Conversion of Long Leases [2001] SLC 112 (DP) (April 2001)

BAILII is celebrating 24 years of free online access to the law! Would you consider making a contribution?
No donation is too small. If every visitor before 31 December gives just Â£1, it will have a significant impact on BAILII's ability to continue providing free access to the law.
Thank you very much for your support!

[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]

Scottish Law Commission (Discussion Papers)

You are here: BAILII >> Databases >> Scottish Law Commission >> Scottish Law Commission (Discussion Papers) >> Conversion of Long Leases [2001] SLC 112 (DP) (April 2001)
URL: http://www.bailii.org/scot/other/SLC/DP/2001/112.html
Cite as: [2001] SLC 112 (DP)

[New search] [Printable PDF version] [Help]

SCOTTISH LAW COMMISSION

(Discussion Paper No 112)

Discussion Paper on Conversion of Long Leases

This Discussion Paper is published for comment and criticism and does not represent the final views of the Scottish Law Commission

EDINBURGH: THE STATIONERY OFFICE

£16.00

The Scottish Law Commission was set up by section 2 of the Law Commissions Act 1965^[1] for the purpose of promoting the reform of the law of Scotland. The Commissioners are:

The Honourable Lord Gill, Chairman
Patrick S Hodge, QC
Professor Gerard Maher
Professor Kenneth G C Reid
Professor Joseph M Thomson.

The Secretary of the Commission is Miss Jane L McLeod. Its offices are at 140 Causewayside, Edinburgh EH9 1PR.

The Commission would be grateful if comments on this discussion paper were submitted by 31 July 2001. Comments may be made on all or any of the matters raised in the paper. All correspondence should be addressed to:

Mr J M Dods
Scottish Law Commission
140 Causewayside
Edinburgh EH9 1PR

Tel: 0131 668 2131
Fax: 0131 662 4900
E-mail: [email protected]

NOTES

Copies of comments received may be (i) referred to in any later report on this subject, (ii) made available to any interested party on request, and (iii) summarised on our website, unless consultees indicate that all or part of their response is confidential. Such confidentiality will of course be strictly respected.

For those wishing further copies of this paper for the purpose of commenting on it, the paper may be downloaded from our website at www.scotlawcom.gov.uk, or purchased from The Stationery Office Bookshops.

CONTENTS

	Paragraph
PART 1 – INTRODUCTION

Background	1.1
Empirical work	1.3
What is a long lease?	1.5
Earlier conversion schemes	1.8
Our proposals in summary	1.11
Which Parliament?	1.13
PART 2 – CONVERSION: IN PRINCIPLE
Introduction	2.1
The case for conversion	2.2
Qualifying leases	2.13
Leases by local authorities	2.23
Lease as a real right	2.24
Supplementary criteria	2.25
Rent	2.26
Date of lease	2.28
Value of property	2.29
Type of property	2.30
Exempt leases	2.31
Inalienable property	2.31
Existing conversion schemes	2.34
Minerals	2.35
Nature of use	2.36
Nature of landlord	2.37
Other grounds	2.38
Proposal	2.39
Voluntary or compulsory?	2.40
One day or many?	2.44
PART 3 – CONVERSION: A POSSIBLE SCHEME
Introduction	3.1
From lease to ownership	3.2
Subordinate real rights	3.4
Opting out	3.7
The scheme in summary	3.8
Compensation for loss of rent	3.9
Amount of compensation	3.9
Compensation due only if claimed	3.11
Interaction with notice of exemption	3.12
A scheme in outline	3.13
Intermediate leases	3.17
Non-monetary rents	3.18
Proposal	3.20
Compensation for loss of other money payments	3.21
Leasehold casualties	3.21
Renewal premiums	3.22
Reservations and pertinents	3.25
Leasehold conditions	3.28
Positive servitudes	3.32
Real burdens	3.40
Conditions as quasi real burdens	3.40
Three feudal principles	3.42
The first principle: nomination of a benefited property	3.43
The second principle: enforcement rights held by third parties	3.46
The third principle: survival of all facility burdens and service burdens	3.49
Adjustment of terminology	3.50
Compensation for extinction of development value burdens	3.51
Proposal	3.52
Other conditions	3.53
Remaining conditions affecting the tenant	3.53
Conditions affecting the landlord	3.54
Conditions enforceable contractually	3.57
Computation of duration	3.59
Renewals	3.60
Breaks	3.64
Leases for life	3.66
Proposal	3.67
Registration issues	3.68
Unregistered leases	3.76
PART 4 – RESIDENTIAL GROUND LEASES
Introduction	4.1
The case for conversion	4.6
Forced substitute for feus	4.6
Loss of a home	4.8
Absence of alternative accommodation	4.10
Absence of protection	4.11
No compensation for improvements	4.12
The case against conversion	4.13
Justified expectations	4.14
Previous opportunity	4.16
Inappropriate solution	4.17
Cost to the tenant	4.18
Escalation of compensation levels	4.19
Complexity relative to numbers	4.20
Evaluation	4.21
Compensation	4.23
Method of calculation	4.23
Merger or marriage value	4.28
Discount	4.29
Questions for consideration	4.33
1954 Act as a model	4.34
Qualifying leases	4.35
Residential lease for 50 years	4.35
Tacit relocation	4.37
Exemptions	4.38
Notice and conveyance	4.42
Notice	4.42
Conveyance	4.43
Effect of registration	4.47
Protection of heritable creditors	4.48
Identifying the landlord	4.49
Unidentified landlords	4.49
Unregistered landlords	4.50
Intermediate landlords	4.51
The scheme in summary	4.55
Repeal of 1954 Act	4.56
PART 5 – SUMMARY OF PROVISIONAL PROPOSALS	Part 5
APPENDIX A – SURVEY OF LONG LEASES	Appendix A
APPENDIX B – OTHER CONVERSION SCHEMES	Appendix B

ABBREVIATIONS

1954 Act

Long Leases (Scotland) Act 1954

1967 Act

Leasehold Reform Act 1967

2000 Act

Abolition of Feudal Tenure etc.(Scotland) Act 2000

Guthrie Report

Scottish Home Department, Report of the Scottish Leases Committee (chaired by Lord Guthrie) (1952, Cmd 8656)

Paton & Cameron, Landlord and Tenant

G C H Paton and J G S Cameron, The Law of Landlord and Tenant in Scotland (Edinburgh, 1967)

Rankine, Leases

J Rankine, The Law of Leases in Scotland (3^rd edn) (Edinburgh, 1916)

Reid, Property

Kenneth G C Reid et al, The Law of Property in Scotland (Edinburgh, 1996)

Scot Law Com No 165

Scottish Law Commission, Report on Leasehold Casualties (Scot Law Com No 165) (1998)

Scot Law Com No 168

Scottish Law Commission, Report on Abolition of the Feudal System (Scot Law Com No 168) (1999)

Scot Law Com No 181

Scottish Law Commission, Report on Real Burdens (Scot Law Com No 181) (2000)

Stair Memorial Encyclopaedia

Stair Memorial Encyclopaedia: The Laws of Scotland (25 vols, Edinburgh 1986-95)

PART 1 INTRODUCTION

Background

In recent years we have been engaged in a major review of the structure of land law in Scotland. Our Report on Abolition of the Feudal System,

^[2]

Report on Real Burdens

^[3]

Law of the Tenement

^[4]

^[5]

^[6]

^[7]

Other work has been, or will be, carried out on the law of leases. Our Report on Leasehold Casualties (1998)

^[8]

^[9]

^[10]

Sixth Programme of Law Reform

^[11]

Empirical work

A study of the incidence of long leases was carried out in 1951 for the Scottish Leases Committee chaired by Lord Guthrie. This involved an examination of all search sheets in the Register of Sasines for the period 1905-1951. The results, which disclosed 13,151 current leases, were tabulated both by length of initial grant and by unexpired duration. Almost 9,000 leases were found to have more than 100 years still to run.

^[12]

Another factor contributing to a fuller understanding was the willingness of a number of solicitors with practical experience of long leases to share their knowledge with us. An advertisement in the legal press resulted in a great deal of useful information. We are grateful to those solicitors, as well as to others who helped us in various ways.

^[13]

What is a long lease?

By "long lease" is usually meant a lease that is sufficiently long to be registrable in the property registers, that is to say, in the Land Register or the Register of Sasines.

Our survey makes clear that there are really two types of long lease. First, there are leases of ordinary duration - leases of anything from 20 to 125 years, but with a concentration in the lower part of the range. And then there are leases which may be characterised as "ultra-long" - leases for 700 years or more, but typically for 999 years. Almost one half of all leases in our sample were granted for 999 years.

^[21]

Many of the ultra-long leases date from the period before 1900. Often they were used as alternatives to feus in cases where feuing was not permitted. Land held on burgage tenure could not be feued,

Earlier conversion schemes

The role of the 2000 Act in converting feus to ownership has already been mentioned. A scheme for the conversion of long leases was introduced by the Long Leases (Scotland) Act 1954 and was in operation between 1954 and 1959. This implemented the recommendations of the Guthrie Committee, mentioned earlier. A lease was eligible for conversion if it was of residential property and had been granted before 14 August 1914 for a period of at least 50 years.

a non domino

Other conversion schemes were, and remain, available on a more restricted basis. A special scheme for tenancies-at-will was introduced in 1979.

^[37]

^[38]

Finally, brief mention may be made of conversion schemes operational in the other jurisdictions of the United Kingdom. In England and Wales it has been possible to convert ultra-long leases since 1881.

^[39]

^[40]

^[41]

Our proposals in summary

Our main proposal is that a conversion scheme should be introduced for ultra-long leases. The scheme would follow closely the scheme for conversion of feus introduced by the 2000 Act. The details are set out in parts 2 and 3. The scheme would be compulsory and automatic, but with the possibility of an opt-out by the tenant. A lease would qualify if it had been granted for more than 175 years and if there was still a substantial period, such as 100 years, left to run. In practice, most qualifying leases will have been granted for 999 years or similar. On a specified day all ultra-long leases would be converted into ownership, and the residual ownership of the landlord would be extinguished. Certain leasehold conditions could remain in force as real burdens, and provision is also made for servitudes. Compensation would be due for the loss of rent but not for the loss of the landlord's residual ownership.

1.12

In part 4 we consider whether a second scheme is needed for the small number of residential ground leases which are too short to qualify under the main scheme. A two-scheme model is found both in England and Wales and in Northern Ireland.

^[42]

^[43]

Which Parliament?

Legislation to give effect to our proposals would be within the legislative competence of the Scottish Parliament.

PART 2 CONVERSION: IN PRINCIPLE

Introduction

In this part of the discussion paper we canvass the principle of converting ultra-long leases into ownership. The details of a possible scheme are discussed in part 3. We postpone until part 4 the question of whether conversion should be extended to leases of a shorter duration.

The case for conversion

2.2

Most ultra-long leases were granted for periods such as 999 years and have still many hundreds of years to run. This means that they are barely distinguishable from feus, and indeed were often granted as an alternative to feus, in circumstances where feuing was not possible.

^[49]

An ultra-long lease suffers from many of the disadvantages already familiar from feus.

^[50]

^[51]

In the case of feus, these disadvantages were considered sufficient grounds for conversion into proper ownership. That conversion is effected by the Abolition of Feudal Tenure etc. (Scotland) Act 2000,

^[52]

^[53]

In fact the difficulties with leases extend beyond those with feus. Because ultra-long leases are relatively rare, and are concentrated within small geographical areas, they are unfamiliar to many legal practitioners. The result is often an increase in transaction costs when the property comes to be sold. Several firms of solicitors complained to us of this difficulty. An agent for the purchaser who is unfamiliar with the type of holding is likely to ask inappropriate questions and to seek assurances on matters on which assurance is either not required or could not reasonably be obtained. Worse than this, a contract to buy a house or land expressed in standard terms does not cover the possibility that the title might be held on long lease. This means that, unless the terms have been appropriately adjusted, a purchaser can refuse to proceed with the transaction on the basis that the title offered is merely one of lease. Such cases occur, and have been litigated.

^[54]

A tenant under a long lease may also encounter difficulties in relation to mortgages. A small number of lenders will not advance money on the security of a lease.

^[55]

^[56]

There are special difficulties with flatted properties. The common law of the tenement presupposes ownership rather than ultra-long lease. Yet tenements exist in which each flat is held under such a lease. In that case there is no applicable law, although in practice the law of the tenement is probably applied by analogy. In our Report on the Law of the Tenement we noted that we had "considered whether we should formalise the position by extending our proposals to flats which are held on exceptionally long leases but concluded that the issue is best approached as part of our long-term project on leasehold tenure".

^[57]

Report

A number of other factors may be mentioned. Not to convert leases now would be to store up problems in the long term when such leases come to an end and the tenant loses the property without compensation, including compensation for improvements.

A practical point is that a scheme already exists. If ultra-long leases are truly pseudo-feus, then it would be logical to apply to such leases the scheme which applies for the conversion of feus. And in fact the scheme set out in the 2000 Act could be used almost as it stands.

^[61]

Finally, the case against conversion is weak. It could not be said, as might be said of leases of much shorter duration, that conversion interferes with the freely negotiated terms of a contract. The original contract has long since become a property right, and there has been no free negotiation. Nor could it be said that conversion will confer a windfall benefit on one party at the expense of the other. So far as the tenant is concerned, the conversion operates only at a technical level. It brings the law into line with reality. But the economic value of his asset is likely to remain unchanged. Landlords who suffer loss - in practice loss of the income stream from payment of rent - will be compensated, in the same way as superiors are compensated for loss of feuduty under the 2000 Act.

2.12

We conclude that the case for conversion is convincingly strong. Our proposal, on which we invite comment, is therefore that

1. The right of a tenant under an ultra-long lease should be converted into a right of ownership of the land, and the right of the landlord should correspondingly be extinguished.

The rest of this part of the paper considers the way in which such a conversion scheme might work.

Qualifying leases

2.13

A lease should qualify for conversion only if its duration is so long as to amount virtually to ownership. Leases shorter than this have a valuable role to play in the property market and are not touched by our proposed reform. Thus nothing in our proposals will affect the 25-year commercial lease or the 60-year PFI/PPP lease

^[62]

Our survey of leases suggests a clear dividing line between ordinary long leases on the one hand and leases which amount to virtual ownership on the other. If our figures can be relied on, most long leases have been granted either for around 999 years or for 125 years or less. There is little in between.

^[63]

^[64]

^[65]

There is also a second factor to be taken into account. As a lease begins to approach its close the line is crossed between quasi-ownership and mere lease. At that point conversion should cease to be possible. Another way of putting the matter is to say that, if the end of a lease is sufficiently imminent for the landlord's interest to acquire an independent value (that is to say a value beyond that attributable to the income stream from the rent), the tenant can no longer be considered as the virtual owner of the land and should not be entitled to become the actual owner, or at least not without payment of compensation. In the case of most of the leases with which we are concerned, this will not occur for many hundreds of years into the future. If an initial grant of more than 175 years is taken as the mark of an ultra-long lease, then there were 1781 such leases in our survey. Of those, 1531 (86%) had more than 700 years still to run, while a mere 43 (2%) were due to expire within the next 175 years (and none within the next 50).

^[66]

The difficulty remains of fixing a minimum unexpired duration for the purposes of a conversion scheme. Under the equivalent scheme in England and Wales, conversion is allowed of certain leases, without payment of compensation, provided that the unexpired term is not less than 200 years.

Against this background, there seem to be two different ways of setting the criteria for conversion of long leases. One is simply to focus on unexpired duration, as in Northern Ireland. Given the terms of section 67 of the 2000 Act, the period could not be less than 175 years. The rule might therefore be that conversion is available in every case where, on a day to be fixed by statute, the unexpired portion of the lease is more than 175 years. This first option we refer to as option A.

2.18

The other way of approaching the issue would be to use a combination of initial term and unexpired duration. Initial term would be a means of separating quasi-ownership from genuine lease; and unexpired duration would be a means of ensuring that a tenant could not convert once the landlord's interest had acquired an independent value. A feature of this approach is that it allows a shorter period of unexpired duration. This is because the requirement of an initial term has already filtered out cases of genuine lease - and in particular the standard commercial ground lease. All that remains to be settled is the value of the reversionary interest. We suggest for consideration that the initial term might be any period over 175 years coupled with an unexpired duration of more than 100 years. This second option we refer to as option B.

2.19

These options operate to different effect only at the very margins. Almost all ultra-long leases would comfortably satisfy the criteria in either option and so would qualify for conversion. In order to bring out such differences as there are, we tested the options against our database of long leases. If option A were used, 1653 leases would qualify for conversion. Option B would bring in an additional 2.4% of leases - some 40 in all. Mainly these are residential leases. The reason that they fall within option B but not option A is that they have an unexpired duration of between 100 and 175 years. Given the size of the sample, however, these figures cannot be assumed to be completely reliable, and we would welcome views on the likely effect of using one option rather than the other.

2.20

Although neither option was before the Royal Institution of Chartered Surveyors in Scotland, it may possibly be inferred from the following passage in their response that they would prefer option A:

"Turning to commercial leases, many of which will have been granted by local authorities since the 1960s and 1970s, we would suggest that, in order to be consistent with the policy on lease length as set out in the Abolition of Feudal Tenure etc (Scotland) Act, that it would appear appropriate for the cut off point of virtual ownership to be set at 175 years. While we accept that the residual value between 100 and 175 years may be nominal, we would argue that in 'institutional perception' terms, there could certainly be some value. Given that the majority of commercial ground leases are granted for a period of 125 to 150 years, with funding agreed on this basis, we would be concerned that a cut off point of 100 years could discourage institutional investors from proceeding with developments."

Nonetheless, it may be that the initial requirement of 175 years set by option B would also be sufficient to allay the worries which RICS express; and the position would be reinforced if there was a special rule for the local authority leases, as is suggested below.^[71] The response just quoted was given in the context of commercial ground leases. The main gain from option B is that it allows the conversion of a larger number of residential leases. An initial limit of 175 years would admit two familiar types of residential lease, namely leases for 99 years renewable once (making a total of 198 years) and leases for 19 years renewable 9 times (making a total of 190 years); and a shorter unexpired duration is also more favourable. If the effect of option B is to admit more residential leases but without at the same time drawing in ordinary commercial ground leases,^[72] then it is probably to be preferred. A difficulty with option A is that it would leave unconverted a certain number of residential leases notwithstanding that the value of the landlord's interest was negligible.^[73] That difficulty would, however, be met in a different way if a separate scheme were to be introduced for shorter residential leases.^[74]

Two final points may be mentioned. First, a number of questions require to be resolved as to how the length of leases is to be measured for the purposes of qualifying for conversion. These are considered further in part 3.

^[75]

^[76]

^[77]

We invite views on the following questions:

2. (a) In determining which leases qualify for conversion would it be preferable to follow

(i) option A (unexpired term of more than 175 years) or

(ii) option B (initial grant for more than 175 years coupled with an unexpired term of more than 100 years)?

(b) In relation to the preferred option, are the suggested limits for length of lease satisfactory or should different limits be substituted?

Leases by local authorities

2.23

We understand that ground leases are occasionally granted by local authorities for periods in excess of 175 years. Our survey picked up several 200-year leases granted by the same local authority in the 1960s. A different local authority has brought to our attention a relatively recent lease, of a shopping centre, with an initial term of 206 years. If a local authority grants a ground lease, it does so on the basis that, at some point in the future, the land will revert to the authority and become available for public purposes. To allow such leases to be converted into ownership is, it may be argued, contrary to the public interest. Yet some at least of those leases would fall within the proposed conversion scheme, at least on the figures suggested above.

^[78]

^[79]

3. Should there be exempted from conversion any lease in which the head landlord is a local authority and which has been granted for a period not exceeding 300 years?

If the exemption is approved, we would also welcome views on the following question:

4. Should the exemption mentioned in proposal 3 be extended to other public bodies and, if so, to which?

Lease as a real right

It goes almost without saying that the lease must have been constituted as a real right. The idea of conversion is to transform one real right (lease) into another real right (ownership). There can be no question of upgrading a right which is merely contractual. A lease is made real either by taking possession under the Leases Act 1449 or by registration under the Registration of Leases (Scotland) Act 1857; but not all contractual leases fall within the terms of the two Acts. The requirement of a real right would apply only to the original lease, and it would be no bar to conversion that its current holder had not yet completed title by registration or possession.

^[80]

Supplementary criteria

Thus far, the only measure used to identify leases which would qualify for conversion is duration. Our provisional view is that there is no need for supplementary criteria and that duration alone achieves a sufficient separation between quasi-ownership and lease proper. Nonetheless we give brief consideration to other possible factors.

2.26

Rent. The equivalent scheme in England and Wales is confined to ultra-long leases "without any rent, or merely with a peppercorn rent or other rent having no money value".

^[81]

^[82]

We do not think that a high rent should be a bar to conversion. So long as the landlord is fairly compensated for the loss of income, it should not matter whether the rent is high or low. Indeed with high rents the difficulty is more one for the tenant than for the landlord. A tenant may be unwilling, or unable, to pay the capitalised value of an annual rent of several thousand pounds. Later we suggest that a tenant who does not wish to pay should be able to opt out of the conversion scheme and continue with his lease.

^[83]

Date of lease. The 1954 Act scheme applied only to leases granted before 10 August 1914.

^[84]

^[85]

Value of property. The value of the property which is leased was at one time considered relevant for the purposes of Rent Act protection, which was seen as a social reform for relatively low-cost housing.

^[86]

Type of property. The 1954 Act scheme was directed at leases of houses rather than at leases which were ultra-long, although many of the leases converted would also have fallen into the ultra-long category. Non-residential leases were excluded from the 1954 Act.

^[87]

^[88]

^[89]

Exempt leases

Inalienable property. Some property which can be leased is not capable of being transferred outright. This is either because of the nature of the property itself or because of some limitation of power affecting the landlord. Shootings and freshwater fishings fall into the first category.

^[90]

^[91]

^[92]

The position is different if inalienability is attributable merely to a lack of power in the owner/landlord. Here the property is capable of alienation, but not by its current owner. A further distinction requires to be made between a restriction of power which rests on obligation and one which is attributable to a lack of capacity.

^[93]

^[94]

^[95]

A restriction of power attributable to lack of capacity is a different matter. Without capacity there can be no transfer, and a purported transfer would be void - subject to the special rule that validates all entries made on the Land Register.

^[96]

incapax

^[97]

^[98]

Existing conversion schemes. A number of other conversion schemes are already on the statute book.

Minerals. There seems no reason for exempting leases of minerals as such, although it may be necessary to provide for the continuation of the conditions often found in such leases.

^[105]

Nature of use. The view has already been expressed that the scheme should apply both to commercial leases (ground leases, in practice) and also to mineral leases. Presumably a lease of agricultural subjects, if of ultra-long duration, ought also to be covered. It has not been suggested to us that any other type of lease merits exemption, although we would welcome views.

2.37

Nature of landlord. A special rule for leases of between 175 and 300 years by local authorities was mentioned earlier.

^[106]

Other grounds. We are not aware of other grounds on which a lease ought to be exempted from the conversion scheme, but we would welcome views.

2.39

Proposal. We propose for consideration that:

5. A lease should be exempted from the conversion scheme if -

(a) it is a lease of property which is of its nature inalienable, or

(b) the head landlord is a person prevented by statute from alienating property of the type which is subject to the lease.

Voluntary or compulsory?

2.40

It is necessary to decide whether the proposed scheme should be voluntary or compulsory. Naturally, any conversion scheme must be compulsory as respects the landlord; but it need not be compulsory for the tenant. Here there seem three choices. The scheme could be compulsory, or it could be voluntary, or it could be compulsory but subject to the possibility of an opt-out. The 1954 Act scheme was voluntary, as are the various schemes in force in England and Wales. The scheme for ultra-long leases which operates in Northern Ireland is compulsory.

^[107]

In the case of ultra-long leases, we do not think that a conversion scheme should be wholly voluntary. If ultra-long leases are undesirable, then proper provision ought to be made for their removal. A voluntary scheme would do only half the job. As under the 1954 Act scheme, a significant number of tenants would fail to take the steps necessary to achieve conversion.

^[108]

An advantage of a compulsory scheme is that it solves the problem of subleases. Suppose, for example, that A leases to B for 999 years, that B subleases to C for the same period, and that C subleases to D also for 999 years. In respect of the same piece of land there are then three leases, all classified as ultra-long and all, in principle, capable of conversion under the scheme. As with the scheme for abolition of the feudal system, the ultimate right to become owner rests with the tenant holding under the lowest qualifying lease (D in the example).

^[109]

It may be assumed that, in the normal case at least, a qualifying tenant will not be opposed to conversion. It is true that conversion may involve the payment of money as compensation for the extinction of the rent,

^[110]

One day or many?

If conversion is to be compulsory, it must also occur automatically, without either landlord or tenant being required to do anything. For otherwise there is the risk that the relevant action would not be taken.

^[111]

There is one case in which automatic conversion would not be possible. A real right of lease can be acquired without registration in the property registers.

^[112]

leases

^[113]

It is impossible to know how many ultra-long leases are currently unregistered. Almost certainly the numbers are small. In practice an unregistered lease could not be used as security for a loan,

Summing up the previous section, we propose that:

6. On a day to be appointed (the "appointed day") there should be automatic conversion of all qualifying leases into ownership, except that –

(a) it should be possible for a tenant to elect that there should be no conversion; and

(b) in a case where a lease is unregistered, conversion should not occur until the time of registration.

The details of the conversion scheme are the subject of part 3.

PART 3 CONVERSION: A POSSIBLE

SCHEME

Introduction

3.1

In this part we set out a possible scheme for the conversion of ultra-long leases into ownership. The meaning of "ultra-long" in this context was considered in part 2.

^[118]

dominium utile

From lease to ownership

On a day to be appointed by Scottish Ministers by statutory instrument (the "appointed day"),

^[119]

^[120]

^[121]

If property has been sublet, the relevant lease is the lowest to qualify as ultra-long. The reversionary interest of those higher up the chain is remote and of negligible value. So if A, the owner of land, leases to B for 999 years, who subleases to C for 900 years, who subleases to D for 899 years, who subleases to E for 15 years, the person holding the lowest ultra-long lease is D. On the appointed day D becomes owner, but subject to the (unconverted) 15-year lease held by E.

^[122]

Subordinate real rights

Conversion is a purely technical change. Insofar as the right was encumbered before the appointed day, it should continue to be encumbered thereafter. Existing subordinate real rights, in other words, should remain in place.

lease

land

It need hardly be added that encumbrances affecting an intermediate lease would fall with the lease itself. Intermediate leases are relatively uncommon in the present context, and encumbrances on such leases (such as standard securities) less common still.

3.6

The discussion so far has been confined to subordinate real rights, ie to encumbrances external to the lease.

^[127]

^[128]

Opting out

Feudal abolition did not allow of exceptions. A complex and outdated system of land tenure could not have been preserved merely for the benefit of a small number of vassals who, for one reason or another, were reluctant to move to full ownership. With leases the position is different. Leasing will remain a popular method of landholding in the future, as in the past. If, therefore, a tenant under a qualifying lease wishes to remain as tenant, he should be free to do so.

pro indiviso

The scheme in summary

The scheme outlined above may be summarised in the form of a proposition:

7. We invite views on the following possible scheme for the conversion of ultra-long leases into ownership:

(a) A lease would be a qualifying lease for the purposes of the scheme if, on the appointed day –

(i) it complied with proposals 2 and 3 in respect of unexpired duration;

(ii) it was registered in the Land Register or Register of Sasines;

(iii) it was not an exempt lease in terms of proposal 5 or of (d) below; and

(iv) in a case where, in respect of any land, the above criteria were fulfilled by more than one lease, it was the lowest such lease.

(b) On the appointed day, in relation to any qualifying lease of land –

(i) the right of lease would be converted into ownership;

(ii) any right of lease higher than the converted right would be extinguished;

(iii) the landlord's ownership would be extinguished; and

(iv) any right in security or proper liferent over the land would cease to affect the land.

(c) Following conversion, the land would be subject to any subordinate real right which, immediately before the appointed day, affected –

(i) the lease, and

(ii) (except as mentioned in (b)(iv) above) the land.

(d) A lease which is otherwise a qualifying lease would be exempted from conversion if, before the appointed day, any tenant -

(i) executed a notice of exemption;

(ii) sent a copy of the notice to the landlord or landlords (except where not reasonably practicable to do so); and

(iii) registered the notice in the Land Register or Register of Sasines.

Compensation for loss of rent

3.9

Amount of compensation. On conversion into ownership, rent would cease to be due, and the (former) landlord should be compensated for the loss of income. In practice most rents are likely to be small - according to our survey, less than £5 in around two thirds of all qualifying leases.

^[135]

^[136]

^[137]

It is possible to argue, however, that the feuduty rules are unduly generous. When the rules were first introduced, in 1974, the price of two and a half per cent Consolidated Stock resulted in a feuduty "factor" (ie the figure by which the annual feuduty required to be multiplied in order to arrive at the redemption sum) of 6.3. Since 1974 there has been a steady rise in the price of Consolidated Stock, with the result that the feuduty factor is now in excess of 20. In 1974 a feuduty of £5 could be redeemed for £31.50. The price today would be more £100 or more. This suggests that the price of Consolidated Stock may no longer be a reliable measure of compensation. Admittedly it was re-used as recently as the 2000 Act, but in a context where consistency was required with the 1974 Act provisions. In the case of redemption of rent, there is no earlier model which need be treated as binding;

^[138]

^[139]

^[140]

"[W]e do not consider that ... [a multiplier of 20] is a true reflection of the current market position. Circumstances have changed since the introduction of the 1974 Act: entire superiorities change hands at multipliers of less than half this redemption factor. It would therefore seem unfair if former vassals were required to pay more than the multiplier for which entire superiorities change hands."

At this stage we do not make a firm proposal and simply invite views as to the multiplier which should apply for the redemption of rent:

8. (a) Should compensation for loss of rent be calculated by reference to –

(i) the value of two and a half per cent Consolidated Stock; or

(ii) a multiplier of the annual rent?

(b) If a multiplier is preferred, what figure should be selected?

Compensation due only if claimed. Under the 2000 Act the superior must ask for compensation. Otherwise none is due, and the feuduty is extinguished without payment.

^[141]

Interaction with notice of exemption. A difficulty peculiar to the conversion of leases is the interaction with notices of exemption. The problem can be shortly stated. A tenant can opt out of conversion by registering a notice of exemption;

^[142]

before

^[143]

^[144]

A scheme in outline. Our preliminary view, therefore, is that a claim for compensation should be served before the appointed day. Indeed, in order to allow the tenant sufficient time to register a notice of exemption, it ought to be served no later than three months before that day. A possible scheme would be the following. Compensation would be claimed by service of a notice by the landlord. Payment would then be due on the "redemption day" stipulated in the notice, which could not be less than three months after the date of service. Each lease would thus have a different redemption day. Liability for payment would rest with the person who was tenant on the date of service; and payment would be due to the person who was landlord on that date. A person would qualify as tenant or landlord even although title had not been completed by registration (or possession).

Special mention should be made of cases where the original subjects of let have been divided, by assignation of a part. Our survey suggests that this may have occurred in more than half of all leases.

cumulo

Once a notice has been duly served, payment of compensation could be avoided only by service and registration of a notice of exemption. The debt would then cease to be due, but the lease would survive the appointed day and rent would continue to be payable. In practice it may be expected that the tenant would register the notice during the three-month interval between service and redemption, but later registration should not be excluded. If rent, provisionally redeemed on the redemption date, were to be revived by the later registration of a notice of exemption, the tenant would become liable for the rent attributable to the intermediate period.

3.16

If no claim for compensation was made, the obligation to pay rent would be extinguished on the appointed day, and no compensation would then be due.

3.17

Intermediate leases. In most of the properties affected by the scheme there is only a single landlord and a single tenant.

^[155]

^[156]

Non-monetary rents. In around 1% of the leases in our survey the rent, or part of the rent, was expressed in non-monetary form. For example, in one lease six fat hens formed part of the rent. Another supplemented a low monetary rent with four bolls of good and sufficient oat farm meal. If compensation is to be payable, it is necessary to find some method of converting these rents into monetary value.

3.19

Roughly speaking, such rents divide into three categories. First, there is the case where the lease itself provides the basis of conversion: for example, fifteen and a quarter pecks of oat meal conform to the highest Candlemas fiars prices. Here no legislative help seems needed. In relation to the particular example quoted, the courts which set fiars prices were abolished by the Local Government (Scotland) Act 1973, but the Act provides that any periodical payment ascertained by reference to such prices is now to be the average value of the payment during the three years prior to abolition.

^[157]

^[158]

^[159]

Proposal. The scheme outlined above may be summarised in the form of a proposition:

9. We invite views on the following possible scheme for the payment of compensation in respect of extinction of rent:

(a) Compensation would be payable provided that a notice, in prescribed form, was served by the landlord on the tenant not later than three months before the appointed day.

(b) The notice would stipulate –

(i) the amount of compensation, and

(ii) the date (the "redemption day") on which payment was due.

(c) The redemption day could be not less than three months after service of the notice but not later than the appointed day.

(d) In relation to a single rent due in respect of properties held by different tenants, it would be for the landlord to apportion the compensation, having regard to any informal apportionment of rent currently in existence.

(e) A non-monetary rent would be converted into its monetary equivalent, and in a case where the rent was ascertained by reference to the value of grain or other fungibles, the equivalent would be taken to be the average value during the previous ten years.

(f) On the redemption day, the compensation would become payable by the person who, on the date of service of the notice, was the tenant of the property to the person who, on that date, was the landlord; but where the compensation was £50 or more, payment could be made by instalments.

(g) Rent would cease to be payable –

(i) in respect of any period on or after the redemption day or

(ii) where no compensation notice had been served, in respect of any period on or after the appointed day

but liability for arrears would be unaffected.

(h) A mid-landlord would have the same right to claim compensation as any other landlord.

(i) In other respects, the scheme would follow the rules for feuduty set out in part 3 of the Abolition of Feudal Tenure etc. (Scotland) Act 2000.

Compensation for loss of other money payments

3.21

Leasehold casualties. A casualty is an obligation to pay money (other than rent) at certain intervals, regular or irregular - for example, every 19 years, or on the assignation of the lease. However, leasehold casualties will be extinguished following the enactment of the Leasehold Casualties (Scotland) Bill, currently before the Scottish Parliament. The Bill applies to all leases granted for a period of not less than 175 years and so will cover all the leases which qualify for our scheme.

^[160]

Renewal premiums. Later we suggest that a renewal which the landlord is bound to grant should be counted for the purposes of determining the duration of a lease, and hence the eligibility for conversion.

^[161]

"binds and obliges herself and her foresaids at the expiry of the foresaid period of ninety-nine years to renew this Subtack for the like period of ninety-nine years upon the tenants paying one year's rent in addition to the rent then due ..."

Where, as usually, the renewal premium (grassum) is tied to the ground rent, it is likely to be very small – less than £1 in the example quoted above. Occasionally the amount due is larger. We found one example in which payment was a full year's rental value "whatever that may happen to be".^[162] With renewable leases the tenant will usually need to count at least one renewal in order to bring the unexpired duration to the qualifying level for the purposes of conversion, and occasionally more than one will be required. This suggests both that compensation should be given for the loss of such renewal premiums as are required to reach the qualifying level, but also – in view of the very small number of cases, and the derisory sums often involved – that the method of calculation need not be very sophisticated. The simplest approach would be to treat renewal premiums as an additional rent, spread evenly over the period of the lease. So a premium of £10 payable for renewal every 99 years would be treated as an additional rent of £0.10 a year. This figure could then be added to the rent for the purposes of calculating compensation in the manner already described. This method has the merit of simplicity, while achieving a certain amount of rough justice. It favours the tenant if the next renewal is expected shortly and the landlord if it is still a long way off. Alternatively, it would be possible to provide for a much more precise calculation, based on the current value of a right to receive the premium on the date on which it is due.^[163] In that case a statement of the valuation principle would seem sufficient, leaving the parties to agree on the actual figure.^[164] The very small numbers involved would probably not justify the preparation of a special statutory table of values.^[165] As with claims for rent, the compensation would require to be claimed by notice served not later than three months before the appointed day.^[166]

Maintenance obligations are considered later.

^[167]

Our proposal is that

10. (a) The rules for compensation claims in respect of loss of rent, set out in proposal 9, should apply equally to compensation claims for loss of renewal premiums.

(b) We invite views as to whether the amount payable in respect of renewal premiums should be determined –

(i) by counting as additional rent the figure produced by dividing the premium by the renewal period, or

(ii) by assessing the current value of the right to receive the premium on the date when it would be due.

Reservations and pertinents

3.25

In principle the property which comes to be owned under the scheme should be the same as the property which was previously let. The change is to the nature of the right, and not to the thing in which the right is held. Thus any reservations from the property formerly let should be reflected in the property now owned; and any pertinents of the lease - additional rights exercised in association with the property but beyond its boundaries

^[168]

^[169]

^[170]

Minerals are not included in a lease of land except by express provision,

^[171]

^[172]

^[173]

Pertinents may be either corporeal or incorporeal. The principal incorporeal pertinents (servitudes and real burdens) are considered more fully below. Corporeal pertinents are usually shared with other properties and so are held pro indiviso. The standard example occurs in tenements. Where whole tenements are held on leasehold tenure, the lease of each flat includes, expressly or, possibly, by implication,

^[174]

Leasehold conditions

Rent has already been discussed.

^[175]

^[176]

^[177]

Not all conditions found in leases are enforceable in a question between successors. Enforceability requires that the condition is inter naturalia of the lease, that is to say, of a kind which belongs naturally in a lease of the type in question.

^[178]

^[179]

Our discussion is also confined to conditions of the actual lease being converted. In cases involving leasehold chains, it sometimes happens that the terms of the qualifying lease are different from those of leases higher up the chain. But only the former are relevant, for conditions in a mid- or head- lease are unenforceable against a subtenant;

^[180]

It will be convenient to divide leasehold conditions into three categories. In the first place there are those conditions which, had the original grant been a conveyance rather than a lease, would have been classified as positive servitudes. Secondly, there are those conditions which, in a conveyance, would be regarded as real burdens. And finally there are those conditions which fall into neither of the first two categories but are peculiar to leases. Common examples are restrictions on assignation or subletting, or provisions about surrendering the property on the expiry of the lease. It need hardly be said that conditions of this last kind have no place once a lease has become ownership, and so should not survive the process of conversion. Servitudes and real burdens require a fuller discussion.

Positive servitudes

3.32

A servitude requires two properties in separate ownership, for there must be both a burdened property (servient tenement) and a benefited property (dominant tenement).

^[181]

^[182]

This proposal may not go far enough. It is not uncommon for tenants (or landlords) to exercise "rights" over the others' property which are not expressly provided for in the lease. Thus the pipes and other services to the landlord's property may pass through the property which is tenanted; or the only reasonable access to the back garden of the tenanted property may be by way of a lane forming part of the landlord's property. Often the other property belonging to the landlord will itself be leased to someone else, perhaps on another ultra-long lease; but the principle is the same whether it is leased or not. If the two properties were already in separate ownership, a right exercised in the manner just described would usually be classified as a servitude. Sometimes this would be because a servitude was implied into the original conveyance which separated the properties; but in any event a servitude would usually have been acquired by exercise of the right for the twenty years of positive prescription.

^[183]

A reasonable solution would be to give the former tenant (or landlord), on conversion, the benefit of any period of quasi-prescription. Thus the rule might be that, on the appointed day, the property should have the benefit of, but also be subject to, all servitudes which, if the properties had been separately owned since the date of the lease, would have been constituted by positive prescription or otherwise. This gives weight to past use. Without such a rule the former tenant (or landlord) might be deprived of a right which was reasonably required for the proper enjoyment of his property.

^[184]

^[185]

In theory implied servitudes might equally be part of the rule now proposed, for if the properties were deemed to have been separately owned since the date of the lease, servitudes might have been implied at the time of the deemed separation. But that would be of significance only in the rare case of a qualifying lease granted within the last twenty years. For leases older than that, the "right" will either have been exercised, in which case it would be established by positive prescription on the principle already mentioned, or it will not have been exercised, in which case it will have been extinguished by negative prescription.

^[186]

Much the same issue arises if the land originally leased is divided into two or more units, whether by partial assignation or by partial sublease; and once again the solution seems to lie in treating the units as if they had been in separate ownership, in this case from the date of division.

3.37

No special rule would be needed in relation to property not owned by the landlord.

^[187]

^[188]

We provisionally propose that:

11. (a) On the appointed day the land formerly affected by the lease should be subject to, or as the case may be take the benefit of, such positive servitudes as would have existed on that day if –

(i) the lease had been a conveyance of the land, and accordingly

(ii) that land had been in separate ownership since the date on which the lease was constituted as a real right.

(b) The same rule should apply in respect of any partial assignation or partial sublease prior to the appointed day.

3.39

We have limited our discussion to servitudes which are positive in character on the basis that, by the time any legislation came to be passed, the Title Conditions (Scotland) Bill will be in force, and negative servitudes will have been assimilated with real burdens.

^[189]

Real burdens

Conditions as quasi real burdens. Many ultra-long leases contain conditions which, in a conveyance, would be classified as real burdens. Indeed the connection is made overt in the style books, which tend to import for leases the model clauses already given in the context of feus and other conveyances;

^[190]

^[191]

^[192]

If conditions such as these are to survive the conversion to ownership, they will have to be transformed from leasehold conditions into real burdens.

^[193]

^[194]

^[195]

Three feudal principles. The problem of a real burden without a benefited property is familiar from the conversion of feus into ownership. The result of the abolition of superiorities is to leave many of the (feudal) real burdens without a benefited property to which enforcement rights can attach. The solution adopted by the 2000 Act rests on three broad principles. In the first place, a superior who owns land in the immediate neighbourhood can nominate that land as a new benefited property in the real burden (subject to some qualifications); and a superior which is a designated conservation body can preserve the right to enforce such burdens as qualify as conservation burdens, even in the absence of a benefited property. Otherwise superiors lose all enforcement rights. In the second place, enforcement rights held by third parties survive. Where neighbours have a right to enforce burdens, those rights are unaffected by feudal abolition. This is because the benefited properties are not feudal in character. Finally, special rules are made for facility burdens and service burdens, in view of their special importance. It is possible, as well as desirable, to adapt these principles for use in leasehold conversion.

3.43

The first principle: nomination of a benefited property. The first principle needs little in the way of adaptation. Like a superior, a landlord may, or may not, own other land in the immediate neighbourhood. Any land which is owned could be nominated as the benefited property in the leasehold condition. On the appointed day the condition would then become a real burden. A landlord would not be considered as "owning" any land which was subject to another ultra-long lease,

^[196]

Report on Real Burdens

Scottish Ministers are empowered to draw up a list of conservation bodies.

^[197]

^[198]

Normally only the immediate landlord could save conditions, because only that landlord would have a right to enforce the conditions under the present law.

^[199]

jus quaesitum tertio

^[200]

The second principle: enforcement rights held by third parties. The second principle is relatively unimportant in the context of leasehold conversion. In feus it is common for enforcement rights to be held also by third parties, usually co-feuars. A main cause is the development of a doctrine of implied enforcement rights in cases such as Hislop v MacRitchie's Trs.

^[201]

^[202]

A particular difficulty concerns conditions imposed in (partial) assignations.

^[203]

^[204]

^[205]

"shall be as effectual against any singular successor of the assignee in the subjects assigned as if such assignee had been a grantee of the lease and it had been duly recorded or, as the case may be, the grantee's interest had been so registered."

The meaning of this provision is difficult to grasp. A possible reading is that conditions in an assignation are deemed to be conditions of the lease itself, and hence enforceable by the landlord against the assignee, now his tenant. But it seems improbable that it was intended to give enforcement rights to the landlord in relation to conditions generally imposed for the benefit of the cedent (or perhaps of co-assignees). A more natural reading of the provision, therefore, is that it does no more than ensure that the assignee, and successors, are to be bound. This, however, leaves open the question of title to enforce. If the land had been owned rather than leased, and the 2 hectares disponed rather than assigned, there would usually be an implication that the conditions were to be enforceable by A and his successors as owners of the retained hectare.^[206] Again, however, there is no suggestion that the doctrine applies in the case of leasehold conditions. If that is correct, it would follow that the conditions in the assignation would be enforceable by A and his successors only where it was expressly so provided. Otherwise the conditions would have no more than contractual effect.

The position may be summarised in this way. There is no authority to suggest that the doctrine of implied enforcement rights applies to leases. In the absence of such a doctrine, a third party can have enforcement rights only where these have been expressly granted in the lease or other constitutive deed. There must, in other words, be express nomination of a benefited property. Where this has been done, we suggest that on the appointed day the condition should become a real burden in favour of that property. But otherwise leasehold conditions would not survive, on this principle at least.

3.49

The third principle: survival of all facility burdens and service burdens. A facility burden is one which provides for the maintenance or regulation of a facility of benefit to some other property. In practice this is usually a shared facility such as the common part of a tenement building or a private road or a boundary wall. A service burden is one which relates to the provision of services (such as the supply of water) to land other than the burdened property. Service burdens are rarely encountered in practice, but facility burdens are common. The standard obligation to maintain a fence, mentioned earlier,

Adjustment of terminology. The broad effect of the principles just described is that some leasehold conditions will become real burdens and survive the appointed day while others will be extinguished with the lease itself. In relation to those which survive there will need to be some adjustment of terminology. Leasehold conditions impose obligations on "assignees and their successors". The obligations are not in perpetuity but "during the currency of this lease". The standard of maintenance required may be expressed as being that of "good and tenantable condition and repair". And so on. Legislation providing for the conversion of leasehold conditions into real burdens would need to take some account of terminology.

^[211]

Compensation for extinction of development value burdens. One other aspect of the 2000 Act scheme may be mentioned. An occasional feature of feus was that a grant was made at a significant undervalue on the basis that the land could be used only for some limited purpose, such as the building of a church or a community hall. In effect, real burdens were being used to reserve to the superior the development value of the land.

^[212]

^[213]

Proposal. Our proposal about the conversion of leasehold conditions into real burdens is as follows:

12. (a) This proposal applies to conditions in the qualifying lease which are of their nature capable of being constituted as real burdens.

(b) By notice registered before the appointed day, the landlord should be able to reallot a condition to a new benefited property on the terms set out in sections 18 to 21 of the Abolition of Feudal Tenure etc. (Scotland) Act 2000; and on the appointed day the condition should become a real burden.

(c) By notice registered before the appointed day, a landlord which is a conservation body should be able to preserve a condition concerned with conservation on the terms set out in sections 27 and 28 of the Abolition of Feudal Tenure etc. (Scotland) Act 2000; and on the appointed day the condition should become a conservation burden.

(d) Where the right to enforce a condition is, by express provision, conferred on the tenant (or owner) of any particular property, on the appointed day the condition should become a real burden in respect of which that property is the benefited property.

(e) Any condition which regulates the maintenance, management, reinstatement or use of heritable property which constitutes, and is intended to constitute, a facility of benefit to other land should, on the appointed day, become a facility burden.

(f) Any condition which regulates the provision of services to other land should, on the appointed day, become a service burden.

(g) The benefited properties –

(i) in a facility burden should be any land to which the facility is (and is intended to be) of benefit, and also the heritable property which constitutes the facility; and

(ii) in a service burden should be any land to which the services are provided.

Many leasehold conditions will not fall under any parts of the above proposal and, like feudal real burdens following feudal abolition, will be extinguished on the appointed day.

Other conditions

3.53

Remaining conditions affecting the tenant. Not all conditions will qualify as servitudes or real burdens under the rules just described. But since the remaining conditions would have no useful role once the lease itself had ceased to exist, they should simply be extinguished on the appointed day. Transitional provisions will be needed in respect of obligations which were outstanding as at the appointed day.

^[214]

Conditions affecting the landlord. Leasehold conditions may affect a landlord as well as a tenant. In fact express obligations on the landlord are uncommon in ultra-long leases, but obligations may be implied - for example, a warranty of title, or that the subjects are reasonably fit for the purposes of the lease.

^[215]

inter naturalia

^[216]

^[217]

It occasionally happens that an obligation on the landlord is the direct counterpart of an obligation on the tenant. For example, the tenant may be bound to pay for maintenance which is then to be carried out by the landlord. In a case where the tenant's obligation is converted into a real burden, under the rules suggested earlier, then the landlord's counter-obligation should survive also and be binding on the former landlord or (in the case of facility or service burdens) on the replacement enforcer. The counter-obligation could not be independently enforced, but enforcement of the real burden would be prevented for as long as the counter-obligation remained outstanding. An equivalent rule is provided for in the 2000 Act.

^[218]

A second exception was mentioned earlier.

^[219]

^[220]

Conditions enforceable contractually. The 2000 Act makes an express saving for conditions of the feu insofar as they are enforceable contractually.

13. (a) On the conversion of a qualifying lease into ownership, all the terms and conditions of the lease should cease to have effect, whether as real or as contractual conditions.

(b) However, the enforcement of a real burden created under proposal 12 should be subject to compliance with any obligation which was binding on the landlord immediately before the appointed day and which was the direct counterpart of the real burden.

(c) This proposal is subject to proposals 11 and 12.

Computation of duration

3.59

The duration of a lease determines whether it qualifies for conversion. Account must be taken both of initial duration and of the unexpired term remaining on the appointed day.

^[224]

Renewals. Our survey disclosed examples of leases for an initial term but with an obligation on the landlord to renew. Case law also gives examples.

A renewal requires action on the part of the tenant. It is an option and not an automatic event. If the tenant fails to seek renewal, the lease either comes to an end or continues from year to year by tacit relocation. In either case the option to renew lapses.

^[229]

^[230]

It seems clear that renewals - both actual and potential - should be included in the calculation of the duration of leases. To do otherwise would be to understate the probable length of the lease. Renewals were included in the computation of duration for the 1954 conversion scheme and, much more recently, in both the 2000 Act and in the Leasehold Casualties Bill.

^[231]

A variant, occasionally found, is the consecutive lease. Here, a few years into an existing lease, the landlord grants a second lease which is to begin immediately on the termination of the first. Again it seems that the leases should be aggregated for the purposes of the calculation of duration.

3.64

Breaks. Break options are sometimes found in ultra-long leases. Invariably they are in the landlord's favour.

If break options are to count, however, there seems scope for a significant exception. The standard style of ultra-long lease given in the style books contains a break option which may be exercised only against payment of compensation for the value of the buildings. Here, for example, is the Encyclopaedia of Scottish Legal Styles:

^[238]

"… hereby lets to the said CD … for a period of 999 years ... But notwithstanding the above term of endurance the landlord shall be entitled to put an end to this lease and to remove the tenant from the said subjects at the end of every 99 years thereof on premonition given six months before the term at which such removal is to take place ... and in case the landlord shall take advantage of any such break (but in that case only) he shall be bound to pay the tenant the value of the whole buildings or erections on the premises as the same shall be determined by two arbiters one named by the landlord and the other by the tenant ..."

Our survey produced a number of examples of such leases, and in at least one estate they appear to have been standard practice. A requirement to pay compensation is an acknowledgement that the substantial economic right lies with the tenant rather than with the landlord. In effect, the landlord is buying the tenant out. A break clause coupled with compensation is the functional equivalent of a clause of redemption or pre-emption in a feu. Our preliminary view, therefore, is that it should not prevent conversion under our scheme for ultra-long leases, and that it should be disregarded for the purposes of calculating duration.

Leases for life. Four of the leases in our survey were for the life of the first tenant plus a further period of years, the further period being either 361 years or, in one case, 741 years. No doubt such leases are extremely rare. Further, if our sample is typical, the leases so obviously qualify for conversion that it would not be necessary to make a precise calculation of the lifetime of the tenant. Nonetheless, a cautious view would be that it is necessary to make provision for how such a calculation might be attempted. Fortunately, the 1954 Act contains such a provision.

^[239]

^[240]

^[241]

Proposal. Our proposal is that:

14. For the purposes of determining the duration of a lease –

(a) there should be included

(i) any renewal period which the landlord is bound to grant, and

(ii) the duration of any other lease which is to run consecutively with the current lease;

(b) there should be excluded any period after a break option which is exercisable by the landlord (other than a break option which can be exercised only on payment of compensation for the value of buildings);

(c) any reference to the lifetime of a tenant should be calculated as

(i) the years during which the person was tenant, if known, or

(ii) 35 years, or

(iii) in a case where the tenant is alive, the years for which the person is likely to be tenant, having regard to a standard table of life expectancy.

Registration issues

3.68

Automatic conversion has obvious implications for the Land Register. Until the appointed day the landlord is owner of the land. On or after that day, the tenant is owner, and the lease itself is extinguished. The change occurs by force of statute, without registration; and until the Register catches up it will be inaccurate. Some legislative assistance to the Keeper is required, as it was required under the 2000 Act.

^[242]

In the first place, it needs to be made clear that the Keeper has the power to make the necessary changes to the Register. These changes are likely to involve (i) altering the status of the title sheet from leasehold to ownership; (ii) deleting from the burdens section the conditions of the lease other than those converted into real burdens by registered notice or by statute;

^[243]

^[244]

^[245]

In the second place, it is necessary to allow for the possibility of error. A mistake made by the Keeper in the course of the changes described above should be capable of being corrected; and again the necessary rectification should be allowed without regard to the position of a proprietor in possession. However, that proprietor should have the protection of the rule from the 2000 Act which prevents rectification to the effect of reinstating encumbrances which have been deleted in error.

^[246]

^[247]

Next there is the issue of indemnity. Usually a person who suffers loss as result of rectification is entitled to indemnity.

^[248]

^[249]

Finally, there is the question of timescale. Although the number of ultra-long leases is small, and the number registered in the Land Register smaller still, it will be impracticable for the Keeper to make the necessary alterations to the Register on the appointed day itself. Thus for a limited period the Register will not accurately reflect the post-conversion position. No one ought to be misled by this. The existence of the legislation will be well-known to any professional adviser; and if the landlord's title sheet is still on the Register, it will also be disclosed that the title is subject to an ultra-long lease.

3.73

Thus far our proposals follow closely the scheme laid down by the 2000 Act. But we propose one departure. Under the 2000 Act the alterations to the Register are, in effect, to occur in two distinct phases. First, dominium utile is upgraded to ownership and superiority title sheets are deleted. And secondly, those real burdens which do not survive abolition are deleted. The second phase is not to take place for some years after the appointed day, partly in recognition of the difficulty of the task to be performed.

^[250]

^[251]

^[252]

It may be added that no action need be taken in relation to the Register of Sasines. The Sasine Register is a register of deeds and not of rights, whereas the proposed legislation will affect, not the original deeds themselves, but the rights to which the deeds give rise.

3.75

We propose that

15. (a) It should be made clear -

(i) that any rectification of the Land Register which is required to take account of the legislation on leasehold conversion, or of anything done under or by virtue of that legislation, is not to be regarded as prejudicing any proprietor in possession, and

(ii) that there is no entitlement to indemnity under section 12 of the Land Registration (Scotland) Act 1979 as a result of any such rectification.

(b) However, paragraph (a) should not apply insofar as the rectification involves the reinstatement of an encumbrance which was previously deleted.

Unregistered leases

3.76

A small number of ultra-long leases have never been registered and will remain unregistered on the appointed day.

It may occasionally happen that the unregistered lease is a sublease and that the head lease is registered. In that case the head lease would be converted into ownership on the appointed day, as the lowest lease then qualifying,

^[259]

Our proposal is that

16. Where a lease fails to qualify for conversion only because it was not registered on the appointed day, it should become a qualifying lease on the day on which it is first registered; and proposals 7, 9, 11, 12 and 13 should apply with the substitution of "day of registration" for "appointed day".

PART 4 RESIDENTIAL GROUND LEASES

Introduction

4.1

"Ground lease" is a convenient term, although not a technical one. As its name suggests, a ground lease is a lease of bare ground - of land not yet built on. In a ground lease the landlord supplies the land and the tenant the buildings; and the rent is attributable to the former but not to the latter.

^[260]

^[261]

In 1954 there was introduced a statutory right to convert residential ground leases into ownership, on payment of compensation to the landlord. The Long Leases (Scotland) Act 1954 applied to all residential leases granted before 10 August 1914 for a duration of at least 50 years.

The take-up of the 1954 Act scheme seems to have been patchy, and such figures as are available point to regional variations. In Moray, for example, 141 of the 361 surviving leases were converted between 1954 and 1959, whereas in Dumfries the corresponding figure was a mere two out of 793 leases.

Nonetheless some leases would remain. We have tried to make an assessment of the number of residential ground leases still in existence today but which would not qualify for conversion under the scheme for ultra-long leases. That scheme is intended to apply to all leases granted for more than 175 years, provided that there is an unexpired duration of 100 (or on one version 175) years.

From time to time it has been suggested that the 1954 Act ought to be revived to allow the conversion of remaining residential ground leases.

^[282]

The case for conversion

Forced substitute for feus. The main justification for conversion advanced by the Guthrie Committee was that ground leases were often granted only because subinfeudation was unavailable - generally because the land was held under burgage tenure or was entailed, or because subinfeudation was expressly prohibited in the feu. In effect the leases were quasi-feus. Accordingly, once the final barrier to subinfeudation was removed in 1914, with the passing of the Entail (Scotland) Act, it seemed logical that the quasi-feus should be converted into actual feus. However, conversion on this view should be confined to pre-1914 leases, for as soon as subinfeudation came to be available, granting a lease became a matter of free choice with which the law should not interfere.

^[283]

Today this justification is plainly spent. Leases which are sufficiently long to count as quasi-feus will come within our scheme for the conversion of ultra-long leases. Other leases are not covered by the justification. Indeed there can hardly be any left from before 1914, for a typical short ground lease would have been granted for a period of 99 years. Our survey found only five such leases which might possibly be still in existence.

4.8

Loss of a home. By far the strongest argument in favour of conversion is that, at the end of a ground lease, the tenant loses his home while the landlord merely realises an investment. An investment can be compensated with money. A home cannot. A conversion scheme against payment of money would be a means of giving the home to the tenant while continuing to realise an investment for the landlord. Arguably that is the right way round. It is the length of the lease which turns a house into a home, just as it is the presence of the home which marks residential ground leases out from ground leases taken for commercial purposes. In leases of short duration the landlord might intend to re-occupy the property himself or through a member of his family. In that case the house is as much the home of the landlord as of the tenant. But once a lease passes the 50 years required by the 1954 Act, the landlord's interest is likely to assume a monetary form.

4.9

To some extent this argument is self-defeating. If a landlord is content with money rather than the eventual return of his property, he will be willing to enter into a voluntary arrangement with the tenant. In that case a statutory scheme is unnecessary. But in practice not all landlords are content to give up their property, particularly if the property forms part of a larger estate the integrity of which they wish to protect.

4.10

Absence of alternative accommodation. Ground leases tend to be concentrated in particular areas, often reflecting the practice of a particular estate in the disposal of property. If a lease comes to an end and the tenant loses his home, there may be no alternative accommodation in the immediate vicinity. This may be especially the case in certain rural areas where accommodation is scarce. If so, the tenant will have to leave, not merely his home, but also the neighbourhood, with obvious implications for employment and for domestic life. The scale of this problem is difficult to assess and we would be grateful for the views of those with experience of residential ground leases.

4.11

Absence of protection. An ultra-long lease would be converted into ownership, under the scheme proposed earlier. A short lease of a dwellinghouse will often attract security of tenure, whether as a protected tenancy under the Rent (Scotland) Act 1984, a secure tenancy under the Housing (Scotland) Act 1987 or as an assured tenancy under the Housing (Scotland) Act 1988. The leases with which we are concerned here, however, are uniquely unprotected. They are too short to qualify for conversion into ownership, but have too low a rent, usually, to qualify for security of tenure.

^[284]

^[285]

No compensation for improvements. Once a lease expires, not only must the tenant leave the property but usually there is no entitlement to compensation for improvements. Most improvements - and certainly buildings - accede to the land and so become the property of the landlord. At the end of the lease they must be left behind, unless they qualify as trade

The case against conversion

A number of other factors argue against the introduction of a conversion scheme.

4.14

Justified expectations. If the original parties are still in place, then the lease is a consensual contract, freely entered into; and if, as almost always, the parties are successors, they are subject to rights and obligations which they have chosen to assume. In acquiring a lease a tenant buys with his eyes open. In most cases he will have had the benefit of legal advice. The price will have reflected the terms of the lease. A lease which has only twenty years to run and allows no compensation for improvements is worth much less in the market place than a lease with an unexpired duration of 900 years. The house, which will soon return to the landlord, was not built by the tenant but by some, usually remote, predecessor. In short, the tenant has received what he paid for, no more and no less. The same is true of the landlord. The property was bought subject to the lease, and the price paid will have been determined largely by the length of the unexpired term. In summary, each party to the lease has certain expectations, based on its terms. The law should hesitate before it interferes with such expectations, and with the established rights of parties.

4.15

This argument may seem to have less force in a case where the lease has passed down a family without ever being exposed on the open market. At the least there may have been genuine misunderstandings. For if a house has been in the family for 100 years it may be natural to assume, without inquiry, that the present arrangements are permanent in nature. And that belief may have been reinforced by the words and actions of the current landlord. The distinction between lease and ownership, so apparent to the lawyer, is not always so clear to a person living, virtually rent-free, in a house. It is noteworthy that the 1954 Act scheme, while not generally available to those acquiring the lease after 10 May 1951, made an exception for acquisition by inheritance.

^[290]

Previous opportunity. A right to convert was conferred by the 1954 Act. There was thus a previous opportunity during the period from 1954 to 1959. On one view, the opportunity should not be renewed.

^[291]

Inappropriate solution. Other solutions are possible and, perhaps, better. In French law,

superficies

Cost to the tenant. A conversion scheme could not be free.

Escalation of compensation levels. Conversion already occurs on a voluntary basis, although we have no information as to its frequency. A worry expressed by the Guthrie Committee was that the introduction of a statutory scheme might drive up the levels of compensation typically asked for in voluntary conversions.

^[303]

Complexity relative to numbers. A conversion scheme would inevitably be complex, both to devise and thereafter to administer. It is true that a model already exists in the 1954 Act, but a considerable amount of adaptation would be required to make that scheme fit for modern conditions.

Evaluation

We have found the various arguments difficult to assess. While there is an obvious attraction in giving the house to the tenant in exchange for compensation to the landlord, some may question whether a tenant who acquired a lease with his eyes open and at market value should receive an option to purchase for which he did not pay and which he had no reason to expect. It is undeniable, however, that a tenant holding under a residential ground lease lacks the security of tenure which is available to most long-term tenants of dwellinghouses. In the end the practical arguments may seem the most compelling. A conversion scheme would be complex without necessarily being very useful. If the real problem is thought to be the danger of eviction, then a better way forward might be the introduction of security of tenure, perhaps by means of an extension of the lease. That could be justified as a solution proportionate to the scale of the problem. For the moment, however, we have no concluded views and merely ask:

17. (a) Is there a need for legislative protection for tenants holding under residential ground leases (not being ultra-long leases within proposal 2)?

(b) If so, should such protection comprise -

(i) a right to convert the lease into ownership;

(ii) a right to security of tenure, for example by extension of the lease for a fixed period; or

(iii) some other form of protection (please specify)?

4.22

As we have left open the possibility of a conversion scheme for residential ground leases, it is necessary to consider some of the issues raised by such a scheme. That is the subject of the remainder of this part.

Compensation

4.23

Method of calculation. Probably the most important single issue is the calculation of the compensation payable by the tenant to the landlord.

The existing schemes suggest two main models for compensation. One is to make a direct valuation of the landlord's interest, taking into account the terms of the lease and its duration. This method is used in the English schemes of 1967 and 1993 and in the Northern Irish scheme of 1971. The other model is to value the property itself and then to deduct an amount which either represents the tenant's interest or which takes account of the fact that the landlord would not, but for conversion, receive the return of the property until the end of the lease. The property is valued on the basis of vacant possession, and taking into account any development potential released by the expiry of the lease.

^[313]

The direct method of valuation, used in England and Wales and in Northern Ireland, can take account of the terms of the particular lease and may give a more accurate picture of the value of the tenant's acquisition. But, partly in consequence, the method is slower and more expensive, and more open to dispute. The valuer must determine the bids a seller would be likely to receive on the basis of the, often complex, assumptions set out in the particular scheme; and at least to start with there will be no comparisons to assist. In the process it may be necessary to assess relative long-term changes in the value of land. The English schemes have caused some problems in practice

^[314]

^[315]

The indirect method of valuation, used in Scotland in the 1954 Act,

^[316]

The direct method of valuation offers a nuanced approach which is appropriate in cases where there is diversity of type and duration of lease. In the present case, however, there is little in the way of diversity. Once ultra-long leases are excluded, most remaining ground leases are granted for broadly similar periods and subject to broadly similar terms. Our inclination, therefore, would be to support the indirect method of valuation. Disputes as to valuation could be referred to the Lands Tribunal.

^[317]

Merger or marriage value. When considering different methods of valuation it is important to bear in mind that the separate values of the landlord's and the tenant's interest, when taken together, amount to less than the value of the property. This is because there is a value in owning both interests which is excluded when the interests are owned separately. This value is referred to as "merger value" or "marriage value". The landlord's interest is therefore worth more to the tenant than to other purchasers because if the interest is acquired he will own the property outright, which is worth more than the aggregate of the two separate interests. In assessing compensation it is necessary to decide where the benefit of the marriage value should lie. One approach would be to say that compensation should be based on the landlord's loss rather than on the tenant's gain. In that case it is sufficient to compensate the landlord for the value of his interest, without regard to the marriage value. In the 1967 and 1993 schemes for England and Wales, however, marriage value is generally

^[318]

^[319]

Discount. All conversion schemes so far introduced appear to offer the tenant some kind of discount on the acquisition of the landlord's interest, although the nature of the compensation formulae makes the extent of the discount hard to assess. Certainly the price was discounted under the 1954 Act scheme which applied in Scotland.

^[320]

^[321]

The 1967 Act scheme in England and Wales also offers discounted compensation.

^[322]

^[323]

It is not for this Commission to determine whether, or to what extent, the price ought to be discounted, and we merely record some of the arguments for and against.

^[324]

^[325]

"In considering the terms upon which conversion should be granted we have taken into account (i) the strong probability that a permanent feu right would have been granted initially had the landowner had the power to do so; (ii) the fact that the property was built by the predecessors of the lessee; (iii) the present inflated values of property; and (iv) the existing practice of Scottish landowners with regard to conversion, which almost always takes into account the fact that their predecessors were not free to grant feus."

Of those justifications, numbers (i) and (probably) (iv) would not seem to apply today.^[326] In England and Wales, the white paper which preceded the 1967 Act placed most weight on the fact that the house was built, or paid for, by the lessee (ie justification (ii) of the Guthrie Committee):^[327]

"In the case of long leases, experience has shown that the system has worked very unfairly against the occupying leaseholder. The freeholder^[328] has provided the land; but in the great majority of cases it is the leaseholder or his predecessor in title who at their own expense have built the house on the land. Whether this is so or not in all cases, it is almost universally true that over the years it is the lessee and his predecessors who have borne the cost of improvements and maintenance, and these will probably have cost far more than the original building itself … [T]he price for enfranchisement must accordingly be based not on present market values but on the value of the land itself … The price of enfranchisement must be calculated in accordance with the principle that in equity the bricks and mortar belong to the qualified leaseholder and the land to the landlord."

The continued force of this kind of argument is difficult to assess. Whatever its merits 40 or 50 years ago, today it meets the difficulty that many of those now holding leases have no connection with the original lessee and simply bought the lease at market value, having due regard to its terms and duration. If so, there may not be much of a case for special treatment. In this connection it may be mentioned that the 1954 Act scheme had a cut-off point of 10 May 1951, and more recent acquirers of leases could not convert.^[329] We would welcome the views of consultees, particularly those with practical experience of such leases.

Regard must also be had to the European Convention on Human Rights, and in particular to article 1 of the First Protocol, which provides that:

"Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure payment of taxes or other contributions or penalties."

At the time when the 1954 Act scheme was introduced, UK citizens had no right of direct access to the European Commission of Human Rights. The 1967 Act scheme, however, was challenged before the Commission and the Court in a landmark case, James v United Kingdom.^[330] The Court decided that the scheme did not breach article 1. In the Court's view it was not manifestly unreasonable to characterise the ground lease system, as then operating, as a social injustice; and the elimination of a social injustice was an act in the "public interest". Further, having regard to a State's margin of appreciation, it could not be said that the level of compensation failed to afford a fair balance between the general interest of the community and the fundamental rights of individuals.^[331] A challenge was also rejected under articles 6, 13 and 14 of the Convention.

Questions for consideration. We invite views on the following questions:

18. In the event that a scheme for the conversion of ground leases is introduced -

(a) what would be the appropriate method of calculating the compensation due to the landlord?

(b) should the compensation be less than the value of the landlord's interest and, if so, by how much should that value be discounted?

1954 Act as a model

4.34

Any new scheme should be modelled so far as possible on the old. This is not only for economy of effort in respect of a scheme which would probably be little used but also because the Long Leases (Scotland) Act 1954 was itself a well-conceived piece of legislation. If success can be measured by an absence of reported case law, the 1954 Act was highly successful; and indeed the Act continued to be used, unofficially, as the basis of voluntary conversions long after it had ceased to apply. Much of the credit for this, no doubt, goes to the careful work of the Guthrie Committee. In the outline scheme described below we have followed the 1954 Act except where there seemed good reason not to do so.

Qualifying leases

4.35

Residential lease for 50 years. Following the 1954 Act, we suggest that a lease should qualify for conversion if it was granted for a period of 50 years or more and is currently occupied as a private dwellinghouse which forms the usual residence of the tenant.

Under the 1954 Act a dwellinghouse includes any garden, garage or other pertinent,

Tacit relocation. The lease, of course, must still be in existence, for without a subsisting lease there is nothing to convert. But provided that there is a lease, the length of the unexpired period is relevant only in relation to the amount of compensation.

bona fide

Exemptions. Both the 1954 Act

The other two exemptions in the 1954 Act are for (i) land acquired for development at the end of the lease

In our scheme for ultra-long leases we suggested that certain classes of inalienable property ought to be exempt, and we repeat that suggestion here.

^[358]

^[359]

We propose that

19. In the event that a scheme for the conversion of ground leases is introduced

(a) A ground lease should be eligible for conversion if -

(i) it was granted for a period of not less than 50 years, and

(ii) the property is occupied by the tenant as a private dwellinghouse forming his usual residence.

(b) If part only of the property is occupied as a private dwellinghouse, only that part should be eligible for conversion.

(c) An expired lease should be eligible for conversion if the lease was subsisting at the date of publication of this discussion paper (except where terminated by agreement or due to the fault of the tenant).

(d) A lease continuing by tacit relocation should be treated as a subsisting lease.

(e) A lease should be exempted from the conversion scheme if it is a lease of property inalienable in the sense of proposal 5.

(f) If the landlord acquired his interest with the purpose of occupying the property as his residence on expiry of the lease, the sheriff should have a discretion to exempt the lease from conversion.

(g) Views are invited as to whether there should also be exempted -

(i) leases where the landlord's interest was acquired for future development of the property;

(ii) leases from Scottish Ministers, government departments, and local authorities.

Notice and conveyance

4.42

Notice. The scheme could not be compulsory, unlike the proposed scheme for ultra-long leases.

Conveyance. Conversion is completed by registration in the Land Register.

^[368]

^[369]

^[370]

By the time that any legislation was in force, the feudal system would have been abolished.

Where the landlord will continue to own other property in the area, the question of real burdens and servitudes arises. Even if the disposition were silent on the subject there would be implied in favour of the grantee such servitudes as are reasonably necessary for the enjoyment of property;

The disposition would be executed, in the usual way, by the granter only (ie by the landlord).

Effect of registration. Registration in the Land Register will confer ownership on the tenant. To describe this process as "conversion" is convenient but not accurate. The lease does not become ownership. Rather the ownership previously held by the landlord passes, on registration, to the tenant.

Protection of heritable creditors

As the end of a lease approaches and the value of the landlord's interest increases, standard securities will become more common and also more valuable.

Identifying the landlord

Unidentified landlords. In most of the leases with which we are concerned, the tenant will have been making regular payments of rent and the identity of the landlord will be perfectly apparent. But if the amount due is small and the lease long, it is possible that the rent is no longer collected. In that case there may be occasionally be difficulties in identifying the landlord. It is true, of course, that some kind of title will exist somewhere on the property register. But the description may be so vague as to be virtually unintelligible, and there may not have been any transmissions in modern times. Further, even if the title can be properly located, there may be no identifiable person now living with whom it can be connected. The 1954 Act makes no provision for this situation,

^[403]

^[404]

Unregistered landlords. The tenant must serve the notice on the landlord, that is to say, on the owner of the property in question; and, consistently with the scheme for ultra-long leases,

^[405]

^[406]

^[407]

Intermediate landlords

In theory, the original lease may have been followed by a sublease, or even by a series of subleases. Our survey, however, suggests that this is rarely the case in residential ground leases. Of the 46 leases identified as possibly qualifying for conversion,

^[408]

The starting point is that a sublease is, in principle, treated like any other lease. Hence if it was granted for 50 years and is occupied by the subtenant as a private dwellinghouse forming his usual residence, then it would qualify for conversion under the scheme.

^[409]

The attribution of compensation is not straightfoward. The approach taken by the 1954 Act was to compensate intermediate landlords for "profit rent" (ie the difference between rent received and rent payable) but not for "profit years" (ie the unexpired term left once the sublease had come to an end). The subtenant made a payment for the capitalised value of the profit rent.

sub

Very occasionally there might be an interaction between the scheme for ground leases and the scheme, described in parts 2 and 3, for ultra-long leases. Suppose that A leases to B for 999 years and B subleases to C for 99 years. C uses the property as a dwellinghouse. In principle, both B and C can convert and become owners, but B must give way to C, on the principle that the lower right always prevails.

after

The scheme in summary

The mechanics of the scheme can be summarised in the form of a proposal

20. We invite views on the following possible scheme for the conversion of residential ground leases into ownership:

(a) A tenant holding under a lease qualifying under proposal 19 would have an option to acquire ownership of the property in exchange for payment to the landlord of compensation.

(b) The option would be exercised by service of a notice, in statutory form, on the landlord.

(c) The landlord would be bound to grant a disposition of the property within three months of the notice, or such other period as may be agreed between the parties. Payment would be due at that time.

(d) The disposition would -

(i) state that it was granted in implement of the relevant legislation;

(ii) convey the property that was leased;

(iii) grant and reserve such servitudes as may be reasonably necessary for the enjoyment of the property and of any neighbouring property owned by the landlord; and

(iv) impose such real burdens as are reasonable in the circumstances.

(e) The reasonable conveyancing expenses of the landlord would be met by the tenant. It is for consideration whether the tenant should also meet the expenses of valuation.

(f) Registration in the Land Register would -

(i) transfer ownership from landlord to tenant;

(ii) extinguish the lease and any intermediate leases;

(iii) extinguish any right in security or proper liferent over the land; and

(iv) make the land subject to any subordinate real right which formerly affected the lease.

(g) Before paying the landlord, the tenant would be bound to apply the compensation money to the repayment of any loan secured by a heritable security affecting the land and registered not later than 14 days prior to registration of the disposition in his favour.

(h) If the landlord cannot be identified, the sheriff court should be empowered to authorise signature of the disposition and to receive payment of the compensation.

(i) If the qualifying lease is a sublease, the scheme should apply with the following modifications:

(i) except where not reasonably practicable, the tenant should serve a copy of the notice on all intermediate landlords;

(ii) compensation should be calculated on the basis of the unexpired term of the sublease; and

(iii) while the compensation payment should continue to be made to the head landlord, an intermediate landlord should have a claim on that sum to the extent that it is attributable to his own lease.

(j) For the purposes of this proposal, "landlord" means the owner of the land which is leased; and "owner" means

(i) the person who has right to the land whether or not he has completed title, or

(ii) if any person is entitled to become owner under proposals 7 or 16, that person.

Repeal of 1954 Act

4.56

It has not been possible to use the 1954 Act scheme since 31 August 1959. Nonetheless the relevant part of the Act (part I) remains on the statute book. We suggest therefore that

21. Part I of the Long Leases (Scotland) Act 1954 should be repealed.

PART 5 SUMMARY OF PROVISIONAL

PROPOSALS

The right of a tenant under an ultra-long lease should be converted into a right of ownership of the land, and the right of the landlord should correspondingly be extinguished.

(Paragraph 2.12)

(a) In determining which leases qualify for conversion would it be preferable to follow

(ii) option A (unexpired term of more than 175 years) or

(ii) option B (initial grant for more than 175 years coupled with an unexpired term of more than 100 years)?

(b) In relation to the preferred option, are the suggested limits for length of lease satisfactory or should different limits be substituted?

(Paragraph 2.22)

Should there be exempted from conversion any lease in which the head landlord is a local authority and which has been granted for a period not exceeding 300 years?

(Paragraph 2.23)

Should the exemption mentioned in proposal 3 be extended to other public bodies and, if so, to which?

(Paragraph 2.23)

A lease should be exempted from the conversion scheme if –

(a) it is a lease of property which is of its nature inalienable, or

(b) the head landlord is a person prevented by statute from alienating property of the type which is subject to the lease.

(Paragraph 2.39)

On a day to be appointed (the "appointed day") there should be automatic conversion of all qualifying leases into ownership, except that –

(a) it should be possible for a tenant to elect that there should be no conversion; and

(b) in a case where a lease is unregistered, conversion should not occur until the time of registration.

(Paragraph 2.47)

We invite views on the following possible scheme for the conversion of ultra-long leases into ownership:

(a) A lease would be a qualifying lease for the purposes of the scheme if, on the appointed day –

(i) it complied with proposals 2 and 3 in respect of unexpired duration;

(ii) it was registered in the Land Register or Register of Sasines;

(iii) it was not an exempt lease in terms of proposal 5 or of (d) below; and

(iv) in a case where, in respect of any land, the above criteria were fulfilled by more than one lease, it was the lowest such lease.

(b) On the appointed day, in relation to any qualifying lease of land –

(i) the right of lease would be converted into ownership;

(ii) any right of lease higher than the converted right would be extinguished;

(iii) the landlord's ownership would be extinguished; and

(iv) any right in security or proper liferent over the land would cease to affect the land.

(c) Following conversion, the land would be subject to any subordinate real right which, immediately before the appointed day, affected –

(i) the lease, and

(ii) (except as mentioned in (b)(iv) above) the land.

(d) A lease which is otherwise a qualifying lease would be exempted from conversion if, before the appointed day, any tenant -

(i) executed a notice of exemption;

(ii) sent a copy of the notice to the landlord or landlords (except where not reasonably practicable to do so); and

(iii) registered the notice in the Land Register or Register of Sasines.

(Paragraph 3.8)

(a) Should compensation for loss of rent be calculated by reference to –

(i) the value of two and a half per cent Consolidated Stock; or

(ii) a multiplier of the annual rent?

(b) If a multiplier is preferred, what figure should be selected?

(Paragraph 3.10)

We invite views on the following possible scheme for the payment of compensation in respect of extinction of rent:

(a) Compensation would be payable provided that a notice, in prescribed form, was served by the landlord on the tenant not later than three months before the appointed day.

(b) The notice would stipulate –

(i) the amount of compensation, and

(ii) the date (the "redemption day") on which payment was due.

(c) The redemption day could be not less than three months after service of the notice but not later than the appointed day.

(d) In relation to a single rent due in respect of properties held by different tenants, it would be for the landlord to apportion the compensation, having regard to any informal apportionment of rent currently in existence.

(e) A non-monetary rent would be converted into its monetary equivalent, and in a case where the rent was ascertained by reference to the value of grain or other fungibles, the equivalent would be taken to be the average value during the previous ten years.

(f) On the redemption day, the compensation would become payable by the person who, on the date of service of the notice, was the tenant of the property to the person who, on that date, was the landlord; but where the compensation was £50 or more, payment could be made by instalments.

(g) Rent would cease to be payable –

(i) in respect of any period on or after the redemption day or

(ii) where no compensation notice had been served, in respect of any period on or after the appointed day

but liability for arrears would be unaffected.

(h) A mid-landlord would have the same right to claim compensation as any other landlord.

(i) In other respects, the scheme would follow the rules for feuduty set out in part 3 of the Abolition of Feudal Tenure etc. (Scotland) Act 2000.

(Paragraph 3.20)

10.

(a) The rules for compensation claims in respect of loss of rent, set out in proposal 9, should apply equally to compensation claims for loss of renewal premiums.

(b) We invite views as to whether the amount payable in respect of renewal premiums should be determined –

(i) by counting as additional rent the figure produced by dividing the premium by the renewal period, or

(ii) by assessing the current value of the right to receive the premium on the date when it would be due.

(Paragraph 3.24)

11.

(a) On the appointed day the land formerly affected by the lease should be subject to, or as the case may be take the benefit of, such positive servitudes as would have existed on that day if –

(i) the lease had been a conveyance of the land, and accordingly

(ii) that land had been in separate ownership since the date on which the lease was constituted as a real right.

(b) The same rule should apply in respect of any partial assignation or partial sublease prior to the appointed day.

(Paragraph 3.38)

12.

(a) This proposal applies to conditions in the qualifying lease which are of their nature capable of being constituted as real burdens.

(b) By notice registered before the appointed day, the landlord should be able to reallot a condition to a new benefited property on the terms set out in sections 18 to 21 of the Abolition of Feudal Tenure etc. (Scotland) Act 2000; and on the appointed day the condition should become a real burden.

(c) By notice registered before the appointed day, a landlord which is a conservation body should be able to preserve a condition concerned with conservation on the terms set out in sections 27 and 28 of the Abolition of Feudal Tenure etc. (Scotland) Act 2000; and on the appointed day the condition should become a conservation burden.

(d) Where the right to enforce a condition is, by express provision, conferred on the tenant (or owner) of any particular property, on the appointed day the condition should become a real burden in respect of which that property is the benefited property.

(e) Any condition which regulates the maintenance, management, reinstatement or use of heritable property which constitutes, and is intended to constitute, a facility of benefit to other land should, on the appointed day, become a facility burden.

(f) Any condition which regulates the provision of services to other land should, on the appointed day, become a service burden.

(g) The benefited properties –

(i) in a facility burden should be any land to which the facility is (and is intended to be) of benefit, and also the heritable property which constitutes the facility; and

(ii) in a service burden should be any land to which the services are provided.

(Paragraph 3.52)

13.

(a) On the conversion of a qualifying lease into ownership, all the terms and conditions of the lease should cease to have effect, whether as real or as contractual conditions.

(b) However, the enforcement of a real burden created under proposal 12 should be subject to compliance with any obligation which was binding on the landlord immediately before the appointed day and which was the direct counterpart of the real burden.

(c) This proposal is subject to proposals 11 and 12.

(Paragraph 3.58)

14.

For the purposes of determining the duration of a lease –

(a) there should be included

(i) any renewal period which the landlord is bound to grant, and

(ii) the duration of any other lease which is to run consecutively with the current lease;

(b) there should be excluded any period after a break option which is exercisable by the landlord (other than a break option which can be exercised only on payment of compensation for the value of buildings);

(c) any reference to the lifetime of a tenant should be calculated as

(i) the years during which the person was tenant, if known, or

(ii) 35 years, or

(iii) in a case where the tenant is alive, the years for which the person is likely to be tenant, having regard to a standard table of life expectancy.

(Paragraph 3.67)

15.

(a) It should be made clear -

(i) that any rectification of the Land Register which is required to take account of the legislation on leasehold conversion, or of anything done under or by virtue of that legislation, is not to be regarded as prejudicing any proprietor in possession, and

(ii) that there is no entitlement to indemnity under section 12 of the Land Registration (Scotland) Act 1979 as a result of any such rectification.

(b) However, paragraph (a) should not apply insofar as the rectification involves the reinstatement of an encumbrance which was previously deleted.

(Paragraph 3.75)

16.

Where a lease fails to qualify for conversion only because it was not registered on the appointed day, it should become a qualifying lease on the day on which it is first registered; and proposals 7, 9, 11, 12 and 13 should apply with the substitution of "day of registration" for "appointed day".

(Paragraph 3.78)

17.

(a) Is there a need for legislative protection for tenants holding under residential ground leases (not being ultra-long leases within proposal 2)?

(b) If so, should such protection comprise -

(i) a right to convert the lease into ownership;

(ii) a right to security of tenure, for example by extension of the lease for a fixed period; or

(iii) some other form of protection (please specify)?

(Paragraph 4.21)

18.

In the event that a scheme for the conversion of ground leases is introduced -

(a) what would be the appropriate method of calculating the compensation due to the landlord?

(b) should the compensation be less than the value of the landlord's interest and, if so, by how much should that value be discounted?

(Paragraph 4.33)

19.

In the event that a scheme for the conversion of ground leases is introduced -

(a) A ground lease should be eligible for conversion if -

(i) it was granted for a period of not less than 50 years, and

(ii) the property is occupied by the tenant as a private dwellinghouse forming his usual residence.

(b) If part only of the property is occupied as a private dwellinghouse, only that part should be eligible for conversion.

(c) An expired lease should be eligible for conversion if the lease was subsisting at the date of publication of this discussion paper (except where terminated by agreement or due to the fault of the tenant).

(d) A lease continuing by tacit relocation should be treated as a subsisting lease.

(e) A lease should be exempted from the conversion scheme if it is a lease of property inalienable in the sense of proposal 5.

(f) If the landlord acquired his interest with the purpose of occupying the property as his residence on expiry of the lease, the sheriff should have a discretion to exempt the lease from conversion.

(g) Views are invited as to whether there should also be exempted -

(i) leases where the landlord's interest was acquired for future development of the property;

(ii) leases from Scottish Ministers, government departments, and local authorities.

(Paragraph 4.41)

20.

We invite views on the following possible scheme for the conversion of residential ground leases into ownership:

(a) A tenant holding under a lease qualifying under proposal 19 would have an option to acquire ownership of the property in exchange for payment to the landlord of compensation.

(b) The option would be exercised by service of a notice, in statutory form, on the landlord.

(c) The landlord would be bound to grant a disposition of the property within three months of the notice, or such other period as may be agreed between the parties. Payment would be due at that time.

(d) The disposition would -

(i) state that it was granted in implement of the relevant legislation;

(ii) convey the property that was leased;

(iii) grant and reserve such servitudes as may be reasonably necessary for the enjoyment of the property and of any neighbouring property owned by the landlord; and

(iv) impose such real burdens as are reasonable in the circumstances.

(e) The reasonable conveyancing expenses of the landlord would be met by the tenant. It is for consideration whether the tenant should also meet the expenses of valuation.

(f) Registration in the Land Register would -

(i) transfer ownership from landlord to tenant;

(ii) extinguish the lease and any intermediate leases;

(iii) extinguish any right in security or proper liferent over the land; and

(iv) make the land subject to any subordinate real right which formerly affected the lease.

(g) Before paying the landlord, the tenant would be bound to apply the compensation money to the repayment of any loan secured by a heritable security affecting the land and registered not later than 14 days prior to registration of the disposition in his favour.

(h) If the landlord cannot be identified, the sheriff court should be empowered to authorise signature of the disposition and to receive payment of the compensation.

(i) If the qualifying lease is a sublease, the scheme should apply with the following modifications:

(i) except where not reasonably practicable, the tenant should serve a copy of the notice on all intermediate landlords;

(ii) compensation should be calculated on the basis of the unexpired term of the sublease; and

(iii) while the compensation payment should continue to be made to the head landlord, an intermediate landlord should have a claim on that sum to the extent that it is attributable to his own lease.

(j) For the purposes of this proposal, "landlord" means the owner of the land which is leased; and "owner" means

(i) the person who has right to the land whether or not he has completed title, or

(ii) if any person is entitled to become owner under proposals 7 or 16, that person.

(Paragraph 4.55)

21.

Part I of the Long Leases (Scotland) Act 1954 should be repealed.

(Paragraph 4.56)

APPENDIX A – Survey of Long Leases

Aim of the survey

The aim of the survey was to investigate the incidence and use of long leases in Scotland.

Methodology

During the period 20 March to 26 April 2000 information was obtained on 2679 leases from the Land Register of Scotland for the counties of Ayr, Clackmannan, Lanark and Renfrew.

^[422]

^[423]

Ayr and Lanark were chosen because at the time of the survey carried out for the Guthrie Report in 1951

Table 1 shows the number of leases examined in each county together with a comparison of the numbers which existed in 1951.

	Number of leases examined	% of leasehold titles examined	Number of leases in 1951
Ayr	303	100	1988
Clackmannan	193	100	305
Lanark	1220	25	4153
Renfrew	963	50	655

Table 1: Number of leases examined

It will be seen that the survey examined all leasehold title sheets for Clackmannan and Ayr, one half of the title sheets for Renfrew, and one quarter of the title sheets for Lanark. For practical reasons, the search did not include the Register of Sasines. There is therefore excluded from the survey any pre-existing lease which saw no activity during the period under review of a kind which would induce first registration in the Land Register.

Information was taken from the title sheets about:

• title number

• date of registration

• address of property

• name of original landlord

• consideration

• start year of lease

• duration

• rent

• partial assignations and allocations of rent

• subleases

• whether the minerals had been excepted.

Some information was not available, namely:

• name of original landlord for 55 leases

• consideration for 114 leases

• start year for 57 leases

• duration for 80 leases

• original rent for 268 leases

• whether the lease had been assigned in part or not for 71 leases ^[429]

• whether on a partial assignation the rent under the original lease had been allocated for 27 leases^[430]

• the amount of the allocated rent, where the rent had been allocated, for 12 leases^[431]

• whether the lease was a sublease for 244 leases and

• whether the minerals had been excepted for 37 leases.

In addition to searching the Land Register we placed a notice in the Journal of the Law Society of Scotland and also contacted a number of persons with knowledge and experience of long leases. We are grateful to those solicitors and others

^[432]

The estate search for that part of the Seafield Estate which is in Moray was also examined as it was known that the Estate had a practice of granting long leases at the end of the 19^th century.

Incidence and distribution

The number of title sheets examined (2360) was smaller than the total number of leases (2679). In other words, some title sheets included two or more leases. This was usually because two distinct properties were registered under the same title or because a second lease extended or re-granted the first. In general the total number of leases has been used as the base figure for this survey, but in considering the incidence of leases it is more helpful to focus on the number of title sheets. We know that the total number of title sheets on the Land Register for the counties of Ayr, Clackmannan, Lanark and Renfrew at the time of the survey was 278,200. If the incomplete figures for Lanark and Renfrew are grossed up to 100, we also know that the total number of leasehold title sheets for the four counties was 6454. This means that only 2.3% of property titles in the four counties were held on leasehold tenure. That compares with the 6.9% in the same four counties disclosed by the 1951 survey.

^[433]

less

So far as distribution is concerned, the survey suggests that long leases were used only by certain landed estates,

^[434]

^[435]

Initial duration^[436]

A number of charts are given at the end of this survey. Chart 1 shows the overall distribution of leases by length while charts 2 and 3 show the same information in closer focus.

^[437]

• 1786 leases had an initial duration of more than 175 years while the remaining 813 leases had a duration of 175 years or less. Thus the ratio of "ultra-long" to "ordinary" leases is approximately 2:1.

• Most leases were granted for either 20, 25, 60, 99, or 999 years.

• Only 2 leases were granted for between 126 and 175 years.

• No leases were granted for between 176 and 199 years.^[438]

• Only 21 leases were granted for between 200 and 299 years.

• 1765 leases (68%) were granted for 300 years or longer.

• 380 leases were granted for between 700 and 998 years.^[439]

• 1269 leases (49%) were granted for a period of 999 years.

• The longest duration was 1,000,000 years.^[440]

Table 2 gives further information about the most popular lengths of lease.

Initial duration	20	25	60	99	999
Number of leases	60	313	51	60	1269
% of total	2.31%	12.04%	1.96%	2.31%	48.83%
Average number of years to expiry	12	14	50	74	860
Shortest number of years to expiry^[441]	1	1	30	55	745
Longest number of years to expiry	18	24	59	98	995

Table 2 Initial duration

Unexpired duration

Chart 4 (at the end of this survey) shows the unexpired duration of all leases examined other than

• 86 leases for which there was insufficient information

• 25 leases which may be continuing on tacit relocation, and

• 35 leases with 1645 or more years remaining.

14.

Table 3 shows the numbers and categories of lease covered by the various periods.

Unexpired duration (in years)	Number of leases	% of total^[442]	Number of leases of 175 years or under	Number of leases of more than 175 years
0 – 49	671	25.88%	671	0
50 – 175	184	7.10%	141	43
176 – 199	7	0.27%	0	7
200 – 500	34	1.31%	0	34
500 – 700	166	6.40%	0	166
700 – 999	1496	57.69%	0	1496
1000 – 1000000	35	1.35%	0	35

Table 3 Unexpired duration

It is instructive to bring together the figures on initial and on unexpired duration. These show that most leases of more than 175 years were granted for at least 700 years and have at least 700 years remaining.

Initial duration by year of grant

16.

Charts 5 to 10 (at the end of this survey) show the minimum and maximum lengths of leases granted in particular periods of time.

^[443]

^[444]

^[445]

Rent^[446]

Leases of more than 175 years. The rent is known for around 95% (1705) of the leases granted for an initial period of more than 175 years. Only 26 leases (1.52% of the sample) have a rent of more than £50, and of those a mere 7 have a rent of much more than £100. Of the other leases:

• 1160 (68.03%) have a rent of £5 or less

• 505 (29.62%) have a rent of between £5.01 and £30, and

• 14 (0.82%) have a rent of between £30.01 and £50.

18.

Leases of 175 years and under. The rent is known for around 79% (644) of the leases granted for an initial period of 175 years and under. The rents vary enormously ranging from one pence to over a million pounds:

• 99 leases (15.37%) have a rent of £10 or less

• 33 leases (5.12%) have a rent of between £10.01 and £100

• 54 leases (8.39%) have a rent of between £100.01 and £1000

• 133 leases (20.65%) have a rent of between £1000.01 and £5000

• 250 leases (38.82%) have a rent of between £5000.01 and £50000

• 73 leases (11.34%) have a rent of between £50000.01 and £400000

• 1 lease has a rent of £700000, and

• 1 lease has a rent of £1152750.

The rent depends both on the date when the lease was granted and on the nature of the property leased. However, the amount of the rent is not always a reliable indicator of the date of the grant. For example, two 999-year leases were granted in the 1990s for a rent of £1 and £0.01 respectively.

19.

Charts 11 to 14 (at the end of this survey) show the average rent for leases granted during different periods. For leases prior to 1950 the average rent rarely rose above £20.

^[447]

Leases of more than 175 years

Two thirds of the leases in the survey were granted for more than 175 years. There are 1694 leases of more than 175 years for which the rent, start date and length are all known, and which have not expired. 95% of those (1612) were of 700 years or more with at least 200 years remaining

^[448]

Residential leases of 175 years or less

The information from the Land Register did not indicate which properties were residential. However an attempt has been made to estimate the number of leases of 175 years or less which might be of residential property.

22.

The first step was to exclude leases granted after 1974, the year in which it ceased to be possible to grant residential leases for more than 20 years.

^[449]

Chart 15 shows the lengths of the 46 leases, and chart 16 the number of years remaining under the leases disregarding those which might be continuing by tacit relocation. Most of the 46 leases were granted by a public or local authority, or by particular landed estates. The properties are mainly in East Kilbride, Girvan, Greenock, Glasgow or Hamilton.

24.

Evidence provided by solicitors suggests that the duration of a residential lease generally depends on location. For example, leases in Saltcoats have tended to be granted for 99 years, sometimes with an option to extend for a further 99 years; leases in Stevenson have tended to be granted for 369 years (19 x 19); leases in Ardrossan and Wishaw for 999 years;

^[450]

^[451]

The rents for those leases for which information was available ranged from £0.97 to £193,500. More precisely there were

• 8 leases with a rent of £10 or less

• 2 leases with a rent between £11 and £100

• 7 leases with a rent between £101 and £500

• 3 leases with a rent between £501 and £1000

• 4 leases with a rent between £1001 and £2000

• 3 leases with a rent between £2001 and £3000

• 1 lease with a rent between £3001 and £4000

• 2 leases with a rent between £4001 and £5000

• 2 leases with a rent between £5000 and £8500

• 3 leases with a rent over £8500

Chart 1 – Distribution of leases of 1030 years or less

Chart 2 – Distribution of leases of 175 years or less

Chart 3 – Distribution of leases of between 175 and 998 years

Chart 4 – Years remaining for unexpired leases with less than 1645 years to run

Chart 5 – Minimum/Maximum length of lease for each year of grant for period 1692 – 1750

1692 1734 1736 1746 1747 1748 1749

Minimum length for year Maximum length for year

Chart 6 – Minimum /Maximum length of lease for each year of grant for period 1750 – 1800

Minimum length for year Maximum length for year

Chart 7 – Minimum/Maximum length of lease for each year of grant for period 1800 – 1850

Minimum length for year Maximum length for year

Chart 8 – Minimum/Maximum length of lease for each year of grant for period 1850 – 1900

Minimum length for year Maximum length for year

Chart 9 – Minimum/Maximum length of lease for each year of grant for period 1900 – 1950

Minimum length for year Maximum length for year

Chart 10 – Minimum/Maximum length of lease for each year of grant for period 1950 – 2000

Minimum length for year Maximum length for year

Chart 11 - Average annual rent (in £s) for leases granted between 1692 and 1870

Average rent for year

Chart 12 – Average annual rent (in £s) for leases granted between 1870 and 1950

Average rent for year

Chart 13 – Average annual rent (in £s) for leases granted between 1950 and 1964

Average rent for year

Chart 14 – Average annual rent (in £s) for leases granted between 1964 and 2000

Average rent for year

Chart 15 – Length of residential leases of 175 years or less granted before 1975

Chart 16 – Years remaining for residential leases of 175 years or less granted before 1975

Note

In Chart 16:

The 10 leases with less than 20 years to run were granted for less than 60 years.

The 5 leases of between 25 and 54 years to run were granted for between 60 and 98 years.

The 9 leases with between 55 and 70 years to run, and 2 of the leases with 73 years to run were granted for 99 years.

The lease with 20 years to run, that with 72 years to run, 2 of those with 73 years to run and the 5 leases with more than 80 years to run, were granted for longer than 99 years.

APPENDIX B - Other Conversion Schemes

SECTION 1: SCOTLAND

Residential long leases

The Long Leases (Scotland) Act 1954 conferred a right to acquire ownership of leased property during the period from 1 September 1954 to 31 August 1959. The scheme applied to residential leases for at least 50 years granted before 14 August 1914.^[452]

Compensation was payable by the tenant. In all conversions, the landlord was entitled to compensation for loss of rent ^[453] and for loss of leasehold casualties. In addition, if the lease had an unexpired period of 100 years or less, the landlord was entitled to compensation for the loss of his residual right of ownership, calculated as follows.^[454] First, the property was valued on the basis that it was being sold on the open market on 1 September 1954 with vacant possession and subject to a feuduty equal to the rent payable for the property. Next, the unexpired duration of the lease was calculated, but was deemed to be 30 years if shorter than that period. Finally the compensation was calculated as the amount which would, if invested at compound interest of 5% per annum, with yearly rests, for the unexpired period of the lease, produce at the end of that period a sum equal to the value of the property as previously calculated.

Tenancies-at-will

The Land Registration (Scotland) Act 1979 ^[455] gives tenants-at-will the right to acquire ownership of the land. A tenant-at-will is defined as someone who is by custom and usage^[456] the occupier of land on which there is a building erected or acquired for value by him or by a predecessor. The rent must be attributable to the land and not the buildings, and the right of occupation must be in perpetuity.^[457] Tenancies-at-will are uncommon in practice.

The tenant must pay compensation as well as the landlord's costs of conveying the land. The compensation is the value of the land without the buildings but assuming that residential planning permission has been granted (or, if lower, 4% of the value of the property including the buildings). An additional sum, not to exceed 90% of the first sum, is payable in order to discharge any heritable security granted by the landlord over the property.

Council houses

Under the Housing (Scotland) Act 1987 a secure tenant of a public sector landlord can purchase the leased property at a discount. To qualify, the tenant must have occupied the property as his only or principal residence and must have been in occupation for at least two years immediately prior to the purchase. If the tenant exercises his right, the landlord arranges a valuation of the property. The property is valued assuming that it is available for sale on the open market with vacant possession, but taking no account of the tenant's and his predecessors' improvements. The tenant is then entitled to purchase the property at this value less a discount of between 32% and 70%.^[458] If he sells within 3 years, the tenant must repay some or all of the discount.^[459]

Crofts

The Crofters (Scotland) Act 1993 confers on crofters a right to buy both the site of the croft house, including the house itself, and also any land which is part of the croft.^[460] In relation to the latter, however, the Scottish Land Court can prevent a purchase which would cause substantial harm to the remaining estate of the landlord.^[461] Compensation for the land is assessed at 15 times the rent. Half of the discount implied by this formula must be repaid if the land is sold within five years.^[462] Compensation for the site of the house is based on the market value of the site, without buildings and on the assumption that no development would be permitted. The amount payable is sometimes no more than a few pounds.^[463] If the landlord provided the house or other fixed equipment, the tenant must also pay half of its value.^[464]

SECTION 2: ENGLAND AND WALES

Ultra-long leases

Under a rule which dates back to 1881 ^[465] the tenant of a lease granted for more than 300 years with more than 200 years left to run is entitled to "enlarge" his interest to ownership provided that no rent of any value^[466] is payable under the lease. To convert the lease to ownership the tenant simply executes a declaration to that effect. No compensation is payable to the landlord. The resulting ownership is subject to the same provisions and obligations as would have applied to the lease if it had not been converted.^[467]

Residential long leases

The Leasehold Reform Act 1967, and subsequent legislation, allow conversion of residential long leases against payment of compensation. To qualify under the 1967 Act a tenant must occupy a house (but not a flat) worth less than a statutory limit as his only or main residence under a lease of more than 21 years at a low rent.^[468] Various types of lease,^[469] and some landlords,^[470] are exempt from the conversion scheme; and the landlord can, on limited grounds, defeat the right to convert.^[471]

Compensation is based on the market value of the landlord's residual interest, ie on the value of the property subject to the lease.^[472] Two factors serve to reduce this amount. First, the lease is deemed to have been extended for 50 years;^[473] and secondly it is assumed that the tenant is not a potential purchaser, thus excluding the marriage value.^[474] No separate compensation is due in respect of rent. The expenses of both parties are borne by the tenant.^[475]

Later legislation applies the 1967 Act scheme to more expensive housing.^[476] The compensation terms, however, are less favourable. Thus there is no deemed extension of the lease (although in some cases the tenant is treated as having security of tenure), the marriage value is to be divided between landlord and tenant, and regard must be had to any consequential decline in the value of other property owned by the landlord.^[477]

Flats were originally excluded from the scheme, mainly because there is no equivalent in freehold tenure of positive covenants in leasehold tenure. If a flat were to be converted from leasehold to freehold, therefore, the existing maintenance covenants would fly off. The problem is circumvented by the Leasehold, Housing and Urban Development Act 1993 ^[478] which allows tenants to join together to acquire ownership of the entire building. Under this process, known as collective enfranchisement, ownership is vested in a nominee company controlled by the tenants, and the individual flats are then leased back on 999-year leases at a nominal rent. Strictly, therefore, there is no conversion, for the tenants remain tenants; but the leases are so long as to amount virtually to ownership. In some cases quasi-ownership may come to be upgraded to full (commonhold) ownership under the Commonhold and Leasehold Reform Bill currently before Parliament, but that is likely to require the consent of all the tenants. The criteria under the 1993 Act are much the same as under the 1967 Act, and compensation is payable on the same basis.^[479] Thus the 1993 Act is confined to buildings containing flats held on long leases at a low rent and which are primarily residential in character. The agreement of two thirds of the tenants is required. These criteria are altered to some extent by the Commonhold and Leasehold Reform Bill.^[480]

SECTION 3: NORTHERN IRELAND

Residential long leases

The Leasehold (Enlargement and Extension) Act 1971 provides a conversion scheme modelled on the (English) Leasehold Reform Act 1967. It applies to residential leases for more than 21 years at a rent which does not exceed a ground rent.^[481] Compensation is calculated in the same way as under the 1967 Act.^[482]

Residential ultra-long leases

A different scheme operates for residential leases if the unexpired duration is more than 50 years.^[483] This was introduced by the Property (Northern Ireland) Order 1997.^[484] On redemption of the ground rent, the lease is converted into ownership.^[485] Redemption can occur at any time but is compulsory on the first occasion on which the lease is transferred.^[486] The redemption figure is 12 times the annual rent.^[487] No compensation is payable in respect of the landlord's interest.

Note 1   Amended by the Scotland Act 1998 (Consequential Modifications) (No 2) Order 1999 (S.I. 1999/1820).    [Back]

Note 2   Scottish Law Commission, Report on Abolition of the Feudal System (Scot Law Com No 168, 1999).    [Back]

Note 3   Scottish Law Commission, Report on Real Burdens (Scot Law Com No 181, 2000).    [Back]

Note 4   Scottish Law Commission, Report on the Law of the Tenement (Scot Law Com No 162, 1998).    [Back]

Note 5   As part of our Sixth Programme of Law Reform (Scot Law Com No 176, 2000) we are to review the system of registration of title as set out in the Land Registration (Scotland) Act 1979. In addition, we have received references on the law of the foreshore and seabed, and in relation to the problems arising out of Sharp v Thomson 1997 SC(HL) 66.    [Back]

Note 6   Abolition of Feudal Tenure etc. (Scotland) Act 2000 ss 1 and 2.    [Back]

Note 7   The paper comes within Item No 4: Property of our Sixth Programme of Law Reform (Scot Law Com No 176, 2000) paras 2.11 and 2.12.    [Back]

Note 8   Scottish Law Commission, Report on Leasehold Casualties (Scot Law Com No 165, 1998).    [Back]

Note 9   This is a Member's Bill in the Scottish Parliament, introduced by Mr Adam Ingram MSP. It completed Stage 3 on 8 March 2001.    [Back]

Note 10   By s 5 the conditions are (i) that the lease was granted before 10 August 1914 and (ii) that the annual rent does not exceed £150.    [Back]

Note 11   Scot Law Com No 176 paras 2.5 to 2.8.    [Back]

Note 12   Report of the Scottish Leases Committee (Cmd 8656) (hereafter the "Guthrie Report") paras 37 and 38 and appendix II.    [Back]

Note 13   We should particularly mention: Mr A M Bowman, Messrs Bonar Mackenzie WS; Mr J C N Craxton, Messrs Craxton & Grant; Mr Fergus Ewing MSP; Mr D Stuart Allan, Fife Council; Mr Andrew Fraser, North Ayrshire Council; Mr J D Grandison, Messrs Pomphreys; Mr Neil D Lambe, Office of Law Reform, Northern Ireland; Messrs McJerrrow & Stevenson; Mr Ian T Mackay, SOLAR; Mr Malcolm McRae, Highland Council; Ms Lynne Raeside, The Royal Institution of Chartered Surveyors in Scotland; Professor Robert Rennie; Professor Peter Robson; Mr Peter Sharp, Messrs Murray & Tait; Mr S R Waters, Messrs Waters Rule & Co.     [Back]

Note 14   At present there are two property registers, the Register of Sasines and the Land Register, dating, respectively from 1617 and 1981. The Register of Sasines is now being phased out, county by county, and by 2003 it is expected that the Land Register will be in operation for all parts of Scotland.    [Back]

Note 15   Registration of Leases (Scotland) Act 1857 s 1.    [Back]

Note 16   Compulsory in the sense that a real right cannot otherwise be obtained: see Land Registration (Scotland) Act 1979 s 3(3).    [Back]

Note 17   Hence the survey carried out for the Guthrie Committee was restricted to leases of over 31 years.    [Back]

Note 18   Land Tenure Reform (Scotland) Act 1974 sched 6 para 1.    [Back]

Note 19   Land Tenure Reform (Scotland) Act 1974 ss 8 to 10.    [Back]

Note 20   Abolition of Feudal Tenure etc. (Scotland) Act 2000 s 67. There are transitional exceptions, including for subleases.    [Back]

Note 21   Appendix A paras 11 and 12.    [Back]

Note 22   This obstacle disappeared in 1874 when burgage tenure was assimilated to feu farm tenure by s 25 of the Conveyancing (Scotland) Act 1874.     [Back]

Note 23   Such provisions were rendered ineffective by s 8 of the Conveyancing Amendment (Scotland) Act 1938.    [Back]

Note 24   Guthrie Report para 44.    [Back]

Note 25   Entail Amendment Act 1848 ss 4 and 24.    [Back]

Note 26   Entail (Scotland) Act 1914 s 4.    [Back]

Note 27   Appendix A para 16 and chart 9.    [Back]

Note 28   In England subinfeudation was abolished in 1290 by the statuteQuia Emptores.    [Back]

Note 29   For this reason ultra-long leases were sometimes referred to as "feu-tacks": see Buchanan's Trs v Pagan (1868) 7 M 1.    [Back]

Note 30   For a discussion of the relationship between feus and leases, see Martin Hogg, "Leases: Four Historical Portraits" in Kenneth Reid and Reinhard Zimmermann (eds), A History of Private Law in Scotland (2000) vol 1, pp 369-71.    [Back]

Note 31   Long Leases (Scotland) Act 1954 s 1.    [Back]

Note 32   1954 Act ss 7 and 8.    [Back]

Note 33   See, however, para 4.3.    [Back]

Note 34   Guthrie Report para 37. This figure is derived by disregarding the 3,224 leases which had expired.    [Back]

Note 35   Appendix A para 9. The ratio of ultra-long to "ordinary" leases appears to be roughly 2:1.    [Back]

Note 36   Guthrie Report paras 43-4. For a recent (and unsuccessful) example see B G Hamilton Ltd v Ready Mixed Concrete (Scotland) Ltd 1999 SLT 524.    [Back]

Note 37   Land Registration (Scotland) Act 1979 ss 20 to 22. For tenancies-at-will, see paras 70 to 81 of the Guthrie Report. There are very few such tenancies.    [Back]

Note 38   The current legislation is the Housing (Scotland) Act 1987.    [Back]

Note 39   See now s 153 of the Law of Property Act 1925.    [Back]

Note 40   Leasehold Reform, Housing and Urban Development Act 1993.    [Back]

Note 41   Leasehold (Enlargement and Extension) Act (Northern Ireland) 1971; Property (Northern Ireland) Order 1997, SI 1997/1179 (NI8). A Ground Rents Bill is currently being considered by the Northern Ireland Assembly.    [Back]

Note 42   See appendix B to this paper.    [Back]

Note 43   Para 1.8.    [Back]

Note 44   Scotland Act 1998 s 29.    [Back]

Note 45   Reserved matters are listed in sched 5 of the 1998 Act.    [Back]

Note 46   Abolition of Feudal Tenure etc. (Scotland) Act 2000.    [Back]

Note 47   Scotland Act 1998 s 31.    [Back]

Note 48   See para 4.32.    [Back]

Note 49   Para 1.7.    [Back]

Note 50   For which see Scot Law Com No 168 paras 1.16 to 1.19.     [Back]

Note 51   Conveyancing and Feudal Reform (Scotland) Act 1970 ss 1 and 2. Recommendations for the reform of these provisions are contained in part 6 of our Report on Real Burdens (Scot Law Com No 181, 2000).    [Back]

Note 52   For the moment, however, the feudal system is still with us. Abolition occurs on a day (the "appointed day") to be fixed by statutory instrument. See Abolition of Feudal Tenure etc. (Scotland) Act 2000 ss 1 and 71.    [Back]

Note 53   Scot Law Com No 168.    [Back]

Note 54    McConnell v Chassels (1903) 10 SLT 790; Fleming v Boswell (Outer House, Nov 1948, unreported but noted at para 48 of the Guthrie Report).     [Back]

Note 55   The Council of Mortgage Lenders' Handbook for Scotland (2000) suggests that six lenders might come into this category.    [Back]

Note 56   "Confusion" in this technical sense occurs where the same person is both landlord and tenant.     [Back]

Note 57   Scot Law Com No 162 para 4.7.    [Back]

Note 58   ie the Abolition of Feudal Tenure etc. (Scotland) Act 2000.    [Back]

Note 59   2000 Act s 67. There are some exceptions.    [Back]

Note 60   2000 Act s 67(4)(a), (b), discussed in para 3.60.    [Back]

Note 61   Para 3.1.    [Back]

Note 62   For which see Anne Ferguson and Liz Scobbie, "Property Aspects of PFI transactions" (2000) 44 Greens Property Law Bulletin 1.    [Back]

Note 63   Appendix A paras 11 and 12.    [Back]

Note 64   Appendix A chart 3.    [Back]

Note 65   Abolition of Feudal Tenure etc. (Scotland) Act 2000 s 67.    [Back]

Note 66   Appendix A para 14. The total excludes the small number of leases for which the unexpired duration is not known.    [Back]

Note 67   The current provision is s 153 of the Law of Property Act 1925 although based on an earlier provision of 1881. For a discussion, see Megarry & Wade, The Law of Real Property (6th edn by Charles Harpum, 2000) paras 14-178 to 14-181.     [Back]

Note 68   Long Leases (Scotland) Act 1954 ss 7 and 8.    [Back]

Note 69   Property (Northern Ireland) Order 1997, SI 1997/1179 (NI8). It is intended that this Order be superseded by the Ground Rents Bill currently before the Northern Ireland Assembly. Again the qualifying period is 50 years.    [Back]

Note 70   But see also para 2.20 below in relation to commercial leases.    [Back]

Note 71   Para 2.23.    [Back]

Note 72   The policy of the law is to allow ordinary commercial ground leases, ie leases of up to 175 years. See Abolition of Feudal Tenure etc. (Scotland) Act 2000 s 67.    [Back]

Note 73   RICS were satisfied that, in relation to residential leases at least, 100 years was an appropriate measure for the purposes of conversion: "We agree that leases granted in the 1800s for residential purposes, many of which contain outdated conditions such as obligations to grind malt at a local mill, should be extinguished and converted into ownership. In these cases, we agree that if the lease has more than 100 years to run, the value of the landlord's interest in the leased property is negligible ..."    [Back]

Note 74   For which see part 4.    [Back]

Note 75   Paras 3.59 to 3.67.    [Back]

Note 76   See now the Law of Property Act 1925 s 153(1).    [Back]

Note 77   For which see para 2.23.    [Back]

Note 78   If the figures were adjusted upwards, however, a special exemption would cease to be necessary.    [Back]

Note 79   Naturally this would have no effect on residential leases by local authorities, which are in practice never granted for long periods and which in any case have their own conversion scheme under part III of the Housing (Scotland) Act 1987.    [Back]

Note 80   This is the same rule as applies to the conversion of the right of dominium utile under s 2(1) of the Abolition of Feudal Tenure etc. (Scotland) Act 2000.     [Back]

Note 81   See now s 153(1) of the Law of Property Act 1925. By s 153(4), however, rent not exceeding £1 is extinguished if it has not been paid for 20 years. The lease then becomes convertible.    [Back]

Note 82   Appendix A para 17.    [Back]

Note 83   Paras 2.43, 3.7 and 3.8.    [Back]

Note 84   Long Leases (Scotland) Act 1954 s 1(1).    [Back]

Note 85   Guthrie Report para 68(2)(i).    [Back]

Note 86   Rent (Scotland) Act 1984 s 1(1)(a) (protected/regulated tenancies). Houses above a certain rateable value were excluded from protection. Today there is no such exclusion for assured tenancies under the Housing (Scotland) Act 1988.    [Back]

Note 87   Long Leases (Scotland) Act 1954 s 1(1).    [Back]

Note 88   As in the lease litigated in B G Hamilton Ltd v Ready Mixed Concrete (Scotland) Ltd 1999 SLT 524.    [Back]

Note 89   Such a lease is far from being an "ordinary" commercial ground lease (for which see note 24).    [Back]

Note 90   See generally, Rankine, Leases pp 501-07; Paton & Cameron, Landlord and Tenant pp 78-84.    [Back]

Note 91   Freshwater and Salmon Fisheries (Scotland) Act 1976 s 4; Palmer's Trs v Brown 1989 SLT 128.    [Back]

Note 92   For separate tenements, see Reid, Property paras 207-13.     [Back]

Note 93   Reid, Property para 599.    [Back]

Note 94   In addition, if the purchaser was in bad faith, the transfer would be reducible by the creditor in the obligation on basis of the "offside goals" rule. See eg Rodger (Builders) Ltd v Fawdry 1950 SC 483.    [Back]

Note 95   This is the solution reached in the conversion scheme for tenancies-at-will: see Land Registration (Scotland) Act 1979 s 21(9). And see also Ross & Cromarty District Council v Patience 1997 SC(HL) 46. In any event, a conversion of the kind proposed could not be characterised as a sale and so would not trigger the pre-emption.     [Back]

Note 96   Land Registration (Scotland) Act 1979 s 3(1).    [Back]

Note 97   By this we mean an absolute removal of capacity. Thus we would not include the, quite common, case where alienation is permissible but requires the consent of a particular person, such as the Secretary of State or Scottish Ministers. Further, we would exclude provisions which apply generally, such as those in the Age of Legal Capacity (Scotland) Act 1991.    [Back]

Note 98   National Trust for Scotland Order Confirmation Act 1947 (c xxxviii) s 4(1).    [Back]

Note 99   See Appendix B paras 3 to 6.    [Back]

Note 100   Housing (Scotland) Act 1987 part III.    [Back]

Note 101   Crofters (Scotland) Act 1993 ss 12 to 19.     [Back]

Note 102   Land Registration (Scotland) Act 1979 ss 20 to 22.     [Back]

Note 103   Hence the original definition of "crofter" in s 34 of the Crofters Holdings (Scotland) Act 1886.    [Back]

Note 104   Maclean v Kershaw 1993 SLCR 145. The definition for the purposes of the statutory conversion scheme is contained in s 20(8) of the 1979 Act. The fullest treatment of tenancies-at-will is that contained in the Guthrie Report at paras 70-81.    [Back]

Note 105   See para 3.26 below.    [Back]

Note 106   Para 2.23.    [Back]

Note 107   Appendix B para 13.    [Back]

Note 108   Para 4.3.    [Back]

Note 109   See further para 3.3.    [Back]

Note 110   Paras 3.9 to 3.20.    [Back]

Note 111   A requirement that the landlord do something, such as grant a disposition, would meet the obvious difficulty that in a significant number of cases the landlord is untraceable.    [Back]

Note 112   The real right is completed by possession, under the Leases Act 1449.    [Back]

Note 113   Feudal abolition works in precisely the same way. What is converted into ownership, by s 2(1) of the 2000 Act, is the "estate of dominium utile". The question of entitlement to that estate is then resolved by the usual rules of property law.    [Back]

Note 114   In theory there could be an assignation in security, but the creditor's right could be completed only by taking possession. It was the difficulty of creating securities over unregistered leases which was the main impetus behind the introduction of a registration scheme in 1857.    [Back]

Note 115   Land Registration (Scotland) Act 1979 s 3(3).    [Back]

Note 116   The timetable is set out at 1997 SLT (News) 218.    [Back]

Note 117   For further details, see paras 3.76 to 3.78.    [Back]

Note 118   Paras 2.13 to 2.22.    [Back]

Note 119   Note that this is not intended to be the same day as the "appointed day" for the purposes of the Abolition of Feudal Tenure etc. (Scotland) Act 2000 (s 71). The conversion of leases could not occur as early as the abolition of the feudal system.    [Back]

Note 120   Other than leases which are unregistered: see paras 3.76 to 3.78.    [Back]

Note 121   Abolition of Feudal Tenure etc. (Scotland) Act 2000 s 2(1).    [Back]

Note 122   A variant is that the land may have been divided and only a part sublet to D. In that case D becomes owner of the part, and C owner of the rest.    [Back]

Note 123   A subordinate real right is a real right other than ownership. See Reid, Property paras 5 and 6. The main subordinate real rights are security, proper liferent, lease, servitude and real burden.     [Back]

Note 124   Thus s 9(2) of the Conveyancing and Feudal Reform (Scotland) Act 1970, as amended, prospectively, by sched 12 para 30(6)(a) of the Abolition of Feudal Tenure etc. (Scotland) Act 2000, provides that a standard security may be granted over "any land or real right in land". A lease is a real right in land. The distinction is not, however, always so clear with other real rights. For example, if the tenant grants a sublease, it seems a matter of analytical preference whether this is classified as a real right in the land or as a real right in the lease.    [Back]

Note 125   Later we set out special rules for conditions contained in the lease itself: see paras 3.28 to 3.58.    [Back]

Note 126   A third example, but one already accounted for, is leases higher up in the chain.    [Back]

Note 127   See Reid, Property para 349 for the distinction between intrinsic and extrinsic encumbrances.    [Back]

Note 128   Paras 3.9 ff.    [Back]

Note 129   Para 2.42.    [Back]

Note 130   For redemption of rent, see paras 3.9 to 3.20 below.    [Back]

Note 131   Occasionally there may also be other factors. For example, it may have been in the spirit of the original arrangement between the parties that the person disposing of the land should remain as nominal owner.    [Back]

Note 132   Except where this was impracticable, eg because their identity was unknown.    [Back]

Note 133   In the absence of a title sheet/search sheet for the lease, there would be nowhere for the notice to be registered.    [Back]

Note 134   Special rules for unregistered leases are discussed at paras 3.76 to 3.78. However, a lease registered as part of the process of registering a notice of exemption would not be unregistered as at the appointed day and hence would not be subject to those rules.    [Back]

Note 135   Appendix A para 17.    [Back]

Note 136   Land Tenure Reform (Scotland) Act 1974 ss 4 – 6.     [Back]

Note 137   Abolition of Feudal Tenure etc. (Scotland) Act 2000 s 9. It is also used to a limited extent in the Leasehold Reform Act 1967 sched 1 para 7A in relation to certain types of profit rent.    [Back]

Note 138   However, it may be noted that under the 1954 Act scheme the multiplier for profit rent, in a case where the unexpired duration was 96 years or more, was 19.85. See Long Leases (Scotland) Act 1954 s 9 and sched 3.    [Back]

Note 139   Property (Northern Ireland) Order 1997, SI 1997/1179 (NI8) art 15 and sched 1.    [Back]

Note 140   The evidence, which is dated 2 November 1999, is reproduced as part of the Stage 1 Report issued by the Justice and Home Affairs Committee on 9 December 1999.    [Back]

Note 141   Abolition of Feudal Tenure etc. (Scotland) Act 2000 s 8.    [Back]

Note 142   Para 3.7.    [Back]

Note 143   Section 8(1) of the 2000 Act requires that claims be made within two years of the appointed day.    [Back]

Note 144   Para 3.43.    [Back]

Note 145   This follows the definition of "superior" and "vassal" in s 16(1) of the 2000 Act. There is no definition of "landlord" or "tenant" in the Leasehold Casualties (Scotland) Bill.    [Back]

Note 146   Any more than compensation for loss of feuduty is secured by the superior's hypothec, or in any other way. See 2000 Act s 13.    [Back]

Note 147   For the avoidance of doubt it would probably be necessary to provide that the lease continues (until the appointed day), notwithstanding the absence of rent. For the equivalent provisions in respect of feuduty, see ss 4(3) and 5(3) of the Land Tenure Reform (Scotland) Act 1974.    [Back]

Note 148   2000 Act s 10.    [Back]

Note 149   2000 Act s 12.    [Back]

Note 150   Of the 2608 leases in respect of which we have information of this point, division had occurred in 1503 cases (57.63%).    [Back]

Note 151   If only by analogy with cumulo feuduty.    [Back]

Note 152   Of the 1476 divided leases where our survey provided information on this point, there was informal apportionment in 586 (39.7%).    [Back]

Note 153   Including an informal apportionment arising out of actual practice in the payment of rent.    [Back]

Note 154   2000 Act s 9(3), (4).    [Back]

Note 155   Our figures suggest that there are intermediate leases in only around one fifth of cases.    [Back]

Note 156   Para 3.3.    [Back]

Note 157   Local Government (Scotland) Act 1973 s 228.    [Back]

Note 158   Long Leases (Scotland) Act 1954 s 19(a).    [Back]

Note 159   Long Leases (Scotland) Act 1954 s 19(b). The proviso, which extinguishes such rents if not claimed for ten years, seems to discriminate unfairly against this type of rent.    [Back]

Note 160   Leasehold Casualties (Scotland) Bill s 1(1) (as amended at Stage 2 on 14 February 2001). The further limitation, that the lease must have been granted before 1 September 1974, is due to the fact that leasehold casualties could not be imposed after that date. See Land Tenure Reform (Scotland) Act 1974 s 16.     [Back]

Note 161   See paras 3.60 to 3.63.    [Back]

Note 162   This is the same measure as used in rental value leasehold casualties, for which see Scot Law Com No 165 paras 2.9 to 2.12 and n 28.     [Back]

Note 163   For a discussion of this method, which is used in the Leasehold Casualties (Scotland) Bill, see Scot Law Com No 165 paras 5.4 ff (and especially para 5.5).    [Back]

Note 164   An example is s 3(1)(e) of the Leasehold Casualties (Scotland) Bill.    [Back]

Note 165   The tables and formulae contained in the Leasehold Casualties Bill are not suitable for this purpose because they presuppose a recurring payment rather than, as in the present case, what will usually be only a single payment for a single renewal.    [Back]

Note 166   Para 3.13.    [Back]

Note 167   Paras 3.40 to 3.52.    [Back]

Note 168   For pertinents, see Reid, Property paras 199 to 206; Caledonian Heritable Ltd v Canyon Investments Ltd 2001 GWD 1-62.    [Back]

Note 169   Reid, Property paras 207 to 212.     [Back]

Note 170   An example is woods, which are reserved by implication from leases: see Rankine, Leases p 210. Sporting rights may also cause difficulty, unless they are re-classified as real burdens. See Paton & Cameron, Landlord and Tenant p 79.    [Back]

Note 171   Rankine, Leases pp 208-9. Hence s 12(c) of the Long Leases (Scotland) Act 1954. The reason, according to Erskine II.6.22, is that "In a lease of lands, the use which the lessee acquires in the subject let is not understood to comprise every right, which was before competent to the landlord, but is limited to those yearly fruits which either naturally, or by the lessee's industry, spring up from the surface."    [Back]

Note 172   Reid, Property paras 264 to 266.    [Back]

Note 173   This is also the approach which was adopted in the conversion of feus into ownership. See Scot Law Com No 168 para 6.5. Note however s 12(b) of the Long Leases (Scotland) Act 1954, which was presumably included for the avoidance of doubt, in recognition of the fact that the original lease was changing form.    [Back]

Note 174   It may be necessary to resolve this doubt, if the (former) landlord is not to be left with ownership of the roof and other common parts.     [Back]

Note 175   Paras 3.9 to 3.20 above.    [Back]

Note 176   Registration of Leases (Scotland) Act 1857 s 3(2)-(5) (inserted by the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 s 3).    [Back]

Note 177   Being the case for which the 1985 legislation was designed. See J M Halliday, Conveyancing Law and Practice vol 2 (2nd edn by I J S Talman, 1997) p 886.    [Back]

Note 178   See eg W M Gordon, Scottish Land Law (2nd edn, 1999) para 23-22.    [Back]

Note 179   Even if, on the appointed day, the original parties are still in place. But see para 3.57 below.    [Back]

Note 180   Fergusson v Brown (1901) 9 SLT 341; Bell, Principles s 1252; R Hunter, Law of Landlord and Tenant (3rd edn, 1860) vol II p 168; Stair Memorial Encyclopaedia vol 13 para 382. However, in an extended commentary on Purves v Gentle (1797) Hume 794, Hume suggests that the rule might be different in respect of "obligations which can only be performed by the person who is in the natural possession of the lands". In practice, of course, a head landlord might be able to secure compliance by recourse to irritancy.    [Back]

Note 181   In this paper we follow the new terminology proposed by the Title Conditions (Scotland) Bill.    [Back]

Note 182   D J Cusine and R R M Paisley, Servitudes and Rights of Way (1998) paras 1.18 to 1.21.    [Back]

Note 183   Prescription and Limitation (Scotland) Act 1973 s 3(2).    [Back]

Note 184   It is possible to address this issue more directly in a conversion scheme which operates by a conveyance from landlord to tenant. See para 4.45 and, for an example from England and Wales, s 10 of the Leasehold Reform Act 1967.    [Back]

Note 185   Little v Irving (2000), reported and commented on in R R M Paisley and D J Cusine (eds), Unreported Property Cases from the Sheriff Courts (2000) pp 120-37.    [Back]

Note 186   Prescription and Limitation (Scotland) Act 1973 s 8. Of course what is being extinguished here is a deemed, and not an actual, servitude. The effect of the proposed rule is to put the former landlord and tenant in precisely the same position as if the original lease had been a conveyance. Thus the deemed conveyance and deemed servitudes are accompanied by deemed negative prescription.    [Back]

Note 187   Sometimes, of course, property not owned by the landlord today would have been so owned at the time of the granting of the lease and so would be subject to the rule described above.    [Back]

Note 188   Prescription and Limitation (Scotland) Act 1973 s 15(1) (definition of "possession").    [Back]

Note 189   See Scot Law Com No 181 paras 12.2 to 12.14.    [Back]

Note 190   R Bell, A System of the Forms of Deeds used in Scotland (1800) vol III p 116; Scots Style Book (1904) vol 5 p 326-7.    [Back]

Note 191   In leases, however, it may sometimes be difficult to distinguish a clause of redemption from an ordinary break provision in favour of the landlord.    [Back]

Note 192   On which see generally Paton & Cameron, Landlord and Tenant pp 131-5.    [Back]

Note 193   This has no counterpart in the conversion of feus to ownership, because the feuing conditions were already real burdens.     [Back]

Note 194   Scot Law Com No 181 part 2.    [Back]

Note 195   Title Conditions (Scotland) Bill s 56. Sometimes in leases substantive provisions are tied into an irritancy clause. For example, certain restrictions are declared enforceable by irritancy (only). Naturally, restrictions of this kind would fall with the irritancy clause.     [Back]

Note 196   Any more than a superior is, under the 2000 Act, treated as "owning" other land in respect of which he has onlydominium directum.    [Back]

Note 197   Abolition of Feudal Tenure etc. (Scotland) Act 2000 s 26 (a provision which is likely to be replaced by s 33 of the Title Conditions (Scotland) Bill).    [Back]

Note 198   Abolition of Feudal Tenure etc. (Scotland) Act 2000 ss 27 and 28.    [Back]

Note 199   Stair Memorial Encyclopaedia vol 13 para 383.    [Back]

Note 200   Sears Properties Netherlands BV v Coal Pension Properties Ltd 2000 SCLR 1002.     [Back]

Note 201   (1881) 8 R(HL) 95.    [Back]

Note 202   Writing in 1967, Paton & Cameron (Landlord and Tenant p 98) express the view that: "The question has not arisen whether one lessee may enforce against a neighbouring co-lessee restrictions contained in the latter's lease (for example, building conditions contained in a long lease) on the ground of similarity of condition and mutuality of interest, but there seems no reason why this should not be possible, if there is a reference to a common plan or a stipulation in each long lease that the same restrictions are to be imposed in all the others". But this idea has not been taken up by the case law.    [Back]

Note 203   For which see para 3.28 above.    [Back]

Note 204   Reid, Property para 352. The difficulties do not depend on the particular example given. Another standard case where conditions might be used in assignations is where a tenement is built on land held on an ultra-long lease, and (partial) assignations are granted of the individual flats.    [Back]

Note 205   Registration of Leases (Scotland) Act 1857 s 3(2) (inserted by the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 s 3).    [Back]

Note 206   Reid, Property paras 403 and 404.    [Back]

Note 207   Para 3.40.    [Back]

Note 208   Provided it imposes an unequivocal obligation to maintain. Some versions of the clause seem designed only to relieve the landlord of any obligation, and leave open the question of liability with the lessee of the adjacent property.    [Back]

Note 209   Abolition of Feudal Tenure etc. (Scotland) Act 2000 s 23 (which is likely to be replaced by s 47 of the Title Conditions (Scotland) Bill). The actual terms "facility burdens" and "service burdens" appear only in the Title Conditions Bill.     [Back]

Note 210   There is a minor exception for maintenance obligations which have been assumed by local authorities or other public authorities.    [Back]

Note 211   Section 73 of the Abolition of Feudal Tenure etc. (Scotland) Act 2000 makes provision in relation to feudal terminology.     [Back]

Note 212   Scot Law Com No 168 paras 5.14 to 5.57.    [Back]

Note 213   Abolition of Feudal Tenure etc. (Scotland) Act 2000 ss 33 to 40.    [Back]

Note 214   For the equivalent provisions in feudal abolition, see 2000 Act ss 17(2), (3) and 54(2), (3).    [Back]

Note 215   Paton & Cameron, Landlord and Tenant pp 127-35.    [Back]

Note 216   Thus an obligation to convey the subjects to the tenant on request has been held to fail the inter naturalia test. See Bisset v Magistrates of Aberdeen (1898) 1 F 87.    [Back]

Note 217   Abolition of Feudal Tenure etc. (Scotland) Act 2000 s 54. For the background, see Scot Law Com No 168 paras 4.92 to 4.96.    [Back]

Note 218   2000 Act s 25. By s 47 counter-obligations are extinguished on the extinction of the real burden itself.    [Back]

Note 219   Paras 3.32 to 3.38.    [Back]

Note 220   The reason is that such rights are already servitudes proper, because the benefited and burdened properties are already in separate ownership.     [Back]

Note 221   2000 Act s 75.    [Back]

Note 222   Because contractual provisions tend not to affect superiors.    [Back]

Note 223   A former landlord has no real right to transfer to others. By contrast, not only could a former tenant transfer his real right (of ownership) to a singular successor, but in so doing could assign the contractual right against the former landlord.    [Back]

Note 224   Paras 2.13 to 2.22.    [Back]

Note 225   Wight v Earl of Hopetoun (1763) Mor 10,461; Scott v Straiton (1771) Mor 15,200; Campbell v McLean (1870) 8 M(HL) 40.     [Back]

Note 226   Special provision for such leases was made by s 1 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985, introducing a retrospective amendment to the Land Tenure Reform (Scotland) Act 1974 s 8(4)(ii).    [Back]

Note 227   Abolition of Feudal Tenure etc. (Scotland) Act 2000 s 67(1), (2).    [Back]

Note 228   2000 Act s 67(4)(a), (b).    [Back]

Note 229   Commercial Union Assurance Co Ltd 1964 SLT 62 (tacit relocation).    [Back]

Note 230   Land Registration (Scotland) Act 1979 s 22A.    [Back]

Note 231   Long Leases (Scotland) Act 1954 s 18(1)(a); Abolition of Feudal Tenure etc. (Scotland) Act 2000 s 67(2); Leasehold Casualties (Scotland) Bill s 9(2)(b) (as amended at Stage 2 on 14 February 2001).    [Back]

Note 232   If the break option were conceived in favour of the tenant, then, for the purposes of computation of duration, it should be assumed that it would not be exercised.    [Back]

Note 233   See para 3.62.    [Back]

Note 234   Long Leases (Scotland) Act 1954 s 18(1)(c).    [Back]

Note 235   This is because the scheme requires an unexpired duration of more than 100 years (or 175 years, on the alternative version): see proposal 2 in para 2.22. If a second scheme were to be introduced for residential ground leases (for which see part 4), conversion would be available under that scheme.    [Back]

Note 236   Paras 2.2 and 2.15.    [Back]

Note 237   Leasehold Casualties (Scotland) Bill s 9(2)(a) (as amended at Stage 2 on 14 February 2001). Similarly, the Leasehold Reform Act 1967 disregards break options in the calculation of qualifying duration (s 3(1)), but not in the calculation of compensation (s 9) where the terms of the individual lease are taken into account.    [Back]

Note 238   Encyclopaedia of Scottish Legal Styles vol 6 (1937) pp 211-2. And see also Scots Styles Book vol 5 (1904) p 325-6.    [Back]

Note 239   Long Leases (Scotland) Act 1954 s 18(1)(b).    [Back]

Note 240   This does not of course mean that the first tenant had a life expectancy of only 35 years. Rather 35 years is the period of his life during which he is deemed to have held the lease.    [Back]

Note 241   This would require to be adjusted to take account of the increase in life expectancy during the past 50 years.    [Back]

Note 242   2000 Act ss 3 and 46. For the background, see Scot Law Com No 168 paras 2.46 to 2.50.    [Back]

Note 243   Paras 3.40 to 3.52.    [Back]

Note 244   Para 3.4.    [Back]

Note 245   Land Registration (Scotland) Act 1979 s 9(3).    [Back]

Note 246   2000 Act s 3(b) (adding a new subs (3C) to s 9 of the 1979 Act).    [Back]

Note 247   Under s 12(1)(b) of the Land Registration (Scotland) Act 1979.    [Back]

Note 248   Land Registration (Scotland) Act 1979 s 12(1)(b).    [Back]

Note 249   The same solution is reached by s 3(c) of the 2000 Act.    [Back]

Note 250   2000 Act s 46. See Scot Law Com No 168 paras 4.21 to 4.25.    [Back]

Note 251   Paras 3.40 to 3.52.    [Back]

Note 252   If only because there is no problem of third party enforcement rights.    [Back]

Note 253   Paras 2.45 and 2.46.    [Back]

Note 254   Paras 3.13 to 3.16.    [Back]

Note 255   Paras 3.43 and 3.44.    [Back]

Note 256   Para 3.7.    [Back]

Note 257   Naturally this does not apply to the notice of exemption, which is registered by the tenant. In practice this notice could be registered concurrently with the lease.    [Back]

Note 258   This example assumes that option B applies: see proposal 2 in para 2.22.    [Back]

Note 259   Para 3.3.    [Back]

Note 260   Guthrie Report paras 28 and 29. The position may be much the same where the landlord supplies the buildings but the tenant pays for them by means of initial grassum (premium). There too the rent may be attributable to the land alone.    [Back]

Note 261   Land Tenure Reform (Scotland) Act 1974 ss 8 to 10. This excludes residential long leases of more than 20 years.    [Back]

Note 262   Long Leases (Scotland) Act 1954 s 1(1). The Act did not distinguish between ground leases and other leases, but in practice almost all leases which satisfied the stated criteria would have been ground leases. Compare here the definition of "tenant-at-will" in s 20(8) of the Land Registration (Scotland) Act 1979.    [Back]

Note 263   Guthrie Report para 68(2)(i). And see also para 1.7.     [Back]

Note 264   The committee reported in 1952: see Report of the Scottish Leases Committee (1952, Cmnd 8656) (referred to in this paper as the "Guthrie Report").    [Back]

Note 265   1954 Act s 1(1) and 6.    [Back]

Note 266   1954 Act s 1(2).    [Back]

Note 267   1954 Act ss 7 to 14.    [Back]

Note 268   These figures were made available to us in 1977 by Registers of Scotland. They include a small number of voluntary conversions from the same period. An article published in 1959 commented that "There is no evidence that the Act has so far been taken advantage of on any very extensive scale": see J G Mitchell, "Some Notes on Long Leases" (1959) 2 Conv Rev 186, 188.    [Back]

Note 269   Unexpired duration is given in column 6 of the table in appendix II to the Guthrie Report.    [Back]

Note 270   Guthrie Report paras 38 and 57 to 67.    [Back]

Note 271   Guthrie Report para 7.    [Back]

Note 272   Long Leases (Temporary Provisions) (Scotland) Act 1951.    [Back]

Note 273   Some, however, may have been kept in existence by tacit relocation.    [Back]

Note 274   Guthrie Report para 41.    [Back]

Note 275   As part of the preparation of the Guthrie Report, a complete survey was carried out of all search sheets in the Register of Sasines for the period 1905-51. This disclosed 13,151 surviving long leases of which around two thirds were thought to be of ultra-long duration. See Guthrie Report paras 38 and 40. Our own survey produced similar results: see appendix A para 11.    [Back]

Note 276   Paras 2.13 to 2.22.    [Back]

Note 277   Appendix A paras 21 and 22.    [Back]

Note 278   On option B of the conversion scheme (unexpired term of 100 years) there are only a handful of such leases. With option A, however, the numbers rise to 40. See para 2.19.    [Back]

Note 279   Guthrie Report appendix II.    [Back]

Note 280   The survey was carried out in 2000.    [Back]

Note 281   In the absence of activity, such leases would remain in the Register of Sasines.    [Back]

Note 282   For example, this suggestion was made in some of the responses to our Discussion Paper on Leasehold Casualties (Scot Law Com DP No 102, 1997).    [Back]

Note 283   Thus Guthrie Committee para 68(2)(i): "The only evidence of serious hardship placed before us related to cases in which ground leases had been granted because the landowner was unable to grant feus, either because of the prohibitions in a deed of entail or because of restrictions upon subinfeudation. In these cases the leases are expiring during a period of inflated values of heritable, and particularly residential, property and at a time of acute housing shortage. We consider that, as the landowner would almost certainly have granted a permanent right of feu had he had the power to do so, the lessee should be entitled to have his temporary right converted into a feu where the ground lease was granted before the passing of the Entail (Scotland) Act, 1914. Thereafter no real obstacles to the granting of feus remained and any ground leases granted were entered into voluntarily by both parties."    [Back]

Note 284   In practice the statute which is most likely to be applicable is the Rent (Scotland) Act 1984. But by s 2 of that Act the rent must be at least two thirds of the rateable value of the property on 23 March 1965. See eg Fennel v Cameron 1968 SLT (Sh Ct) 30.    [Back]

Note 285   Later (para 4.21) we suggest that security of tenure might be a more useful reform.    [Back]

Note 286   Brand's Trs v Brand's Trs (1876) 3 R(HL) 16.    [Back]

Note 287   Agricultural Holdings (Scotland) Act 1991 s 18. In fact this provision suspends the operation of accession.    [Back]

Note 288   Wallace v Braid (1900) 2 F 754; Dollar Land (Cumbernauld) Ltd v CIN Properties 1998 SLT 992.    [Back]

Note 289   Our survey suggests that such provisions are rare in ground leases, although we encountered some 999-year leases in which the landlord must pay for the value of the buildings in the event of exercising a break option.    [Back]

Note 290   Long Leases (Scotland) Act 1954 s 3.    [Back]

Note 291   Thus, in rejecting the idea that compensation should be available as an alternative to conversion, the Guthrie Report argued (para 69) that "where a lessee under an old ground lease of residential property fails to take advantage of the opportunity to obtain a feu title in accordance with our recommendations, we can see no reason why he should be given an alternative right to compensation".    [Back]

Note 292   Dalloz, Encyclopédie Juridique (2nd edn, 1970-98), Répertoire de Droit Civil, Tome X, Superficie.     [Back]

Note 293   A successor would not generally be protected, however. See Housing (Scotland) Act 1988 s 18 and sched 5 part I (ground 7). Other grounds for repossession, both mandatory (part I) and discretionary (part II), are set out in sched 5.     [Back]

Note 294   Landlord and Tenant Act 1954, implementing the majority view of the Jenkins Committee (Leasehold Committee: Final Report 1950, Cmnd 7982).    [Back]

Note 295   Housing (Scotland) Act 1988 ss 24 and 25.    [Back]

Note 296   Leasehold Reform Act 1967 ss 1 and 14. In Scotland the small scale of the problem might allow a more targeted approach. For example, extension might be confined to those who acquired the lease by succession, as opposed to by purchase on the open market; the additional period might be restricted to the number of years required to allow the lease to run for a further 50 years; and the lease might be non-assignable.     [Back]

Note 297   No compensation is payable for the 50-year extension under the Leasehold Reform Act 1967, but the existing ground rent is increased to a modern ground rent, with a review after 25 years (s 15(2)). It is estimated that a modern ground rent is around a third of the market rent for the house as a whole (see Commonhold and Leasehold Reform (Cm 4843, 2000) p 158). By contrast a premium is payable for the 90-year extension of the lease of a flat, at a peppercorn rent, under part I chapter II of the Leasehold Reform, Housing and Urban Development Act 1993: see in particular ss 39(1), 56 and sched 13.    [Back]

Note 298   Compare here the scheme for ultra-long leases, where no compensation is needed in respect of the vestigial interest of the landlord.     [Back]

Note 299   Paras 4.23 to 4.33.    [Back]

Note 300   How substantial will depend on whether some kind of discount is allowed, for which see paras 4.29 to 4.32. Without a discount the tenant would, in the case mentioned, require to pay practically the market value of the property.    [Back]

Note 301   For the status of leases continuing by tacit relocation, see para 4.37.    [Back]

Note 302   Appendix A chart 16.    [Back]

Note 303   Guthrie Report para 66: "[W]e are satisfied that the usual practice of Scottish landowners, so far from showing an insistence on their legal rights, has been generous. There have, of course, been instances in which a lessee has been faced with a demand for a price which took into account almost the whole of the landowner's legal rights at the enhanced current value, but it seems clear that these cases have been exceptional, and at the end of our inquiry we find ourselves somewhat anxious lest the publicity which this matter is receiving should result in the abandonment by Scottish landowners of the reasonable spirit which has usually characterised their negotiations with lessees until now."    [Back]

Note 304   The scheme outlined in part 3 for ultra-long leases would be unsuitable for a number of reasons, such as the principle of compulsion, the absence of compensation, and the treatment of leasehold conditions.    [Back]

Note 305   Paras 4.34 ff.    [Back]

Note 306   Para 4.4. It must be emphasised that our figures are based on a survey of a sample of registration counties for a limited period and so may under- (or over-) estimate the number of eligible leases. But on any view the overall numbers are small.    [Back]

Note 307   See para 4.3 for the take-up rate under the 1954 Act.    [Back]

Note 308   James v United Kingdom (1985) ECHR Series A no 98 para 19.    [Back]

Note 309   If it is accepted (paras 2.15 and 2.16) that an unexpired duration of 100 years marks the point at which the landlord's interest ceases to have value, it follows that no compensation would be due in such a case, other than in respect of rent. That was also the position taken by the 1954 Act (s 8). In practice there will be very few leases with an unexpired duration of more than 100 years which would not qualify for conversion as an ultra-long lease.    [Back]

Note 310   Land Registration (Scotland) Act 1979 ss 20 to 22.    [Back]

Note 311   Occasionally other payments may be due, most notably renewal premiums (for which see para 3.22).    [Back]

Note 312   This is a matter for agreement between the parties, which failing for decision by the Lands Tribunal. See Long Leases (Scotland) Act 1954 s 20. There should be a presumption in favour of any existing informal apportionment: see para 3.14. A difficulty is that only one of the parts may be being converted. Plainly, the tenants of the remaining parts should be bound by the apportionment only where they have agreed to it; but the landlord should not be able to claim rent to the extent that compensation has been paid.     [Back]

Note 313   Thus the user restrictions in the lease would fly off, although some might be reimposed as real burdens (for which see para 4.45).    [Back]

Note 314   For example, in James v United Kingdom ECHR Series B, vol 81 (1986) the applicant disclosed that for the properties sold under the 1967 Act, the time between the tenant intimating that he wanted to exercise the right and the date on which the property was actually conveyed ranged from between 1 and 13 years, the average being 4 years 8 months.    [Back]

Note 315   Commonhold and Leasehold Reform (2000, Cmnd 4843) pp 149-53. At p 150 it is stated, in relation to the Leasehold, Housing and Urban Development Act 1993, that: "The Goverment is concerned that the present arrangements for determining the enfranchisement price are complex and uncertain and can lead to costly arguments, often over matters which have a relatively small impact on the overall price. They provide the opportunity for unscrupulous landlords to drag the process out in order to frustrate leaseholders' legitimate aims."    [Back]

Note 316   And also under the legislation for the right to buy council houses: see Housing (Scotland) Act 1987 s 62.    [Back]

Note 317   As under s 21 of the Leasehold Reform Act 1967. In 1954 the Lands Tribunal for Scotland was not yet in existence, and disputes were referred to a valuer appointed, failing agreement, by the sheriff: see s 7(3) of the 1954 Act.    [Back]

Note 318   But not under the 1967 Act scheme in its original form: see para 4.30.     [Back]

Note 319   Commonhold and Leasehold Reform (2000, Cmnd 4843) p 150. The sharing of marriage value is thus reasserted as government policy.    [Back]

Note 320   Long Leases (Scotland) Act 1954 s 7.    [Back]

Note 321   This is the example given at para 68(4) of the Guthrie Report.    [Back]

Note 322   Leasehold Reform Act 1967 s 9. See further Appendix B para 9.    [Back]

Note 323   James v United Kingdom (1985) ECHR Series A no 98 para 23.    [Back]

Note 324   Here we are brief. But some of the arguments which apply to the principle of conversion (paras 4.6 to 4.21) apply here also.    [Back]

Note 325   Guthrie Report para 68(4).    [Back]

Note 326   Paras 4.6 and 4.7.     [Back]

Note 327   Leasehold Reform in England and Wales (1966, Cmnd 2916) paras 1 and 11.    [Back]

Note 328   ie the landlord.    [Back]

Note 329   Long Leases (Scotland) Act 1954 s 3. This was partly to stop speculative acquisition: see Guthrie Report para 68(3). There was an exception for those acquiring by inheritance.    [Back]

Note 330   (1985) ECHR Series A no 98.    [Back]

Note 331   Thus para 56: "On the view that Parliament took, it logically follows that 'in equity' the tenant should only be required to pay for that part of the property which he has not already paid for, that is the value of the ground … The objective pursued by the leasehold reform legislation is to prevent a perceived unjust enrichment accruing to the landlord on the reversion of the property. In the light of that objective, judged by the Court to be legitimate for the purposes of Article 1, it has not been established, having regard to the respondent State's wide margin of appreciation, that the 1967 basis of valuation is not such as to afford a fair balance between the interests of the private parties concerned and thereby between the general interest of society and the landlord's right of property".    [Back]

Note 332   For a consideration, and rejection, of other possible criteria, see paras 2.25 to 2.30. Special provision is made in s 2 of the 1954 Act for the case where the lease is held by a trust and the house occupied by a beneficiary. It is for consideration whether there should be an additional requirement that the lease be a ground lease, as in the scheme for conversion of tenancies-at-will: see Land Registration (Scotland) Act 1979 s 20(8)(a).    [Back]

Note 333   Note however that in England and Wales the Leasehold Reform Act 1967 (s 3) applies to leases for more than 21 years.    [Back]

Note 334   The Guthrie Report pointed out (para 69) that "in such cases it is obvious that parties must have had in mind throughout the period of the lease the limited duration of the right of occupation under the lease".    [Back]

Note 335   The Land Tenure Reform (Scotland) Act 1974 ss 8 to 10 in effect prevent the creation of residential leases for more than 20 years.    [Back]

Note 336   Paras 3.59 to 3.67.    [Back]

Note 337   In parts 2 and 3 of this paper. Since that scheme operates only on an "appointed day", it is possible that the ground lease scheme would come into force first. If so, there would be no objection to its use in respect of longer leases which, on the appointed day, would have faced automatic conversion.    [Back]

Note 338   Long Leases (Scotland) Act 1954 s 1(4)(b).    [Back]

Note 339   1954 Act s 1(4)(c).    [Back]

Note 340   1954 Act s 1(1).    [Back]

Note 341   Or from a separate unit in the same building.    [Back]

Note 342   This could be included as part of the discretion discussed in para 4.38.    [Back]

Note 343   Leasehold Reform Act 1967 s 1(3)(a); Housing (Scotland) Act 1988 s 13(1).     [Back]

Note 344   Compare here the scheme for ultra-long leases which requires an unexpired duration of at least 100 years. See paras 2.13 to 2.22.    [Back]

Note 345   Tacit relocation means that a lease automatically continues for a further year if neither party has served a notice of termination on the other. A lease may be continued indefinitely in this way. This is treated as an extension of the original lease rather than as a new lease: see Paton & Cameron, Landlord and Tenant p 222. Leases continuing by tacit relocation were included within the 1954 Act scheme: see Guthrie Report para 68(3).    [Back]

Note 346   It is for consideration whether leases which are subsisting on the day the legislation comes into force but are due shortly to expire should be given a brief statutory extension, as was done by ss 15 to 17 of the 1954 Act, in order to avoid a possible time gap between lease and ownership.    [Back]

Note 347   Long Leases (Temporary Provisions) (Scotland) Act 1951. But while two years was sufficient to accommodate the Guthrie Report, it was not sufficient to accommodate the implementing legislation, which was not passed until 1954.    [Back]

Note 348   1954 Act s 5.    [Back]

Note 349   Leasehold Reform Act 1967 s 18.    [Back]

Note 350   The cut-off is to avoid collusive purchases, and some equivalent would be needed in any new legislation.    [Back]

Note 351   Para 4.8.    [Back]

Note 352   But compensation is payable under the 1967 Act: see s 18(4) and sched 2 para 5.    [Back]

Note 353   1954 Act s 5.    [Back]

Note 354   1954 Act s 4.    [Back]

Note 355   Para 4.14.    [Back]

Note 356   Leasehold Reform Act 1967 s 17.    [Back]

Note 357   In England and Wales there is a limited exemption in a case where the property will be required for development within 10 years: see Leasehold Reform Act 1967 s 28.    [Back]

Note 358   Paras 2.31 to 2.33.     [Back]

Note 359   Para 2.34.    [Back]

Note 360   Paras 2.40 to 2.42.    [Back]

Note 361   This rule of general practice is followed both by the 1954 Act (s 1(1)) and by the 1967 Act (s 8).    [Back]

Note 362   See the 1954 Act s 6(1) and sched 1.    [Back]

Note 363   1954 Act s 1(2). The 1967 Act has no time limit.    [Back]

Note 364   This is made express by s 8(1) of the 1967 Act. The tenant has a right to withdraw within one month of the determination of the price (s 9(3)); but this may not be necessary if a simple and predictable valuation formula is used.    [Back]

Note 365   The right to buy scheme for council houses provides that the initial notice is to be followed by a formal offer and acceptance. See Housing (Scotland) Act 1987 ss 63 to 68. But this places the tenant's right to buy at the mercy of the landlord's willingness to respond, and does not seem appropriate in the case of a private sector scheme. If eg the tenant dies before offer and acceptance can be served, the right to buy is defeated: see Ross v City of Dundee Council 2000 SLT (Lands Tr) 2.    [Back]

Note 366   As in the Long Leases (Scotland) Act 1954 s 1(1). But note the special rule for the subsistence of a lease (para 4.37).    [Back]

Note 367   As in Cooper's Exrs v Edinburgh District Council 1991 SC(HL) 5 (right to buy a council house).    [Back]

Note 368   By the time that the scheme was in force, all registration counties would be operational for the purposes of registration of title. Since the transfer would be for valuable consideration it would fall to be registered in the Land Register and not the Register of Sasines. See Land Registration (Scotland) Act 1979 s 2(1)(a)(ii).    [Back]

Note 369   1954 Act s 1(1); 1967 Act s 8(1).    [Back]

Note 370   Section 13(2) of the 1954 Act gives a judicial remedy if the landlord has failed to sign a feu contract within two months of being called on to do so.    [Back]

Note 371   Abolition of Feudal Tenure etc. (Scotland) Act 2000.    [Back]

Note 372   Compare s 11 and sched 4 of the 1954 Act. It is for consideration whether, as in sched 4, the landlord should be required to grant absolute warrandice. Clearly a sheriff clerk signing on behalf of an unknown landlord could not be expected to warrant the title.    [Back]

Note 373   This is because registration has certain additional effects not accorded to ordinary dispositions. See below.    [Back]

Note 374   As in the scheme for ultra-long leases: see paras 3.25 to 3.27.     [Back]

Note 375   D J Cusine & R R M Paisley, Servitudes and Rights of Way (1998) paras 8.09 ff.    [Back]

Note 376   See, however, Inverness Seafield Co Ltd v Mackintosh 2001 SLT 118, which turned on the speciality that, following Bowers v Kennedy 2000 SC 555, the implied right of access to landlocked property is not treated as an ordinary servitude.    [Back]

Note 377   An implied servitude will not. See Registration of Title Practice Book (2nd edn, 2000) paras 6.54 to 6.58.    [Back]

Note 378   It is for consideration whether special provision is needed for where the landlord omits to do this, particularly if the property is subject to another residential long lease eligible for conversion.    [Back]

Note 379   See 1954 Act s 11(a) ("conditions and restrictions, being reasonable and appropriate in the circumstances"); Land Registration (Scotland) Act 1979 s 20(6) ("such terms and conditions ... as may be appropriate to the circumstances of the case"); and Housing (Scotland) Act 1987 s 64(1) ("such conditions as are reasonable").    [Back]

Note 380   If use restrictions are imposed, they should be factored into the price. In other words, the property should be valued on the basis that the restrictions exist. This will only rarely make a difference, as where for example the effect of restrictions is to prevent development for which planning permission would otherwise be available.    [Back]

Note 381   The position is different where the lease is so long as to amount to a quasi-feu. See paras 3.40 to 3.52. Section 11(a) of the 1954 Act may be explained on the basis that many of the leases with which the Act was concerned were ultra-long.    [Back]

Note 382   However, as the law currently stands, this would require to be done in a separate deed of conditions. The position would be altered by the Title Conditions Bill: see Scottish Law Commission, Report on Real Burdens (Scot Law Com No 168, 2000) paras 3.11 to 3.14.     [Back]

Note 383   Obvious precedents are s 21(1)(e) of the Land Registration (Scotland) Act 1979, and s 71(1)(d) of the Housing (Scotland) Act 1987.    [Back]

Note 384   The 1954 Act s 11 also required execution by the tenant and by any intermediate landlord, for the purpose of renouncing the lease. Under our scheme, renunciation occurs automatically, on registration. See para 4.47.    [Back]

Note 385   Conversion schemes usually so provide. But it may be noted that in the Ground Rents Bill, currently before the Northern Ireland Assembly, it is provided that expenses should lie where they fall.    [Back]

Note 386   1954 Act s 22; 1967 Act s 9(4)(e).     [Back]

Note 387   Land Registration (Scotland) Act 1979 s 20(5).    [Back]

Note 388   Compare the position in the earlier scheme, described in para 3.2.    [Back]

Note 389   Land Registration (Scotland) Act 1979 s 3(1)(a).    [Back]

Note 390   Land Registration (Scotland) Act 1979 s 9.    [Back]

Note 391   Paras 3.4 to 3.6.    [Back]

Note 392   Under the 1954 Act s 21(4), (5) heritable securities cease to affect the land.    [Back]

Note 393   There could not in practice be a sublease below the converting tenant's lease, for otherwise the converting tenant could not fulfil the occupation requirement.    [Back]

Note 394   This is expressly provided for by s 21(1)-(3) of the 1954 Act.    [Back]

Note 395   Compare here the position of securities in ultra-long leases: see para 3.4.    [Back]

Note 396   1954 Act s 10(1).    [Back]

Note 397   1967 Act s 12. The other possible approach, used for tenancies-at-will, is to leave the security in force but place the landlord under an obligation to procure its discharge. In effect this is the rule that applies in normal sales. See Land Registration (Scotland) Act 1979 ss 20(6), (7) and 22.     [Back]

Note 398   Most notably the duty of a heritable creditor, in selling property, to pay the amount due under prior securities. See Conveyancing and Feudal Reform (Scotland) Act 1970 s 27.    [Back]

Note 399   Fourteen days is the period allowed in standard letters of obligation for registration of the purchaser's title.    [Back]

Note 400   The tenant's duty would not extend to floating charges, which do not appear on the property register. But unless a floating charge has attached, it would not affect the property once it had been transferred.    [Back]

Note 401   See Conveyancing and Feudal Reform (Scotland) Act 1970 s 18(1), (1A).    [Back]

Note 402   See proviso to s 10(1) of the 1954 Act. If the creditor could not be found, the amount due could be consigned in court. See Conveyancing and Feudal Reform (Scotland) Act 1970 s 27(2), (3), and para 4.49 below.     [Back]

Note 403   Curiously, however, s 13(3) of the 1954 Act makes provision for intermediate landlords.    [Back]

Note 404   1967 Act s 27. Much the same procedure is used in respect of tenancies at will: see s 21(3) of the Land Registration (Scotland) Act 1979.    [Back]

Note 405   Para 3.13.    [Back]

Note 406   In the unlikely event that there were two such people, the "owner" would be the later person to acquire the right: see Abolition of Feudal Tenure etc. (Scotland) Act 2000 s 16(1) (definition of "superior").    [Back]

Note 407   If the notice was correctly served but the owner subsequently granted a disposition to a third party, this would be like any other case of double sale. The owner would be in breach of the statutory obligations imposed by the notice, and the title of a male fide acquirer would be vulnerable to reduction, and rectification, as an "offside goal".    [Back]

Note 408   Para 4.4.    [Back]

Note 409   Paras 4.35 to 4.41. The same approach was taken by the 1954 Act: see s 1(1).    [Back]

Note 410   1954 Act s 9.    [Back]

Note 411   1954 Act s 7(1) provides for payment to the "landlord". In s 1(3) "landlord" is defined to mean "any person for the time being holding the interest of landlord under a lease"; and "lease" is said not to "include a sublease".     [Back]

Note 412   1967 Act s 5(4) and sched 1 para 7.    [Back]

Note 413   The figure is chosen deliberately. If there were 100 years to run, B would normally become owner under the scheme for ultra-long leases. In that case, as explained below, he would receive all of the compensation.    [Back]

Note 414   If, however, the compensation formula distinguished loss of rent from loss of reversion (para 4.23), it would be possible to follow s 9 and require direct payments to intermediate landlords in respect of the former.    [Back]

Note 415   Compare s 7(2) of the 1954 Act, which considers only the head lease. (Note that, by s 1(3), "lease" means head lease.)     [Back]

Note 416   Similarly, the holder of any other real right extinguished as a result of conversion could be allowed to make a claim against the head landlord. Heritable creditors having already been provided for, the only remaining category may be those – virtually unknown in practice – holding a proper liferent over the land.    [Back]

Note 417   Para 3.3.    [Back]

Note 418   Paras 2.40 to 2.47.    [Back]

Note 419   Para 2.16.    [Back]

Note 420   Since eligibility under that scheme depends on the unexpired duration of the lease, it may be necessary for the legislation itself to nominate the appointed day (as opposed to leaving this to delegated legislation).     [Back]

Note 421   Para 4.50.    [Back]

Note 422   We are grateful to the staff of Registers of Scotland for supplying a list of the leasehold titles for each county, providing information on each title, and allowing the title sheets to be inspected. In particular we wish to thank Mr Ian Davis, Mr John Marshall, Mr Marcus MacKenzie, Mr Douglas Pentland, and the staff in Customer Services, for their advice and assistance.    [Back]

Note 423   We wish to thank Ms Marina Miller for creating a database for the survey.    [Back]

Note 424   In April 1951 the Keeper of the Registers of Scotland carried out for the Guthrie Committee a survey of all search sheets in the Register of Sasines for the period 1905-1951. Its findings were published in appendix II of the Guthrie Report.    [Back]

Note 425   In both categories Lanark was in first place. This is probably still the case. O'Donnell and Rennie found that the greatest concentration of leasehold titles was in Lanarkshire: see D O'Donnell and R Rennie, "Non–Feudal Landholdings in Scotland" (1998) 3 SLPQ 31 at 49.    [Back]

Note 426   Lanark became an operational area on 3 January 1984, and Ayr on 1 April 1997.    [Back]

Note 427   Clackmannan became an operational area on 1 October 1992. Kirkcudbright and Wigtown became operational areas on 1 April 1997.    [Back]

Note 428   Renfrew became an operational area on 6 April 1981.    [Back]

Note 429   There were 1503 assignations in part.    [Back]

Note 430   1.80% of the 1503 assignations in part.    [Back]

Note 431   2.05% of the 586 leases for which the rent had been allocated.    [Back]

Note 432   See para 1.4 n 12 of the discussion paper.    [Back]

Note 433   This figure is the percentage of search sheets attributable to surviving leases. In calculating this percentage there has been excluded from the total number of search sheets the search sheets of the 1024 leases in those counties that had expired by 1951.    [Back]

Note 434   Research in files from the early 1950s in the National Archives of Scotland suggests that various estates around Scotland granted 99-year leases of residential properties, such as the Breadalbane Estate, the Buccleuch Estate, the Hamilton & Kinneil Estate, the Kippendavie Estate, the Macdonald Estate, and the Seafield Estate.     [Back]

Note 435   This is supported by the evidence received from practitioners with experience of long leases. They referred to pockets of leases in Alva, Ardrossan, Saltcoats, Stevenson, and Wishaw.     [Back]

Note 436   It was not possible to ascertain the duration of 80 leases so the sample here is 2599 leases.    [Back]

Note 437   For practical reasons the charts exclude leases with an initial duration of more than 1030 years, of which there were 44 ranging from 1,037 years to 1,000,000 years.    [Back]

Note 438   The break between 125 years and 200 years may be due to the practice of granting commercial leases for 125 years to encompass the three 40-year cycles of building, trading and demolition.    [Back]

Note 439   14.62% of the sample leases. Some of the 380 leases may be subleases granted for the remaining term of leases originally granted for 999 or 900 years. 41.35% (184) of all leases identified as subleases for which the length was known (445 leases) were granted for over 125 and under 999 years. Others may be re-grants of original 999 or 900 year leases which have been lost or not recorded.    [Back]

Note 440   11 leases were granted for 1,000,000 years. All were of properties in Paisley and were granted between 1825 and 1892.    [Back]

Note 441   Disregarding those which may be continuing on tacit relocation.    [Back]

Note 442   The base figure is 2593 leases. This is derived by subtracting from the full total of 2679 leases the 86 leases in respect of which the unexpired duration is uncertain. The figure includes leases which may be continuing by tacit relocation.    [Back]

Note 443   But, for practical reasons, excluding leases of more than 999 years.    [Back]

Note 444   Land Tenure Reform (Scotland) Act 1974 ss 8 to 10.    [Back]

Note 445   Based on the address of the property and the name of the landlord, we estimate that all but 11 of the 173 999-year leases were of residential property.    [Back]

Note 446   Rent here is the original unallocated rent under the lease, as most allocations do not appear to have had the landlord's approval. See para 3.14 of the discussion paper.    [Back]

Note 447   The average rent of £60 in 1873 is due to the 10 properties which form part of a lease granted in 1873 for a rent of £101.54. The average of £24.17 in 1924 reflects a single lease granted for £24.17. 5 properties in the survey are held under partial assignations of this lease.    [Back]

Note 448   However there were no such leases with between 200 and 500 years remaining.    [Back]

Note 449   Land Tenure Reform (Scotland) Act 1974 ss 8 to 10.     [Back]

Note 450   This was borne out by the survey. 318 leases in Wishaw were examined, of which 263 leases were granted for 999 years and 298 were granted for at least 812 years. The length of 3 leases in Wishaw was unknown. 18 leases in Ardrossan were examined, and the lengths of 14 of these leases was known. 11 were for 999 years, and 2 for 855 years.     [Back]

Note 451   This was borne out by the survey. 171 leases in Alva were examined. Of the 163 leases of which the length was known, 161 were granted for 999 years and 1 for 979 years.    [Back]

Note 452   Long Leases (Scotland) Act 1954 s 1(1). For an account of the Act, see J G Mitchell, "Some Notes on Long Leases" (1959) 2 Conv Rev 186.    [Back]

Note 453   Provided by the rent previously payable continuing to be payable as feuduty.    [Back]

Note 454   Long Leases (Scotland) Act 1954 s 7.    [Back]

Note 455   Land Registration (Scotland) Act 1979 ss 20-22.    [Back]

Note 456   See Maclean v Kershaw 1993 SLCR 145.     [Back]

Note 457   1979 Act s 20(8).    [Back]

Note 458   The tenant is always entitled to a 32% discount, and is entitled to an additional 1% (2% for flats) discount for every year beyond the 2 years continuous occupation immediately preceding the date of service of the application to purchase the house. The maximum discount of 60% (70% for flats) is reached after 30 years (15 years for flats). These discounts are reduced by s 42 of the Housing (Scotland) Bill, currently before the Scottish Parliament.    [Back]

Note 459   A disposal in the first year triggers repayment of 100% of the discount; in the second year, 66% of the discount; and in the third year, 33% of the discount.    [Back]

Note 460   Crofters (Scotland) Act 1993 s 12. In addition part 3 of the Land Reform (Scotland) Bill, which was published in draft on 22 February 2001, will, if enacted, give to crofting community bodies a right to buy certain croft land.    [Back]

Note 461   1993 Act s 13(2).    [Back]

Note 462   1993 Act s 14.    [Back]

Note 463   Fraser v Noble 1977 SLT (Land Ct) 8 (£5); Corbett v Assynt Estates 1995 SLCR 122 (£30).    [Back]

Note 464   1993 Act s 15.    [Back]

Note 465   Section 65 of the Conveyancing and Law of Property Act 1881 as amended by s 11 of the Conveyancing Act 1882, now both replaced by s 153 of the Law of Property Act 1925.    [Back]

Note 466   Section 153(4) provides that if the rent is not more than £1 and the rent has not been collected for 20 years, 5 of which must have been after 1 January 1926 when the Law of Property Act 1925 came into force, the rent will be deemed to have ceased to be payable. No arrears or future payments can be exacted in this case: section 153(5).    [Back]

Note 467   The provision has caused difficulties. What, for example, happens to conditions which are acceptable in leases but not in simple ownership of the ground, such as an obligation not to alienate the property, or to remove at the end of the period of the lease? See eg T P D Taylor, The Enlargement of Leasehold to Freehold, (1958) 22 Conv (NS) 101.    [Back]

Note 468   Leasehold Reform Act 1967 ss 1 – 4A. The tests are similar to those giving security of tenure under the Landlord and Tenant Act 1954. Instead of conversion, a tenant under a qualifying lease has a right to have the lease extended for 50 years: see ss 1(1) and 14 – 16.    [Back]

Note 469   Eg agricultural leases: s 1(3) of the 1967 Act.    [Back]

Note 470   Eg certain public authority landlords can be exempted: s 28 of the 1967 Act.    [Back]

Note 471   Eg the right to convert may be defeated if the landlord needs the house to live in himself: 1967 Act s 18. The Rent Acts allow a landlord to remove a tenant on the same ground. The tests applied by the court in the two situations are very similar.     [Back]

Note 472   1967 Act s 9(1).    [Back]

Note 473   The rent in this deemed extension is to be a ground rent only, disregarding buildings: see 1967 Act s 15(2).    [Back]

Note 474   For marriage value, see para 4.28. The valuer is directed to make a number of other assumptions, for example that the property is being sold with and subject to the rights and burdens to which the conveyance to the tenant is to be made.    [Back]

Note 475   1967 Act s 9(4).    [Back]

Note 476   Leasehold Reform, Housing and Urban Development Act 1993 ss 63 – 66; Housing Act 1996 ss 105, 106 and sched 9 paras 1 and 2.    [Back]

Note 477   1967 Act ss 9(1A), (1C) and 9A.    [Back]

Note 478   Leasehold Reform, Housing and Urban Development Act 1993 part I, chapter I (ss 1 – 38). Alternatively, under chapter II of part I (ss 39 – 62) individual tenants can obtain a 90-year extension of their lease, at a peppercorn rent, on payment of a premium.    [Back]

Note 479   For compensation, see 1993 Act s 32 and sched 6.    [Back]

Note 480   For the background to this Bill, see Commonhold and Leasehold Reform (Cm 4843, 2000).    [Back]

Note 481   Leasehold (Enlargement and Extension) Act 1971 s 1. As under the 1967 Act the tenant has the alternative of a 50-year extension.    [Back]

Note 482   1971 Act s 14.    [Back]

Note 483   Property (Northern Ireland) Order 1997 art 7(3), (4).    [Back]

Note 484   SI 1997/1179 (NI 8). The Order is to be replaced by the Ground Rents Bill, currently before the Northern Ireland Assembly, which is in much the same terms. This implemented vol 1, part 1 of The Final Report of the Land Law Working Group (Department of Finance and Personnel for Northern Ireland, Office of Law Reform, 1990).     [Back]

Note 485   1997 Order art 20(2): a certificate of redemption operates, where "the land was held … for a leasehold estate … to enlarge the rent-payer's estate into an estate in fee simple …".    [Back]

Note 486   1997 Order arts 5 and 6.    [Back]

Note 487   1997 Order art 15 and sched 1.    [Back]

BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII
URL: http://www.bailii.org/scot/other/SLC/DP/2001/112.html

	[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
	Scottish Law Commission (Discussion Papers)
You are here: BAILII >> Databases >> Scottish Law Commission >> Scottish Law Commission (Discussion Papers) >> Conversion of Long Leases [2001] SLC 112 (DP) (April 2001) URL: http://www.bailii.org/scot/other/SLC/DP/2001/112.html Cite as: [2001] SLC 112 (DP)