You need to act fast to preserve rights, says Frances Rooney
PROPERTY solicitors are facing another important change to the law surrounding title conditions – and the deadline is fast approaching.
Under the Title Conditions (Scotland) Act 2003 (the “Act”), many rights to enforce certain existing title conditions will automatically come to an end on 28 November, 2014.
There is however a chance to preserve these rights, provided that the statutory procedure has been followed by 27 November, 2014.
Not all title conditions will be affected by the deadline. Any created under the Act, that is, on or after 28 November, 2004, are unaffected. Positive servitudes, and servitude conditions, are not affected either.
However, real burdens and negative servitudes created before the appointed day, may be at risk.
Categorisation of a title condition is therefore crucial. However the (then competent) lack of specification in older deeds, the overlapping between categories, and the interaction between the old common law and the new statutory rules means that this is not always straightforward.
Yet it is necessary to decide for any title conditions potentially at risk of being lost whether they are preserved by the Act automatically or not. This is because only real burdens and negative servitudes are at risk.
Real burdens have always required a benefited property and a burdened property. However, until the Act came into force, it was not necessary to identify the benefited property in a deed creating a burden. Various common law rules therefore evolved to deal with the situation and to imply which parties had enforcement rights.
Under the Act, all implied rights of enforcement under the common law will end on 28 November, 2014. The Act does include certain statutory replacements for some of the old rules and also creates new statutory enforcement rights.
However, there are still gaps between the common law and the statute, and this means that many rights to enforce real burdens will end this year.
There is a chance to preserve these rights before 28 November, 2014.
Negative servitudes are not always easy to spot. Some, such as right to light, are simpler than others. However certain building restrictions also fall within the scope of negative servitudes.
This may be the case whether or not the word “servitude” was employed in the relevant deed.
The Act temporarily converted negative servitudes into real burdens for the ten-year transitional period. When that ends, many (though not all) negative servitudes will be swept away entirely unless the relevant notices have been lodged to preserve them.
The procedure for preserving rights is set out in the Act, but the main steps are: 1. Identify title conditions to be preserved; 2. Identify benefited and burdened property owners; 3. Prepare notice using the statutory form; 4. Send an unsigned copy of the notice (and annexures) to every burdened owner; 5. Arrange signature and swearing oath by the benefited owner before a Notary Public; and 6. Dual register the notice no later than the deadline of 27 November, 2014.
The ramifications of this deadline will continue to be felt long afterwards.
While registering a notice under the Act will not resurrect an otherwise unenforceable condition, the risk of not preserving rights is self- evident.
Many title conditions which are enforceable at present may not be in a few months’ time – whether or not they continue to appear on a Land Certificate.
Moreover, once the Land Registration etc (Scotland) Act 2012 comes into force in December, the Keeper will have a duty to rectify where there is a manifest error in the Land Register.
This may well provide a chance for solicitors to request that some title conditions are cleared from the Register where the relevant notice was not lodged in time.
If a landowner requires advice on this matter, a solicitor needs to examine the relevant title to determine whether the title condition is of a category which is affected and whether the wording and underlying common law rules put that particular condition into the high risk category.
If it is potentially affected, the solicitor then needs to consider whether it has in any case already been preserved under the new statutory rules. Then, the notice and registration procedure needs to be followed.
Time is running out, and owners and their solicitors must therefore act now if they are concerned at the potential impact. • Frances Rooney is an associate at Harper Macleod LLP, www.harpermacleod.co.uk