Specialist Topics
Leasehold Interests
It should be noted that there is no provision in the Conveyancing and Feudal Reform (Scotland) Act 1970 for service of notice of allocation of rent, and that Part I of the Land Tenure Reform (Scotland) Act 1974 (redemption of feuduties etc.) does not apply to leases. Rentals, however, may be allocated by means of memoranda and altered by minutes of agreement.
Notwithstanding the fact that Part I of the 1974 Act does not apply to leases, it is not uncommon for so-called ‘tack duty redemption receipts’ to be included in an application for registration. Whilst undoubtedly a convenience for both landlord and tenant, these documents are legally ineffectual as they purport to erase one of the essential requirements of a registrable lease; they should therefore be ignored (although the practice is to archive them). In such cases, the rental provisions will, therefore, remain in the text of the relevant burdens section entry.
A leasehold casualty is a provision in a lease which imposes a requirement for payment of a lump sum additional to the rent to the landlord, on the occurrence of specified events or at specified times. Unfortunately, the lease itself rarely, if ever, uses the specific word ‘casualty’, so, for the avoidance of doubt, a leasehold casualty can be simply described as any obligation in a lease to pay money to the landlord on the happening of any specific event. FOr the avoidance of doubt, a penalty is not a casualty.
Registration officers must take great care when they encounter leasehold casualties. First and foremost, they have to remember that it is not the case that all leasehold casualties are extinct. Several times in the past, registration officers wrongly edited out leasehold casualties that were still subsisting, which left the Keeper exposed to very large indemnity claims.
Section 16 of the Land Tenure Reform (Scotland) Act 1974 rendered casualty provisions in leases executed on or after 1 September 1974 unlawful, but landlords remained entitled to enforce casualties in leases executed before that date. The Leasehold Casualties (Scotland) Act 2001 (hereafter ‘the 2001 Act’) provides for extinction of many, but not all, casualties which survived the 1974 reform.
Which casualties are
rendered extinct?
The 2001 Act declares that any casualty provision in a
‘relevant lease’ is void. A ‘relevant lease’
is defined as a lease granted before 1 September 1974 and for a
period of not less than one hundred and seventy five years. Where
a lease contains a provision requiring the landlord to
renew, the renewed period is to be added to the original duration
when determining whether or not the lease period exceeds one
hundred and seventy five years.
Which casualties remain
subsisting and enforceable?
Casualties in leases having durations of less than one
hundred and seventy five years which were executed prior to 1
September 1974 remain subsisting and enforceable and must, on
registration of the tenant’s interest, be entered in the
burdens section of the title sheet.
Date of extinction
The date of extinction of those casualties rendered void
by the 2001 Act is 10 May 2000.
Registration implications
First registration and transfer of part applications
If the date of entry of the assignee in the assignation or partial assignation which induces registration is on or after 10 May 2000, any void casualty provisions contained in the lease or parent title should be omitted from the burdens section of the new title sheet.
Dealings with Whole
Where an assignee has taken entry after 10 May 2000, the Keeper will edit any void casualty provisions out of the burdens section if requested to do so at the time of a dealing with the whole. If no request for removal is made, the Keeper’s policy is not to devote any time to checking for extinct casualty provisions at this stage. Any extinct terms which remain on the register will be ‘mopped up’ during the re-examination of every burdens section which will follow the enactment of the Title Conditions Bill.
Request for removal of casualty without dealing
Any tenant of a registered interest who wishes a casualty provision removed other than at the time of a dealing with the subjects may apply for rectification. Such applications should be made on Form 9 and the appropriate fee will be payable.
Copy in certificate
In any instances where the lease is bound into the Land Certificate ‘copy in certificate’ and casualty provisions would otherwise be omitted or removed, as appropriate, the following note may be added to the entry for the lease in the burdens section:
Note: The casualty provisions in the foregoing lease were rendered void from 10 May 2000 by section 1(1) of the Leasehold Casualties (Scotland) Act 2001.
Any irritancy clause in a lease should normally be included in full in the relevant entry in the burdens section. The only exception is where the irritancy clause is rendered unenforceable by virtue of section 5 of the Leasehold Casualties (Scotland) Act 2001 (see Irritancy). In that exceptional case, the irritancy clause will be handled as follows:
First registration and transfer of part applications
If the date of entry of the assignee in the assignation or partial assignation which induces registration is on or after 10 May 2000, any void irritancy clause contained in the lease or parent title should be omitted from the burdens section of the new title sheet.
Dealings with Whole
Where an assignee has taken entry after 10 May 2000, the Keeper will edit any void irritancy provisions out of the burdens section if requested to do so at the time of a dealing with the whole. If no request for removal is made, the Keeper’s policy is not to devote any time to checking for extinct irritancy provisions at this stage. Any extinct terms which remain on the register will be ‘mopped up’ during the re-examination of every burdens section which will follow the enactment of the Title Conditions Bill.
Request for removal of irritancy clause without dealing
Any tenant of a registered interest who wishes an irritancy provision removed other than at the time of a dealing with the subjects may apply for rectification. Such applications should be made on Form 9 and the appropriate fee will be payable.
Copy in certificate
In any instances where the lease is bound into the Land Certificate ‘copy in certificate’ and irritancy provisions would otherwise be omitted or removed, as appropriate, the following note may be added to the entry for the lease in the burdens section:
It is stressed, however, that the omission or removal of irritancy provisions is appropriate only where the lease fulfils the three requirements in section 5 of the 2001 Act.
Conditions may be discharged, modified, etc. by minutes of agreement or waiver etc. and also (under certain exceptions) by an order of the Lands Tribunal (see Part I of 1970 Act).
(e) Creation of real conditions in leasehold property
In the past, considerable doubt existed as to whether it is competent to create conditions which will affect leasehold property in any deed other than the lease itself. Accordingly the original practice was to insert a note after any burdens entry for a partial assignation or deed of conditions which purported to impose conditions on leasehold property, to the effect that the conditions contained therein had not been made real. When a registration officer is processing a dealing where the existing title sheet contains such a note, the note should be removed.
Section 3 of the Law Reform (Miscellaneous Provisions)
(Scotland) Act 1985 provided that it shall always have been competent to impose
conditions in an assignation or deed of conditions affecting leasehold property.
The conditions in partial assignations and deeds of conditions affecting property
held on a long lease can therefore be treated in the same way as conditions
in dispositions or deeds of conditions affecting property. The leaseholder cannot
create heritable servitude rights however and where a deed purports to create
these they should be referred to a Senior Caseworker.
(f) Burdens affecting the landlord’s title
When the landlord’s title is subject to feuing conditions and/or other burdens, such conditions are capable of being enforced against the tenant and must therefore be disclosed in the tenant’s title sheet. Failure to disclose feuing conditions etc. could mean that a superior, although able to irritate the feu against his feuar (the landlord), would be unable to proceed against the tenant’s interest and consequently would have a claim upon the Keeper’s indemnity. The burdens section of a leasehold title should therefore reflect the various burdens appearing in the landlord’s title sheet subject only to the elimination of burdens which are irrelevant e.g. because of geographical location.
(g) Burdens section of the landlord’s title sheet
In view of the terms of Section 12(3)(m) of the 1979 Act, where the landlord’s title is registered, no attempt will be made to disclose in the landlord's title sheet any of the feuing conditions or conditions of lease which he has a right to enforce, or obligations in favour of the feuar or lessee which he undertakes. There will, however, be inserted in the burdens section an entry in the following form:
Any rights granted in leases over unleased parts of the landlord's title will be disclosed in the burdens section of the landlord’s title sheet in addition to the above note. The entry will be in the following style:
19.16 Deeds which include colour photographs
There have been several instances where one or more pages of colour photographs have formed part of a schedule in a lease forming the deed inducing registration. These photographs are being used to show pictorially the state of repair of the property at the time of granting the lease, as a basis for the maintenance provisions between landlord and tenant. In registering such cases, the copy in certificate method is the norm.
Initially, a procedure was devised whereby the applicant’s agent was asked to supply the requisite number of colour copies of such photographs for land registration purposes or to pay the cost of the Agency’s providing such copies. After further consideration, it has been decided that colour reproduction of such photographs as part of the Land Register process is not justified in relation to any perceived benefit arising therefrom.
Therefore, where such colour photographs appear in any deed which accompanies an application for registration and require to be copied, Reprographic Section will be instructed (as in the normal course of events) to reproduce those photographs in monochrome (black and white); this will apply for all purposes, e.g. copy in certificate, subsequent office copies etc. The legal registration officer will insert a note under the appropriate entry in the burdens section of the title sheet, e.g.:
The one exception to the above rule will be where the deed identifies a feature by referring specifically to a colour or colours in a photograph annexed to the deed. In such a case, the legal registration officer must consider if colour reproduction of the photograph is required or if some other method of identification of the feature is possible.
19.17 Leasehold Titles - Burdens Section Entries - Styles of Preambles
Lease (Sub-lease) (referred
to in the Property Section) (for ------ years from -------) by A to B and his
heirs and assignees, recorded (or registered) --------, of ------------, of
which the subjects in this title form part, contains the following burdens,
conditions and rights:
[ ]
Assignation of the (Lease ) in Entry ----- [but only to extent of ---------,
of which the subjects in this title form part] by A to B and his heirs and assignees,
recorded (or registered) -------------, contains the following burdens, conditions
and rights:
[ ]
Lease for xxx years from xxx by A to B recorded xxx of xxx contains the following
burdens, conditions and rights which subsist notwithstanding the extinguishment
of said Lease confusione, viz.
Note that the reference to the deed containing "burdens, conditions and
rights" should be amended to reflect the specifics of the application being
processed.
End of Topic