Burdens Section
10.42 Deeds of Conditions - Statutory Position
In this section all references to sections of statutes relate to the Land Registration (Scotland) Act 1979 unless otherwise specifically stated. In terms of section 32 of the Conveyancing (Scotland) Act 1874, a proprietor of lands may execute a deed setting forth conditions &c. under which he is to feu or otherwise deal with his lands or any part thereof, and on the deed being recorded such conditions &c. may be effectually imported in whole, or in part, by reference in any deed or conveyance relating to such lands subsequently granted; provided it is expressly stated in such deed or conveyance that it is granted under the conditions &c. set forth in such deed of conditions. Under section 40 of the Conveyancing (Scotland) Act 1924, and section 37 of the Conveyancing and Feudal Reform (Scotland) Act 1970, a heritable creditor acting under his power of sale in a bond and disposition in security or a standard security can grant a deed of conditions where the subjects are being disponed in lots.
Under section 32 of the 1874 Act the lands are not burdened by the conditions until the deed of conditions has been imported by reference in a subsequent conveyance of the lands.
By section 17 of the 1979 Act, which section came into force on the passing of the Act on 4 April 1979, the conditions &c. in a deed of conditions, executed on or after that date, burden the land immediately on recording or registration of the deed of conditions, unless the deed of conditions contains an express declaration that the provisions of section 17 are not to apply.
If, therefore, a deed of conditions executed on or after 4 April 1979 remains silent about the applicability of section 17, the conditions apply immediately to the whole of the land affected by the deed of conditions on its recording or registration. If the land affected or so burdened is registered, there is, in terms of section 15(2), no need to refer to the deed of conditions in subsequent feus or conveyances of the whole or part of the lands. A description of the subjects by reference to the title number will be sufficient to carry the conditions set out in the parent title sheet.
If, however, a deed of conditions was executed before 4 April 1979 or was executed on or after that date but contains a declaration that section 17 is not to apply, the subjects are not burdened by the conditions until the deed of conditions has been imported by reference in a subsequent conveyance.
Such a conveyance might be the deed that induces first registration. The conditions will have been made real (i.e. they will burden or run with the land) by virtue of having been imported by reference, and the deed of conditions will be shown in the burdens section of the title sheet. From that point onwards section 15(2) would apply and subsequent conveyances of the said registered subjects would not be required to refer to the deed of conditions.
Section 15(2) refers to (a) a deed relating to a registered interest in land, (b) a real burden &c. (i.e. one that has been made real) and (c) an entry in the title sheet under section 6(1)(e). Where a deed of conditions is entered in the burdens section of a title sheet, it does not follow that the burdens set forth in the deed of conditions have been made real. The mere fact that they are shown in the burdens section does not make them real or enforceable.
An example of the situation where such burdens have not been made real is where a developing estate is voluntarily registered and there is a deed of conditions executed before 4 April 1979 or executed after that date but excludes the provisions of section 17. The deed of conditions will be entered in the burdens section of the title sheet of the interest. It does not, however, come within the terms of section 15(2). The burdens have not been made real and it is entered not under section 6(1)(e) but rather under section 6(1)(g) – ‘such other information as the Keeper thinks fit to enter in the register’. It follows, therefore, that a subsequent conveyance of the whole or subsequent conveyances of parts must import the burdens set forth in the deed of conditions in order to make them real and for the benefit of section 15(2) to apply.
Importation of burdens by reference in a deed relating to a registered interest remains competent in respect of a deed of conditions, but only in respect of a deed of conditions. That part of section 32 of the 1874 Act, which refers to deeds of conditions, was excluded from the disapplication provisions in section 29(3) of the 1979 Act. Therefore, burdens in earlier recorded/registered deeds that have not been incorporated into the title sheet, cannot subsequently be made real by reference in a deed submitted as a dealing with whole or transfer of part unless they are in a deed of conditions.
The form of reference to a deed of conditions remains that prescribed by section 32 of the 1874 Act with the substitution, where appropriate, in terms of section 29(2) of ‘registered in the Land Register of Scotland’ for ‘recorded in the Division of the General Register of Sasines for the County of ..........’.
The course of action to be followed when dealing with a Deed of Conditions can vary depending on the circumstances in which the deed of conditions is used. The instructions set out in the following paragraphs should be used as a guide.
Underlying all of these scenarios is that there may be reasons in particular cases for not referring to the deed of conditions in a sale of part of the area affected by the deed. Very occasionally, the settler may decide that an entry for the deed of conditions in the burdens section should not be made at all. Any decision to omit a deed of conditions from a title sheet should be authorised by the team leader.
The style for the preamble for the Deed of Conditions entry in the burdens section should reflect the wording of the deed. Examples are given in "Styles of preambles - general examples".
10.44.1 Registration of Developing Estate or Builder's Title
In the situation where a developing estate or builder's title is being registered, perhaps voluntarily, and a deed of conditions is to be entered in the burdens section, without the burdens having been made real (i.e. the deed of conditions has been executed before 4 April 1979 or has been executed on or after that date but has excluded the provisions of section 17), then the following procedure should be adopted.
Where the deed of conditions was executed before 4 April 1979 (most likely in a voluntary registration), then a note in the following terms should be inserted at the end of the deed of conditions entry:
Where the deed of conditions was executed on or after 4 April 1979 and contains a declaration that section 17 is not to apply, the declaration itself will not be included in the text set out in the burdens section but a note in the following terms will be inserted after the entry.
Where the deed of conditions was executed on or after 4 April 1979 and section 17 has not been disapplied, then the deed of conditions can be entered in the burdens section and no note will be required.
10.45 Transfers of Part and First Registrations out of Non Research Areas
On the sale of an area forming part of a developing estate or builder’s title, as described in the foregoing sub-section, or in the case of a first registration not falling within a research area, one of the following approaches should be followed.
10.45.1 Deed of Conditions referred to for burdens
Where the deed of conditions was executed before 4 April 1979 and the deed conveying the part contains a reference to it for burdens, then the deed of conditions will be set out in the burdens section of the title sheet of the Transfer of Part or First Registration and no note will be required after the entry. Similarly, if processing a transfer of part where a deed of conditions has been shown in the burdens section with no qualifying note, the reference in the description to the parent title number is sufficient for its terms to be set out in the new title sheet.
Where the deed of conditions was executed on or after 4 April 1979 and contains a declaration that section 17 is not to apply, and the deed conveying the part contains a reference to it for burdens, then the deed of conditions will be set out in the burdens section of the title sheet of the Transfer of Part or First Registration and the following note will be set out after the entry.
10.45.2 Deed of Conditions not referred to for burdens
Where a deed of conditions, in either of the categories referred to in section 10.45.1 is not referred to for burdens then the deed of conditions may nevertheless be set out in the burdens section of the title sheet of the transfer of part or first registration and the appropriate note from the two following notes should be set out after the entry.
Where the deed of conditions was executed before 4 April 1979:
or where the deed of conditions was executed on or after 4 April 1979 and contains a declaration that section 17 is not to apply:
Where the deed of conditions was executed on or after 4 April 1979 and section 17 has not been disapplied, then there is no need for the deed conveying the part to refer to the deed of conditions for burdens and the deed of conditions will be set out in the burdens section of the title sheet of the Transfer of Part, without further comment.
10.46 Deeds of Conditions in Research Areas
Research area burdens have been drafted on the assumption that the burdens in deeds of conditions will have been made real by the time registration takes place, or will be made real on registration. The settler must, however, check the position to discover whether, in relation to the subjects being registered, the burdens in the deed of conditions have or have not been made real.
Where the deed of conditions was executed before 4 April 1979, the titles for any subjects submitted for registration and forming part of the area affected by the deed of conditions (normally the research area itself) down to, and including, the deed inducing registration, should be checked to ensure that the deed of conditions has been referred to for burdens therein. If it has, the burdens in the deed of conditions will have been made real and the deed of conditions can be entered in the burdens section of the title sheet for the subjects being registered, without the need for any following note. If the deed of conditions has not been referred to, then the deed of conditions may be set out in the burdens section along with the following note.
Where the deed of conditions was executed on or after 4 April 1979 and contains a declaration that section 17 is not to apply, then the titles for any subjects submitted for registration and forming part of the area affected by the deed of conditions down to and including the deed inducing registration, should be checked to ensure that the deed of conditions has been referred to for burdens. If it has, the burdens in the deed of conditions will have been made real and the deed of conditions can be entered in the burdens section of the title sheet for the subjects being registered. The entry for the deed of conditions in the research area file will probably contain a footnote to the effect that the deed of conditions contains a declaration that section 17 is not to apply but that the conditions have been made real by being imported by reference in a subsequent deed. This entry can be used without amendment.
If the deed of conditions has not been referred to, the deed of conditions may be set out in the burdens section anyway along with the following note.
The above does, of course, mean the alteration of a research area burden but only in relation to the particular case being settled.
Where the deed of conditions was executed on or after 4 April 1979 and contains no disapplication in terms of section 17, then the burdens contained in the deed of conditions entry will already have been made real and the deed of conditions can be entered in the title sheet of the subjects being registered without further comment.
The research area settling instructions will, in most cases, guide the settler as to whether breakaways require to refer to the deed of conditions for burdens to be made real. However, because files have been created over many years, in which time ideas and policies have changed, settlers must satisfy themselves as to the position and proceed accordingly.
10.47 Saving clauses in Deeds of Conditions
As previously mentioned, in terms of section 17 the conditions in a deed of conditions executed on or after 4 April 1979 burden the land which is the subject of the deed automatically on the registration or recording of the deed, unless it contains an express statement that the provisions of section 17 are not to apply.
It is common practice for a deed of conditions to include a ‘saving clause’ reserving power to the granter to waive or vary the conditions set out therein. The purpose of such a clause is to avoid the creation of a jus quaesitum tertio (third party right) in favour of an individual proprietor of a part of the deed of conditions area, as against another such proprietor. This is intended to allow the granter, at a later date, to alter or even abandon the conditions in respect of one part of the subjects without reference to the proprietors of other parts already feued or disponed. Such a clause is undoubtedly competent in deeds of conditions executed prior to 4 April 1979 and to those executed on or after that date which contain an express disapplication of section 17, because in these cases the conditions are not made real until they are imported into the breakaway title by a reference to the deed of conditions.
Doubts were raised initially as to whether such a clause is competent when the deed of conditions has been executed on or after 4 April 1979 and has not disapplied section 17. It was once thought that the conditions in such a deed of conditions, as they are automatically made real on the registration or recording of the deed, could only be altered by the granter at a later date if he obtained the consent of the proprietors of any part already feued or disponed.
It is now thought that, even in the case of such deeds of conditions, a saving clause is evidence that the intention of the granter of the deed of conditions is not to confer a jus quaesitum tertio on the proprietors of parts of the subjects subsequently sold.
This logically means that, if there is a saving clause in a deed of conditions, even if section 17 is not disapplied, the granter of the deed of conditions (or his successors where the saving clause includes them) may subsequently vary the conditions with regard to any ground remaining in his possession, without reference to the proprietors of parts sold in the interim. This is provided that the variation does not adversely affect the interest of such proprietors by imposing new burdens on them or altering existing ones to their detriment (e.g. any attempt by the developer to sell areas of common ground should be referred through normal channels for further guidance).
Any saving clause contained in a deed of conditions should, therefore, be included in the relevant burdens section entry no matter when the deed of conditions was executed or whether section 17 is disapplied or not.
Because of the doubts about the competence of saving clauses in deeds of conditions executed after 4 April 1979 and not disapplying section 17, such clauses have been omitted from the deeds of conditions entries in some older research area files and from deeds of conditions entries given effect to in early prior registration cases. For the sake of consistency between properties affected by the same deed of conditions, no attempt should be made to amend the existing entries created for such deeds of conditions.
The existence or non-existence of a saving clause in a deed of conditions will make no difference to the instructions and styles of notes relating to the burdens being made real.
In cases where a deed of variation of a deed of conditions has to be given effect to, it is a difficult legal question as to whether any of the variations will adversely affect the rights of other proprietors. All such cases must be referred to Registration Services for further guidance.
10.48 Intermingled Rights and Burdens
In some deeds of conditions, rights are interspersed with burdens. In these deeds it is rarely practical to extract such rights and set them out in the property section, and great care must be exercised by a settler undertaking that course of action. In some cases, these rights are restrictions on the exercise of a burden or reservation and it is appropriate that they should be set out in the burdens section along with the burden or reservation (e.g. a minerals reservation clause). Further, in some cases burdens are expressed as rights in favour of other subjects. Care must be taken that these are not mistaken for rights in favour of the subjects being registered.
As a general rule, where rights and burdens are intermingled in the deed of conditions, the whole text will be set out in the burdens section. A decision then has to be made on whether to reflect this in the property section. Therefore, where the breakaway deed for the individual subjects actually conveys in the dispositive clause the rights in question and describes them by reference to the deed of conditions where the rights are set out at length, a reference should be made in the property section of the title sheet for the individual property in the following terms:
· ……together with the rights set out in the Deed of Conditions in Entry x of the Burdens Section.
See also Amenity and Common Areas in developments