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The end of deeds of conditions?

18 January 16

A new Lands Tribunal decision has placed a further obstacle in the way of developers seeking to impose maintenance burdens by deed of conditions. Is it time for a different approach?

by Andrew Todd

Across Scotland you will find landscaped and lawned spaces, woodlands and children’s play areas next to new (and not so new) homes. During the summer, you’ll hear the hum of mowers, or the whirr of strimmers, as workmen keep areas cut, clean, tidy and safe.

Some areas will be publicly adopted, maintained by the local council and paid for by your council tax. Others are not, and local residents will pay factors instead. Factoring seems a simple arrangement: a factor is appointed to carry out work on behalf of all residents. But this simple arrangement can become very complicated when residents and factors fall out, as a recent case before the Lands Tribunal for Scotland, Marriott v Greenbelt Group Ltd (LTS/TC/2014/27, 2 December 2015), has shown.

Background

The Greenbelt company is one of the UK’s biggest factors – it specialises in owning and caring for open spaces in housing developments, a type of factoring known as the “landownership model”. This involves developers (i) transferring all open space to Greenbelt so that it owns it; and (ii) imposing title conditions on residents to make them responsible for paying maintenance fees.

Michael Marriott was a customer of Bett Homes. He bought a new home in a development in Menstrie in 2005. The development had open spaces which were owned and maintained by Greenbelt under the landownership model. Marriott’s title deeds included a deed of conditions which required him to pay a maintenance charge. Marriott objected to the charge and raised an action against Greenbelt on six grounds. This article will look at two of those grounds.

First ground: illegal monopoly

Marriott argued that if the residents were unhappy with their factor, they could not sack them and appoint another. They had to use Greenbelt, as Greenbelt was the owner of the benefited property that enforced the maintenance burdens.

Marriott argued that this position in effect created a monopoly, and that the maintenance real burden charging costs back to residents was invalid under s 3(7) of the Title Conditions (Scotland) Act 2003. This section prohibits real burdens that create a monopoly.

By a majority the Tribunal rejected this argument. It focused on the word “create”. It said that the burden did not create a monopoly. The monopoly already existed as a result of the Greenbelt Company owning the benefited property. The maintenance burden was implementing an existing monopoly – a monopoly which was justifiable as all owners have a monopoly over how they use their own property.

Accordingly, the Tribunal’s decision supports the landownership model of factoring on this point. However, all was not lost to the applicants.

Second ground: void for uncertainty

A burden has to be contained within the “four corners of the deed”. With certain very narrow exceptions, you cannot refer to other documents when setting out what a real burden means. This is only fair. Anyone should be able to pick up a title deed and know exactly what they are buying.

Marriott argued that the maintenance burdens were unclear because they breached the “four corners” rule. They defined the open space by referring to a planning permission; and costs were capped by reference to an index in the Financial Times. Marriott argued that by referring to these external documents, the real burdens were unclear and therefore invalid.

The Tribunal agreed. While Greenbelt tried to argue that the 2003 Act had weakened the “four corners” rule, the Tribunal reaffirmed that real burdens had to be clear, precise and set out in the titles themselves.

Accordingly, burdens which required Marriott to pay to maintain an area of ground defined by external documents were unclear and therefore invalid.

What does this mean for developers?

This decision reinforces the need for developers to define exactly what the open areas of a development will be before the first customer moves in and receives a title. If the open areas are not defined, the factoring arrangements could be invalid through uncertainty.

What does it mean for people buying homes?

New homes: This case highlights the need to identify whether common areas have been defined correctly. If not, you could find that customers are buying homes in areas where factoring arrangements will not work and they could be left in developments with open spaces that will not be maintained.

Existing developments: In practice, factors continue to charge residents for maintaining open space whether there is a legal basis for it or not. Most people are happy to pay someone to take responsibility for it, provided they feel they are getting value for money. The problems arise when customers and factors fall out. If you are buying a property which has factoring arrangements, you should let your client (and lender) know if the arrangements could be challenged, as they too could be left with open spaces that may not be maintained.

What next?

This decision, along with the earlier Lands Tribunal decisions of PMP Plus 2009 SLT (Lands Tr) 2 and Lundin Homes 2013 SLT (Lands Tr) 73 (see “Here comes the flood?”, Journal, October 2013, 33), have created big problems for anyone creating or examining titles with open spaces. While, in an ideal world, developers would set out exactly what they will build at the start of their development, as the housing market changes and years pass, customers want different types of homes. Plans change, layouts change and title needs to be able to change with it. We need laws which are dynamic to reflect the reality of building new homes throughout Scotland. Unfortunately, as this decision, PMP Plus and Lundin Homes have shown, real burdens in deeds of conditions are not dynamic and are quick to break under pressure.

Instead I believe we should manage open spaces using development management schemes – the statutory framework for management and maintenance of shared facilities. This is specifically designed to give developers flexibility, and house buyers control of the factor, maintenance and charges. In short, after three strikes, deeds of conditions for open spaces must surely be on the way out. 

Andrew Todd is in-house solicitor with Springfield Properties plc

Have your say


Your comment

Stewart Ferguson

Monday February 8, 2016, 21:16

Interesting article. I note in particular the statement that factors often continue to act whether there is a legal basis or not. I am involved in trying to oust "factors" or "managers" who have acted as such without legal authority for some 10 years plus - arranging for the cutting of grass being front gardens and not "open space" - the gardens were bizarrely declared to be a matter of common maintenance in the title deeds! They do so on the basis that most of the home owners mistakenly believe they remain liable to the factors. I don't think dishonesty on the part of factors should be so casually accepted.


RegLope

Thursday March 31, 2016, 11:56

A very interesting article, indeed. It is shocking the way GreenBelt has interpreted the court ruling (see their website).

Stewart Ferguson also raises a fair point by questioning why homeowners and local authorities accept some dubious practices from factors.

I would be interested in hearing from other homeowners with an interest in using the ruling of the Lands Tribunal as a precedent for challenging the MONOPOLY of factors and the lack of transparency around their charges, and the way contracts are awarded to them.

Feel free to contact me at regpez@gmail.com.

Thanks


Richard

Friday June 10, 2016, 22:00

I have lived in my house from new and moved in 2008 and have had no contact from Greenbelt until the end of last year when a bill appeared for £300+! Then in Feb another bill with late fees appeared and a few more appeared March, April but I returned them unopened and another this month now at £700+ with late fees for maintenance land around me - the nearest green area to me is a hill three streets away and is maintained or at least has been sometimes by council works clearly dressed - so not sure what Greenbelt are trying to ask for money round this way? I shall continue to ignore their letters returning them unopened.

Why it took them so long to charge for their services in all the years I've lived here I am not sure.


Jonnox

Sunday June 19, 2016, 16:05

Due to lack of transparency regarding charges from Greenbelt and work carried out at an unacceptable standard, I have refused to pay.

I now find myself summoned to a small claims court. I find this information very interesting and will be looking at ways of presenting my case around this one.


Cathy Priestley

Friday July 8, 2016, 17:27

It seems to me that the bigger picture is around land banking, or why not release the land as common hold after the development is finished? Much of this green space land is a public amenity of which the residents do not have exclusive use, yet they still pay full council tax. It is like creeping privatisation of public open space paid for by those who live on the developments.

Anyone interested in a newly formed UK network campaigning for change could take a look at www.homeownersrights.net


Just another, feeling exploited without reward in Kent

Saturday July 30, 2016, 13:37

Based on what is written here, I'm no longer amazed by odd things I've noticed about GreenBelt. They have left a bitter taste in the mouths of a few people here at the Herne Bay area of Kent. I will definitely be reaching out to you RegLope


Paul Scott

Monday August 1, 2016, 10:44

We are in a similar situation with Greenbelt who have suddenly issued huge charges and late payment fees equating to £45k to 310 residents for maintaining some very small green areas on our development (built in 2011) despite a maintenance company already in place. We cannot understand why a company in Scotland has been engaged for our development in East Kent 450 miles away. As yet none of this work has been carried out.


Thomas Miller

Saturday August 20, 2016, 15:13

miller homes keepers gate

Greenbelt don't do the work they charge for,

there were 12 men doing the work, now there are two and they sit in their van most of the time,

factoring charges have almost doubled from last year, more land to maintain, bigger bills to send out,

a completely dishonest and fraudulent service,

it is in your title deeds so pay up and shut up,

they don't answer to anyone,

and when you challenge them,

it is a waste of time


Jean Ferguson

Friday August 26, 2016, 15:59

One of the questions I have is whether it's possible to secure justice in a Land Court crawling with Scottish Government officials and people with deep ties to the building industry.

Very hard reading this verdict to see how the legal arguments on the monopoly and dominant position etc could have failed.

You only have to read the language in the verdict to see that the general feeling of the panel was that it was very naughty of the little people to get out of their box.

Blind justice? I suspect not.


William Ashe

Monday September 12, 2016, 10:54

Nice scam having someone else pay to have your grounds maintained, this is why the councils have to be taken to task and the jobs for life contracted out.


Arthur Lynch

Friday September 16, 2016, 22:20

Our residents' association (in Scotland) is on this journey. What really gets me is that our community charge is full up and gives no consideration to the fact that we will be paying a factor and a land manager for services that our local authority are also being paid to provide. Thus we are paying twice and by paying twice we are in essence subsidising the local authority.

I wonder what would happen if the residents en masse refuse to pay the land manager and the factor (with prior notice). How long would the respective contractors be prepared to do the work unpaid?

It's time this legalised theft was stopped!!


Abex

Tuesday September 20, 2016, 11:52

I, like yourself Jonnox now find myself summoned to a small claims court.

Have you had your day in court Jonnox? If so how did you get on?


Jonnox

Thursday September 22, 2016, 22:49

Went to court, judge has put case to a proof hearing, this will take place in 2 months.


TN

Sunday November 20, 2016, 16:07

I completed purchase of my property in February of this year, initially viewing it in October 2015. It was noticeable even then that the landscaped areas around the property - supposedly 'maintained' by Greenbelt, were a disgrace. Some areas were nothing more than compacted mud, and have remained so. I have recently refused to pay a £150 invoice sent to me by Greenbelt, and am now being threatened by Court action. I have informed Greenbelt that I will not be paying their invoice until work has been completed. I'd be interested in talking to anyone who's had a similarly negative experience.


Another GB "customer"

Wednesday November 23, 2016, 18:46

We received our welcome letter from GB in 2011, and our first bill in 2012 (for 2011 AND 2012 as they like to charge upfront, even anticipating charges for antisocial behaviour and fly-tipping...). 2013 bill arrived to see that they had doubled the AMC from October onwards. Our deeds state that all price increases should be no more than that of the retail price index for 5 years, after which the following year they can align (if necessary) with the current costs of someone maintaining their land. We get threatened every year with court action, saying we must abide by the terms in our title deeds.. well, sorry to say Alex Middleton.. but if we have to.. then YOU have to. Just one of many factors as to why I've refused to pay my bill for the last 3 years, and will continue to do so. I urge EVERYONE to take a look at www.homeownersrights.net, and sign up to the Facebook page. Makes for great reading especially knowing that Mr Middleton's moles have infiltrated it, so now and again we can have some fun. Time we gave him and the rest of his fatcats a Christmas to remember.


John Reid

Wednesday December 7, 2016, 19:39

Greenbelt are a disgrace and the worst company I've ever had to deal with. I can understand why they have problems, the man running the company for starters, Alex Middleton who I personally have found to be a very ignorant man.

This company is a money machine and seems to have its own law?

The work we pay for is a disgrace, but the biggest ripoff is the once monthly visit by Greenbelt's operations manager. I've never seen this man leave his pickup. I've tried for the past 3-4 years to speak to him, but he will not meet me, he also is a very ignorant man, so with guys like this running the company, you then get to understand why they have problems.


Andy

Wednesday February 1, 2017, 18:21

We are currently going through the small claims court with Greenbelt. They decided after 15 years, to finally take us to court for non payment. It was adjourned for 6 weeks to give them chance to bring more evidence. Just waiting to hear something now. Interestingly I hear a lot of Scottish homeowners have had their deeds amended this week so hopefully it's the start of something bigger.


Scott Mclean

Friday March 3, 2017, 13:40

I have various disputes with Greenbelt group over the years regarding the quality of work and what it is they are actually maintaining. Over the past few years home owners on my estate have taken over areas which were on the maintenance schedule and monoblocked them to increase driveways etc. I have questioned this many times and never got an answer until today 03/03/2017 when I was told that they have sold these areas of land to the house owners. I was very surprised by this because I did not think they owned them but it seems that they do, however I am not sure that this type of ownership allows them to sell the land? I pointed out that if this was indeed the case then the fees should be reduced accordingly taking into account areas that they are charging for but not maintaining. Needless to say I was told they had allowed for this but not shown it on the bill anywhere, so would appreciate if anyone could tell me if they are in fact allowed to sell off sections of land?


John Cooper

Monday April 24, 2017, 13:40

Feel free to join our Facebook page. Search "unhappy Greenbelt Group Customers". Please be prepared to provide ID to an admin to stop non-customers applying to join.


David Sutherland

Sunday June 25, 2017, 11:06

I have been in dispute with Greenbelt Group for 4 years now and very much sick of it. They have wrecked our enjoyment of our home and we will probably have to move house to get rid of them.

We believe they are in breach of The Unfair Terms in Consumer Contracts Regulations 1999 e.g. section 5 (1) (2) (3) (4) (5) to mention just a few.

We have written to the Scottish Government and Registers of Scotland who really have not been helpful.

As a lay person I am continuing to try and make my case and will be writing to Registers of Scotland again.

Regards

David


Thomas miller

Tuesday August 15, 2017, 06:18

Another year another green belt bill,2017 Aug

Greenbelt and their contractors should be investigated

By police Scotland

For charging for work they don't do.

You have to get out the van,

That would be a good starting point.

There was a bottle stuck in the hedge for months,

When they came to cut the hedge, they cut round the bottle

And left it in the hedge.

The test case had no impact on anything Greenbelt do

Pity.