) Act 1925 for the redemption of standard charge on payment of a capitalised sum to the Church of Scotland General Trustees. These provisions remain available, but in practice redemption normally takes place under the provisions of sections 4 and 5 of the 1974 Act.
Section 4 of the 1974 Act provides for voluntary redemption of feuduty, ground annual or skat (but not standard charge, which is catered for in the 1925 Act). The provisions apply to cumulo payments and to formally allocated proportions thereof. There is no provision in section 4 for voluntary redemption of apportioned amounts. Voluntary redemption may take place at any term of Whitsunday or Martinmas, at the instigation of the person liable to pay. The procedure is as follows:
It follows that, whenever voluntary redemption has taken place, there should be in existence a redemption receipt issued by the person entitled to payment. If no such receipt is submitted with the application for registration, settlers should not assume that voluntary redemption has taken place. If the receipt has been lost, a letter from the person entitled to payment (or his solicitor), confirming that voluntary redemption has taken place, is an acceptable alternative. Settlers should not accept a negative answer to question 5(d) on Form 1 (or – e.g. – a redemption receipt marked ‘to follow’ on Form 4 but never actually submitted) as sufficient evidence of voluntary redemption.
In the absence of evidence of voluntary redemption, the details of the feuduty should be included in the relevant entry or entries in the burdens section of the title sheet, unless the compulsory redemption provisions noted below apply. Where the obligation relates to an informally apportioned share, both the apportioned amount and the cumulo sum should be disclosed.
Section 5 of the 1974 Act provides for compulsory redemption of feuduty, ground annual, skat or standard charge in the event of a sale after 1 September 1974 of the property subject to the payment. The provisions apply where the whole property subject to a cumulo payment is sold, or where the whole of a property on which a sum has been formally allocated is sold. The provisions do not apply to the sale of a part of a property subject to a cumulo or allocated payment. Similarly – as with voluntary redemption – there is no provision for compulsory redemption of an apportioned amount.
Where compulsory redemption applies, the presumption is that:
If the person liable to pay wishes the property to be free of the burden of the redemption money, he has two options:
It follows that, whenever compulsory redemption has taken place, the redemption money should in principle be assumed to be a burden on the property (and should therefore be disclosed in the burdens section of the title sheet) unless there is produced with the application:
In practice, in an application for first registration settlers should accept a negative answer to question 5(d) on Form 1 as sufficient evidence that the redemption money is no longer a burden on the property (and should not therefore disclose it in the title sheet), unless the search sheet reveals that an extract order extending the two month period has been recorded.
If the redemption money requires to be disclosed in the burdens section of the title sheet, this should be done by way of an entry along the lines of the following:
‘The redemption money in respect of a feuduty [ground annual etc.] of £5 redeemed in terms of section 5 of the Land Tenure Reform (Scotland) Act 1974 is a burden on the subjects in this Title.’
It is stressed, however, that these procedures should only be followed where compulsory redemption applies. In particular, settlers should not accept a negative answer to question 5(d) as evidence of redemption of an apportioned annual payment. Redemption of such a payment may be accepted on a non-statutory basis by the person entitled to payment. By his acceptance, the person entitled to payment is effectively recognising formal allocation of the previously apportioned payment. Only a redemption receipt is sufficient evidence that non-statutory redemption of an apportioned payment has taken place.
10.53 Disclosure of details of annual monetary payments in the burdens section
Payments of the type dealt with in this chapter will be disclosed in the burdens section in three situations:
As noted above, if there is no evidence of voluntary redemption and no potential for compulsory redemption, the details of the annual payment will continue to be disclosed in the entry for the relevant feu deed, contract of ground annual etc.. Where a proportion of the cumulo is informally apportioned in a subsequent deed, the details of the apportionment will also be included in the entry for that deed.
10.53.2 Allocated proportion redeemed
Where an allocated proportion of a cumulo payment has been redeemed (or where the same effect has been achieved by non-statutory redemption of an apportioned amount), no details of the payment will be shown in the entries in the burdens section. However, a note in the following style will be shown after the entry for the deed creating the cumulo payment:
‘Note: A proportion of the feuduty [ground annual etc.] payable under the above Feu Charter [etc.] was allocated on the subjects in this title and has been redeemed’.
Updated May 2006