Flashcards in Head 18: Real Burdens Deck (80):
What are real burdens?
Real burdens are positive and negative obligations affecting the burdened property. They require something to be done or not to be done.
Typical examples of burdens which impose restrictions are ones which prevent trading from a residential property or prohibit alterations.
A real burden is an obligation either to do something ('affirmative burden[ E.g. maintaining a fence or a wall. Or to insure the property. Or to share the cost of maintenance.]') or not to do something ('negative burden[ E.g. not to trade, not to build above a certain height, not to keep animals in the property.]') (s 2 TCA 2003). In general real burdens cannot give a right to use or enter the burdened property (this is the role of servitudes). Negative burdens have replaced negative servitudes.
How are real burdens similar to servitudes?
Like servitudes there is a ‘benefitted property’ and a ‘burdened property’. Real burdens also ‘run with the land’. The types of obligations imposed by real burdens could also be created by simple contract but a contract would not bind successor owners.
Quite often a praedial real burden looks much like a servitude, ie it is enforceable by the owners etc of a single benefited property against the owners etc of a single burdened property. And as with servitudes, there is sometimes more than one benefited property.
How do real burdens differ from servitudes?
Unlike servitudes, real burdens are in effect codified (under the TCA 2003 - part 1 in particular which regulates creation, enforcement and extinction.) so the older case law often remains relevant.
Why did real burdens develop?
⁃ Servitudes cannot impose a positive obligation. And even although servitudes could impose some negative conditions under Roman law, the scope of this was limited (to things like not building).
⁃ Real burdens also developed in the context of the feudal system. Superiors were often the benefited proprietors.
How are real burdens classified?
Almost always, real burdens are praedial (i.e. for the benefit of a benefited property[ E.g. A has the right to recover half the cost of maintaining the boundary fence between his neighbour B due to a real burden. The real burden is in favour of A's property.]).
But unlike servitudes, it is also possible to have personal real burdens (i.e. a burden without a benefited property which are enforceable by a particular person) (discussed below). These have only been possible since the TCA 2003 s 1. They are far less common than praedial real burdens and the emphasis here is on praedial real burdens.
s 1 TCA 2003
⁃ "(1) A real burden is an encumbrance on land constituted in favour of the owner of other land in that person's capacity as owner of that other land.
⁃ (2) In relation to a real burden-- (a) the encumbered land is known as the "burdened property"; and (b)the other land is known as the "benefited property".
⁃ (3)Notwithstanding subsections (1) and (2) above, the expression "real burden" includes a personal real burden; that is to say a conservation burden, a rural housing burden, a maritime burden, an economic development burden, a health care burden, a manager burden, a personal pre-emption burden and a personal redemption burden (being burdens constituted in favour of a person other than by reference to the person's capacity as owner of any land)."
What is a subdivision?
ie the now benefited and burdened properties were originally joined in single ownership and the land is sold as a separate unit for the first time). It is possible in this case for the burdens to be non-reciprocal, i.e. enforceable by one party only. And it is possible for there to be more than one benefitted property, i.e. enforceable by the neighbours.
What is a common scheme?
a group or community of properties and are reciprocally enforceable within that group or community (this usually works by something called a 'deed of conditions'). Typical examples are housing estates and blocks of flats. Each property is then both a benefited and a burdened property. These reciprocal burdens are called ‘community burdens’. These special rules apply only to this type of burden.
NB: The distinction between common scheme cases and subdivision cases is fundamental to the working of the TCA 2003.
When are real burdens created?
In practice, real burdens are rarely created other than where land is being sold.
What are ancillary burdens?
(s 2(3)). These are servitude-like in that they allow you to make limited use of the burdened property but this must be tied to another burden (it cannot stand on its own). An example would be the right to enter the burdened property (ancillary) to check it is being maintained (main burden).
What are the various conditions under s 3?
Under s 3 there are various conditions: (s 3(1)-(4) are positive; [s 3(5) skipped] s 3(6)-(8) are negative)
⁃ s 3(1) a real burden must relate in some way to the burdened property and not simply the person who owns that property (i.e. it must be praedial, not simply personal)
⁃ s 3(2) the relationship may be direct or indirect[ E.g. the duties of all the flats in the tenement to maintain the roof. The ground floor flats aren't beside the roof but they are sufficiently close to be indirectly obligated to maintain the roof.] but shall not merely be that the obligated person is the owner of the burdened property (so you cannot say that the owner of the property for the time being must sing a song to me over the fence every night; the burden must be tied to the property in terms of the content)
⁃ s 3(3) in a case in which there is a benefited property, a real burden must, unless it is a community burden, be for the benefit of that property
⁃ s 3(4) a community burden may be for the benefit of the community to which it relates or of some part of that community (so in the development case, it may be for the benefit of the community as a whole rather than an individual benefitted property (e.g. tenement being factored)
⁃ s 3(6) a real burden must not be contrary to public policy as for example an unreasonable restraint of trade[ This is dealt with on a case by case basis.] and must not be repugnant with ownership[ I.e. it mustn't be so invasive that the proprietor of the burdened property can't exercise his rights. So a burden stopping you selling or leasing the property would not be valid.] (nor must it be illegal[ E.g. a real burden that only white people live in the property would contravene race discrimination legislation.])
⁃ s 3(7) except in so far as expressly permitted by this Act, a real burden must not have the effect of creating a monopoly[ E.g. a provision which required a certain company must always be the 'factor'. Or that a certain company must always provide security guards for the property.] (as for example, by providing for a particular person to be or to appoint--
⁃ (a) the manager of property; or
⁃ (b) the supplier of any services in relation to property).
⁃ s 3(8) it shall not be competent--
⁃ (a) to make in the constitutive deed provision; or
⁃ (b) to import under section 6(1) of this Act terms which include provision,
⁃ to the effect that a person other than the holder of the burden may waive compliance with, or mitigate or otherwise vary, a condition of the burden[ This means that you can't put a condition in the deed saying that a third party can enforce a burden.].
Is there a fixed list of real burdens?
There is no fixed list of real burdens. Subject to the conditions as to content (must impose only positive or negative obligations), you can invent any real burden you fancy.
How is the creation of burdens regulated?
Creation of real burdens is regulated by s 4 of the Act.
How are real burdens created?
Real burdens are always [Never by positive prescription.] created by dual registration (against both the benefited and burdened properties (s 4(5))).
A real burned must be created in a deed, which is registered against both the title of the benefitted property and that of the burdened property. The deed which creates burdens is known as a constitutive deed[ Under the old law a conveyance or deed of conditions was required, but any deed is sufficient now.]. It must describe both properties or the community in the case of community burdens.
Although this can be any deed, in practice it still tends to be conveyances (if subdivision) and deeds of conditions (if a builder over a common scheme). However there is no restriction in the type of deed used to create real burned after 28 November 2004.
⁃ One example of where you can use a different type of deed (which wasn't possible under the old law) is a deed discharging an existing burden which is known as a minute of waiver, but imposing a new burden instead.
How does dual registration requirement affect the creation of common scheme real burdens?
For the common scheme this will involve registering against a community (so the single deed will be registered against the community). NB the nemo plus rule applies which means you can only impose burdens on property which you own. Thus the builder burdens the properties before the builder sells them.
What are the rules about what the deed must contain?
1) the full terms of the burden (‘four corners of the deed’ rule)
⁃ In principle the full terms of the real burden must be set out within the 'four corners' of the constitutive deed.
⁃ Aberdeen Varieties v James Donald 1939
⁃ Two theatres were owned by the same company. One of the theatres was sold off but the other was kept. The company wanted to stop the one which they sold being used as a theatre. So they imposed a clause[ '[the property] shall not be used in all time coming for the performance of pantomime, melodrama or comic opera or any stage play which requires to be submitted to the Lord Chamberlain under the Act for regulating Theatres 6th & 7th Vict c 68 .'.] to prevent the sold theatre being used as a theatre. But because they had referred to an Act of Parliament but failed to set out the whole terms of the Act, it was held that this was not a valid real burden (i.e. they had failed to set out the full terms of the burden.) The deed would have had to copy out the full terms of the statute to create a valid real burden.
⁃ NB this rule from Aberdeen Varieties has slightly been relaxed by s 5 of the TCA which states that where you are referring to public documents or statutes for the purposes of maintenance burdens, you do not have to set out the full terms of that document. A ‘public document’ means ‘an enactment or a public register to which the public readily has access’. (Aimed particularly at burdens providing of rate maintenance of tenements which apportion liability on the basis of rateable value or feu duty).
2) a description of the benefited and burdened properties
⁃ It must be clear what is benefited and what is burdened (by means of a map/plan)
3) the words 'real burden' or equivalent must be used
⁃ This is obligatory. So the general rule is that you must state that it is a 'real burden' but in some cases an equivalent is sufficient: 'equivalent' could be a named type of burden such as a conversation burden.
When do real burdens cease to have contractual effect?
On registration, burdens cease to have contractual effect (s 61) (so they can only be enforced under the law of real burdens rather than contract law.)
Does the nemo plus rule apply to real burdens?
Yes - the land can be burdened only by the owner.
What happens when the real burden is silent as to how long it is to last?
It is presumed to be perpetual (s 7), subject to the rules of extinction.
Who can enforce real burdens?
Any person with proven both title and interest (s 8(1))
Who has title?
Title is tied to the benefited property. The owner of the property has title and also a person with a real right of lease, proper liferent, the non-entitled spouse or civil partner of an owner of the benefited property with occupancy rights. (s 8(2))
Who has interest?
Interest is defined in s 8(3). A person has interest to enforce if:
(a) in the circumstances of the case[ So its taken on a case by case basis.], 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
(b) the real burden being an affirmative burden created as an obligation to defray, or contribute towards, some cost, that person seeks (and has grounds to seek) payment of, or as respects, that cost.
What are the two things to consider with regards to 'material detriment'?
1. the greater the distance from the burdened property, the less likely the breach is to cause material detriment (and thus the less likely you are to have 'interest'). So e.g. in the Aberdeen Varieties case, this also failed because there was 1/2 mile between the two properties which were the subject of the real burden. It was held that 1/2 mile was too far.
2. in addition, the extent of the breach is also relevant to interest. If there is a burden restricting building and you build a rabbit hutch, this is far less likely to be material detriment than a block of flats being built.
Barker v Lewis 2007
This concerned a small new development of four houses near St Andrews. Each house had a 'no trading' burden. One of the new owners moved in and opened a bed and breakfast. The other owners went to court to seek interdict to stop this on the basis of the no trading burden. The crux of the issue was whether the bed and breakfast was causing 'material detriment' to the other properties in the cul-de-sac. There were arguments about noise and cars etc. Both the Sheriff and Sheriff Principle found, on the facts, that there wasn't material detriment. The sheriff equated ‘material’ with ‘substantial’. They held that if there were more guest rooms (there were only 2) then they might have held differently. NB A.S. Not entirely comfortable with the decision. The decision underlines that many breaches of burdens will not be challengeable, because even immediate neighbours may not have interest
Kettlewell v Turning Point Scotland 2011
20 houses in the cul-de-sac. Each house had a burden against trading and could only be used for one family only. A charity bought one of the houses and proposed to use it as a care home for 6 unrelated adults. The other houses objected on the grounds of noise and won. It was held that turning the house into a care home for 6 adults did on the facts amount to material detriment.
Who can you enforce real burdens against?
Under s 9 of the 2003 Act:
⁃ An affirmative burden[ E.g. to maintain or to pay for the cost of maintenance.] is enforceable only against the owner of the burdened property.
⁃ A negative/ancillary burden is enforceable against the owner or tenant of the burdened property, or any other person(s) having use of that property. They are in effect real rights.
⁃ So if there is a restriction on trade, then the owner and also the tenant etc is also prohibited from trading.
s 10 - [not too important] it concerns the continuing liability of former owners in relation to affirmative burdens e.g. where you are liable for the cost of maintaining a fence and sell on without paying, then you can still be liable under s 10(1) (so moving on doesn't remove your liability for costs) and equally under s 10(2) the incoming owner is also severally liable.
- However if the obligation is to pay for work already carried out, there is only liability if a ‘notice of potential liability for costs’ has been registered against the title to the property (s 10(2A) and 10A).
- But under s 10(3) if you try to receive payment from the incoming owner they can claim the money back from the former owner.
How are real burdens enforced?
The usual court remedies are available.
⁃ For affirmative burdens: specific implement[ E.g. a burden to maintain.], action for payment
⁃ For negative burdens: interdict (speed is of the essence) or damages.
⁃ NB there was a nuclear remedy called 'irritancy' which was abolished by the Abolition of Feudal Tenure Act 2000 s 53 (feudal burdens) and TCA 2003 s 67 (non feudal burdens). This meant that the benefited proprietor in principle could go to the court and have the burdened proprietor’s title extinguished if a real burden was breached.
How are burdens interpreted?
⁃ Objectively - the courts must try to determine there objective meaning. They are generally interpreted in favour of freedom e.g. using the burdened property freely. Therefore if there is an ambiguity then you interpret in favour of the person who it is imposed against (that is, against the benefited party) (contra proferentem)
⁃ At common law the courts were hostile to burdens and so used all sorts of ways to not enforce real burdens because they were difficult to extinguish. However now under the TCA there are more ways to extinguish them. So under s 14 TCA 'real burdens shall be construed in the same manner as other provisions of deeds which relate to land and are intended for registration.' (This means they shall be construed objectively - not hostilely).
Brown v Crum Ewing's Trs 1918
Provision requiring the house to be used as a "private dwelling house". This was held not to be breached when it was being used for 25 orphaned girls (thus this use was held to be within the meaning of private dwelling house). [But if the provision had said "...for one family only" then the decision would have been different.]
Low v Scottish Amicable Building Society 1940
There was a burden preventing trade, business or profession. It was held that did not stop work which was ancillary to residential use (such as advocates having a consulting room in their house, or ladies taking in sewing or piano lessons) and therefore permissible.
Carswell v Goldie 1967
A real burden which states: "..the vassal shall be bound to erect upon the plot of ground .. within two years from the date of entry aftermentioned, and thereafter to maintain in all time coming, a self-contained dwellinghouse, with relative offices which may include a garage.." It was held that this wording did not exclude a second garage.
Snowie v Museum Hall 2010
Concerned a burden which banned trade/business/profession whether as principal or ancillary use also. The outer house judge held that this wouldn't stop someone working at home in an ancillary way if it didn't bother the neighbours (e.g. taking work home from your job).
⁃ AS: this decision is wrong because such activities are ancillary. However, the point is that there is unlikely to be "interest" in force since these activities are unlikely to cause the neighbours "material detriment" (if you are simply working as an accountant at home then you are probably not causing the neighbours material detriment) so although there is a breach of the burden, there won't be interest to enforce.
Why is it important to identify the benefited property?
This concerns who has 'title[ This has been briefly covered earlier but this section gives a much more detailed consideration]' to enforce a real burden.
To know who has title, one must know what the benefited property is.
How were properties identified before before 28 November 2004?
Identifying the burdened property is quite straightforward. Even before 28 November 2004, deeds creating real burdens were always identified, and were registered against, the burdened property. So the burdened property is always clear and must be carefully identified. However, the common law took a lax approach to the identification of the benefited property. Usually the constitutive deed would not nominate the property and so the courts developed a set of rules under which a benefited property(s) would be implied. These rules were complex and barely comprehensible.
How are properties identified after 28 November 2004?
Post 2004, the benefited property will also be clear since you must identify and register against it under s 4.
What is the problem with the idea that pre-28 November 2004 properties did not have to be identified?
Real burdens are, in principle, perpetual (TCA 2003 s 7), and for many years to come most real burdens affecting land will have been created before 28 November 2004. Under the law in force then there was no requirement to nominate the benefited property, although this was sometimes done in practice. In the absence of such nomination, various rules were developed by the courts for enforcement rights to be implied (sometimes known as 'implied jus quaesitum tertio'). These rules are largely abolished by TCA 2003 s 49 and new rules were enacted in their place (ss 52–57). These rules are complex and overlap and a further complication is the fate of real burdens created under the abolished feudal system.
What is the essential distinction between burdens created before, and those created after, 28 November 2004?
Normally the date of creation is the date of registration.
⁃ For burdens created after 28 November 2004 the benefited property or properties must be identified in the constitutive deed and the deed registered against the title to that property (TCA 2003 s 4(2)(c)), and there can be no question of enforcement rights arising by implication.
⁃ For burdens created before[ THE FOLLOWING ONLY APPLIES TO BURDENS CREATED BEFORE THIS DATE.] 28 November 2004 the situation is governed by a sequence of 7 complex and overlapping rules, as follows (they apply retrospectively):
What is Rule 1?
Any express nomination of a benefited property in the constitutive deed is given effect to.
⁃ So if the deed of conditions nominates the benefited property(s) then this will be given effect to (the easiest rule).
What is Rule 2?
(Rule 2) Burdens imposed on related properties under a common scheme[ This rule only concerns common schemes.] are mutually enforceable by the owners etc of each of the properties. TCA 2003 s 53.
⁃ In other words, each property in a common scheme of related properties is a benefited as well as a burdened property.
⁃ If, as usually, at least two properties are affected by the common scheme, the burdens are classified as community burdens: TCA 2003 s 25. Section 53 applies even if only one of the properties was burdened before 28 November 2004.
Neither "common scheme" or "related properties" are fully defined in the Act (but both must be proved)
How is common scheme defined?
this is not defined in the Act but it probably concerns identical or comparable burdens coming from the same person. [So the idea is that plot 4 has the same burdens as plot 8 and they are imposed by the same builder.] These will usually be identical. Where burdens are imposed in different deeds, for example the individual dispositions for each house, it is more likely that they vary.
Russel Properties (Europe) Ltd v Dundas Heritable Ltd 
Mixed development of flats, shops and industrial properties in East Kilbride. There were different use restrictions on the properties. The commercial properties had use restrictions for certain purposes. One was required to be used as a licensed public house and or public restaurant). Part of it was to be leased to Tesco and the question was whether the neighbouring property could enforce the burden - was it a property within a common scheme? It was held by the Outer House that it was not a common scheme since the different use restrictions attached to different properties meant there wasn't enough commonality. [AS: this decision could have gone the other way.]
Brown v Richardson 2007
Held that a deed of conditions over the wider area was equivalent to a conveyance of the wider area.
There wasn't a deed of conditions over the wider area (under s 53(2)(c), there was a conveyance. The lands tribunal held that a conveyance over the wider area imposing the same real burden over the wider area was equivalent to a deed of conditions imposing the same burden. (So houses on a typical housing estate would be related properties but not scattered properties in rural estates (2002)).
Ultimately, every case is decided on its facts, and s 53 can apply in many cases.
How is 'Related properties' defined?
Whether the properties are related is subjective and depends on the facts. It is a subjective decision for the courts.
Section 53(2) states that "whether properties are related properties...is to be inferred from all the circumstances and without prejudice to the generality of the subsection circumstances giving rise to this inference might include:
(a) the convenience of managing properties together because they share some common feature or obligation for common maintenance of some facility,
(b) there being shared ownership of common property,
(c) being subject to the common scheme by being virtue of the same deed of conditions,
(d) the properties each being a flat in a tenement."
What is Rule 3?
Burdens imposed on unrelated properties under a common scheme are mutually enforceable by the owners etc of each (or any) of the properties if the deed (or deeds) creating the burdens (a) gives notice that a common scheme exists and (b) contains nothing to exclude mutual enforceability. TCA 2003 s 52.
- It can apply even if the properties are not ‘related’ within the meaning of s 53.
- It is a statutory restatement of the common law rule established in Hislop v MacRitchie’s Trs.
⁃ This is a higher hurdle to overcome than 2 above- there are three requirements rather than two for a property to be subject to implied enforcement rights under the rule:
⁃ 1) Requires notice of the common scheme on the title to that property
⁃ 2) Requires notice that a common scheme exists
⁃ This requires an indication than the same obligations are imposed on other properties (eg the constitutive deed relates to a larger area).
⁃ 3) Deed contains nothing to exclude creation of mutual enforceability rights.
⁃ This is not satisfied if the granter is given a right to waive or vary the burdens.
⁃ Similarly a prohibition on subdivision would exclude this party enforcement rights.
⁃ **This was the common law and it was quite restrictive because many builders would reserve the right to vary and this would prevent third party enforcement rights....
What is Rule 4?
Facility burdens are enforceable by the owners etc of any property to which the facility is of benefit and by the owners of the facility itself. TCA 2003 s 56(1).
⁃ Facility burdens [ e.g. common parts of a tenement, common recreation areas, private roads, private sewerage systems, and boundary walls. ]= burdens which regulate the maintenance, management, reinstatement or use of, generally shared, facilities (TCA 2003 s 122(1), (3)).
NB these burdens could also be upheld by rules 2 and 3 too - the rules overlap.
- The burden does not apply where the obligation to maintain the facility has been taken over by a public authority,
Greenbelt Property Ltd v Riggens 2010
Whether a piece of land on the edge of a development on which there were trees was a common facility. It was held on the facts that it wasn't a common facility.
What is Rule 5?
Service burdens are enforceable by the owners etc of any property to which the services are to be provided.
⁃ These are not very common. Service burdens are burdens requiring the provision of services such as water or electricity - the owners etc of the property to which the services are to be provided can enforce.
⁃ TCA 2003 s 122(1).
***Rules 1-5 can concern burdens created feudally or non-feudally. Whereas rule 6 is feudal only and rule 7 is non-feudal only.***
What is Rule 6?
Feudal burdens are enforceable by the owners etc of any benefited property nominated in a notice registered before 28 November 2004 under the 2000 Act s 18.
⁃ Concerns only real burdens imposed in a feudal deed prior to 28 November 2004.
- There was a period up until the abolition of feudal tenure in 2004 where superiors could reserve enforcement rights[ I.e. transfer enforcement rights from the] in very restrictive circumstances. To do so they had to own neighbouring land which had to have a building on it within 100 metres of the burdened property and the building had to be a ‘place of human habitation or resort’ (2000 Act s 18). Only around 2000 notices were registered (small number).
⁃ This rule is easy because so few were registered and the register tells you if they have been.
⁃ [Feudal burden = burden originally imposed in a grant in feu (feu disposition, feu charter, feu contract) and which, therefore, was formerly enforceable by the feudal superior without reference to a benefited property.]
What is Rule 7?
Non-feudal burdens imposed other than under a common scheme[ This therefore concerns the subdivision scenario.] are enforceable by the owners etc of any property in the immediate neighbourhood still retained by the granter at the time of creation.
⁃ This is restricted to burdens imposed in non-feudal deeds such as dispositions.
- This is the subdivision case. (Not where there is a common scheme - where there is a common scheme, the position is regulated instead by rules (ii) and (iii) above.)
- Rule 7 is the only survivor of the former rules on implied enforcement rights. The rule is that the benefitted property is implied to be the land retained in the neighbourhood at the time that the burdens were imposed. So if J sells a plot of land to K and imposes real burdens, then sells a second plot to L and imposes the same real burdens, L’s land would be a benefited property as regards K’s because it was retained a the time of the grant by J to K. However because a common scheme is capable of arising in respect of the plots of K and L, rule 7 does not confer any enforcement rights upon Leah.
- It derives from[ But is now contained in TCA 2003 s 50.] J A Mactaggart & Co v Harrower (1906) and does not apply to pre-emption rights: Braes v Keeper of the Registers of Scotland 2010.
- The reprieve is temporary. Rule (vii) expires on 28 November 2014 unless, before that date, there has been registered a notice under s 50 of the TCA 2003 nominating the property as a benefited property.
- The notice must be registered against both the benefited and the burdened properties.
When is a burden 'alive'?
If a real burden was created before 2004, the fact that they are on the register doesn't necessarily mean that they are live burdens. They are only live burdens if there is somebody with enforcement rights - where there are enforcement rights then the 7 above rules must be checked to see if any apply. If the answer is yes then the burden is alive and enforceable by that person. If the answer is no then the burden is dead - despite still being on the land register.
This contrasts with burdens created after 2004 - these are fully transparent. By looking at the Land Register one can determine who can enforce them and that they are alive.
Have feudal real burdens been completely abolished?
In principle, real burdens created under the feudal system were extinguished on 28 November 2004. See 2000 Act s 17. In practice, however, most survived by virtue of one of the rules just described. Furthermore, the s 18 notice (for conversion of feudal burdens into praedial real burdens) is supplemented by notices under ss 18A, 18B, 18C, 27 and 27A of the 2000 Act (for conversion of feudal burdens into various types of personal real burden).
The main class of feudal burden to perish were where
(a) there was no common scheme and
(b) no notice has been registered under s 18 etc of the 2000 Act.
These burdens will remain on the Register (2000 Act s 46) until 28 November 2014.
What happens when a burdened property is divided?
Where a burdened property is divided, each part remains subject to the burden (except where the burden clearly relates to one part and not the other). TCA 2003 s 13.This applies whether the division took place before or after 28 November 2004.
What happens when a benefited property is divided?
Where a benefited property is divided, the part conveyed away ceases to benefit from the burden and be able to enforce the real burden unless contrary provision is made in the conveyance. The policy is to avoid the proliferation of benefited properties. TCA 2003 s 12. There are three exceptions:
⁃ (1) The rule can be overridden by making contrary provision in the conveyance.
- (2) In the case of burdens imposed under a common scheme, all subdivided parts continue as benefited properties - so s 12 does not apply in the case of community burdens.
- (3) The rule only applies to conveyances since 28 November 2014.
What is a pre-emption?
A pre-emption is where you sell property and place a clause into the disposition stating that if the buyer wishes to resell the property then they must give you the right of first refusal (a chance to buy the property back). This is a permissible real burden. In practice the presence of a pre-emption right may deter other purchasers and therefore it is possible to obtain a pre-sale undertaking from the holder of the pre-emption that the right will not be exercised (s. 83 TCA 2003)
How might a pre-emption be done?
Pre-emptions can be done in two ways:
⁃ 1) Contract between the original parties
⁃ It will only bind the original parties.
⁃ 2) Real burden
⁃ Since it is a real burden, does this mean that all successive owners will be subject to it?
⁃ No - the legislation provides a way of breaking the pre-emption. The way a pre-emption is broken is provided for under s 84 TCA 2003:
⁃ When the owner of plot A (burdened with a pre-emption in favour of plot B) is planning to sell it, if they make a written offer to sell back to plot B then the owner of plot B can either accept or refuse this offer. Whichever they do, this pre-emption is then at an end.
⁃ The effect of this is that the owner of plot B only has one chance to buy. *But this only applies if, as stated above, the owner of plot A offers it back formally in writing, compliant with s 84.* So if the owner of plot A does not offer it back formally in compliance with s 84 then the pre-emption right will endure.
What happens if the owner of the burdened property sells property without offering back to the holder of the pre-emption right?
This is an offside goal because there is a prior obligation to sell to the owner of plot B. The purchaser will be in bad faith because the pre-emption right is on the register thus all the requirements of the offside goals rule are satisfied so the title conferred on the new owner of plot A is voidable and can be reduced by the owner of plot B under the offside goals rule.
⁃ Roebuck v Edmunds 1992 is an example of this - confirming that the offside goals rule applies in practice.
What are the two types of option of real burden mentioned in TCA 2003?
1. A right of redemption
2. A right of reversion
What is a right of redemption?
A redemption is also a right to buy the property back. It allows the granter in a conveyance to repurchase the land, normally at a fixed price and at any time. The difference between a pre-emption and a redemption is that a pre-emption is only relevant when the owner of plot A (burdened property) wants to sell. However a redemption is much more onerous - it is a right to buy the property back whenever the redemption holder wants.
⁃ Redemptions are much more onerous that pre-emptions. Since they are onerous, the law has been restricting them.
⁃ Under s 3(5) TCA, redemptions can no longer be created as real burdens. So 26 November 2024 will be the last one.
⁃ Redemptions still exist that were created prior to 2004 but they are subject to a 20 year time limit (provided they were created after 1974 - Land Tenure Reform Act 1974 s 12).
What is a right of reversion?
Rights of redemption are part of a wider class of rights of reversion which confer the right to re-acquire land, not necessarily in return for payment.
Do personal real burdens have a benefitted property?
No - there is no benefited property. Otherwise the rules are much the same as praedial rule burdens but they are restricted both as to content and holder.
TCA 2003 s 1(3)
A complete list of personal real burdens is given in this section (eight types are recognised):
⁃ Two of those (personal pre-emption burdens and personal redemption burdens) are available only by way of conversion from feudal burdens (under 2000 Act s 18A). The most significant are likely to be conservation burdens[ These are burdens which can be created in favour of a conservation body.] (TCA 2003 s 38)
- And economic development burdens (TCA 2003 s 45) (they are mainly held by governmental bodies and require the land to be used for a particular type of industry- not usually available to natural persons).
- Others are climate change burdens, heath care burdens, maritime burdens, rural housing burdens, manager burdens, personal pre-emption and redemption burdens.
Part 3 of the TCA 2003
Such special rules as are needed for personal real burdens are set out in part 3 of the TCA 2003. In particular, this makes provision for:
1. assignation of the right of the holder[ This is how the right to enforce is transferred.] (s 39) and for
2. A presumption of interest to enforce (s 47).
What is extinction?
This is potentially a very important issue because real burdens are, in principle, perpetual. In some circumstances real burdens can be extinguished.
How can real burdens be extinguished?
a) By the Land Tribunal
b) By agreement: standard case (i.e. not community burdens) - minutes of waiver
c) By agreement: community burdens
d) Unilateral discharge - ‘sunset rule’
e) By breach: negative prescription
f) By breach: acquiescence
g) By breach: no interest to enforce
h) Compulsory purchase
As for servitudes.
What power does the Land Tribunal have over real burdens?
This is now regulated by Part 9 of the TCA 2003 re-casts the 1970 Act provisions and makes some significant changes.
Under the TCA 2003 the Tribunal may vary [SO the tribunal can discharge the original burden but in place of that they can say that the owner of the burdened property must accept a different burden (however this is uncommon - more often than not the Tribunal will unconditionally discharge the burden).] or discharge any 'title condition', including a real burden and servitude, on application by the owner of the burdened property or any other person against whom the condition is enforceable (s 90(1)(a)).
In the case of community burdens it is competent for the proprietors of at least 25% of the units to apply for variation as regards the community as a whole (s 91).
On receiving an application, the Tribunal must notify the owner of the benefited property or, in the case of a personal real burden, the holder of the burden (s 93).
Following notification, representations may be made to the Tribunal by anyone with title to enforce the condition within a stipulated period, being not less than 21 days (ss 95 and 96). The Tribunal may intimate to other parties, e.g. Tenants, if it thinks fit (s 93(3)).
If no representations are made by an owner of a benefited property (or holder of a personal real burden), the application is granted automatically as of right and without further inquiry[ I.e. automatically.] (s 97). But this rule applies only to real burdens (other than facility[ Facility burdens are burdens which are about the maintenance or management of a shared facility like an obligation to maintain it.] and service burdens), and not eg to servitudes.
What happens in cases of objections by the Lands Tribunal?
In all other cases of objections the Tribunal must consider the application on its merits having regard to the TEN factors set out in s 100 (s 98). Each case is therefore decided on its facts.
Even if persuaded on the merits, the Tribunal has power to order compensation or the imposition of a replacement burden (s 90(6)-(11)).
The Tribunal discharge takes effect on registration of the Tribunal's order (s 104(2)).
What is the procedure for getting a real burden varied or discharged by the Lands Tribunal?
⁃ The owner of the burdened property must fill in an application form to the Lands Tribunal.
⁃ The Lands Tribunal must serve a copy on all the benefited owners. They are then allowed to make representations (object) and normally they have 21 days to do so.
⁃ At the end of the 21 days there are a number of possibilities depending on whether someone has objected.
⁃ If there are no objections then the Lands Tribunal will simply grant the application without further enquiry (s 97, see above - this only applies with applications for variation / discharge of real burdens).
⁃ If somebody does object then the Tribunal must investigate the case. It goes on a site visit to look at the property to determine what effect the development would have on your neighbour. They either hold a proper court hearing or it is done by written representations. The Act states that in opposed cases the Tribunal must only grant the application where it is reasonable to do so.
How does the Land Tribunal determine what is 'reasonable'?
In determining what is reasonable, the Tribunal must apply the factors set out in s 100 of the Act. There are 10 factors (a) - (j). These factors are not all equally important. The most important are (b) and (c):
⁃ (b): to what extent does the burden confer benefit on the benefited property
⁃ (c): how much of a nuisance is the burden to the owner of the burdened property [ So these two factors require a balancing act to be made between these two competing considerations.]
⁃ Factor (a) is also important: it concerns whether there has been a change in circumstances since the burden was first in place (e.g. a burden that was reasonable in 1820 may not still be reasonable today).
Ord v Mashford 2006
One of the first cases to be decided under the Act. (Perhaps have a look at this case to get a sense of what is going on - but don't worry too much about the facts).
What are the chances of success of varying or discharging a real burden through the Land Tribunal?
There are very high prospects of success (~80%).
s 15 TCA 2003
One obvious way of getting rid of a real burden is by approaching those who have enforcement rights and to ask them to release you from a burden. The price is a matter for negotiation.
This is provided for in s 15 TCA 2003: it must be done by a unilateral deed (granted by the owner of the benefited property(s) and must be dual-registered.) In practice these deeds used to extinguish a real burden are known as deed of discharge or minutes of waiver. The deed then requires registration against the title to the burdened property.
What is the problem with using a minutes of waiver?
⁃ The owner of the benefited property might say no.
⁃ The owner of the benefited property might say yes but demand lots of money.
⁃ There may be a lot of benefited properties (and thus consensual discharge may be highly impractical).
What is the difficulty with obtain a discharge of a community burden by agreement?
It would often be impractical to obtain the agreement, and signatures, of everyone in a community. So the TCA 2003 allows a deed signed only by:
⁃ 1) a simple majority of owners (or a manager on their behalf) or different percentage specified in constitutive deed (s 33) or
⁃ 2) by the owners of ‘adjacent units’ e.g. the affected property and of all other properties in the community within 4 metres (discounting public roads and roads less than 20 metres wide) (s 35).
What are the requirements for the discharge of community burdens?
NB the Act is conscious that the effect of discharge may affect many members of the community. Therefore all the other owners in the community must be notified and allowed 8 weeks to apply to the Lands Tribunal for preservation of the burden. The notices will identify the burdened property and the burdens in question.
[If such an objection is lodged then the Lands Tribunal must decide on the reasonableness under s 100 using the 10 factors set out in the section on the lands tribunal above. It will grant it only if the variation is not int he best interests of the proprietors of all the properties in the community; or is unfairly prejudicial to one or more of them]
For a s 33 discharge individual notification is needed.
For a s 35 discharge it is sufficient to attach a notice to the property and a lamp post or two in the vicinity of the burdened property, or an advertisement in the local newspaper if there are no lamp-posts within 100 metres.
As an alternative to a majority, s 33 also allows signature by a manager duly authorised for that purpose.
Assuming no Lands Tribunal application, a certificate to that effect is endorsed by the Tribunal on the discharge. An oath must be sworn or affirmed by the burdened proprietor confirming compliance. Registration then extinguishes or varies the burden.
One thing to be aware of is that it is possible to use s 33 for a variation of the conditions as they affect EVERYBODY rather than just one person. So the entire community burden can be altered for everybody.
What is the ‘sunset rule’?
Also called unilateral discharge.
There is a special rule for real burdens which are older than 100 years.
Real burdens (but not servitudes etc) which are more than 100 years old may, in principle, be discharged by the owner of the burdened property or any other person against whom the burden is enforceable (s 20).
What are excluded from the 'sunset rule'?
[But excluded are conservation burdens, maritime burdens, facility burdens, and service burdens (s 20(3)).]
What is the procedure of a unilateral discharge?
The procedure is for the owner etc to draw up a notice of termination in the form set out in sch 2 (he is known as the terminator). \
The notice is sent to the owners of all benefited properties within 4 metres (discounting roads less than 20 metres wide).
In respect of other benefited properties it is sufficient to fix a notice on the burdened property and on an appropriate lamp post or posts (s 21).
Benefited owners then have a minimum period of 8 weeks to object by applying to the Lands Tribunal (s 90(1)(b)(i)).
If no application is made (of if it does not extend to all the burdens, or all the benefited properties), the notice is endorsed with a certificate by the Tribunal and may then be registered (s 23).
On registration the burden is extinguished (subject to the outcome of any Tribunal application) (s 24).
How does negative prescription discharge a real burden?
[All the above have been deliberate attempts to extinguish real burdens. There is another approach - simply to ignore/breach the real burden.
⁃ This decision to breach the burden can be made either in knowledge of the real burden or inadvertently (i.e. if they were unaware of the real burden).]
In the event of breach, the right of an owner of the benefited property to enforce the burden against you prescribes after 5 years (TCA 2003 s 18). The extinction by prescription is only an extinction to the extent of the breach[ So in some senses it is more of a variation of the burden.].
⁃ So if there is a real burden which states "no building" and the burdened property owner builds an extension in breach of this. After 5 years the burden is varied to the extent of allowing the extension that has been built but otherwise it remains in place - the owner of the burdened property is still not allowed to build any more.
How can a real burden be extinguished by acquiescence?
Even if less than 5 years has passed, a burden may be extinguished, to the extent of the breach, by acquiescence. So if a benefited proprietor stands by and watches while a real burden is breached they should not be allowed to object later. This was a common law rule and common law still applies but it has now been codified into TCA 2003 s 16(1).
What is the criteria that must be met under s 16(1) for a burden to be extinguished by acquiescence?
The following criteria must be met:
⁃ This requires breach involving material expenditure;
- Potential loss of the benefit expenditure if burden were now to be enforced; and
- Either actual (if informal) consent or non-objection for a period not exceeding 12 weeks from substantial completion of the work. After the 12-week period has passed, the fact of non-objection is presumed (although the presumption can be overcome).
- The work is sufficiently obvious so those with the right toe force knew, or should have known, about it.
⁃ [So in other words, if you neighbour is breaching a real burden and you are aware of this, then you must object at the time - you can't wait until it is finished for years and then object.]
- Here if the criteria are satisfied the burden will be extinguished to the extent of the breach. Successors of the benefited proprietor will therefore be bound.