The new law of real burdens

Fourth of six-part article on the law of real burdens post-feudal abolition

The Journal, April 2004, page 58

As regards the duration of real burdens, section 7 of the 2003 Act restates the common law position that real burdens subsist in perpetuity unless the constitutive deed provides for a specific period or unless the “sunset rule”, which will be mentioned briefly next month, applies.

Title and interest to enforce

With regard to enforceability, section 8 contains some important new provisions with regard to title and interest to enforce. Subsection (1) provides that a real burden “is enforceable by any person who has both title and interest to enforce it”. That is the existing legal rule, but subsection (2) goes on to provide that in addition to the owner of the benefited property the following persons are by statute deemed to have title to enforce. These are:

• a person who has a real right of lease or proper liferent in the benefited property or a pro indiviso share in such right;
• the non-entitled spouse of an owner of the benefited property, or of a leaseholder or proper liferenter of the benefited property and who has occupancy rights in it; and
• any person who was at the time when an obligation to defray or contribute towards some cost arose, the owner of the benefited property or one of the other individuals mentioned immediately above.

However, the only person who has title to enforce a real burden consisting of a right of pre-emption, redemption, reversion or any other type of option to acquire the burdened property is the owner of the benefited property.

The other arm of the right to enforce, namely an interest to do so is contained in subsection (3) of section 8 which provides that a person has such interest if:

• in the circumstances of any case, failure to comply with the real burden is resulting in, or will result in, material detriment to the value or enjoyment of the person’s ownership of, or right in, the benefited property; or
• the real burden being an affirmative burden created as an obligation to defray or contribute towards some cost, he seeks (and has grounds to seek) payment of, or as respects, that cost.

It should be noted that there is no definition in the Act of what may constitute “material detriment”, but it is anticipated that each case will require to be judged on its facts and circumstances.

Enforcing affirmative burdens

Section 9 provides that an affirmative burden is enforceable against the owner of the burdened property while a negative burden or an ancillary burden is enforceable against not only the owner but also the tenant or any other person having the use of the burdened property. In the case of affirmative burdens, the former owner of the burdened property remains primarily liable for implementation of an obligation to do something or to pay or contribute to the cost of any works on the burdened property which arose during his or her period of ownership. Section 10 does however provide that the incoming owner is severally liable with the former owner for implementation of the particular obligation. Again, as regards affirmative burdens, section 11 contains a new provision to the effect that unless the constitutive deed provides otherwise, when a burdened property whether before or after the appointed day is divided into two or more parts, liability for performance of the obligation is apportioned on the basis of the respective areas of the subdivided property, “floor areas” being substituted for “areas” in the case of a burdened property which is divided into flats in a building which becomes a tenement.

Conversely, section 12 provides that where part of a benefited property is sold or otherwise conveyed, that part ceases to be a benefited property unless otherwise provided in the conveyance.

Implied rights of enforcement

As previously mentioned, in the case of burdens created after the appointed day there must, unless the burden is either a community burden or a personal real burden, in every case be a burdened property and a benefited property and the burdens require to be registered against both properties in the Land Register or the Sasine Register. That being so, it was obviously essential that the Act should contain transitional provisions enabling benefited proprietors not specifically identified in constitutive deeds registered or recorded prior to the appointed day to continue to enforce real burdens thereafter. While section 49(1) abolishes any rule of law whereby land may be a benefited property by implication, subsection (2) of section 49 and section 50 provide that any person who considers that he may be a benefited proprietor by implication is allowed a period of 10 years from the appointed day within which to execute and register a note of preservation of a real burden in the form set out in schedule 7 to the 2003 Act.

The facility is not applicable to real burdens which have been imposed under a common scheme affecting both the burdened and the benefited property but is designed specifically to preserve the implied rights under the Mactaggart rule ((1906) 8F 1101) whereby C may continue to enforce real burdens against B where B is the burdened proprietor in a conveyance of part of A’s land and C is the subsequent purchaser of A’s retained land.

Implied rights and common schemes

Considerably more problematical are the provisions with regard to preservation of burdens created in deeds registered before the appointed day where real burdens are imposed under a common scheme. These provisions are designed as a statutory replacement for the rule in Hislop v MacRitchie’s Trustees (1881) 8R (HL) 95 and the provisions are to be found in sections 52, 53 and 57. Section 52 sets out the general proposition that where real burdens are imposed under a common scheme by a deed registered before the appointed day and the constitutive deed expressly or impliedly refers to the existence of the common scheme, all units subject to the common scheme are to be benefited properties as well as burdened properties in relation to the real burdens. That general proposition is modified by subsection (2) which makes it clear that the proposition only applies if the constitutive deed contains no express or implied provision to the contrary, for example by reservation of a right to vary or waive the real burdens.

More importantly, section 53 introduces the concept of related properties in a common scheme again where burdens have been imposed under a constitutive deed registered before the appointed day. Whether or not properties are related properties is to be inferred from all the circumstances and subsection (2) goes on to detail circumstances which might give rise to such inference. These are four in number being, first, the convenience of managing the properties together because they share some common feature or an obligation for common maintenance of some facility; secondly, there being shared ownership of common property; thirdly, their being subject to the common scheme by virtue of the same deed of conditions; or, fourthly, each of the properties being a flat in the same tenement.

Finally, on the matter of new implied rights of enforcement it should be mentioned that sections 54 and 55 make special provision for reciprocal enforcement rights of real burdens imposed on individual units within sheltered or retirement housing developments created in a constitutive deed registered before the appointed day.