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 £5, 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 (Reports) |
||
|
You are here: BAILII >> Databases >> Scottish Law Commission >> Scottish Law Commission (Reports) >> Conversion of Long Leases (Report) [2006] SLC 204(Appendix_A) (December 2006) URL: http://www.bailii.org/scot/other/SLC/Report/2006/204(Appendix_A).html Cite as: [2006] SLC 204(Appendix_A) |
||
[New search] [Printable RTF version] [Help]
Section
Schedule 1 —Form of notice for preservation of sporting rights
Schedule 2 —Form of notice for conversion of qualifying condition by nomination of benefited property
Schedule 3 —Form of notice seeking agreement to the conversion of qualifying condition
Schedule 4 —Form of notice for conversion of qualifying condition into personal pre-emption burden or personal redemption burden
Schedule 5 —Form of notice for conversion of qualifying condition into economic development burden
Schedule 6 —Form of notice for conversion of qualifying condition into health care burden
Schedule 7 —Form of notice for conversion of qualifying condition into conservation burden
Schedule 8 —Form of notice for conversion of qualifying condition into conservation burden by nomination of conservation body or Scottish Ministers to have title to enforce real burden
Schedule 9 —Form of notice requiring compensatory payment etc: cumulo rent
Schedule 10—Form of notice requiring compensatory payment etc: partially continuing lease
Schedule 11—Form of notice requiring compensatory payment etc. in ordinary case
Schedule 12—Form of notice requesting additional payment
Schedule 13—Form of further notice requiring additional payment following agreement
Schedule 14—Form of preliminary notice for compensatory payment exceeding £500
Schedule 15—Form of preliminary notice for additional payment exceeding £500
Schedule 16—Form of instalment document
Schedule 17—Acknowledgement of service and certificate of posting
Schedule 18—Form of notice of exemption
Schedule 19—Form of notice of recall
Schedule 20—Table of life expectancy
Schedule 21—Minor and consequential amendments
An Act of the Scottish Parliament to convert the right of lease in relation to certain long leases into ownership; to create, on such conversion, separate tenements in relation to certain rights of game and fishing; to provide for the conversion into real burdens of certain rights and obligations under such leases; to provide for payment to former owners of land of compensation for loss of it on conversion; to provide for tenants of qualifying long leases to opt out of conversion; and for connected purposes.
1 Meaning of "qualifying lease"
(1) Subject to section 2 of this Act, a lease is a "qualifying lease" if it complies with subsection (2) below.
(2) A lease complies with this subsection if, immediately before the appointed day, it is a right of lease in land—
(a) which is registered;
(b) granted for a period of more than 175 years;
(c) in respect of which the unexpired portion of such period is more than 100 years; and
(d) which is not a lease—
(i) of minerals; or
(ii) which includes minerals and in respect of which a royalty, lordship or other payment of rent determined by reference to the exploitation of those minerals is or may be payable.
(3) Where a lease is divided (whether as a result of partial assignation or otherwise), each part shall, for the purposes of this Act, be treated as a separate lease.
GENERAL NOTE
In the Notes to each section the Abolition of Feudal Tenure etc. (Scotland) Act 2000 is referred to as the "2000 Act" and the Title Conditions (Scotland) Act 2003 as the "2003 Act".
NOTE
Part 1 of the bill sets out the basic scheme for the conversion of certain long leases into ownership on the appointed day. The conversion scheme does not of course apply to a lease which has terminated before the appointed day. The appointed day is defined in section 59. A lease will qualify for conversion if immediately before the appointed day it satisfies certain requirements. The requirements are set out in subsection (2).
Firstly, the lease must be a lease of land. Land is defined in section 68(1) as including anything which is or which may be held as a separate tenement. Accordingly leases of sporting or other rights which cannot be owned separately from the land to which they attach are excluded from the conversion scheme. This implements recommendation 5(b). See paragraph 2.36 of the report.
Subsection 2(a) requires the lease to be registered. It implements recommendation 4. See paragraph 2.31 of the report. Section 55 makes provision for a lease which is constituted as a real right by possession rather than registration and which is first registered close to or after the appointed day.
Subsections 2(b) and (c) require the lease to be of a certain duration. Together the subsections implement recommendation 2. See paragraphs 2.13 to 2.21 of the report. 175 years is the maximum period for which a lease may now be granted: 2000 Act, section 67. The duration of a lease (including unexpired duration) is calculated in accordance with section 60 of the bill.
Subsection 2(d) excludes a lease of minerals or a lease which is primarily of minerals from the conversion scheme. Such a lease is an exception to the rule that a lease of a separate tenement is a qualifying lease. This subsection implements recommendation 5(a). See paragraphs 2.34 to 2.35 of the report.
Subsection (3) applies where a lease has been divided by assignation. The conversion scheme applies to such a lease as though the retained part and the assigned part were separate leases. See paragraph 2.46 of the report.
2 Only one lease of particular land to be qualifying lease
(1) Where land is subject to two or more leases both or each of which complies with section 1(2) of this Act (such a lease being referred to in this Act as a "potential qualifying lease"), subsections (2) to (4) below shall apply for the purposes of determining—
(a) which of such leases shall be the qualifying lease; and
(b) of which land the lease is a qualifying lease.
(2) If none of the land which forms the subjects of a potential qualifying lease forms the subjects of an inferior lease, such potential qualifying lease shall be the qualifying lease of such land.
(3) If any of the land which forms the subjects of a potential qualifying lease forms the subjects of an inferior lease, such potential qualifying lease shall be the qualifying lease of such land which does not form the subjects of an inferior lease.
(4) If all of the land which forms the subjects of a potential qualifying lease forms the subjects of an inferior lease, such potential qualifying lease shall not be a qualifying lease.
(5) In this section—
"inferior lease", in relation to a potential qualifying lease, means a sublease—
(a) of the whole or part of the subjects of the potential qualifying lease; and
(b) which is itself a potential qualifying lease.
NOTE
Where land is subject to two or more leases which satisfy the requirements in section 1, this section sets out rules to determine the qualifying lease and the subjects of that lease. It implements recommendation 6. See paragraphs 2.45 and 2.46 of the report and the examples referred to there.
3 Conversion of right of lease to right of ownership
(1) Subject to section 53(2) of this Act, on the appointed day—
(a) a qualifying lease shall become the right of ownership of the land in relation to which it is the qualifying lease;
(b) any right of ownership of that land existing immediately before that day shall be extinguished; and
(c) any superior lease shall be extinguished.
(2) In this Act, a "superior lease" means a lease of land in relation to which, and to the extent that, a qualifying lease is a sublease of that land.
NOTE
Subsection (1) converts the qualifying lease into ownership while at the same time extinguishing any right of ownership that existed immediately before the appointed day along with any superior leases. Conversion takes place automatically unless the tenant of the qualifying lease has opted out under part 4.
Subsection (2) defines the concept of superior lease. The purpose of this definition is to ensure that all higher leases are extinguished only in respect of the land that is subject to the qualifying lease.
The section implements recommendations 1 and 7 to 10. See paragraphs 2.1 to 2.12 and 3.1 to 3.24 of the report.
4 Extinction of certain rights and obligations on appointed day
(1) Subject to subsection (2) below and sections 5 and 6 and Part 2 of this Act, all rights and obligations arising (whether expressly or by implication) from—
(a) the qualifying lease; and
(b) any superior lease,
shall, on the appointed day, be extinguished.
(2) Subsection (1) above shall not affect any right or obligation arising from a lease mentioned in that subsection in so far as that right or obligation is, by its nature, enforceable only as a personal right or obligation, that is to say, the right or obligation could not be enforced by or against the successor of a party to the lease.
(3) Notwithstanding subsection (1) above, rent shall continue to be payable for any period before the appointed day; and if (in so far as so payable) it has not fallen due before that day, it shall fall due on that day.
(4) Subject to subsection (5) below—
(a) on or after the appointed day, no proceedings for enforcement of any such rights or obligations as are mentioned in subsection (1) above shall be commenced;
(b) any proceedings already commenced for such enforcement shall be deemed to have been abandoned on that day and may, without further process and without any requirement that full judicial expenses shall have been paid by the pursuer, be dismissed accordingly; and
(c) any decree or interlocutor already pronounced in proceedings for such enforcement shall be deemed to have been reduced or, as the case may be, recalled on that day.
(5) Subsection (4) above shall not affect any proceedings, decree or interlocutor in relation to—
(a) a right or obligation which subsists by virtue of section 5 of this Act;
(b) a right or obligation which is converted under Part 2 of this Act;
(c) a right or obligation which is created under section 6 of this Act; or
(d) a right to recover damages or to the payment of money (including rent).
NOTE
Subsection (1) extinguishes all rights and obligations arising from the qualifying lease and any superior lease. The rights and obligations may be set out expressly in a deed or be implied by virtue of the landlord and tenant relationship. There is a saving for any rights or obligations that survive the appointed day in one form or another under sections 5 and 6 and part 2.
Subsection (2) provides an exception for personal rights and obligations.
Subsection (3) makes it clear that the obligation to pay rent for any period before the appointed day remains enforceable.
Subsection (4) prevents any proceedings being raised or continued after the appointed day for the enforcement of any rights and obligations extinguished by subsection (1). It does not matter that the breach occurred before the appointed day. Any decree or interlocutor already pronounced does not survive the appointed day. For instance, an interdict enforcing a use restriction would cease to apply.
Subsection (5) provides that subsection (4) does not apply to rights and obligations which survive the appointed day under section 5 and 6 and part 2 of the bill. It will also remain possible after the appointed day to enforce a right to recover damages or a right to the payment of money (such as rent).
Subsections (1) and (3) to (5) implement recommendation 11(b) and (c). See paragraphs 3.27 to 3.30 of the report. Subsection (2) implements recommendation 26. See paragraphs 4.74 to 4.77 of the report.
5 Subordinate real rights, reservations and pertinents
(1) This section applies where a right of ownership in land is created by the conversion of a qualifying lease under section 3(1)(a) of this Act (such land being referred to in this section as "the converted land").
(2) The converted land shall be subject to any subordinate real rights to which the qualifying lease was, immediately before the appointed day, subject.
(3) The converted land shall, subject to subsection (4) below, be subject to—
(a) any subordinate real rights (other than any superior lease extinguished by virtue of section 3(1)(c) of this Act); and
(b) any other encumbrances,
to which the converted land itself was, immediately before the appointed day, subject.
(4) Any heritable security or proper liferent to which the converted land itself was subject immediately before the appointed day shall, on that day and to the extent that the security or liferent affected the land, be extinguished.
(5) The converted land shall—
(a) include any pertinent (whether express or implied) of the qualifying lease which, by its nature, may be a pertinent of land; and
(b) exclude anything capable of being held as a separate tenement in land (including any right so held by virtue of section 7 of this Act) which is reserved (whether expressly or by implication) from—
(i) the qualifying lease; or
(ii) any superior lease.
NOTE
This section sets out the subordinate real rights and encumbrances that burden the right of ownership of the converted land from the appointed day. It also makes provision in respect of pertinents and reservations. In this section "converted land" is the land in which a right of ownership is created through the conversion of a qualifying lease under s 3(1)(a).
Subsection (2) implements recommendation 11(a)(i). See paragraphs 3.25 and 3.30 of the report. On the appointed day subordinate real rights over the qualifying lease become subordinate real rights over the right of ownership created under section 3.
Subsections (3) and (4) implement recommendation 11(a)(ii). See paragraphs 3.25, 3.26 and 3.30 of the report. The right of ownership created under section 3 is subject to any encumbrances and subordinate real rights, other than heritable securities, proper liferents or any superior leases, which burdened the head landlord's ownership immediately before the appointed day. Servitudes, real burdens, and public rights of way, for example, will all continue. Subsection (4) does not affect the personal obligation of the debtor under the heritable security.
Subsection (5) defines the extent of the converted land by reference to pertinents and reservations of the lease. This subsection implements recommendation 12. See paragraphs 3.31 to 3.33 of the report. On the appointed day a pertinent of the qualifying lease becomes a pertinent of the converted land provided that it is of a type that is recognised as a pertinent of land. Excluded from the converted land is anything that was reserved from the qualifying lease (or any superior lease), provided that it is capable of being held as a separate tenement. If the reservation is not capable of being held as a separate tenement, it is disregarded on conversion and will form part of the converted land.
The main example of a reservation is a minerals reservation. Where the minerals are not already separate tenements they will become separate tenements on the appointed day when ownership of the surface is separated from ownership of the minerals. The clause of reservation will continue to regulate the relationship between the owner of the minerals (the former landlord) and the owner of the surface (the former tenant). See paragraphs 5.1 to 5.6 of the report.
Subsection (5) interacts with section 7. Under section 7 a notice may be registered converting reserved sporting rights into a separate tenement. If a notice is registered, the sporting rights will not form part of the converted land. If a notice is not registered, the converted land will include the reserved sporting rights as such rights are not capable on their own of being held as a separate tenement. In that case if the rights have been leased out separately the lease in question is not affected by conversion of the qualifying lease (see subsection (3)) but there would be a change of landlord. See paragraph 5.17 of the report.
6 Creation of servitudes on conversion
Where a right of ownership in land is created by the conversion of a qualifying lease under section 3(1)(a) of this Act, that land shall include or, as the case may be, be subject to any servitudes which would have been created (whether expressly, by implication or by positive prescription) had the original grant of—
(a) the qualifying lease;
(b) any superior lease; and
(c) any partial assignation of a lease, where the subjects of that lease include the land which forms the subjects of the qualifying lease,
been a conveyance of land.
NOTE
The effect of this section is to create those servitudes which would have been created (whether expressly, impliedly or by positive prescription) had the deeds referred to been a conveyance of land leading to separation of ownership. The section implements recommendation 13. See paragraphs 3.34 to 3.41 of the report.
The deeds referred to are the qualifying lease, any lease higher in the hierarchy of leases (where there is such a hierarchy), or any partial assignation relating to the qualifying lease. The latter, for example, covers the case where a single lease is divided into two by assignation. The assignation may include rights and obligations which affect the part of the lease that is assigned and also the part that is retained.
7 Conversion of reserved sporting rights
(1) This section applies where a right of—
(a) game; or
(b) fishing,
is reserved (whether expressly or by implication) from a qualifying lease or superior lease (such a right being referred to in this Act as a "sporting right").
(2) A landlord may, before the appointed day, execute and register a notice in, or as nearly as may be in, the form contained in schedule 1 to this Act.
(3) The notice shall—
(a) set out the title of the landlord;
(b) identify the land affected by the sporting right;
(c) set out the terms of such right; and
(d) set out the terms of any counter-obligation to the right.
(4) For the purposes of subsection (2) above—
(a) a notice is registered only when registered against the land identified in pursuance of paragraph (b) of subsection (3) above; and
(b) the notice may be registered against the title of the owner of the land or the tenant under the qualifying lease.
(5) Before submitting any notice for registration under this section, the landlord shall swear or affirm before a notary public that to the best of the knowledge and belief of the landlord all the information contained in the notice is true.
(6) For the purposes of subsection (5) above—
(a) if the landlord is—
(i) an individual unable, by reason of legal disability or incapacity, to swear or affirm as mentioned in that subsection, then a legal representative of the landlord may swear or affirm; or
(ii) not an individual, then any person authorised to sign documents on its behalf may swear or affirm; and
(b) any reference in that subsection to the landlord shall be construed in accordance with paragraph (a) above.
(7) If subsections (2) to (6) above are complied with and immediately before the appointed day the sporting right to which the notice relates is still enforceable, on the appointed day—
(a) that right shall become a separate tenement in land;
(b) in the case of a right of game, the separate tenement shall, subject to subsection (8) below, be comprised of—
(i) in a case where the right is expressly reserved, the rights and obligations specified in the lease and, in so far as is consistent with those express rights and obligations, an exclusive right to take hares, pheasants, partridges, grouse, black game and ptarmigan;
(ii) in a case where the right is reserved by implication, an exclusive right to take hares, pheasants, partridges, grouse, black game and ptarmigan; and
(c) in the case of a right of fishing, the separate tenement shall be comprised of—
(i) in a case where the right is expressly reserved, the rights and obligations specified in the lease and, in so far as is consistent with those express rights and obligations, an exclusive right to fish for freshwater fish;
(ii) in a case where the right is reserved by implication, an exclusive right to fish for freshwater fish.
(8) Any exclusive right conferred by subsection (7)(b) above is subject to section 1 of the Ground Game Act 1880 (c. 47) (right of occupier to kill and take ground game).
(9) Where a right becomes, under subsection (7) above, a separate tenement in land—
(a) that right shall be subject to any counter-obligation enforceable immediately before the appointed day; and
(b) without prejudice to any other way in which such a counter-obligation may be extinguished, any such counter-obligation is extinguished on the extinction of the right.
(10) In this section and section 8 of this Act, any reference to a "landlord" is a reference—
(a) in a case where there is one superior lease, to the landlord under the superior lease;
(b) in a case where there are two or more superior leases, to the landlord under whichever of those leases is not itself subject to a superior lease.
(11) This section is subject to sections 8 and 62 of this Act.
NOTE
This section provides for the conversion of a sporting right into a separate tenement by the owner of the land. It is modelled on section 65A of the 2000 Act. It implements recommendation 27. See paragraphs 5.7 to 5.23 of the report. The term "right of fishing" allows an express reservation in a lease of salmon fishings of a non-exclusive right to fish for salmon to be converted.
Subsection (2) provides for the execution and registration of a notice by the landlord. The notice must follow the statutory form given in schedule 1. Landlord in this context means the owner of the land. See subsection (10).
Subsection (3) sets out requirements as to the content of the notice. This includes the terms of any counter-obligation to the right.
Under subsection (4) registration can be either against the interest of the landlord (ie the owner of the land) or the tenant of the qualifying lease.
Subsections (5) and (6) provide that the notice must be sworn or affirmed before a notary public. In the normal case this must be done personally by the landlord but some exceptions are set out in subsection (6). Subsection (6)(a)(ii) must be read with schedule 2 of the Requirements of Writing (Scotland) Act 1995, which identifies who may sign on behalf of companies and other juristic persons.
Subsection (7) converts the sporting right into a separate tenement on the appointed day provided that the requirements of the section have been complied with and the right is still enforceable. It also prescribes the content of the separate tenement. Where the right has been expressly reserved there is a double content. First it comprises the rights and obligations set out in the lease in question. Secondly insofar as consistent with those express rights etc it comprises, in the case of game, an exclusive right to take hares, pheasants, partridges, grouse, black game and ptarmigan, and, in the case of fishing, an exclusive right to fish for freshwater fish. Freshwater fish is defined in section 68. The definition is taken from section 69(1) of the Salmon and Freshwater Fisheries (Consolidation) (Scotland) Act 2003.
Subsection (8) qualifies subsection (7) by providing that any exclusive right to game is subject to the right of the occupier under the Ground Game Act 1880 to take or kill hares.
Subsection (9) provides that the separate tenement continues to be subject to any existing counter-obligation. It also provides that a counter-obligation is extinguished on the extinction of the tenement.
Subsection (10), as read with the definition of landlord in section 68(1), makes clear that only the owner of the land can serve a notice converting the right into a separate tenement. Where the right is held in common each co-owner must sign the notice.
The section is subject to section 8 which makes further provision about this type of notice and section 62 which deals with service.
8 Further provision in respect of notices under section 7
(1) Where more than one qualifying lease is affected by the same sporting right, a landlord shall, if that landlord wishes to execute and register a notice under section 7(2) of this Act in relation to those qualifying leases in respect of that right, require to do so in relation to each separately.
(2) Where a qualifying lease is affected by more than one sporting right, a landlord may, if that landlord wishes to execute and register a notice under section 7(2) of this Act, do so by a single notice.
NOTE
Subsection (1) provides that where a right affects more than one qualifying lease a landlord has to register a separate notice in respect of each lease. However where the same qualifying lease is affected by different rights subsection (2) allows one notice to be used.
9 Qualifying conditions
(1) Subject to subsection (6) below, a condition is a "qualifying condition" if—
(a) it is constituted in accordance with subsection (2) below;
(b) it is enforceable against the tenant (and the successors of the tenant) of—
(i) the qualifying lease; or
(ii) any superior lease; and
(c) it complies with the provisions of subsection (3) below.
(2) A condition is constituted in accordance with this subsection if it is set out in—
(a) the qualifying lease;
(b) any superior lease which is not a lease granted by virtue of section 17(1) of the Land Tenure Reform (Scotland) Act 1974 (c.38);
(c) any deed varying a lease such as is mentioned in paragraph (a) or (b) above; or
(d) any assignation of or other deed relating to a lease such as is mentioned in paragraph (a) or (b) above where the assignation or other deed is registered under section 3 of the Registration of Leases (Scotland) Act 1857 (c.26).
(3) A condition complies with this subsection if it consists of—
(a) an obligation to do something (including an obligation to defray, or contribute towards, some cost);
(b) an obligation to refrain from doing something; or
(c) subject to subsection (4) below—
(i) a right to enter, or otherwise make use of, property; or
(ii) a provision for management or administration.
(4) A condition which consists of a right or provision mentioned in paragraph (c) of subsection (3) above shall comply with that subsection only if the right or provision is for a purpose ancillary to an obligation such as is mentioned in paragraph (a) or (b) of that subsection.
(5) In determining whether a condition complies with subsection (3) above, regard shall be had to the effect of the condition rather than to the way in which the condition is expressed.
(6) A condition is not a qualifying condition if—
(a) it is an obligation to pay rent;
(b) it confers a right of irritancy;
(c) the provision constituting it states that it is enforceable only by irritancy;
(d) it imposes a restriction on—
(i) assignation; or
(ii) subletting,
that is neither a right of pre-emption, a right of redemption or reversion nor any other type of option to acquire the lease; or
(e) it imposes a monetary penalty which is payable on the failure of the tenant to comply with any of the other conditions under the lease.
NOTE
Part 2 of the bill provides a scheme for the conversion of certain leasehold conditions into real burdens. Once the conditions have been converted they become subject to the law of real burdens. See generally part 4 of the report.
This section identifies the criteria that must be met in order for a leasehold condition to qualify for conversion. The section should be read along with section 10. The effect of the two sections is that the leasehold condition must be capable of being constituted as a real burden. The sections implement recommendations 14 and 15. See paragraphs 4.3 to 4.27 of the report.
Subsection (1)(a), along with subsection (2), requires the condition to be set out in certain deeds. An interposed lease is specifically excluded from the list of constitutive deeds.
Subsection (1)(b) requires the condition to be binding on successors.
Subsection (1)(c), along with subsections (3) and (4), sets out certain requirements as to the content of the condition. Subsection (5) is an aid to interpretation. Whether a leasehold condition complies with subsection (3) will be judged by the effect of the words and not merely by their form. These provisions are based on section 2 of the 2003 Act.
Subsection (6) sets out some exclusions. Obligations to pay rent and restrictions on assignation and subletting presuppose the relationship of landlord and tenant and therefore cannot be converted. However rights of pre-emption, redemption or reversion may be capable of conversion. Rights of irritancy and penalty clauses are also struck at.
10 Restriction on conversion of qualifying conditions
A qualifying condition shall not become a real burden by virtue of this Part of this Act unless the real burden that would be so created complies with the provisions of section 3 (omitting subsection (5)) of the Title Conditions (Scotland) Act 2003 (asp 9) (in this Act, referred to as the "2003 Act").
NOTE
The effect of this section is that a condition which becomes a qualifying condition must also comply with section 3 of the 2003 Act for it to be validly converted into a real burden. Section 3 provides rules as to the content of a real burden. It must, for instance, relate directly or indirectly to the burdened property; it must be for the benefit of the benefited property and it must not be contrary to public policy. Section 3(5) of the 2003 Act which prohibits the creation of new rights of redemption is excluded as it would otherwise prevent the conversion of a qualifying condition having the effect of a redemption or resumption.
11 Meaning of "qualifying land"
In this Act, "qualifying land", in relation to a qualifying condition, means the land which forms the subjects of the qualifying lease.
NOTE
This section defines the term "qualifying land".
12 Determination, for purposes of sections 13 to 22, of person entitled to enforce qualifying condition
(1) Subsections (2) and (3) below have effect for the purposes of determining in relation to sections 13 to 22 of this Act whether a person is entitled to enforce a qualifying condition.
(2) A person having right to property to which the entitlement to enforce a qualifying condition attaches may enforce the qualifying condition whether or not the person has completed title to that right (and where more than one person comes within that description, only the person who most recently acquired that right may enforce the qualifying condition).
(3) Where before the appointed day the tenant under a lease—
(a) assigns the lease in part; and
(b) includes in the assignation or, as the case may be, a deed registered under section 3 of the Registration of Leases (Scotland) Act 1857 (c.26), a qualifying condition,
a person who is a tenant or subtenant of the part of the land that is not so assigned (or a successor as tenant or subtenant of such person) may enforce the qualifying condition.
(4) In sections 13 to 15 of this Act, a person is an "entitled person" if that person is entitled to enforce a qualifying condition (whether as landlord or otherwise).
(5) Where the entitlement to enforce a qualifying condition is held in pro indiviso shares—
(a) if the entitlement is held as landlord, any reference in sections 13 to 15 of this Act to an entitled person is a reference to all of the persons holding such a share; and
(b) if the entitlement is held otherwise than as landlord, any reference in those sections to an entitled person is a reference to any of the persons holding such a share.
NOTE
The notice procedure introduced by sections 13 to 22 for converting a qualifying condition into a real burden can only be used by a person who has the right to enforce the qualifying condition. Section 12 sets out some rules on title to enforce a qualifying condition for the purposes of these sections.
Subsection (2) provides that a person who has not completed title to the property to which the right to enforce a qualifying condition attaches has the right to enforce the condition. Where more than one person comes within that description then the person with the latest right to the property is to be preferred. See paragraph 4.42 of the report.
Subsection (3) provides that where a lease has been partially assigned, the tenant or subtenant of the retained part of the lease has title to enforce conditions imposed in the assignation or related deed. Such a person can then serve a notice under sections 13, 14, and 18 to 22 of the bill. The subsection implements recommendation 20 (c). See paragraphs 4.53 to 4.55 of the report. The reference to a deed registered under s 3 of the Registration of Leases (Scotland) Act 1857 includes a deed of conditions registered under the old s 3(5) of the 1857 Act which was repealed and replaced by the Title Conditions (Scotland) Act 2003 (s 128, sched 14 paragraph 1, and sched 15).
Subsection (4) defines "entitled person" for the purposes of section 13 to 15. The definition recognises that third parties may have a right to enforce a qualifying condition.
Subsection (5) sets out rules, for the purposes of sections 13 to 15, for the situation where a right to enforce is held by more than one person pro indiviso. If the right to enforce is held in the capacity of landlord all pro indiviso landlords have to act together. In a section 13 case, for example, they must all be parties to the notice and they must all own the land to be nominated as a benefited property. If the right to enforce is held by a third party a pro indiviso holder of the right can act alone but the effect is to convert the condition into a real burden for the benefit of all pro indiviso holders. See paragraph 4.42 of the report.
13 Conversion by nomination of benefited property
(1) Subject to section 15 of this Act, where at least one of the conditions set out in subsection (2) below is met, an entitled person may, before the appointed day, prospectively convert a qualifying condition into a real burden by nominating—
(a) the qualifying land, or any part of it, as burdened property in relation to such burden; and
(b) land such as is mentioned in subsection (3) below, or any part of that land, as a benefited property in relation to such burden,
by executing and registering a notice such as is mentioned in subsection (5) below.
(2) The conditions are—
(a) that the land which would by virtue of this section become a benefited property has on it a permanent building which is in use wholly or mainly as a place of human—
(i) habitation; or
(ii) resort,
and that building is, at some point, within 100 metres (measuring along a horizontal plane) of the land which would by virtue of this section become the burdened property;
(b) that the qualifying condition comprises a right of pre-emption or of redemption; and
(c) that the land which would by virtue of this section become a benefited property comprises—
(i) minerals; or
(ii) salmon fishings or some other incorporeal property,
and it is apparent from the terms of the qualifying condition that the condition was included in the lease for the benefit of such land.
(3) The land referred to in subsection (1)(b) above is land, other than the qualifying land, which—
(a) if the land is not subject to a qualifying or exempt lease, the entitled person is owner of; or
(b) if the land is subject to such a lease, the entitled person is tenant of under that lease.
(4) Where the entitled person holds the entitlement to enforce the qualifying condition otherwise than as landlord—
(a) the land referred to in subsection (3)(a) above shall be the land to which the entitlement to enforce the condition attaches; and
(b) the lease referred to in subsection (3)(b) above shall be the lease to which the entitlement to enforce the condition attaches.
(5) The notice referred to in subsection (1) above shall—
(a) be in, or as nearly as may be in, the form contained in schedule 2 to this Act;
(b) set out the title of the entitled person to enforce the qualifying condition;
(c) identify the land nominated as the burdened property;
(d) identify the land nominated as a benefited property;
(e) in a case where, by virtue of an order under section 15 of this Act, none of the conditions set out in subsection (2) above requires to be met, state that such an order has been made;
(f) in any case other than that mentioned in paragraph (e) above, specify which of the conditions set out in that subsection is (or are) met;
(g) set out the terms of the qualifying condition; and
(h) set out the terms of any counter-obligation to the qualifying condition if it is a counter-obligation enforceable against the entitled person.
(6) For the purposes of subsection (1) above, a notice is registered only when registered against both the burdened property and the benefited property.
(7) Registration under subsection (6) above shall—
(a) in the case of the burdened property, be against the title of—
(i) the owner of the property; or
(ii) the tenant under the qualifying lease of the property; and
(b) in the case of a benefited property, be against the title of—
(i) the owner of the property; or
(ii) if the property in question is subject to a qualifying lease or exempt lease, the tenant under such lease.
(8) Before submitting any notice for registration under this section, the entitled person shall swear or affirm before a notary public that to the best of the knowledge and belief of the entitled person all the information contained in the notice is true.
(9) For the purposes of subsection (8) above, if the entitled person is—
(a) an individual unable by reason of legal disability, or incapacity, to swear or affirm as mentioned in that subsection, then a legal representative of the entitled person may swear or affirm;
(b) not an individual, then any person authorised to sign documents on its behalf may swear or affirm;
and any reference in that subsection to an entitled person shall be construed accordingly.
(10) If subsections (1) to (9) above are complied with and immediately before the appointed day the qualifying condition is still enforceable by the entitled person (or that person's successor), then, on that day, the qualifying condition shall become a real burden in relation to which—
(a) the land identified in pursuance of paragraph (c) of subsection (5) above shall be the burdened property; and
(b) the land identified in pursuance of paragraph (d) of that subsection shall be a benefited property.
(11) This section is subject to sections 30 and 62 of this Act.
NOTE
This section allows a person with a right to enforce a qualifying condition (the "entitled person") to convert the condition into a real burden in favour of neighbouring land. It is modelled on section 18 of the 2000 Act. "Entitled person" is defined in section 12. The entitled person will usually be the landlord (of the qualifying lease or a superior lease) but in some circumstances will be a neighbour. This section implements recommendation 18(a) to (d). See paragraphs 4.42 to 4.47 of the report.
Subsection (1) provides for the execution and registration of a notice nominating the land which is to be the burdened property and the land which is to be a benefited property in relation to the real burden. The burdened property is the subjects of the qualifying lease or part of those subjects. The land that may be nominated as a benefited property is governed by subsections (3) and (4).
Save where the Lands Tribunal for Scotland ("Lands Tribunal") grants an order under section 15 a notice is not validly registered unless one of the conditions set out in subsection (2) is met. The conditions are substantially the same as those in section 18(7) of the 2000 Act.
Subsections (3) and (4) determine what land may be nominated by an entitled person as a benefited property. In the majority of cases the entitled person will be the landlord. Here the land to be nominated as the benefited property is land (i) which the landlord owns and which is not subject to a qualifying or exempt lease or (ii) is land which the landlord is tenant of under a qualifying or exempt lease. In the case of third parties the land which may be nominated as a benefited property is that land to which the right to enforce attaches (whether to the ownership of that land or to the tenant's interest under a lease of that land). In the latter case the tenancy under an ultra long lease qualifies as ownership for the purposes of nominating the benefited property. The requirement that the land in question should not be subject to a qualifying or exempt lease mirrors the requirement in section 18(1) of the 2000 Act that the superior had to own the dominium utile of the nominated land. The same rules apply to determine what land may be nominated as a benefited property under section 14.
Subsection (5) sets out the content of the notice which must follow the statutory form given in schedule 2. Further provision as to counter-obligations (paragraph (h)) is made in section 28.
Subsections (6) and (7) provide for dual registration of the notice against both the burdened and the benefited property. There is a choice in both cases of registering against the title of the owner or (where applicable) the title of the tenant. The subsections implement recommendation 23. See paragraphs 4.64 to 4.65 of the report.
Subsections (8) and (9) provide that the notice must be sworn or affirmed before a notary public. In the normal case this must be done personally but some exceptions are set out in subsection (9). Subsection (9)(b) must be read with schedule 2 of the Requirements of Writing (Scotland) Act 1995, which identifies who may sign on behalf of companies and other juristic persons.
Subsection (10) converts the qualifying condition into a real burden on the appointed day provided that the requirements of the section have been complied with and immediately before the appointed day the qualifying condition is still enforceable by the entitled person or a successor of that person.
The section is subject to section 30, which makes further provision in relation to notices, and section 62, which deals with service.
14 Conversion by agreement
(1) An entitled person may, before the appointed day—
(a) serve notice such as is mentioned in subsection (4) below, on the tenant under the qualifying lease, that the entitled person seeks to enter into an agreement with the tenant under this section—
(i) prospectively converting a qualifying condition into a real burden;
(ii) prospectively nominating the qualifying land, or any part of it, as burdened property in relation to such burden; and
(iii) prospectively nominating land such as is mentioned in subsection (2) below, or any part of that land, as a benefited property in relation to such burden;
(b) subject to subsection (5) below, enter into such an agreement with the tenant; and
(c) register that agreement.
(2) The land referred to in subsection (1)(a)(iii) above is land, other than the qualifying land, which—
(a) if the land is not subject to a qualifying or exempt lease, the entitled person is owner of; or
(b) if the land is subject to such a lease, the entitled person is tenant of under that lease.
(3) Where the entitled person holds the entitlement to enforce the qualifying condition otherwise than as landlord—
(a) the land referred to in subsection (2)(a) above shall be the land to which the entitlement to enforce the condition attaches; and
(b) the lease referred to in subsection (2)(b) above shall be the lease to which the entitlement to enforce the condition attaches.
(4) The notice referred to in subsection (1) above shall—
(a) be in, or as nearly as may be in, the form contained in schedule 3 to this Act;
(b) set out the title of the entitled person to enforce the qualifying condition;
(c) identify the land nominated as the burdened property;
(d) identify the land nominated as a benefited property;
(e) set out the terms of the qualifying condition; and
(f) set out the terms of any counter-obligation to the qualifying condition if it is a counter-obligation enforceable against the entitled person.
(5) If the entitled person and the tenant think fit they may, by the agreement, modify the qualifying condition or any counter-obligation to the qualifying condition if it is a counter-obligation enforceable against the entitled person (or both the qualifying condition and any such counter-obligation).
(6) An agreement such as is mentioned in paragraph (b) of subsection (1) above shall be a written agreement—
(a) which expressly states that it is made under this section; and
(b) which includes all the information, other than that relating to service, required to be set out in completing the notice the form of which is contained in schedule 3 to this Act.
(7) For the purposes of subsection (1) above, an agreement is registered only when registered against both the burdened property and the benefited property.
(8) Registration under subsection (7) above shall—
(a) in the case of the burdened property, be against the title of—
(i) the owner of the property; or
(ii) the tenant under the qualifying lease of the property; and
(b) in the case of a benefited property, be against the title of—
(i) the owner of the property; or
(ii) if the property in question is subject to a qualifying lease or exempt lease, the tenant under such lease.
(9) If subsections (1)(b) and (c) and (6) to (8) above are complied with and immediately before the appointed day the qualifying condition is still enforceable by the entitled person (or that person's successor), then, on that day, the qualifying condition shall become a real burden in relation to which—
(a) the land identified in pursuance of paragraph (c) of subsection (4) above shall be the burdened property; and
(b) the land identified in pursuance of paragraph (d) of that subsection shall be a benefited property.
(10) If—
(a) the entitled person has not completed title to—
(i) the property by virtue of which such person is entitled to enforce a qualifying condition; or
(ii) the land nominated as a benefited property; or
(b) the tenant has not completed title to the qualifying lease,
then, in a case to which section 15(3) of the Land Registration (Scotland) Act 1979 (c.33) (circumstances where unnecessary to deduce title) does not apply, the entitled person or, as the case may be, the tenant may enter into an agreement under this section only if in the agreement the entitled person, or the tenant, deduces title from the person who appears in the Register of Sasines as having the last recorded title to the interest in question.
(11) This section is subject to section 30 of this Act.
NOTE
This section allows the "entitled person" (as defined in section 12) to enter into an agreement with the tenant of the qualifying lease for the purpose of converting a qualifying condition into a real burden in favour of neighbouring land. It is modelled on section 19 of the 2000 Act. The entitled person will usually be the landlord (of the qualifying lease or a superior lease) but in some circumstances will be a neighbour. The section implements recommendation 19. See paragraph 4.48 of the report. An attempt to reach agreement is a prerequisite to an application under section 15 for an order from the Lands Tribunal dispensing with the need for any of the conditions set out in section 13(2) to be satisfied.
Subsection (1) requires a notice to be served on the tenant under the qualifying lease as a preliminary to the agreement.
Subsections (2) and (3) determine what land may be nominated as a benefited property. The rules are the same as those that apply to determine what land may be nominated as a benefited property under section 13. See the Note to section 13(3) and (4).
Subsection (4) sets out the content of the notice which must follow the statutory form given in schedule 3. Further provision as to counter-obligations (paragraph (f)) is made in section 28.
Subsection (5) allows the parties to the agreement to modify the terms of the qualifying condition or any counter-obligation.
Subsection (6) regulates the form and content of the agreement.
Subsections (7) and (8) provide for dual registration of the agreement against both the burdened and the benefited property. There is a choice in both cases of registering against the title of the owner or (where applicable) the title of the tenant. The subsections implement recommendation 23. See paragraphs 4.64 to 4.65 of the report.
Subsection (9) converts the qualifying condition into a real burden on the appointed day if the requirements of the section have been met and immediately before the appointed day the qualifying condition is still enforceable by the entitled person or a successor of that person.
Subsection (10) provides for deduction of title in cases where under the general law deduction of title would be required.
The section is subject to section 30, which makes further provision in relation to an agreement under this section.
15 Application to Lands Tribunal for order dispensing with requirement under section 13(1)
(1) Where an entitled person cannot proceed under subsection (1) of section 13 of this Act prospectively to nominate land because none of the conditions set out in subsection (2) of that section are met, that person may apply to the Lands Tribunal for an order under subsection (4) below.
(2) An application may be made under subsection (1) above only if the entitled person has first, in pursuance of section 14 of this Act, attempted to reach agreement as respects the qualifying condition in question with the tenant under the qualifying lease.
(3) An application under subsection (1) above—
(a) shall include a description by the entitled person of the requisite attempt to reach agreement; and
(b) shall be made not later than 1 year after the day on which this section comes into force.
(4) If, on an application under subsection (1) above, the Lands Tribunal is satisfied that, were the qualifying condition to be extinguished, there would be material detriment to the value or enjoyment of the entitled person's ownership (taking such person to have ownership) of the land which is to be nominated, under section 13(1) of this Act, as the benefited property, the Tribunal may make an order dispensing with the need for any of the conditions set out in subsection (2) of that section to be met.
(5) The decision of the Lands Tribunal on an application under subsection (1) above shall be final.
(6) A person opposing an application made under subsection (1) above incurs no liability in respect of expenses incurred by the entitled person unless, in the opinion of the Lands Tribunal, the actings of the person opposing are vexatious or frivolous.
NOTE
This section allows the "entitled person" (as defined in section 12) to apply to the Lands Tribunal for an order dispensing with the need to satisfy any of the conditions set out in section 13(2). It is modelled on section 20 of the 2000 Act. The entitled person will usually be the landlord (of the qualifying lease or a superior lease) but in some circumstances will be a neighbour. The section implements recommendation 18(e). See paragraph 4.45 of the report.
Subsection (2) prevents an application being made unless there has first been an attempt to reach agreement under section 14.
Subsection (3) requires the application to be made within a year of the section coming into force. The intention is that the section should come into force on Royal Assent. This will enable any applications to be dealt with before the appointed day. The application has also to include a description of the attempt to reach agreement.
Subsection (4) provides that the Lands Tribunal can grant an order if it is satisfied that there would be material detriment to the value or enjoyment of the entitled person's ownership (taking such person to have ownership) of the prospective benefited property were the qualifying condition in question to be extinguished. If an order is granted, the entitled person can then proceed to register a notice under section 13 converting the qualifying condition into a real burden.
Subsection (5) provides that the decision of the Lands Tribunal is final.
Subsection (6) makes provision for expenses in the case of a person opposing an application.
16 Manner of dealing with application under section 15
(1) On receiving an application under section 15 of this Act, the Lands Tribunal shall give such notice of that application, whether by way of advertisement or otherwise, as may be prescribed for the purposes of that section by the Scottish Ministers by rules under section 3 of the Lands Tribunal Act 1949 (c.42) (the "1949 Act") to the tenant under the qualifying lease and, if the Lands Tribunal thinks fit, to any other person.
(2) Any person (whether or not the person has received notice under subsection (1) above) who—
(a) is a tenant under the qualifying lease; or
(b) is affected by that qualifying condition or by its proposed constitution as a real burden,
may, within such time as may be so prescribed, oppose or make representations in relation to the application.
(3) The Lands Tribunal—
(a) shall allow any such person as is mentioned in subsection (2) above; and
(b) may allow any other person who appears to it to be affected by the qualifying condition to which the application relates or its proposed constitution as a real burden,
to be heard in relation to the application.
(4) Without prejudice to subsections (1) to (3) above, the Scottish Ministers may, in rules under section 3 of the 1949 Act, make special provision in relation to any matter pertaining to proceedings in applications under section 15 of this Act (or in any class of such applications).
NOTE
This section makes provision for the procedure in the Lands Tribunal in respect of applications under section 15. It is modelled on section 21 of the 2000 Act.
17 Consequential amendment of Tribunals and Inquiries Act 1992
In section 11(7) of the Tribunal and Inquiries Act 1992 (c.53) (which makes provision for Scotland in relation to appeals from certain tribunals), in paragraph (c)—
(a) the words after "under" shall be sub-paragraph (i); and
(b) after that sub-paragraph insert "or
(ii) section 15 of the Long Leases (Scotland) Act 2006 (asp 00) (applications in relation to the conversion of certain conditions in leases into real burdens);".
NOTE
This section makes consequential amendments to the Tribunals and Inquiries Act 1992. It is ancillary to section 15(5) which provides that there is no appeal from the decision of the Lands Tribunal on an application under section 15.
18 Conversion to personal pre-emption or personal redemption burden
(1) Without prejudice to section 13 of this Act, the person entitled to enforce a qualifying condition such as is mentioned in subsection (2) below (whether as landlord or otherwise) may, before the appointed day, prospectively convert that qualifying condition into a personal pre-emption burden or, as the case may be, into a personal redemption burden by executing and registering a notice such as is mentioned in subsection (3) below.
(2) The qualifying condition referred to in subsection (1) above is a condition comprising—
(a) a right of pre-emption; or
(b) a right of redemption.
(3) The notice referred to in subsection (1) above shall—
(a) be in, or as nearly as may be in, the form contained in schedule 4 to this Act;
(b) set out the title to enforce the qualifying condition of the person executing and registering the notice;
(c) identify the qualifying land (or any part of such land);
(d) set out the terms of the qualifying condition; and
(e) set out the terms of any counter-obligation to the qualifying condition if it is a counter-obligation enforceable against the person executing and registering the notice.
(4) For the purposes of subsection (1) above, a notice is registered only when registered against the land identified in pursuance of paragraph (c) of subsection (3) above; and the notice may be registered against the title of the owner of the land or of the tenant under the qualifying lease.
(5) Before submitting any notice for registration under this section, the person entitled to enforce the qualifying condition shall swear or affirm before a notary public that to the best of the knowledge and belief of that person all the information contained in the notice is true.
(6) For the purposes of subsection (5) above, if the person entitled to enforce the qualifying condition is—
(a) an individual unable by reason of legal disability, or incapacity, to swear or affirm as mentioned in that subsection, then a legal representative of that person may swear or affirm; or
(b) not an individual, then any person authorised to sign documents on its behalf may swear or affirm,
and any reference in that subsection to the person entitled to enforce the qualifying condition shall be construed accordingly.
(7) If subsections (1) to (6) above are complied with and immediately before the appointed day the qualifying condition is still enforceable by the person who executed and registered the notice under subsection (1) above (or that person's successor), then, on that day—
(a) the qualifying condition shall be converted into a real burden in favour of that person, to be known as a "personal pre-emption burden" or, as the case may be, as a "personal redemption burden"; and
(b) the land identified in pursuance of subsection (3)(c) above shall become the burdened property.
(8) The right to a personal pre-emption burden or personal redemption burden may be assigned or otherwise transferred to any person; and any such assignation or transfer shall take effect on registration.
(9) Where the holder of a personal pre-emption burden or personal redemption burden does not have a completed title—
(a) title may be completed by the holder registering a notice of title; or
(b) without completing title, the holder may grant a deed—
(i) assigning the right to; or
(ii) discharging, in whole or in part,
the burden; but unless the deed is one to which section 15(3) of the Land Registration (Scotland) Act 1979 (circumstances where unnecessary to deduce title) applies, the holder must, in the deed, deduce title from the person who appears in the Register of Sasines as having the last recorded title to the burden in question.
(10) This section is subject to sections 30 and 62 of this Act.
NOTE
This section allows a person with the right to enforce a qualifying condition which confers a right of pre-emption or redemption to convert that condition into a real burden to be known as a personal pre-emption burden or a personal redemption burden. The entitled person will usually be the landlord (of the qualifying lease or a superior lease) but in some circumstances will be a neighbour. It is modelled on section 18A of the 2000 Act. This section implements recommendation 17(e)(h) and (l). See paragraph 4.38 of the report.
Subsection (1) provides for the execution and registration of a notice. This must be done by "the person" with the right to enforce the qualifying condition. All pro indiviso landlords, for example, have to be parties to the notice.
Subsection (2) identifies the type of qualifying condition which may be converted.
Subsection (3) sets out the content of the notice which must follow the statutory form given in schedule 4. Further provision as to counter-obligations (paragraph (e)) is made in section 28.
Subsection (4) provides for registration of the notice against the burdened property. Registration can be against either the title of the owner or the title of the tenant. This subsection implements recommendation 23. See paragraphs 4.64 to 4.65 of the report.
Subsections (5) and (6) provide that the notice must be sworn or affirmed before a notary public. In the normal case this must be done personally but some exceptions are set out in subsection (6). Subsection (6)(b) must be read with schedule 2 of the Requirements of Writing (Scotland) Act 1995, which identifies who may sign on behalf of companies and other juristic persons.
Subsection (7) converts the qualifying condition on the appointed day into a personal pre-emption burden or a personal redemption burden in favour of the person with the right to enforce (or that person's successor) provided that the requirements of the section have been complied with and that immediately before the appointed day the qualifying condition is still enforceable.
Subsection (8) makes clear that the benefit of the burden in question can be assigned. The assignation is completed by registration.
Subsection (9) provides for deduction of title in cases where under the general law deduction of title would be required.
The section is subject to section 30, which makes further provision in relation to notices, and section 62, which deals with service.
19 Conversion to economic development burden
(1) Where a local authority is, or the Scottish Ministers are, entitled to enforce a qualifying condition which is imposed for the purpose of promoting economic development it or they may, before the appointed day, prospectively convert that qualifying condition into an economic development burden by executing and registering a notice such as is mentioned in subsection (2) below.
(2) The notice referred to in subsection (1) above shall—
(a) be in, or as nearly as may be in, the form contained in schedule 5 to this Act;
(b) set out the title to enforce the qualifying condition of the person executing and registering the notice;
(c) state that such person is a local authority or the Scottish Ministers;
(d) identify the qualifying land (or any part of such land);
(e) set out the terms of the qualifying condition;
(f) set out the terms of any counter-obligation to the qualifying condition if it is a counter-obligation enforceable against the person executing and registering the notice; and
(g) state that the qualifying condition was imposed for the purpose of promoting economic development and provide information in support of that statement.
(3) For the purposes of subsection (1) above, a notice is registered only when registered against the land identified in pursuance of paragraph (d) of subsection (2) above; and the notice may be registered against the title of the owner of the land or of the tenant under the qualifying lease.
(4) If subsections (1) to (3) above are complied with and immediately before the appointed day the qualifying condition is still enforceable by the local authority or the Scottish Ministers then, on that day, the qualifying condition shall become an economic development burden—
(a) in favour of the local authority or, as the case may be, the Scottish Ministers; and
(b) in relation to which the land identified in pursuance of paragraph (d) of subsection (2) above shall be the burdened property.
(5) This section is subject to sections 30 and 62 of this Act.
NOTE
This section allows a local authority or Scottish Ministers with the right to enforce a qualifying condition which was imposed for the purpose of promoting economic development to convert that condition into an economic development burden in their favour. It is modelled on section 18B of the 2000 Act. This section implements recommendation 17(f)(h) and (m). See paragraph 4.39 of the report. Economic development burden is defined in section 45(1) and local authority is defined in section 122(1) of the 2003 Act.
Subsection (1) provides for the execution and registration of a notice.
Subsection (2) sets out the content of the notice which must follow the statutory form given in schedule 5. Further provision as to counter-obligations (paragraph (f)) is made in section 28.
Subsection (3) provides for registration of the notice against the burdened property. Registration can be against either the title of the owner or the title of the tenant. The subsection implements recommendation 23. See paragraphs 4.64 to 4.65 of the report.
Subsection (4) converts the qualifying condition on the appointed day into an economic development burden in favour of the local authority or Scottish Ministers provided that the requirements of the section have been complied with and that immediately before the appointed day the qualifying condition is still enforceable.
The section is subject to section 30, which makes further provision in relation to notices, and section 62, which deals with service.
20 Conversion to health care burden
(1) Where the Scottish Ministers are entitled to enforce a qualifying condition which is imposed for the purpose of promoting the provision of facilities for health care, they may, before the appointed day, prospectively convert that qualifying condition into a health care burden by executing and registering a notice such as is mentioned in subsection (2) below.
(2) The notice referred to in subsection (1) above shall—
(a) be in, or as nearly as may be in, the form contained in schedule 6 to this Act;
(b) set out the title of the Scottish Ministers to enforce the qualifying condition;
(c) identify the qualifying land (or any part of such land);
(d) set out the terms of the qualifying condition;
(e) set out the terms of any counter-obligation to the qualifying condition if it is a counter-obligation enforceable against the Scottish Ministers; and
(f) state that the qualifying condition was imposed for the purpose of promoting the provision of facilities for health care and provide information in support of that statement.
(3) For the purposes of subsection (1) above, a notice is registered only when registered against the land identified in pursuance of paragraph (c) of subsection (2) above; and the notice may be registered against the title of the owner of the land or of the tenant under the qualifying lease.
(4) If subsections (1) to (3) above are complied with and immediately before the appointed day the qualifying condition is still enforceable by the Scottish Ministers then, on that day, the qualifying condition shall become a health care burden—
(a) in favour of the Scottish Ministers; and
(b) in relation to which the land identified in pursuance of paragraph (c) of subsection (2) above shall be the burdened property.
(5) This section is subject to sections 30 and 62 of this Act.
NOTE
This section allows Scottish Ministers with the right to enforce a qualifying condition which was imposed for the purpose of promoting the provision of facilities for health care to convert that condition into a health care burden in their favour. It is modelled on section 18C of the 2000 Act. This section implements recommendation 17(g)(h) and (n). See paragraph 4.40 of the report. Health care burden is defined in section 46(1) of the 2003 Act.
Subsection (1) provides for the execution and registration of a notice.
Subsection (2) sets out the content of the notice which must follow the statutory form given in schedule 6. Further provision as to counter-obligations (paragraph (e)) is made in section 28.
Subsection (3) provides for registration of the notice against the burdened property. Registration can be against either the title of the owner or the title of the tenant. The subsection implements recommendation 23. See paragraphs 4.64 to 4.65 of the report.
Subsection (4) converts the qualifying condition on the appointed day into a health care burden in favour of Scottish Ministers provided that the requirements of the section have been complied with and that immediately before the appointed day the qualifying condition is still enforceable.
The section is subject to section 30, which makes further provision in relation to notices, and section 62, which deals with service.
21 Conversion to conservation burden
(1) Where a conservation body is, or the Scottish Ministers are, entitled to enforce a qualifying condition of the class described in subsection (2) below, it or they may, before the appointed day, prospectively convert that qualifying condition into a conservation burden for the benefit of the public by executing and registering a notice such as is mentioned in subsection (3) below.
(2) The class is those qualifying conditions which have the purpose of preserving, or protecting—
(a) the architectural or historical characteristics of the land; or
(b) any other special characteristics of land (including, without prejudice to the generality of this paragraph, a special characteristic derived from the flora, fauna or general appearance of the land).
(3) The notice referred to in subsection (1) above shall—
(a) be in, or as nearly as may be in, the form contained in schedule 7 to this Act;
(b) set out the title to enforce the qualifying condition of the person executing and registering the notice;
(c) state that such person is a conservation body or the Scottish Ministers;
(d) identify the qualifying land (or any part of such land);
(e) set out the terms of the qualifying condition; and
(f) set out the terms of any counter-obligation to the qualifying condition if it is a counter-obligation enforceable against the person executing and registering the notice.
(4) For the purposes of subsection (1) above, a notice is registered only when registered against the land identified in pursuance of paragraph (d) of subsection (3) above; and the notice may be registered against the title of the owner of the land or of the tenant under the qualifying lease.
(5) If subsections (1) to (4) above are complied with and immediately before the appointed day the qualifying condition is still enforceable by the conservation body or the Scottish Ministers then, on that day, the qualifying condition shall become a conservation burden—
(a) in favour of the conservation body or, as the case may be, the Scottish Ministers; and
(b) in relation to which the land identified in pursuance of paragraph (d) of subsection (3) above shall be the burdened property.
(6) The references in subsection (5) above to—
(a) the conservation body include references to—
(i) any conservation body which is; or
(ii) the Scottish Ministers where they are,
its successor as the person entitled to enforce the qualifying condition; and
(b) the Scottish Ministers include references to a conservation body which is their successor as such person.
(7) This section is subject to sections 30 and 62 of this Act.
NOTE
This section allows a conservation body or Scottish Ministers with the right to enforce a qualifying condition which promotes conservation to convert that condition into a conservation burden in their favour. It is modelled on sections 27 and 28 of the 2000 Act. This section implements recommendation 17(c)(h) and (k). See paragraph 4.37 of the report. Conservation burden is defined in section 38(1) while conservation body is defined in section 122(1) of the 2003 Act.
Subsection (1) provides for the execution and registration of a notice.
Subsection (2) identifies the type of qualifying condition which may be converted.
Subsection (3) sets out the content of the notice which must follow the statutory form given in schedule 7. Further provision as to counter-obligations (paragraph (f)) is made in section 28.
Subsection (4) provides for registration of the notice against the burdened property. Registration can be against either the title of the owner or the title of the tenant. The subsection implements recommendation 23. See paragraphs 4.64 to 4.65 of the report.
Subsection (5) converts the qualifying condition on the appointed day into a conservation burden for the benefit of the public in favour of the conservation body or Scottish Ministers provided that the requirements of the section have been complied with and that immediately before the appointed day the qualifying condition is still enforceable.
Subsection (6) qualifies the reference in subsection (5) to a conservation body or Scottish Ministers so as to include successors provided that they are either a conservation body or Scottish Ministers. In any other case the notice falls and the condition is extinguished on the appointed day.
The section is subject to section 30, which makes further provision in relation to notices, and section 62, which deals with service.
22 Conversion to conservation burden where conservation body or Scottish Ministers nominated to enforce
(1) The person (not being a conservation body or the Scottish Ministers) entitled to enforce a qualifying condition of the class described in section 21(2) of this Act (whether as landlord or otherwise) may, subject to subsection (2) below, before the appointed day—
(a) prospectively convert that condition into a conservation burden for the benefit of the public; and
(b) nominate a conservation body or the Scottish Ministers to have title to enforce that burden,
by executing and registering a notice such as is mentioned in subsection (3) below.
(2) Subsection (1) above applies only where the consent of the nominee to being so nominated is obtained—
(a) in a case where sending a copy of the notice, in compliance with section 62(2) of this Act, is reasonably practicable, before that copy is so sent; and
(b) in any other case, before the notice is executed.
(3) The notice referred to in subsection (1) above shall—
(a) be in, or as nearly as may be in, the form contained in schedule 8 to this Act;
(b) set out the title to enforce the qualifying condition of the person executing and registering the notice;
(c) state that the nominee is a conservation body (identifying it) or the Scottish Ministers, as the case may be; and
(d) comply with paragraphs (d) to (f) of section 21(3) of this Act.
(4) For the purposes of subsection (1) above, a notice is registered only when registered against the land identified in pursuance of paragraph (d) of subsection (3) above; and the notice may be registered against the title of the owner of the land or of the tenant under the qualifying lease.
(5) If subsections (1) to (4) above are complied with and immediately before the appointed day the qualifying condition is still enforceable by the person who executed and registered the notice under subsection (1) above (or that person's successor) then, on that day, the qualifying condition shall become a conservation burden—
(a) in favour of the conservation body or, as the case may be, the Scottish Ministers; and
(b) in relation to which the land identified in pursuance of subsection (3)(d) above, shall be the burdened property.
(6) This section is subject to sections 30 and 62 of this Act except that, in the application of subsection (2)(b) of section 30 for the purposes of this subsection, such discharge as is mentioned in that subsection shall be taken to require the consent of the nominated person.
NOTE
This section allows a person with the right to enforce a qualifying condition which promotes conservation to convert that condition into a conservation burden in favour of a conservation body or Scottish Ministers. The entitled person will usually be the landlord (of the qualifying lease or a superior lease) but in some circumstances will be a neighbour. The section is modelled on sections 27A and 28A of the 2000 Act. It implements recommendation 17(d)(h) and (k). See paragraph 4.37 of the report. Conservation burden is defined in section 38(1) while conservation body is defined in section 122(1) of the 2003 Act.
Subsection (1) provides for the execution and registration of a notice. This must be done by "the person" with the right to enforce the qualifying condition. All pro indiviso landlords, for example, have to be parties to the notice.
Subsection (2) requires the consent of the nominee to be obtained before a copy of the notice is sent to the tenant under the qualifying lease under section 62(2) or in other cases before the notice is executed. The nominee is required to sign the notice by way of indicating consent.
Subsection (3) sets out the content of the notice which must follow the statutory form given in schedule 8. Further provision as to counter-obligations is made in section 28.
Subsection (4) provides for registration of the notice against the burdened property. Registration can be against either the title of the owner or the title of the tenant. The subsection implements recommendation 23. See paragraphs 4.64 to 4.65 of the report.
Subsection (5) converts the qualifying condition on the appointed day into a conservation burden for the benefit of the public in favour of the nominated conservation body or Scottish Ministers provided that the requirements of the section have been complied with and that immediately before the appointed day the qualifying condition is still enforceable by the person with the right to enforce or that person's successor.
The section is subject to section 30, which makes further provision in relation to notices, and section 62, which deals with service. The adjustment to section 30(2)(b) makes clear that a discharge of a section 22 notice also requires the consent of the nominated person.
23 Conversion to facility or service burden
(1) Where a qualifying condition regulates the maintenance, management, reinstatement or use of heritable property which constitutes, and is intended to constitute, a facility of benefit to land other than the qualifying land then on the appointed day such condition shall become a facility burden in relation to which—
(a) the qualifying land shall be the burdened property; and
(b) the heritable property which constitutes the facility and any land to which the facility is (and is intended to be) of benefit shall be the benefited property.
(2) Where a qualifying condition relates to the provision of services to land other than the qualifying land, then the qualifying condition shall, on the appointed day, become a service burden in relation to which—
(a) the qualifying land shall be the burdened property; and
(b) any land to which the services are provided shall be the benefited property.
(3) Without prejudice to the generality of subsection (1) above, examples of property which might constitute a facility such as is mentioned in that subsection are—
(a) a common part of a tenement;
(b) a common area for recreation;
(c) a private road;
(d) private sewerage;
(e) a boundary wall.
NOTE
Subsection (1) provides for the automatic conversion of qualifying conditions concerned with the maintenance management reinstatement or use of facilities into facility burdens. Typical examples of facilities are given in subsection (3). Obligations to maintain or reinstate which have been taken over by a local or other public authority are excluded (see section 27). This subsection (as with subsection (2)) is modelled on section 56(1) of the 2003 Act which re-enacted section 23 of the 2000 Act and extended its scope to all real burdens. It implements recommendation 16(a)(b) and (c). See paragraphs 4.30 to 4.33 of the report. A facility burden is defined in section 122(1) of the 2003 Act.
Subsection (2) provides for the automatic conversion of qualifying conditions concerned with the provision of services to other land into service burdens. It implements recommendation 17(a)(h) and (i). See paragraph 4.35 of the report. A service burden is defined in section 122(1) of the 2003 Act.
24 Conversion to manager burden
(1) Where a qualifying condition confers on such person as may be specified in the condition power to—
(a) act as the manager of related properties;
(b) appoint some other person to be such manager; or
(c) dismiss any person appointed by virtue of paragraph (b) above,
then, on the appointed day, such condition shall become a real burden in favour of such person and in relation to such burden the qualifying land shall be the burdened property.
(2) A real burden constituted by virtue of subsection (1) above is a manager burden.
(3) For the purposes of subsection (1) above, whether properties are related properties is to be inferred from all the circumstances; and without prejudice to the generality of this section circumstances giving rise to such an inference might include—
(a) the convenience of managing the properties together because they share—
(i) some common feature; or
(ii) an obligation for common maintenance of some facility;
(b) it being evident that the properties constitute a group of properties on which qualifying conditions are imposed under a common scheme; or
(c) there being shared rights to common property.
NOTE
This section provides for the automatic conversion of a qualifying condition which confers a power of management over a group of related properties into a real burden known as a manager burden. A manager burden is defined in section 63(1) of the 2003 Act. Such burdens are time limited, usually to five years from creation (section 63(4) to (7)) which in the case of converted conditions is the date of registration of the qualifying lease or other constitutive deed. This means that very few conditions will persist as manager burdens. The section implements recommendation 17(b)(h) and (j). See paragraph 4.36 of the report.
Subsection (3) provides that whether properties are related depends on the circumstances of each case and gives a list of indicators. It is modelled on section 66(1) of the 2003 Act.
25 Conversion where common scheme affects related properties
(1) Where qualifying conditions are imposed under a common scheme on a group of related properties, such conditions shall, on the appointed day, become real burdens in relation to which each property shall be a benefited and a burdened property.
(2) For the purposes of subsection (1) above, whether properties are related properties is to be inferred from all the circumstances; and without prejudice to the generality of this subsection circumstances giving rise to such an inference might include—
(a) the convenience of managing the properties together because they share—
(i) some common feature; or
(ii) an obligation for common maintenance of some facility;
(b) there being shared rights to common property;
(c) the properties being subject to the common scheme by virtue of the same deed of conditions; or
(d) the properties each being a flat in the same tenement.
(3) This section confers no right of pre-emption, redemption or reversion.
NOTE
This section applies to qualifying conditions the regime provided by section 53 of the 2003 Act for real burdens. It draws on the concepts of "common scheme" and "related properties", which are familiar from that Act. Essentially, qualifying conditions will be imposed under a common scheme insofar as they apply identical or equivalent conditions to each property. The section implements recommendation 20(b). See paragraph 4.52 of the report.
The effect of subsection (1) is to convert automatically qualifying conditions which meet the criteria into real burdens in respect of which each property covered by the scheme will be both a benefited and a burdened property. The burdens created will be community burdens in the taxonomy of the 2003 Act.
Subsection (2) provides that whether properties are related depends on the circumstances of each case and gives a list of indicators. A typical example would be flats in the same tenement.
Subsection (3) prevents rights of pre-emption, redemption or reversion being conferred by virtue of this section.
26 Conversion where expressly enforceable by certain third parties
Where a qualifying condition is expressed as being enforceable by—
(a) the owner; or
(b) the tenant,
of land other than the qualifying land, then, on the appointed day, such condition shall become a real burden in relation to which the qualifying land shall be the burdened property and that other land shall be a benefited property.
NOTE
Sometimes the lease makes clear that, in addition to the landlord, the conditions (or some of them) are to be enforceable by neighbours, ie by the owners or tenants of other land. Without express provision the rights would fall with the conditions themselves. This section therefore provides for the conversion of such conditions into real burdens. The section implements recommendation 20(a). See paragraphs 4.49 to 4.51 of the report.
27 Qualifying conditions excluded from conversion: obligations assumed by local or other public authorities
Sections 23(1) and 25(1) shall not apply to a qualifying condition in so far as such condition constitutes an obligation—
(a) to maintain or reinstate; and
(b) which has been assumed—
(i) by a local or other public authority; or
(ii) by virtue of any enactment, by a successor body to any such authority.
NOTE
This section provides that the automatic conversion of qualifying conditions involving roads, sewerage or other facilities into facility burdens (section 23) does not extend to obligations which have been taken over by a local or other public authority. Obligations of this kind are spent. The section implements recommendation 16(d): see paragraph 4.31 of the report. The provision also applies to obligations which are part of a common scheme (section 25).
28 Counter-obligations on conversion
(1) Where a qualifying condition becomes, by virtue of any of sections 13 to 26 of this Act, a real burden, the right to enforce the burden shall be subject to any counter-obligation such as is mentioned in subsection (2) below.
(2) The counter-obligations are—
(a) in the case of a real burden constituted by virtue of—
(i) section 13 or 18 to 22 of this Act, those specified in the notice registered under the section in question;
(ii) section 14 of this Act, those specified in the agreement;
(iii) section 24 of this Act, those enforceable against the person on whom power is conferred;
(iv) section 26 of this Act, those enforceable against the owner or, as the case may be, tenant of the other land; and
(b) in any other case, those enforceable against any person who immediately before the appointed day was entitled to enforce the qualifying condition which was converted into the burden.
NOTE
This section makes clear that an obligation which is the counterpart of a qualifying condition converted into a real burden under the bill will also survive and be binding on the former landlord or third party enforcer or any replacement enforcer. An example might be where a tenant is under an obligation to pay for maintenance which is then to be carried out by the landlord. The section does not provide a free-standing right to enforce the counter-obligation but it makes the right to enforce the burden subject to performance of the counter-obligation. The section is modelled on section 25 of the 2000 Act. It implements recommendation 25. See paragraphs 4.71 and 4.72 of the report.
Subsections (2) and (3) set out the relevant counter-obligations.
29 Prescriptive period for converted conditions
Where a qualifying condition becomes, by virtue of any of sections 13 to 26 of this Act, a real burden, section 18(5) of the 2003 Act (prescription where breach of burden occurs before the appointed day) shall apply to any breach of such a qualifying condition as it applies to a breach of a real burden.
NOTE
This is a transitional provision. The period of negative prescription for a leasehold condition is presently twenty years. After conversion to a real burden the period will be five years under section 18 of the 2003 Act. The effect of this section is to make the prescriptive period for a breach of a qualifying condition that occurs before the appointed day for leasehold conversion the same as the period for a breach of a real burden that occurred before the day appointed for feudal abolition. That is to say, the prescriptive period for such a breach will be the shorter of 5 years from the appointed day or 20 years from the breach.
30 Further provision in respect of notices and agreements under this Part
(1) Where, in relation to a qualifying lease—
(a) an agreement relating to a qualifying condition has been registered under section 14 of this Act; or
(b) a notice relating to a qualifying condition has been registered under section 13 or 18 to 22 of this Act,
subject to subsection (2) below, it shall not be competent for the person who registered such agreement or notice (or that person's successor) to register under any of those sections in relation to that qualifying lease another such agreement or notice relating to the same qualifying condition.
(2) Nothing in subsection (1) above shall prevent registration of an agreement or notice where—
(a) the discharge of any earlier such agreement has been registered, jointly, by the parties to that agreement (or by their successors); or
(b) as the case may be, the discharge of any earlier such notice has been registered by the person who registered that notice (or by that person's successor).
(3) Where more than one qualifying lease is affected by the same qualifying condition enforceable by the same person, that person shall, if that person wishes to execute and register a notice under this Part of this Act in relation to those qualifying leases in respect of that qualifying condition, require to do so in relation to each separately.
(4) Where a qualifying lease is affected by more than one qualifying condition enforceable by the same person, that person may, if that person wishes to—
(a) enter into and register an agreement under section 14 of this Act in relation to that qualifying lease in respect of those qualifying conditions, do so by a single agreement; or
(b) execute and register a notice under section 13 or 18 to 22 of this Act in relation to that qualifying lease in respect of those qualifying conditions, do so by a single notice.
(5) Nothing in this Part requires registration against land prospectively nominated as a benefited property but outwith Scotland.
NOTE
Subsection (1) reflects the policy that the person with a right to enforce (whether landlord or third party) should not be able to preserve that right under separate heads of conversion. It should not, for example, be competent to convert a condition into a neighbour burden under section 13 and a conservation burden under section 21. A choice has to be made but the choice is not final as subsection (2) allows an earlier agreement or notice to be discharged. The subsections are modelled on section 42(1) of the 2000 Act. They implement recommendation 21. See paragraphs 4.58 and 4.59 of the report.
Subsections (3) and (4) regulate the number of notices that are required. Where the same qualifying condition enforceable by the same person affects more than one qualifying lease, a separate notice must be prepared for each lease but the same notice (or agreement) can be used for more than one condition. The subsections are modelled on section 42(3) and (4) of the 2000 Act. The provisions implement recommendation 22(b). See paragraph 4.62 of the report.
Subsection (5) makes clear that there is no requirement of registration where the prospective benefited property is outwith Scotland.
31 Requiring compensatory payment
(1) This section applies where, on the appointed day, the rights of a landlord under a lease are extinguished by virtue of Part 1 of this Act.
(2) The former landlord under such a lease may, before the expiry of the period of 2 years beginning with the appointed day, serve on the former tenant a notice such as is mentioned in subsection (3) below, requiring that a payment—
(a) calculated in accordance with section 32 of this Act; and
(b) specified in the notice,
be made to the former landlord by the former tenant (such payment being referred to in this Act as a "compensatory payment").
(3) The notice referred to in subsection (2) above is—
(a) in a case where the rent payable immediately before the appointed day was a cumulo rent (as defined in section 51 of this Act) and the lease is not a partially continuing lease, a notice in (or as nearly as may be in) the form contained in schedule 9 to this Act;
(b) in a case where the lease is a partially continuing lease (as defined in section 35(1) of this Act), a notice in (or as nearly as may be in) the form contained in schedule 10 to this Act;
(c) in any other case, a notice in (or as nearly as may be in) the form contained in schedule 11 to this Act.
(4) A notice served under subsection (2) above shall be accompanied by a copy of the explanatory note which immediately follows the form in schedule 9, 10 or, as the case may be, 11 to this Act.
(5) Where the compensatory payment required is equal to or greater than £50, the former landlord shall, together with the notice served under subsection (2) above, serve on the former tenant a document such as is mentioned in section 46(2) of this Act (referred to in this Act as an "instalment document").
(6) This section is subject to section 45 of this Act.
NOTE
Part 3 sets out a scheme under which the landlord of a lease extinguished under part 1 may claim compensation. In the first place a landlord may claim a general payment for the loss of all the landlord's rights. This is termed a compensatory payment and is based on the capitalised value of the rent (see sections 31 to 38). Exceptionally a compensatory payment may not be enough. In certain cases, therefore, a landlord may claim a further payment – termed an additional payment – for the loss of the right in question (see sections 39 to 44). Part 3 implements recommendations 28 to 38. See part 6 of the report.
Section 31 principally implements recommendation 29. See paragraphs 6.17 – 6.21 of the report. To claim compensation, the former landlord must serve on the former tenant a notice in the prescribed form within 2 years beginning with the appointed day. The sum due by the tenant is calculated in accordance with section 32 and is an ordinary unsecured debt. The claim is against the immediate former tenant of the person making the claim (see recommendation 34(ii) and paragraphs 6.52 and 6.53 of the report).
Subsection (3) prescribes the notice to be served in particular cases. In the normal case, a schedule 11 notice will be required. The notices in schedules 9 and 10 are applicable where the rent payable under the lease was a cumulo rent, as defined in section 51, or where the lease is a partially continuing lease (see section 35). The notice must be accompanied by a copy of the appropriate explanatory note (subsection (4)).
If the sum being claimed is £50 or more, an instalment document has to be served along with the notice (subsection (5)). This gives the tenant the option of paying by instalments in accordance with the scheme set out in section 46. The threshold of £50 is the same as the threshold for the instalment scheme in section 10 of the 2000 Act. If an instalment document is not served the notice has no effect. This subsection implements 36(a). See paragraphs 6.65 to 6.67 of the report
Subsection (6) makes the section subject to section 45 the effect of which, in the case of a qualifying lease, is to restrict the amount of compensatory payment to £500 unless a preliminary notice has been served.
32 Calculation of compensatory payment
(1) The compensatory payment specified in a notice served under section 31(2) of this Act shall be the sum of money which would, if invested as mentioned in subsection (2) below, produce an annual sum equal to the sum of—
(a) subject to subsection (3) below and sections 35(3) and 36(4) of this Act, the annual rent payable under the lease; and
(b) any amount determined under section 33 of this Act.
(2) The investment referred to in subsection (1) above is an investment in 2½ per cent Consolidated Stock at the middle market price at the close of business last preceding the appointed day.
(3) Any rent payable under the lease which is expressed wholly or partly in non-monetary terms shall, to the extent that it is so expressed, be left out of account.
NOTE
This section sets out the rules for calculating the sum due by the former tenant as compensation under section 31. This section implements recommendation 28(a) and (d). See paragraphs 6.3 to 6.9 of the report.
Subsections (1) and (2) adopt the formula used in section 9 of the 2000 Act to calculate compensation due for the extinction of a feuduty. The landlord is entitled to the amount that would if invested as set out in subsection (2) produce an annual income equal to the sum of the annual rent that was payable under the extinguished lease. The reference to annual rent includes (i) that part of a cumulo rent that has been apportioned to the lease prior to the appointed day in the circumstances set out in section 51(2), (ii) that part of the annual rent that has been allocated to the lease under section 35(3), and (iii) that part of a cumulo rent that has been allocated to the lease under section 36(4).
In cases where a premium of £100 or less was payable for renewals, the annual rent is increased in accordance with section 33.
Subsection (3) provides that rent shall be disregarded to the extent that it is expressed in non-monetary terms. However, compensation for the loss of such rent can be claimed under section 40(1)(a) as an additional payment under the scheme set out in sections 39 to 44.
33 Annual amount in respect of loss of right to receive renewal premium
(1) This section applies where—
(a) the lease contains an obligation on the landlord to renew it after a fixed period and on payment by the tenant to the landlord of a premium less than or equal to £100; and
(b) the lease complies with section 1(2)(b) and (c) of this Act by virtue of section 60(1)(b) of this Act.
(2) For the purposes of section 32(1)(b) of this Act, the sum determined under this section is the sum obtained by dividing the value of the premium referred to in paragraph (a) of subsection (1) above by the number of years between each obligation to renew.
NOTE
This section applies if a renewal premium of £100 or less was payable under the lease and it was necessary to include the renewal or more than one renewal in order to meet the durational requirements. It implements recommendation 30(a). See paragraphs 6.22 to 6.25 of the report.
Subsection (2) directs the former landlord to divide the amount of the premium by the number of years between each renewal. This gives a sum which represents the "annual amount" of the premium. The annual amount is added to the annual rent that was payable under the lease in order to calculate compensation under section 32.
The reference to a premium is to the premium after taking into account the definition of cumulo premium in section 51 and any allocations that may be necessary under sections 35 and 36 as applied to renewal premiums by section 38.
If a premium of more than £100 was payable the landlord can claim compensation under the additional payments regime set out in sections 39 to 44.
34 Making compensatory payment
If the former landlord has served notice in accordance with section 31 of this Act the former tenant shall, subject to section 46 of this Act, before the expiry of the period of 56 days beginning with the day on which the notice is served, make the compensatory payment to the former landlord.
NOTE
If the landlord has followed the notice procedure correctly, the former tenant must, unless entitled to pay by instalments (see sections 31(5) and 46), make the compensatory payment within fifty six days beginning with the day on which notice is served. See paragraph 6.63 of the report.
35 Partially continuing leases: allocation of rent
(1) In this Part of this Act, a "partially continuing lease" is a lease which, on the appointed day —
(a) is extinguished by virtue of Part 1 of this Act, in respect of part of the subjects of the lease (in this section, such subjects being referred to as the "converted subjects"); and
(b) whether by exemption under Part 4 of this Act or otherwise, continues in respect of any other subjects (in this section, such subjects being referred to as the "continuing subjects").
(2) The landlord shall, before the expiry of the period of 2 years beginning with the appointed day, allocate—
(a) the annual rent payable under the partially continuing lease immediately before the appointed day; or
(b) where a cumulo rent is allocated to the lease under section 36(2) of this Act, the annual rent so allocated,
between the converted subjects and the continuing subjects in such proportions as are reasonable in all the circumstances.
(3) The annual rent allocated to the converted subjects shall be the annual rent payable under the partially continuing lease for the purposes of calculating the compensatory payment under section 32 of this Act.
(4) The annual rent allocated to the continuing subjects shall, subject to section 37(1) of this Act, be the annual rent payable under the partially continuing lease from the appointed day.
(5) In this section and in section 36 of this Act, "landlord" includes former landlord.
NOTE
In some cases it is necessary to determine the annual rent for the purposes of calculating the compensatory payment under s 32. In some cases also it is necessary to determine the annual rent for those leases that continue wholly or partly on and after the appointed day. Sections 35 to 37 identify the cases in question and provide the rules for fixing the annual rent. The onus is on the landlord to fix the annual rent otherwise the landlord will not be able to recover the compensatory payment.
Section 35 is concerned with a lease that is partly extinguished and partly continues on and after the appointed day. A lease will be a partially continuing lease if, for example, there is a partial sublease further down the leasehold chain which is exempt from conversion under part 4 of the Bill. Instead of being extinguished in full, the higher lease will continue in force in relation to the subjects of the exempt lease. See the examples given in footnote 32 to paragraph 6.15 of the report. This section implements recommendation 28(c). See paragraph 6.15 of the report.
Subsection (2) directs the landlord of a partially continuing lease to allocate the annual rent payable under the lease between the continuing part and the extinguished part. If the rent payable under the lease was a cumulo rent, as defined in section 51, the landlord must allocate the cumulo rent (section 36) between the relevant leases before carrying out the allocation under this section.
Under subsection (3) the sum allocated to the extinguished part of the lease is the annual rent that is used to calculate the compensation due under section 32.
Under subsection (4) the sum allocated to the continuing part of the lease is the annual rent payable under the lease from the appointed day. This is subject to section 37(1) which gives the tenant of the continuing part of the lease the right to apply to the Lands Tribunal to challenge the allocation.
Subsection (5) defines landlord for the purposes of this section and section 36. Following the appointed day the landlord of the partially continuing lease is the former landlord of the part of the lease that is extinguished.
36 Allocation of "cumulo rent"
(1) This section applies where—
(a) immediately before the appointed day, a cumulo rent was payable; and
(b) on that day, one or more of the leases in respect of which that rent was payable is extinguished, by virtue of Part 1 of this Act, in respect of any of the subjects of such a lease.
(2) The landlord shall, before the expiry of the period of 2 years beginning with the appointed day, allocate that rent between or, as the case may be, among the leases in such proportions as are reasonable in all the circumstances.
(3) Where, immediately before the appointed day, the cumulo rent was wholly or partly apportioned between or, as the case may be, among the leases, then for the purposes of subsection (2) above the proportions of the landlord's allocation shall be presumed reasonable in so far as they accord with that apportionment.
(4) Where, on the appointed day, a lease in respect of which cumulo rent was payable is extinguished, the annual rent allocated to the lease under subsection (2) above shall be the annual rent payable under the lease for the purposes of calculating the compensatory payment under section 32 of this Act.
(5) Where a lease in respect of which cumulo rent was payable is an exempt lease or is otherwise a lease which continues on and after the appointed day, the annual rent allocated to the lease under subsection (2) above shall, subject to section 37(1) of this Act, be the annual rent payable under the lease from the appointed day.
(6) Where a lease in respect of which cumulo rent was payable is a partially continuing lease, section 35 of this Act applies.
NOTE
Where the annual rent payable under the lease is a cumulo rent, as defined in section 51, that rent requires to be allocated before the compensatory payment can be calculated under section 32. This section sets out the rules. It is modelled on section 9(3) and (4) of the 2000 Act. It implements recommendation 28(b). See paragraphs 6.11 to 6.14 of the report.
Subsection (2) directs the landlord to allocate the cumulo rent between the relevant leases.
Subsection (3) creates a presumption that the landlord's allocation is reasonable if it accords with an apportionment made before the appointed day. This presumption is relevant only in cases where an apportionment was made without the consent of the landlord, for example where the rent was collected by a property manager or other third party and remitted to the landlord in a single sum. To assist the landlord section 48 requires a third party collector to disclose to the landlord information about the tenants from whom the rent has been collected and the amount collected.
Under subsection (4) the sum allocated to a lease that is wholly extinguished is the annual rent used to calculate compensation under section 32.
Under subsection (5) the sum allocated to a lease that continues after the appointed day is the annual rent payable under that lease from the appointed day. This is subject to section 37(1) which gives the tenant of a continuing lease the right to apply to the Lands Tribunal to challenge the allocation.
In cases where part of the cumulo rent is allocated to a partially continuing lease, subsection (6) directs the landlord to make a further allocation between the extinguished part and the continuing part of the lease under section 35.
37 Allocation disputed or not made: right to refer matter to Lands Tribunal
(1) Where a tenant under—
(a) a partially continuing lease disputes the allocation made under subsection (2) of section 35 of this Act (including any allocation as may be required by paragraph (b) of that subsection); or
(b) a lease referred to in subsection (5) of section 36 of this Act disputes the allocation made under subsection (2) of that section,
the tenant may, before the expiry of the period of 56 days beginning with the day on which the landlord gives notice to the tenant of the allocation, apply to the Lands Tribunal for an order fixing the annual rent payable under the lease from the appointed day.
(2) Where a landlord under—
(a) a partially continuing lease; or
(b) a lease referred to in section 36(5) of this Act,
does not, within the period of 2 years beginning with the appointed day, give notice to a tenant of an allocation under section 35(2) or, as the case may be, 36(2) of this Act, the tenant may apply to the Lands Tribunal for an order fixing the annual rent payable under the lease from the appointed day.
NOTE
Under subsection (1) the tenant under a continuing lease or the continuing part of a lease can challenge an allocation made under section 35 or 36 by applying to the Lands Tribunal for an order fixing the annual rent. An application must be made within fifty six days, beginning with the day on which notice of the allocation was given to the tenant. In a section 35 case notification will be given by the notice to be served under section 31.
Subsection (2) gives such tenants the right to apply to the Lands Tribunal for an order fixing the annual rent in cases where the landlord has not given notice of an allocation within two years beginning with the appointed day. Two years is the period within which compensation must be claimed under section 31. An application can be made at any time after the expiry of the two year period.
This section does not give a right of application to the former tenant of a lease, or part of a lease, extinguished on the appointed day in respect of compensation claimed by the former landlord where an allocation has been made under section 35 or 36. However, it is a defence to a claim for compensation that the allocation was unreasonable.
38 Application of sections 35 to 37 to renewal premiums
(1) This section applies where—
(a) the rent payable under a lease is capable of being allocated under section 35 or, as the case may be, section 36 of this Act; and
(b) the lease contains an obligation on the landlord to renew it after a fixed period on payment by the tenant of a premium and the lease complies with section 1(2)(b) and (c) of this Act by virtue of section 60(1)(b) of this Act.
(2) Sections 35 to 37 of this Act shall apply—
(a) with the modifications set out in subsection (3) below; and
(b) subject to subsection (4) below,
for the purposes of allocating or fixing any premium such as is mentioned in subsection (1)(b) above as they apply to rent.
(3) The modifications are—
(a) references to "annual rent" shall be construed as references to a premium such as is mentioned in subsection (1)(b) above;
(b) references to "cumulo rent" shall be construed as references to a cumulo premium; and
(c) in sections 35(3) and 36(4) of this Act, for the words "calculating the compensatory payment under section 32 of this Act" substitute "section 33(1)(a) or (where the premium so allocated is more than £100) section 40(1)(c) of this Act".
(4) Where the rent payable under a lease is allocated under section 35 or, as the case may be, section 36 of this Act, any allocation of a premium such as is mentioned in subsection (1)(b) above shall be presumed to be reasonable in so far as it accords with the allocation of rent.
NOTE
This section applies the provisions on allocation of rent (sections 35 and 36) and right to refer to the Lands Tribunal (section 37) to a renewal premium in certain circumstances. Where a cumulo premium (as defined in section 51) was payable under more than one lease or where a premium was payable under a partially continuing lease, a landlord, for the purposes of claiming a compensatory payment or an additional payment for the loss of the renewal premium, has first to allocate the premium in accordance with the scheme for allocation of rent. If the premium allocated is more than £100, compensation can only be claimed under s 40(1)(c) as an additional payment. This section implements recommendation 30(b). See paragraph 6.26 of the report.
Subsection (3) sets out the modifications that are required to make sections 35 to 37 apply to renewal premiums.
Subsection (4) creates a presumption that an allocation of a premium is reasonable if it follows an allocation of rent.
39 Claiming additional payment
(1) This section applies where, on the appointed day, a right of a landlord under a lease, being a right mentioned in section 40(1) of this Act, is extinguished by virtue of Part 1 of this Act.
(2) The former landlord under such a lease may, before the expiry of the period of 2 years beginning with the appointed day, serve, subject to subsection (3) below, on the former tenant a notice such as is mentioned in subsection (4) below claiming that a payment, calculated in accordance with section 41 of this Act, be made to the former landlord by the former tenant in respect of the extinction of such a right (such payment being referred to in this Act as an "additional payment").
(3) Where—
(a) the lease mentioned in subsection (1) above is a superior lease; and
(b) the extinguished right is a right referred to in paragraphs (d) to (f) of subsection (1) of section 40 of this Act,
service by the former landlord under subsection (2) above shall be on the former tenant under the qualifying lease and any reference to the "former tenant" in sections 41 to 44, 46, 47 and 49 of this Act shall be construed as a reference to the former tenant under the qualifying lease.
(4) The notice referred to in subsection (2) above shall—
(a) be in, or as nearly as may be in, the form contained in schedule 12 to this Act;
(b) be accompanied by a copy of the explanatory note which immediately follows the form in schedule 12 to this Act;
(c) set out the right which has been extinguished and in respect of which the claim is made;
(d) specify the amount of additional payment claimed and the basis on which the amount is calculated; and
(e) where the claim is in respect of a right to development value, set out the basis on which the development value is reserved under the lease.
(5) Where the additional payment claimed is equal to or greater than £50, the former landlord shall, together with the notice served under subsection (2) above, serve an instalment document on the former tenant.
(6) This section is subject to section 45 of this Act.
NOTE
Sections 39 to 44 set out a scheme by which a landlord can claim a further payment for the loss of certain rights in cases where the compensatory payment is not a sufficient measure of the landlord's loss.
Section 39 regulates the initial procedure. The section principally implements recommendation 29 (paragraphs 6.17 – 6.21 of the report).
In order to claim compensation for the loss of a right the former landlord must serve a notice in the prescribed form on the former tenant within two years of the appointed day (subsection (2)). The amount claimed is calculated in accordance with section 41. The claim is against the immediate former tenant of the person making the claim (see recommendation 34(ii) and paragraphs 6.52 and 6.53 of the report) save in the circumstances set out in subsection (3).
Subsection (3) implements recommendation 34(i). See paragraph 6.54 of the report. Where the right lost by the former landlord of a superior lease is one specified in section 40(d) to (f), the former landlord is directed to serve the notice claiming an additional payment on the former tenant of the qualifying lease rather than on the former tenant of the superior lease.
Subsection (4) sets out various requirements for the form and content of the notice. The notice must be accompanied by a copy of the explanatory note.
If the sum being claimed is £50 or more, an instalment document has to be served along with the notice (subsection (5)). This gives the tenant the option of paying by instalments in accordance with the scheme set out in section 46. The threshold of £50 is the same as the threshold for the instalment scheme in section 10 of the 2000 Act. If an instalment document is not served the notice has no effect. This subsection implements recommendation 36(a). See paragraphs 6.65 – 6.67 of the report
Subsection (6) makes the section subject to section 45 the effect of which, in the case of a qualifying lease, is to restrict the maximum amount that can be claimed by way of additional payment to £500 unless a preliminary notice has been served.
40 Extinguished rights in respect of which additional payment may be claimed
(1) The rights referred to in section 39(1) of this Act are—
(a) any right to a rent to the extent that such right is expressed wholly or partly in non-monetary terms;
(b) any right to have the amount payable as rent reviewed or increased from time to time;
(c) any right to receive a premium (other than a premium mentioned in section 33(1) of this Act) in return for renewing the lease after a fixed period, where, by virtue of section 60(1)(b) of this Act such a renewal is required in order for the lease to comply with section 1(2)(b) and (c) of this Act;
(d) any right to resume natural possession of the land subject to a lease upon expiry of the lease, provided that the lease would expire no later than the end of the period of 200 years beginning with the appointed day;
(e) any right, other than a right of pre-emption, enabling a lease to be terminated earlier than the date on which the lease would otherwise expire, providing that such right—
(i) is exercisable no later than the end of the period of 200 years beginning with the appointed day;
(ii) is not a provision of the lease purporting to terminate the lease, or entitling the landlord to terminate it, in the event of a failure of the tenant to comply with any provision of the lease;
(iii) is not a provision of the lease deeming such a failure to be a material breach of contract; and
(iv) does not become a real burden by virtue of section 13, 14 or 18 of this Act; and
(f) any right to development value, providing that such right does not become a real burden by virtue of section 13 or 14 of this Act.
(2) In this Part of this Act—
"development value" means any significant increase in the value of a lease arising as a result of the subjects of the lease becoming free to be used, or dealt with, in some way not permitted under the lease; and
any reference to a "right to development value" means a right to the benefit of any development value of a lease where—
(a) the lease was granted subject to a condition, enforceable by the landlord, reserving to the landlord the benefit (whether wholly or in part) of any development value; and
(b) the consideration (including rent) paid for, or payable under, the lease was—
(i) nominal; or
(ii) significantly lower than it would have been had the lease not been subject to the condition.
NOTE
This section identifies the rights the loss of which may found a claim for an additional payment. It implements recommendation 31. See paragraphs 6.28 to 6.38 of the report. In the notice making the claim it will be for the landlord to nominate, and to justify, the particular ground of claim.
Subsection (1)(a) refers to a right to a non-monetary rent. See paragraph 6.29 of the report.
Subsection (1)(b) refers to a right to have a rent review or rent increase. See paragraphs 6.30 and 6.31 of the report.
Subsection (1)(c) refers to a right to receive a renewal premium other than a renewal premium of £100 or less (which can be recovered under the compensatory payment regime (see section 33)). The premiums in question are for more than £100 or of an uncertain amount. Only such renewals as are necessary to raise the lease to the qualifying duration are relevant. See paragraphs 6.22 to 6.25 and 6.32 of the report. The reference to a premium is to the premium after taking into account the definition of cumulo premium in section 51 and any allocations that may be necessary under sections 35 and 36 as applied to renewal premiums by section 38.
Subsection (1)(d) refers to a landlord's right of reversion. This occasionally may have a value over and above the income stream from rent. See paragraph 6.33 of the report. Section 60 sets out rules for calculating the period of a lease. The right has to be valued in accordance with section 41(2) and (3).
Subsection (1)(e) refers to a right to bring a lease to an end before its normal expiry. The right has to be within the full control of the landlord. A break clause exercisable at regular intervals or a right of redemption or resumption exercisable at the landlord's discretion would be included but not a right to terminate on breach. A right (such as a right of redemption) which is converted into a real burden under sections 13, 14 or 18 is excluded. See paragraphs 6.34 and 6.35 of the report.
Subsection (1)(f) refers to a right to development value provided that the right has not been converted into a real burden under section 13 or 14. "Development value" is defined in subsection (2) as is the expression "right to development value". The definitions are borrowed from the 2000 Act (section 33(1) and (5)). See paragraphs 4.56 and 6.36 to 6.37 of the report.
41 Basis of calculation of additional payment
(1) In calculating the amount of an additional payment—
(a) the extinguished right mentioned in section 40(1) of this Act shall be valued as at the appointed day;
(b) any obligations of the former landlord arising from the lease which are, on the appointed day, extinguished by virtue of Part 1 of this Act shall, subject to subsection (5) below, be taken into account; and
(c) any other entitlement (including under this Act) of the former landlord to recover any loss for which the additional payment is claimed shall be taken into account.
(2) In the case of a claim for an additional payment arising from the extinction of the right mentioned in section 40(1)(d) of this Act, the additional payment shall represent, subject to subsection (3) below, the value which the right could reasonably be expected to obtain if sold on the open market by a willing seller to a willing buyer.
(3) In assessing the value which the right referred to in subsection (2) above would have in the circumstances referred to in that subsection—
(a) it shall be presumed that the lease shall continue until the expiry of the period for which it was granted; and
(b) no account shall be taken of—
(i) any factor attributable to the known existence of a person (including the former tenant) who would be willing to buy the right at a price higher than other persons because of a characteristic of the right which relates peculiarly to that person's interest in buying it; and
(ii) any depreciation in the value of any other land owned by the former landlord.
(4) In the case of a claim for an additional payment arising from the extinction of a right to development value, the additional payment shall not exceed such sum as would make up for any effect which the right produced, at the time when the condition reserving the right was imposed, in reducing the consideration (including rent) paid for or payable under the lease.
(5) No account shall be taken of any obligation referred to in subsection (1)(b) above insofar as it is preserved as a counter-obligation to a real burden.
NOTE
This section sets out some general and some specific rules for determining the amount of an additional payment. It implements recommendation 32(b) to (e).
Subsection (1) contains the general rules. The right is to be valued at the appointed day. Any obligations on the landlord which do not survive conversion have to be taken into account as has any other entitlement of the landlord to recover in respect of the loss. The latter refers primarily to the compensatory payment which in many cases will be sufficient to cover the loss of all rights. See paragraphs 6.40 to 6.42 of the report.
Subsections (2) and (3) contain specific rules relating to the valuation of a landlord's reversionary interest in a claim under section 40(1)(d). See paragraphs 6.43 to 6.44 of the report.
Subsection (4) caps a claim for the loss of the right to development value in the same way that a claim under the 2000 Act is capped (section 37(2)). See paragraph 6.45 of the report.
42 Additional payment: former tenant agrees to payment claimed
(1) This section applies where—
(a) a former landlord has served on the former tenant a notice in accordance with section 39 of this Act; and
(b) the former tenant agrees to make the additional payment specified in the notice to the former landlord.
(2) The former tenant shall, subject to section 46 of this Act, before the expiry of the period of 56 days beginning with the day on which the notice is served, make the additional payment to the former landlord.
NOTE
This section applies in cases where, following service of an additional payment notice in accordance with section 39, the former tenant agrees to make the payment specified in the notice. Unless the tenant is entitled to pay by instalments (see sections 39(5) and 46), payment must be made to the former landlord within 56 days beginning with the day on which the notice was served on the former tenant. This section implements in part recommendation 32(a). See paragraphs 6.39 and 6.63 of the report.
The former tenant need not agree to pay the amount specified in the notice. Instead, the former tenant and the former landlord may agree that a different amount should be paid or where agreement cannot be reached, the matter may be referred to the Lands Tribunal (see sections 43 and 44).
43 Additional payment: amount agreed between former landlord and former tenant
(1) This section applies where—
(a) a former landlord has served on the former tenant a notice in accordance with section 39(2) of this Act; and
(b) the former tenant and the former landlord agree the amount of the additional payment, being an amount other than that specified in the notice.
(2) The former landlord may, before the expiry of the period of 5 years beginning with the appointed day, serve on the former tenant a notice such as is mentioned in subsection (3) below, requiring that the agreed additional payment be made to the former landlord by the former tenant.
(3) The notice referred to in subsection (2) above shall—
(a) specify the agreed additional payment;
(b) be in (or as nearly as may be in) the form contained in schedule 13 to this Act; and
(c) be accompanied by a copy of the explanatory note which immediately follows the form in schedule 13 to this Act.
(4) Where the agreed additional payment is equal to or greater than £50 the former landlord shall, together with the notice served under subsection (2) above, serve an instalment document on the former tenant.
(5) The former tenant shall, subject to section 46 of this Act, before the expiry of the period of 28 days beginning with the day on which the notice is served under subsection (2) above, make the additional payment to the former landlord.
NOTE
Following service of an additional payment notice in accordance with section 39, the former landlord and former tenant may agree that a different amount be paid. This section regulates the procedure to be followed. It implements in part recommendation 32(a). See paragraphs 6.39 and 6.63 of the report.
Subsection (2) requires the former landlord to serve a further notice in the prescribed form on the former tenant specifying the agreed amount and requesting payment. The notice must be served within 5 years of the appointed day to be valid. If a notice is not served the obligation to pay does not arise and the landlord loses the right to collect the payment.
Subsection (3) sets out requirements for the form and content of the notice. The notice must be accompanied by a copy of the explanatory note.
If the sum being claimed is £50 or more, subsection (4) requires that an instalment document is served along with the notice. This gives the tenant the option of paying by instalments in accordance with the scheme set out in section 46. If an instalment document is not served the notice has no effect. This subsection implements 36(a). See paragraphs 6.65 – 6.67 of the report
Unless entitled to pay by instalments, subsection (5) requires the former tenant to make payment to the former landlord within 28 days, beginning with the day on which the notice is served.
44 Reference to Lands Tribunal in relation to claim for additional payment
(1) If no agreement has been reached under section 42 or 43 of this Act, the—
(a) former landlord; or
(b) former tenant,
may refer any matter arising in relation to a claim for an additional payment under section 39 of this Act to the Lands Tribunal.
(2) In determining any such matter, the Lands Tribunal may make such order as it thinks fit (including an order fixing the amount of additional payment).
(3) Where the Lands Tribunal makes an order fixing an additional payment which is equal to or greater than £50 it must provide the former tenant with the option of making the payment in instalments in accordance with section 46 of this Act but—
(a) no instalment document is required;
(b) in subsection (3)(b) of that section, for the words "when so returning such document" there shall be substituted "before the expiry of the period of 28 days beginning with the day on which the Lands Tribunal makes the order fixing the additional payment"; and
(c) the reference in subsection (4) of that section to the date on which the instalment document is served shall be construed as a reference to the date on which the Lands Tribunal makes the order.
(4) A reference under subsection (1) above must be made before the expiry of the period of 5 years beginning with the appointed day.
NOTE
This section applies in cases where no agreement has been reached under section 42 or section 43. It implements in part recommendation 32(a). See paragraph 6.39 of the report
Subsection (1) gives both the former tenant and the former landlord the right to refer any matter relating to a claim for an additional payment to the Lands Tribunal.
Subsection (2) gives the Lands Tribunal a wide discretion to determine the claim and make such order as it thinks fit.
Subsection (3) requires the Lands Tribunal to provide the former tenant with the option of paying by instalments in accordance with the statutory instalment scheme if the additional payment is fixed at £50 or more. This subsection makes certain amendments to the instalment scheme to take account of the fact that no instalment document will be served on the former tenant.
Subsection (4) provides that all references must be made to the Lands Tribunal within 5 years of the appointed day. This is to give some certainty. If no such reference is made a tenant for instance will know that the matter is not to be pursued.
45 Claims in excess of £500: preliminary notice
(1) This section applies where a landlord intends, after the appointed day, to require or, as the case may be, claim from the tenant under a qualifying lease —
(a) a compensatory payment which is;
(b) an additional payment which is; or
(c) more than one additional payments which, taken together, are,
likely to exceed £500.
(2) The landlord shall, not later than 6 months before the appointed day, serve on the person registered as tenant a notice such as is mentioned in subsection (3) below (such notice being referred to in this Act as a "preliminary notice") stating the landlord's intention to require or, as the case may be, claim such a payment.
(3) The preliminary notice shall be in (or as nearly as may be in) the form contained—
(a) in the case of a requirement for a compensatory payment, in schedule 14; or
(b) in the case of a claim for an additional payment, in schedule 15,
to this Act.
(4) The preliminary notice shall—
(a) state—
(i) the amount of compensatory payment to be required or, as the case may be, additional payment to be claimed; or
(ii) where such amount cannot be determined, the best estimate of such amount; and
(b) be accompanied by a copy of the explanatory note which immediately follows the form in schedule 14 or, as the case may be, schedule 15 to this Act.
(5) Where a preliminary notice has not been served in accordance with this section, the amount of—
(a) compensatory payment required under section 31(2) of this Act; or
(b) additional payment claimed under section 39(2) of this Act; or
(c) where more than one additional payment is claimed, the total amount of such payments,
shall not exceed £500.
NOTE
A landlord who wishes to claim more than the sum of £500 by way of compensatory or additional payment from the tenant of the qualifying lease has to serve a preliminary notice six months before the appointed day on the person who is registered at that time as the tenant. Separate notices have to be served in respect of each type of payment. Where an estimate is given which will usually be the case the landlord is not bound by the figure but it must be a reasonable estimate. If a notice is not served or the estimate given is not reasonable the amount of compensatory or additional payment that can be claimed is capped at £500.
This section implements recommendation 33. See paragraphs 6.48 to 6.51 of the report. In so far as the section provides for service on the person registered as tenant it implements recommendation 35(c). See paragraph 6.60 of the report.
46 Making payment by instalments
(1) This section applies where an instalment document under section 31(5), 39(5) or 43(4) of this Act is served on a former tenant.
(2) An instalment document shall be—
(a) a filled out document in, or as nearly as may be in, the form contained in schedule 16 to this Act; and
(b) accompanied by a copy of the explanatory note which immediately follows that form in that schedule.
(3) Subject to subsection (4) below, the former tenant shall obtain the option of making the compensatory or, as the case may be, additional payment by instalments if (and only if)—
(a) the former tenant signs, dates and returns the instalment document within the period which (but for this section) is allowed for making that payment—
(i) in the case of a compensatory payment, under section 34; or
(ii) in the case of an additional payment, under section 42(2) or, as the case may be, 43(5),
of this Act; and
(b) when so returning such document, the former tenant pays to the former landlord an amount equivalent to one tenth of the payment (such amount being payable in addition to the payment and irrespective of how or when such payment is subsequently made).
(4) If on or after the date on which an instalment document is served on the former tenant under a qualifying lease the former tenant ceases, by virtue of a sale or transfer for valuable consideration, to have right to the land in respect of which the claim for payment has been made or any part of that land then—
(a) where the former tenant has obtained the option mentioned in subsection (3) above, the former tenant shall lose that option and the outstanding balance of the entire payment shall fall due on the seventh day after the day on which the former tenant ceases to have that right; and
(b) where the former tenant has not obtained that option, the former tenant shall lose the right to obtain it and—
(i) in the case of a compensatory payment, section 34; or
(ii) in the case of an additional payment, section 42(2) or, as the case may be, 43(5),
of this Act shall apply accordingly.
(5) Subject to subsection (6) below, where the option of making the payment by instalments is obtained, those instalments shall be equal instalments payable where—
(a) the payment is £500 or less, on each of the 5;
(b) it is more than £500 but not more than £1,000, on each of the 10;
(c) it is more than £1,000 but not more than £1,500, on each of the 15; or
(d) it is more than £1,500, on each of the 20,
term days of Whitsunday or Martinmas which then next follow the making of the payment under subsection (3)(b) above.
(6) In—
(a) a case where any instalment payable by virtue of subsection (5) above remains unpaid for 42 days after falling due, the outstanding balance of the entire payment shall immediately fall due;
(b) any other case, the former tenant may pay that outstanding balance at any time.
NOTE
Where the compensatory payment or additional payment is £50 or more the former landlord requires to serve an instalment document along with the relevant notice. This section sets out the rules of the instalment scheme, which is modelled on the scheme in the 2000 Act. The section implements recommendation 36(b). See paragraphs 6.65 to 6.69 of the report.
Subsection (2) prescribes a form of instalment document and requires the former landlord to complete the blank parts of the form. A copy of the explanatory note has to be attached to the document when it is served.
In order to obtain the option to pay by instalments, subsection (3) requires the former tenant to sign, date and return the instalment document along with payment of the 10% surcharge within the period allowed for payment of the compensatory or additional payment, namely twenty eight or fifty six days.
Subsection (4) provides that the option of paying by instalments is lost by the former tenant of a qualifying lease in the event of a sale of the whole or part of the land now owned.
Subsection (5) sets out the details of the scheme.
Subsection (6) provides for immediate payment of the balance if an instalment is unpaid for forty two days and makes clear that in other cases the balance can be repaid at any time.
47 Service of notices under this Part
(1) Service of a notice under any provision of this Part of this Act shall be effected by—
(a) delivering it to the former tenant or, as the case may be, the tenant;
(b) sending it by—
(i) registered post; or
(ii) the recorded delivery service,
to that person at a place such as is mentioned in subsection (2) below; or
(c) in a case where a notice, sent under paragraph (b) above, is returned to the former landlord or, as the case may be, landlord with an intimation that it could not be delivered—
(i) delivering; or
(ii) sending it by post,
with that intimation to the Extractor of the Court of Session.
(2) The place referred to in subsection (1)(b) above is—
(a) the former tenant's or, as the case may be, the tenant's place of residence;
(b) that person's place of business;
(c) a postal address which that person ordinarily uses; or
(d) if none of those places or that address is known at the time of delivery or posting, whatever place is at that time that person's most recently known—
(i) place of residence;
(ii) place of business; or
(iii) postal address which that person ordinarily used.
(3) For the purposes of this Act—
(a) an acknowledgement signed by the former tenant or, as the case may be, tenant, which conforms to Form A of schedule 17 to this Act;
(b) in the case of a notice sent under subsection (1)(b) above, a certificate signed by the former landlord or, as the case may be, landlord which conforms to Form B of that schedule and is accompanied by the postal receipt; or
(c) in the case of a notice delivered or sent under subsection (1)(c) above, an acknowledgement of receipt by the Extractor on a copy of the notice,
shall be sufficient evidence of service of the notice.
(4) The date on which a notice is served on a former tenant or, as the case may be, tenant shall be the date of delivery or, as the case may be, posting of the notice.
(5) In this section, "notice" includes an instalment document.
NOTE
This section sets out the rules for service of a notice in respect of a compensatory or additional payment (and also a preliminary notice). Liability to pay depends on service of a notice and the date of service is the starting point for the period allowed for payment or return of the instalment document and for the quinquennial prescription. If the lease was held pro indiviso separate service is needed for each co-tenant (section 52(2)). The date of service is the date of delivery or posting. Provision is made in certain circumstances for service on the Extractor of the Court of Session. The section implements recommendation 37. See paragraphs 6.70 to 6.73 of the report.
48 Duty of collecting third party to disclose information
(1) This section applies where a landlord or, as the case may be, former landlord receives or has at any time received from a third party an amount—
(a) collected in respect of rent from; and
(b) remitted to the landlord or former landlord on behalf of,
a tenant or, as the case may be, former tenant.
(2) The third party shall—
(a) if required by the landlord or, as the case may be, former landlord for the purpose of serving notice under section 31(2) of this Act; and
(b) in so far as it is practicable,
forthwith disclose to the landlord or former landlord the information mentioned in subsection (3) below.
(3) The information referred to in subsection (2) above is—
(a) the identity and address of the tenant or former tenant; and
(b) in a case where the rent remitted is part of a cumulo rent, the amount so collected from the tenant or former tenant.
NOTE
This section places a statutory duty on the collector of cumulo rent to disclose to the landlord information about the tenants from whom the rent has been collected and the amount so collected. This will help the landlord to identify the current tenants for the purposes of serving a notice under section 31(2) requiring payment of a compensatory payment and to take advantage of the presumption in section 36(3) that an allocation of cumulo rent which follows an existing apportionment is deemed to be reasonable. The intention is for this section to come into force on Royal Assent. The section is modelled on section 14 of the 2000 Act. See paragraph 6.13 of the report.
49 Duty to disclose identity etc. of former tenant
(1) This section applies where—
(a) a former landlord purports to serve notice under section 31(2) or 39(2) of this Act on the former tenant; and
(b) the person on whom that notice is served—
(i) was the tenant at some time before the appointed day; but
(ii) is not the former tenant.
(2) The person on whom the notice is served shall forthwith disclose to the former landlord—
(a) the identity and address of the former tenant; or
(b) (if that person cannot do so) such other information as that person has which might enable the former landlord to discover that identity and address.
NOTE
This section places a statutory duty on a person on whom a notice was mistakenly served claiming a compensatory or additional payment to disclose the name and address of the proper tenant or, failing that, such other information as will enable the proper tenant to be traced. The section is modelled on section 15 of the 2000 Act. It implements recommendation 35(b). See paragraph 6.59 of the report.
50 Extinction by prescription of requirement to make compensatory payment or additional payment
In schedule 1 to the Prescription and Limitation (Scotland) Act 1973 (c.52) (which specifies obligations affected by prescriptive periods of 5 years under section 6 of that Act)—
(a) in paragraph 1, after sub-paragraph (ac) there shall be inserted—
"(ad) to any obligation to make a payment under section 34, 42(2) or 43(5) of the Long Leases (Scotland) Act 2006 (asp 00);"; and
(b) in paragraph 2(e), for the words ", (aa), (ab) or (ac)" substitute "to (ad)".
NOTE
This provision provides that the obligation to pay the compensatory or additional payment prescribes after 5 years. Prescription starts to run from the date that the obligation to pay arises, that is to say, the date of service of the notice in the case of a compensatory payment under section 34, and in the case of an additional payment under sections 42(2) or 43(5). This section implements recommendation 38. See paragraph 6.74 of the report.
51 Cumulo rent and cumulo premium
(1) In this Part of this Act—
"cumulo rent" means, subject to subsection (2) below, a single rent payable under two or more leases; and
"cumulo premium" means, subject to subsections (2) to (4) below, a single premium payable under two or more leases.
(2) Where such rent or premium—
(a) has been apportioned between or amongst—
(i) those leases; or
(ii) some of those leases; and
(b) the parties to those leases consented (whether expressly or by implication) to the apportionment,
any rent or premium so apportioned is not cumulo rent or, as the case may be, not a cumulo premium and shall be the rent or premium payable under the lease for the purposes of this Part of this Act.
(3) Subsection (4) below applies if—
(a) subsection (2) above applies to rent payable under two or more leases; and
(b) a single premium is payable under the leases.
(4) Where this subsection applies, for the purposes of this Part of this Act—
(a) the premium shall be treated as if it were apportioned between or amongst the leases in the same proportion as the apportionment of rent; and
(b) that apportioned premium shall be the premium payable under the lease.
NOTE
This section defines cumulo rent for the purposes of the compensation scheme as a single rent payable under two or more leases. See paragraphs 6.11 and 6.12 of the report.
Subsection (2) qualifies the definition of cumulo rent by providing that, where a rent has been apportioned between the leases before the appointed day with the agreement express or implied of the parties (possibilities (i) and (ii) of paragraph 6.11) the rent apportioned to each lease is to be the rent for that lease. In the usual case that is the figure which forms the basis for the calculation of the compensatory payment under s 32.
A cumulo premium is defined in the same terms and with the same qualifications as a cumulo rent. Where subsection (2) applies (and except where the lease is a partially continuing lease) the premium so apportioned is the figure used to determine whether a claim in respect of the premium falls within the compensatory payment or additional payment regime.
The definition of cumulo premium is qualified further by subsections (3) and (4). They provide that, where a cumulo rent has been apportioned with the agreement of the parties but not the cumulo premium, the premium is allocated between the leases in the same proportions as the rent. Again unless the lease is a partially continuing lease, the sum allocated is the figure used to determine whether a claim in respect of the premium falls within the compensatory payment or additional payment regime.
52 Interpretation of Part 3
(1) In this Part of this Act—
"former landlord", in relation to a lease, means the person who was the landlord immediately before the appointed day; and
"former tenant", in relation to a lease, means the person who was the tenant immediately before the appointed day.
(2) Where, immediately before the appointed day, the right as tenant under a lease is held by two or more persons in common—
(a) they shall be severally liable to make any compensatory or, as the case may be, additional payment (but as between or, as the case may be, among themselves they shall be liable in the proportions in which they hold the right as tenant); and
(b) subject to section 47 of this Act they shall together be treated for the purposes of this Part of this Act as being a single tenant.
NOTE
Subsection (1) defines former landlord and former tenant for the purposes of part 3. It has to be read alongside the definition of landlord and tenant in section 68(1). The definitions include a person who has right to the interest but who has not completed title. If more than one person comes within the definition the latest such person is treated as the landlord or the tenant. This subsection implements recommendation 35(a). See paragraphs 6.56 to 6.58 of the report.
Subsection (2) regulates the liability of joint tenants as regards the compensatory or additional payment in a question with the former landlord and also among themselves. The subsection implements recommendation 35(d). See paragraph 6.61 of the report. It also makes clear that for the purposes of part 3 such tenants are to be treated as a single tenant bar for the provisions on service of a notice.
53 Meaning of "exempt lease"
(1) In this Part of this Act, a lease is an "exempt lease" if—
(a) the tenant under a qualifying lease registers a notice in accordance with section 54(1) of this Act;
(b) it is a lease to which section 55 of this Act applies; or
(c) it is a sublease to which section 56 of this Act applies.
(2) If, immediately before the appointed day, land is subject to an exempt lease—
(a) that lease shall not become the right of ownership of the land;
(b) any right of ownership of that land existing immediately before the appointed day and any superior lease shall not be extinguished; and
(c) the provisions of this Act, in so far as they relate to—
(i) the conversion of a qualifying lease into the right of ownership; or
(ii) the extinction of a right of ownership or, as the case may be, lease,
shall not apply.
NOTE
Subsection (1) defines the term "exempt lease". The main example is a lease in respect of which a notice of exemption has been registered under section 54. The other examples will not be found very often. A lease remains an exempt lease until a notice of recall is registered under section 57.
Subsection (2) sets out the consequences of a lease being an exempt lease when the appointed day arrives. The effect is to suspend the process of conversion in relation to that lease and any superior lease. Existing landlord-tenant relationships continue in force as before. This subsection implements recommendation 39(a). See paragraph 7.7 of the report.
54 Exemption of qualifying lease by registration of exemption notice
(1) The tenant under a qualifying lease may, not later than 2 months before the appointed day, execute and register a notice in, or as nearly as may be in, the form contained in schedule 18 to this Act (referred to in this Act as an "exemption notice").
(2) Where an exemption notice is registered the lease shall be an exempt lease.
(3) This section is subject to section 58 of this Act.
NOTE
This section allows the tenant of a qualifying lease to opt out of conversion. It implements recommendation 39(a) and (b): see paragraphs 3.4 to 3.8 and 7.1 to 7.8 of the report.
Subsection (1) requires the tenant to register a notice of exemption at least two months before the appointed day.
Subsection (2) provides that on registration of the notice the lease becomes an exempt lease thus attracting the operation of section 53(2) which suspends the process of conversion.
Subsection (3) makes the section subject to s 58. This section sets out rules for the service and registration of a notice of exemption or a notice of recall.
55 Certain long leases registered close to or after the appointed day
Where a lease—
(a) is not registered on the day falling 1 year before the appointed day;
(b) would, had it been so registered, have been converted on the appointed day into a right of ownership under section 3(1)(a) of this Act;
(c) despite not being registered, constitutes a real right in land; and
(d) is subsequently registered (whether before, on or after the appointed day),
the lease shall, on the day of registration, be an exempt lease.
NOTE
An unregistered lease which otherwise satisfies the requirements for conversion is not a qualifying lease under section 1. This section makes provision for the situation where the lease is subsequently registered. It implements recommendation 43. See paragraphs 8.14 to 8.18 of the report.
An unregistered lease which is first registered in the year before the appointed day or at any time thereafter is treated as an exempt lease. This enables the lease to be converted into ownership by registering a notice of recall under section 57. This procedure gives the landlord of that lease notification of conversion of the lease to ownership and the opportunity to register notices converting conditions into real burdens etc. Where first registration of the lease takes place in the year before the appointed day section 53(2) applies to suspend the process of conversion.
56 Subleases of exempt leases
(1) This section applies where a tenant under an exempt lease grants a sublease which would have been converted on the appointed day into a right of ownership under section 3(1)(a) of this Act, had the sublease been registered immediately before the appointed day.
(2) Where the sublease is registered (before, on or after the appointed day) it shall, on the day of registration, be an exempt lease.
NOTE
The tenant under an exempt lease may grant a sublease which fulfils the criteria for conversion. This section provides that on registration the sublease is to be treated as an exempt lease. The tenant may then register a notice of recall under section 57. The section implements recommendation 39(f). See paragraph 7.8 of the report.
57 Recall of exemption
(1) The tenant under an exempt lease may execute and register a notice in, or as nearly as may be in, the form contained in schedule 19 to this Act (referred to in this Act as a "recall notice").
(2) On the day on which the recall notice is registered the exempt lease shall, subject to section 1(2) and 2 of this Act (modified, as the case may be, in accordance with subsection (3) below), be a qualifying lease which is no longer an exempt lease.
(3) Where the recall notice is registered—
(a) on a day less than 6 months before the appointed day; or
(b) on or after the appointed day,
this Act shall, subject to subsection (4) below, apply as if the appointed day were the first Whitsunday or, as the case may be, Martinmas occurring on or after the day which falls 6 months after the day on which the notice is registered.
(4) Section 45 of this Act shall not apply in any case where a recall notice is registered in relation to the qualifying lease.
(5) This section is subject to section 58 of this Act.
NOTE
This section allows the tenant under an exempt lease to register a notice of recall. This may be done before or after the appointed day. The section implements recommendation 40(a) to (d). See paragraphs 7.10 to 7.15 and 8.15 of the report.
Under subsection (2) on registration of a notice of recall the exempt lease becomes a qualifying lease provided it satisfies the requirements for conversion. In particular the unexpired duration of the lease must at the appointed day be more than 100 years. Section 2 is relevant where the exempt lease is followed by the grant of a sublease which is also exempt (see section 56) or by the registration of an unregistered but otherwise qualifying sublease (see section 55).
Subsection (3) prescribes the appointed day where the notice of recall is registered in the six months before or on or at any time after the standard appointed day. The effect of deferring the appointed day is to give a landlord of the qualifying lease or any superior lease a period of six months in which to consider whether to register notices converting leasehold conditions into real burdens.
Subsection (4) removes the requirement for the landlord to serve a preliminary notice in order to claim compensation of more than £500. The purpose of such a notice is to invite consideration of opting out but that is no longer relevant where the decision to recall has been made.
Subsection (5) makes the section subject to section 58. This section sets out rules for the service and registration of a notice of exemption or a notice of recall.
58 Exemption notice and recall notice: supplementary
(1) This section applies where a tenant under a qualifying lease or, as the case may be, an exempt lease is executing and registering an exemption notice or, as the case may be, a recall notice.
(2) Except where it is not reasonably practicable to do so, the tenant under the qualifying or, as the case may be, exempt lease shall, before such notice is executed, send by post to the person registered as landlord under such lease and, as the case may be, under any superior lease a copy of—
(a) the notice; and
(b) the explanatory note—
(i) in the case of an exemption notice, which immediately follows the form in schedule 18 to this Act; or
(ii) in the case of a recall notice, which immediately follows the form in schedule 19 to this Act.
(3) The tenant under the qualifying or, as the case may be, exempt lease shall, in the notice, state either—
(a) that a copy of the notice has been sent in accordance with subsection (2) above; or
(b) that it was not reasonably practicable for such a copy to be sent.
(4) The notice shall be registered against the title of the tenant under the qualifying or, as the case may be, exempt lease.
NOTE
This section sets out rules for the service and registration of a notice of exemption or a notice of recall. It implements recommendation 39(c)(d) and (e) and recommendation 40(e). See paragraphs 7.5, 7.6 and 7.11 of the report.
Subsections (2) and (3) provide for the sending of a copy of the notice of exemption or notice of recall to the landlord of the qualifying or exempt lease and any landlord of a superior lease. Service can be on the person who is registered as landlord. Normally service is by post, and must precede registration. The notice must contain a statement about service, or an explanation as to why service was not reasonably practicable.
Subsection (4) requires the notice to be registered against the title of the tenant. This allows anyone dealing with the lease to see the position.
59 The appointed day
In this Act, the "appointed day" means the first Whitsunday or, as the case may be, Martinmas occurring on or after the day 2 years after the day on which this section comes into force.
NOTE
This section fixes the appointed day, which is the day when qualifying leases are converted into ownership. Whitsunday (28 May) and Martinmas (28 November) are chosen because they are the dates on which rent is normally payable. The period of two years between the coming into force of the section under section 70 and the appointed day enables the qualifying lease to be identified ahead of conversion. This in turn enables the statutory notices for conversion of qualifying conditions etc to be served and registered before the appointed day.
60 Determination of duration of lease
(1) In calculating the period for which a lease is granted for the purposes of any provision of this Act—
(a) any provision of a lease (however expressed) enabling the lease to be terminated earlier than the date on which it would otherwise terminate shall be disregarded;
(b) where a lease includes provision (however expressed) requiring the landlord to renew the lease, the period for which any such renewed lease would, were that provision complied with, be granted shall be added to the period for which the original lease is granted;
(c) where the period for which a lease is granted is expressed (in whole or in part) by reference to the lifetime of a person, the period expressed by reference to that lifetime shall—
(i) in a case where such person is deceased and the period beginning on the first day of the period for which the lease was granted and ending on the day that person died can be ascertained, be that period;
(ii) in a case where such person is identifiable and is not deceased, be deemed to be the period of life expectancy as calculated in accordance with the table of life expectancy set out in schedule 20 to this Act; or
(iii) in any other case, be deemed to be a period of 35 years; and
(d) where, before the end of the period for which a lease is granted, the parties to that lease enter into a subsequent lease—
(i) of the same subjects as the original lease; and
(ii) for a period beginning immediately after the end of the period for which such lease is granted,
the period for which the subsequent lease is granted shall be added to the period for which the original lease is granted.
(2) Paragraphs (b) to (d) of subsection (1) above are subject to section 67 of the Abolition of Feudal Tenure etc. (Scotland) Act 2000 (asp 5) (prohibition of leases of more than 175 years).
NOTE
This section implements recommendation 3. See paragraphs 2.22 to 2.30 of the report.
The provision sets out a number of rules for calculating the period (including the unexpired duration) of a lease. The period of a lease is relevant for the purposes of working out whether a lease qualifies for conversion (section 1(2)(b)(c)); whether an additional payment can be claimed for the residual value of the reversionary interest (section 40(1)(d)) and how that value is to be assessed (section 41(3)(a)); and whether an additional payment can be claimed for the loss of a right to bring a lease to an end early (section 40(1)(e)). In each case the duration of the lease is calculated in the same way.
Subsection (1) sets out the rules for break options (which are disregarded), for renewals (which are included), for calculating the lifetime of a tenant (for the exceptional cases where this might be relevant), and for consecutive leases (which are included). A consecutive lease is a lease which is granted during the term of the first lease on essentially the same terms and conditions as the first lease and which is to run from the moment the first lease ends.
Subsection (2) makes clear that a calculation of the period of a lease in accordance with the rules in subsection (1) is subject to section 67 of the 2000 Act. That provision (with certain exceptions) prohibits the grant of a lease for more than 175 years and regulates the number of renewals that are permitted. The provision has no relevance for break options and so subsection (2) does not apply to such options.
61 Extinction of right of irritancy in certain leases
(1) On and after the day on which this section comes into force, it shall not be competent for a lease to which subsection (2) below applies to be terminated by irritancy.
(2) This subsection applies to a lease which, immediately before the day on which this section comes into force, is a right of lease in land which complies with paragraphs (b) to (d) of section 1(2) of this Act.
NOTE
This section prevents a lease of land which satisfies the requirements in subsection (2) from being terminated by irritancy on or after the date that the section comes into force. The intention is for the section to come into force on Royal Assent. The section implements recommendation 11(d). See paragraph 3.29 of the report.
The requirements are that the lease is granted for a period of more than 175 years, has an unexpired duration of more than 100 years and is not a lease of minerals. Registration is not a requirement.
For a lease that is converted or extinguished on the appointed day the effect of the section is to prevent the lease from being irritated in the period between the date of Royal Assent and the appointed day.
Irritancy includes a provision in a lease which deems a failure of the tenant to comply with any provision in the lease to be a material breach of contract.
62 Notices: pre-registration requirements
(1) This section applies in relation to any notice which is to be submitted for registration under section 7 or Part 2 of this Act.
(2) Except where it is not reasonably practicable to do so, the person who intends to execute the notice shall, before so doing, send by post to the tenant under the qualifying lease (addressed to "The Tenant" where the name of that person is not known) a copy of—
(a) the notice; and
(b) the explanatory note set out in whichever schedule to this Act relates to the notice.
(3) The person who executes the notice shall, in the notice, state either—
(a) that a copy of the notice has been sent in accordance with subsection (2) above; or
(b) that it was not reasonably practicable for such a copy to be sent.
NOTE
This section applies to notices which require to be submitted for registration under section 7 (sporting rights) or under sections 13 (neighbour burdens), 18 (personal pre-emption or personal redemption burdens), 19 (economic development burdens), 20 (health care burdens), and 21 and 22 (conservation burdens). It is modelled on section 41 of the 2000 Act. It implements recommendation 22(a). See paragraphs 4.60, 4.61 and 5.16 of the report.
The section provides for the sending of a copy of the notice to the tenant under the qualifying lease. Normally service is by post and must precede registration. The notice must contain a statement about service, or an explanation as to why service was not reasonably practicable.
63 Notices and agreements: extent of Keeper's duty
(1) In relation to any notice submitted for registration under this Act, the Keeper of the Registers of Scotland shall not be required to determine whether the terms of section 58(2) or, as the case may be, 62(2) of this Act have been complied with.
(2) In relation to any notice, or as the case may be agreement, submitted for registration under—
(a) section 13, 14 or 18 to 22 of this Act, the Keeper shall not be required to determine whether, for the purposes of subsection (1) of the section in question, a qualifying condition is enforceable by the person submitting the notice for registration;
(b) section 13 of this Act, the Keeper shall not be required to determine—
(i) in pursuance of subsection (5)(e) of that section, that an attempt to reach agreement has been made in accordance with section 15(2) of this Act; or
(ii) where the condition specified under subsection (5)(f) of that section is the condition mentioned in subsection (2)(a) of that section, whether the terms of that condition are satisfied;
(c) section 19 or 20 of this Act, the Keeper shall not be required to determine whether—
(i) the requirements of subsection (1) of the section in question are satisfied; or
(ii) the statement made in pursuance of subsection (2)(g) of section 19 or, as the case may be, subsection (2)(f) of section 20 is correct; or
(d) paragraph (c) of subsection (1) of section 14 of this Act, the Keeper shall not be required to determine whether the requirements of paragraph (a) of that subsection are satisfied.
(3) The Keeper shall not be required to determine for the purposes of section 7(7) of this Act, whether immediately before the appointed day a sporting right is still enforceable.
(4) The Keeper shall not be required to determine for the purposes of section 13(10), 14(9), 18(7), 19(4), 20(4), 21(5) or 22(5) of this Act, whether immediately before the appointed day a qualifying condition is, or is still, enforceable, or by whom.
NOTE
This section relieves the Keeper of the need to verify certain matters which the Keeper could not reasonably be expected to check. It is modelled on section 43 of the 2000 Act. The section implements recommendation 42(a). See paragraphs 8.9 to 8.11 of the report.
64 Referral to Lands Tribunal of notice dispute
(1) Any dispute arising in relation to a notice registered under this Act may be referred to the Lands Tribunal; and, in determining the dispute, the Tribunal may make such order as it thinks fit discharging or, to such extent as may be specified in the order, restricting the notice in question.
(2) An extract of any order made under subsection (1) above may be registered and the order shall take effect as respects third parties on such registration.
NOTE
This section gives the Lands Tribunal a broad jurisdiction to resolve disputes in relation to notices. The section applies not only to notices converting conditions into real burdens under part 2 of the bill but also to notices converting reserved sporting rights (section 7) and to exemption and recall notices (sections 54 and 57). The section is modelled on section 44(1) and (4) of the 2000 Act. It implements recommendation 24. See paragraphs 4.66 to 4.68 of the report.
Subsection (2) allows the registration of Lands Tribunal orders and provides that, on registration, they will affect third parties.
65 Circumstances where certain notices may be registered where initial submission for registration rejected
(1) This section applies to—
(a) a notice submitted, before the appointed day, for registration under section 7(2) of this Act;
(b) an agreement submitted, before the appointed day, for registration under section 14(1)(c) of this Act;
(c) any notice submitted, before the appointed day, for registration under Part 2 of this Act; or
(d) an exemption notice submitted, before the day falling 2 months before the appointed day, for registration under section 54(1) of this Act,
which is rejected by the Keeper of the Registers of Scotland but which a court or the Lands Tribunal then determines is registrable.
(2) Any notice or agreement to which this section applies which is not registered, may be registered—
(a) not later than the day falling 2 months after the day on which the court or the Lands Tribunal made the determination; but
(b) within such period as the Scottish Ministers may by order prescribe,
and any such notice or agreement registered under this subsection on or after the appointed day or as the case may be the day falling 2 months before the appointed day shall be treated as if it had been registered before that day.
(3) For the purposes of subsection (1) above, the application to the court, or to the Lands Tribunal, which has resulted in the determination shall require to have been made within such period as the Scottish Ministers may by order prescribe.
(4) In this section, "court" means Court of Session or sheriff.
NOTE
This section allows late registration, within limits, if the initial rejection of a notice etc by the Keeper is judicially overturned. It implements recommendation 42(b). See paragraph 8.12 of the report. It is modelled on section 45 of the 2000 Act.
Subsection (1) identifies the notices etc in question. This should be read along with subsection (3) which provides for Scottish Ministers to specify a period of time within which application has to be made to the court or the Lands Tribunal.
Subsection (2) provides that a notice etc has to be registered within 2 months of the determination by the court or the Lands Tribunal, but within such period as Scottish Ministers may prescribe by statutory instrument under section 69. A notice which is registered after the appointed day is given retrospective effect.
The purpose of a longstop is to provide certainty for parties relying on the register. A different period may be prescribed for exempt leases. An exempt lease can be recalled at any time and so the appointed day for that lease is uncertain In the normal case where the appointed day is certain the period that is set will depend on the progress made with applications to the court or the Lands Tribunal.
Subsection (4) defines court for the purposes of this section.
66 Power to prescribe forms and amend table of life expectancy
The Scottish Ministers may from time to time by order—
(a) prescribe forms in substitution for any of the forms in schedules 1 to 19; and
(b) amend the table of life expectancy set out in schedule 20,
to this Act.
NOTE
Almost all leases will be converted on the appointed day. In some cases (for example, where a notice of exemption is recalled) conversion will take place later on a deferred appointed day. Scottish Ministers are therefore given power by this section to prescribe new forms in place of the forms set out in schedules 1 to 19 and also to update the table of life expectancy in schedule 20.
67 Consequential and minor amendments
Schedule 21 of this Act, which contains minor amendments and amendments consequential upon the provisions of this Act, shall have effect.
NOTE
This schedule gives effect to the schedule of minor and consequential amendments.
68 Interpretation
(1) In this Act, unless the context otherwise requires—
"the 2003 Act" means the Title Conditions (Scotland) Act 2003 (asp 9);
"additional payment" has the meaning given by section 39 of this Act;
"appointed day" has the meaning given by section 59 of this Act;
"compensatory payment" has the meaning given by section 31 of this Act;
"cumulo premium" has the meaning given by section 51(1) of this Act;
"cumulo rent" has the meaning given by section 51(1) of this Act;
"exempt lease" has the meaning given by section 53 of this Act;
"freshwater fish" means any fish living in fresh water, including trout and eels and the fry of eels but exclusive of salmon and of any kind of fish which migrate between the open sea and tidal waters;
"land" includes anything held or which, by its nature, may be held as a separate tenement;
"landlord", in relation to a lease, means the person who has right as landlord under the lease, whether or not such person has completed title (and where more than one person comes within that description, the person who most recently acquired that right);
"Lands Tribunal" means Lands Tribunal for Scotland;
"lease" includes a sublease;
"owner", in relation to any land, means the person who has right to the land, whether or not such person has completed title (and where more than one person comes within that description, the person who most recently acquired that right);
"qualifying lease" has the meaning given by section 1(1) of this Act;
"qualifying condition" means a condition which qualifies under section 9 of this Act;
"registering" , in relation to any document, means registering an interest in land or information relating to an interest in land (being an interest or information for which that document provides) in the Land Register of Scotland or, as the case may be, recording the document in the Register of Sasines; and cognate expressions shall be construed accordingly;
"sporting right" has the meaning given by section 7(1) of this Act;
"superior lease" has the meaning given by section 3 of this Act; and
"tenant", in relation to a lease, means the person who has right as tenant under the lease, whether or not such person has completed title (and where more than one person comes within that description, the person who most recently acquired that right).
(2) Subject to the provisions of this Act, expressions used in this Act and in the 2003 Act shall have the same meaning in this Act as they do in that Act.
NOTE
Subsection (1) gives the meaning of certain terms. The majority of the terms have already been discussed in the Notes to the earlier sections of the bill.
Under subsection (2) expressions used in the 2003 Act and in this bill are to have the same meaning unless otherwise provided. Section 122 of the 2003 Act is the interpretation provision. This technique allows a number of terms to be used without further explanation – for example, benefited property, burdened property, conservation body, conservation burden, economic development burden, enactment, facility and service burdens, health care burden, local authority, manager burden, and notary public.
69 Orders
(1) The powers conferred by this Act on the Scottish Ministers to make orders shall be exercisable by statutory instrument.
(2) Each of those powers shall include power to make different provision for different purposes.
(3) A statutory instrument containing an order under this Act shall be subject to annulment in pursuance of a resolution of the Scottish Parliament.
NOTE
This section regulates the making of orders under the bill.
70 Short title and commencement
(1) This Act may be cited as the Long Leases (Scotland) Act 2006.
(2) This Act (apart from sections 61 and 69 and this section) shall come into force on such day as the Scottish Ministers may by order appoint; and different days may be so appointed for different purposes.
NOTE
This section deals with the short title and the dates of commencement. Different elements of the bill may be brought into force at different times.
GENERAL NOTE
Notes to schedules 1 to 20 are at the end of schedule 20.
Name and address of landlord:
Description of land affected by sporting rights:
(see note for completion 1)
Terms of reserved sporting rights:
(see note for completion 2)
Any counter-obligation:
(see note for completion 2)
Title as landlord:
(see note for completion 3)
Service:
(see note for completion 4)
I swear [or affirm] that the information contained in this notice is, to the best of my knowledge and belief, true.
Signature of person sending notice:
(see note for completion 5)
Signature of notary public:
Date:
Explanatory note for tenant under the qualifying lease
When it comes fully into force the Long Leases (Scotland) Act 2006 will convert certain very long leases into ownership. The conversion will occur automatically, and all tenants holding under such leases will then become owners of the property. This notice is being sent to you as a person who is believed to be such a tenant.
The notice is sent by your landlord. He claims to be entitled to exercise the rights listed. Following registration of the notice in the Land Register or Register of Sasines under section [ ] of the Act, those rights will continue to be enforceable even after conversion of the lease to ownership.
This notice does not require you to take any action; but if you think that there is a mistake in it, or if you wish to challenge it, you are advised to contact your solicitor or other adviser.
Notes for completion of the notice
"A copy of this notice has been sent by [specify whether by recorded delivery or registered post or by ordinary post] on [date of posting] to the tenant under the qualifying lease at [state address]."; or
"It has not been reasonably practicable to send a copy of this notice to the tenant under the qualifying lease for the following reason: [specify the reason].".
Name and address of person sending notice:
Description of land nominated as burdened property:
(see note for completion 1)
Description of land nominated as benefited property:
(see note for completion 1)
Links in title:
(see note for completion 2)
Specification of condition met:
(see note for completion 3)
[Terms of qualifying condition(s)]:
(see note for completion 4)
Any counter-obligation:
(see note for completion 4)
Title to enforce the qualifying condition(s):
(see note for completion 5)
Service:
(see note for completion 6)
I swear [or affirm] that the information contained in this notice is, to the best of my knowledge and belief, true.
Signature of person sending notice:
(see note for completion 7)
Signature of notary public:
Date:
Explanatory note for tenant under the qualifying lease
When it comes fully into force the Long Leases (Scotland) Act 2006 will convert certain very long leases into ownership. The conversion will occur automatically, and all tenants holding under such leases will then become owners of the property. This notice is being sent to you as a person who is believed to be such a tenant.
The notice is sent by your landlord or by someone else who claims to be able to enforce the burdens and conditions in the title to your property. That person is also a neighbour. In this notice your property (or some part of it) is referred to as the "burdened property" and neighbouring property belonging to the person sending this notice is referred to as the "benefited property".
The person sending this notice asserts that the use of your property is subject to the "qualifying conditions" listed in the notice. By this notice that person claims the right to continue to enforce these qualifying conditions even after conversion of the lease to ownership, but as owner (or tenant) of the benefited (i.e. neighbouring) property. In order to take effect the notice must be registered in the Land Register or Register of Sasines under section [ ] of the Long Leases (Scotland) Act 2006. Registration preserves the qualifying conditions and means that they can continue to be enforced by the person and by that person's successors as owner (or tenant) of the benefited property.
Normally, for the notice to be valid, there must, on the benefited property, be a permanent building which is within 100 metres of the burdened property. That building must be in use as a place of human habitation or of human resort. However, the presence of a building is not required if the burden gives a right of pre-emption or redemption, or if the benefited property comprises, and the qualifying condition was created for the benefit of, minerals, salmon fishings or some other incorporeal property. Further, the Lands Tribunal for Scotland is able to dispense with these conditions if there would otherwise be material detriment to the person sending the notice.
This notice does not require you to take any action; but if you think that there is a mistake in it, or if you wish to challenge it, you are advised to contact your solicitor or other adviser.
Notes for completion of the notice
"The benefited property has on it a [specify type of building] at [specify address of building] which is within 100 metres of the burdened property.";
"The qualifying condition comprises a right of [specify pre-emption or redemption (or both)]";
"The benefited property comprises, and (as is apparent from the terms of the qualifying condition) that condition was created for the benefit of, [specify minerals or salmon fishings or some other incorporeal property].";
"On [specify date] the Lands Tribunal for Scotland granted an order dispensing with the conditions.".
"A copy of this notice has been sent by [specify whether by recorded delivery, by registered post or by ordinary post] on [date of posting] to the tenant under the qualifying lease at [state address]."; or
"It has not been reasonably practicable to send a copy of this notice to the tenant under the qualifying lease for the following reason: [specify the reason].".
Name and address of person sending notice:
Name and address of tenant under the qualifying lease:
Description of land which, if agreement is reached and the agreement registered, is to be the burdened property:
(see note for completion 1)
Description of land which, if agreement is reached and the agreement registered, is to be the benefited property:
(see note for completion 1)
Links in title:
(see note for completion 2)
Terms of qualifying condition(s):
(see note for completion 3)
Any counter-obligation:
(see note for completion 3)
Title to enforce the qualifying condition(s):
(see note for completion 4)
Service:
(see note for completion 5)
Signature of person sending notice:
Date:
Explanatory note for tenant under the qualifying lease
When it comes fully into force the Long Leases (Scotland) Act 2006 will convert certain very long leases into ownership. The conversion will occur automatically, and all tenants holding under such leases will then become owners of the property. This notice is being sent to you as a person who is believed to be such a tenant.
The notice is sent by your landlord or by someone else who claims to be able to enforce the burdens and conditions in the title to your property. That person is also a neighbour. In this notice your property (or some part of it) is referred to as the "burdened property" and neighbouring property belonging to the person sending this notice is referred to as the "benefited property".
The person sending this notice asserts that the use of your property is subject to the "qualifying conditions" listed in the notice. That person wishes to continue to enforce these qualifying conditions even after conversion of the lease to ownership, but as owner (or tenant) of the benefited (i.e. neighbouring) property. That requires your written agreement. Such an agreement can then be registered in the Land Register or Register of Sasines under section [ ] of the Long Leases (Scotland) Act 2006. Registration preserves the qualifying conditions and means that they can continue to be enforced by the person and by that person's successors as owner (or tenant) of the benefited property.
In the absence of agreement the person may yet be able to enforce the qualifying conditions provided that person can meet certain statutory conditions or if that person applies to the Lands Tribunal for Scotland and the Tribunal grants an appropriate order on being satisfied by that person that there would be material detriment to that person as owner (or tenant) of the prospective benefited property were the qualifying conditions to be extinguished.
If the person sending this notice does apply to the Tribunal you may oppose the application and in doing so may be eligible for legal aid. You would not ordinarily have to meet the person's expenses. You are advised to consult your solicitor or other adviser if you wish to consider opposing the application or if you are uncertain about what is said in this notice.
Notes for completion of the notice
"A copy of this notice has been served by [specify whether by delivery, by recorded delivery, by registered post or by ordinary post] on [date of posting or delivery] to the tenant under the qualifying lease at [state address]."
The notice should not be signed until a copy of it has been so delivered or sent.".
Name and address of person sending notice:
Description of land which is to be the burdened property:
(see note for completion 1)
Terms of qualifying condition(s):
(see note for completion 2)
Any counter-obligation:
(see note for completion 2)
Title to enforce the qualifying condition(s):
(see note for completion 3)
Service:
(see note for completion 4)
I swear [or affirm] that the information contained in this notice is, to the best of my knowledge and belief, true.
Signature of person sending notice:
(see note for completion 5)
Signature of notary public:
Date:
Explanatory note for tenant under the qualifying lease
When it comes fully into force the Long Leases (Scotland) Act 2006 will convert certain very long leases into ownership. The conversion will occur automatically, and all tenants holding under such leases will then become owners of the property. This notice is being sent to you as a person who is believed to be such a tenant.
The notice is sent by your landlord or by someone else who claims to be able to enforce the burdens and conditions in the title to your property. In this notice your property (or some part of it) is referred to as the "burdened property".
The person sending this notice asserts that at present your property is subject to a right of pre-emption [or of redemption] enforceable by that person. By this notice that person claims the right to continue to enforce it even after conversion of the lease to ownership, but in a personal capacity. The notice, if it is registered in the Land Register or Register of Sasines under section [ ] of the Long Leases (Scotland) Act 2006 will allow that person to enforce the right as a personal pre-emption burden [or personal redemption burden] after conversion of the lease.
This notice does not require you to take any action; but if you think that there is a mistake in it, or if you wish to challenge it, you are advised to contact your solicitor or other adviser.
Notes for completion of the notice
"A copy of this notice has been sent by [specify whether by recorded delivery or registered post or by ordinary post] on [date of posting] to the tenant under the qualifying lease at [state address]."; or
"It has not been reasonably practicable to send a copy of this notice to the tenant under the qualifying lease for the following reason: [specify the reason].".
Name and address of body sending notice (being a local authority or the Scottish Ministers):
(see note for completion 1)
Description of land which is to be the burdened property:
(see note for completion 2)
Terms of qualifying condition(s):
(see note for completion 3)
Any counter-obligation:
(see note for completion 3)
Statement that purpose was to promote economic development:
(with supporting evidence: see note for completion 4)
Title to enforce the qualifying condition(s):
(see note for completion 5)
Service:
(see note for completion 6)
Signature of body sending notice:
(see note for completion 7)
Date:
Explanatory note for tenant under the qualifying lease
When it comes fully into force the Long Leases (Scotland) Act 2006 will convert certain very long leases into ownership. The conversion will occur automatically, and all tenants holding under such leases will then become owners of the property. This notice is being sent to you as a person who is believed to be such a tenant.
The notice is sent by your landlord or by someone else who claims to be able to enforce the burdens and conditions in the title to your property. That person is also [a local authority] or [the Scottish Ministers].
The [local authority asserts] [Scottish Ministers assert] that the use of your property is subject to the "qualifying conditions" listed in the notice, and that these conditions qualify as potential "economic development burdens". Economic development burdens are conditions imposed for the purpose of promoting economic development. By this notice the [local authority claims] [Scottish Ministers claim] the right to continue to enforce these qualifying conditions even after conversion of the lease to ownership. At that point they will become economic development burdens. In order to take effect the notice must be registered in the Land Register or Register of Sasines under section [ ] of the Long Leases (Scotland) Act 2006.
This notice does not require you to take any action; but if you think that there is a mistake in it, or if you wish to challenge it, you are advised to contact your solicitor or other adviser.
Notes for completion of the notice
"A copy of this notice has been sent by [specify whether by recorded delivery or registered post or by ordinary post] on [date of posting] to the tenant under the qualifying lease at [state address]."; or
"It has not been reasonably practicable to send a copy of this notice to the tenant under the qualifying lease for the following reason: [specify the reason].".
The Scottish Ministers
Description of land which is to be the burdened property:
(see note for completion 1)
Terms of qualifying condition(s):
(see note for completion 2)
Any counter-obligation:
(see note for completion 2)
Statement that purpose was to promote the provision of facilities for health care:
(with supporting evidence: see note for completion 3)
Title to enforce the qualifying condition(s):
(see note for completion 4)
Service:
(see note for completion 5)
Signature by the Scottish Ministers:
(see note for completion 6)
Date:
Explanatory note for tenant under the qualifying lease
When it comes fully into force the Long Leases (Scotland) Act 2006 will convert certain very long leases into ownership. The conversion will occur automatically, and all tenants holding under such leases will then become owners of the property. This notice is being sent to you as a person who is believed to be such a tenant.
The notice is sent by the Scottish Ministers, in their capacity as your landlord or as a body who claims to be able to enforce the burdens and conditions in the title to your property.
The Scottish Ministers assert that the use of your property is subject to the "qualifying conditions" listed in the notice, and that these conditions qualify as potential "health care burdens". Health care burdens are conditions imposed for the purpose of promoting the provision of facilities for health care. By this notice the Scottish Ministers claim the right to continue to enforce these qualifying conditions even after conversion of the lease to ownership. At that point they will become health care burdens. In order to take effect the notice must be registered in the Land Register or Register of Sasines under section [ ] of the Long Leases (Scotland) Act 2006.
This notice does not require you to take any action; but if you think that there is a mistake in it, or if you wish to challenge it, you are advised to contact your solicitor or other adviser.
Notes for completion of the notice
"A copy of this notice has been sent by [specify whether by recorded delivery or registered post or by ordinary post] on [date of posting] to the tenant under the qualifying lease at [state address]."; or
"It has not been reasonably practicable to send a copy of this notice to the tenant under the qualifying lease for the following reason: [specify the reason].".
Name and address of body sending notice (being a conservation body or the Scottish Ministers):
(see note for completion 1)
Description of land which is to be the burdened property:
(see note for completion 2)
Terms of qualifying condition(s):
(see note for completion 3)
Any counter-obligation:
(see note for completion 3)
Title to enforce the qualifying condition(s):
(see note for completion 4)
Service:
(see note for completion 5)
Signature of body sending notice:
(see note for completion 6)
Signature of witness:
Name and address of witness:
Date:
Explanatory note for tenant under the qualifying lease
When it comes fully into force the Long Leases (Scotland) Act 2006 will convert certain very long leases into ownership. The conversion will occur automatically, and all tenants holding under such leases will then become owners of the property. This notice is being sent to you as a person who is believed to be such a tenant.
The notice is sent by your landlord or by someone else who claims to be able to enforce the burdens and conditions in the title to your property. That person is also [a conservation body by virtue of the regulations mentioned in the notice] or [the Scottish Ministers].
The [conservation body asserts] [Scottish Ministers assert] that the use of your property is subject to the "qualifying conditions" listed in the notice, and that these conditions qualify as potential "conservation burdens". Conservation burdens are conditions imposed in the public interest for the preservation or protection either of architectural or historic characteristics of land or of some other special characteristic of land derived from the flora, fauna, or general appearance of the land. By this notice the [conservation body claims] [Scottish Ministers claim] the right to continue to enforce these qualifying conditions even after conversion of the lease to ownership. At that point they will become conservation burdens. In order to take effect the notice must be registered in the Land Register or Register of Sasines under section [ ] of the Long Leases (Scotland) Act 2006.
This notice does not require you to take any action; but if you think that there is a mistake in it, or if you wish to challenge it, you are advised to contact your solicitor or other adviser.
Notes for completion of the notice
"A copy of this notice has been sent by [specify whether by recorded delivery or registered post or by ordinary post] on [date of posting] to the tenant under the qualifying lease at [state address]."; or
"It has not been reasonably practicable to send a copy of this notice to the tenant under the qualifying lease for the following reason: [specify the reason].".
Name and address of person sending notice:
Nominee (being a conservation body or the Scottish Ministers):
(see note for completion 1)
Description of land which is to be the burdened property:
(see note for completion 2)
Terms of qualifying condition(s):
(see note for completion 3)
Any counter-obligation:
(see note for completion 3)
Title to enforce the qualifying condition(s):
(see note for completion 4)
Service:
(see note for completion 5)
| Signature of person sending notice: (see note for completion 6) |
Signature of consenting nominee: (see note for completion 7) |
| Signature of witness of person sending notice: |
Signature of nominee's witness: |
| Name and address of witness: |
Name and address of witness: |
Date:
Explanatory note for tenant under the qualifying lease
When it comes fully into force the Long Leases (Scotland) Act 2006 will convert certain very long leases into ownership. The conversion will occur automatically, and all tenants holding under such leases will then become owners of the property. This notice is being sent to you as a person who is believed to be such a tenant.
The notice is sent by your landlord or by someone else who claims to be able to enforce the burdens and conditions in the title to your property. That person intends to nominate [a conservation body by virtue of the regulations mentioned in the notice] or [the Scottish Ministers] to have title to enforce certain of those conditions.
The person sending this notice asserts that the use of your property is subject to the "qualifying conditions" listed in the notice, and that these conditions qualify as potential "conservation burdens". Conservation burdens are conditions imposed in the public interest for the preservation or protection either of architectural or historic characteristics of land or of some other special characteristic of land derived from the flora, fauna, or general appearance of the land. By virtue of this notice the [conservation body] [Scottish Ministers] would have the right to enforce these conditions even after conversion of the lease to ownership. At that point the conditions will become conservation burdens. In order to take effect the notice must be registered in the Land Register or Register of Sasines under section [ ] of the Long Leases (Scotland) Act 2006.
This notice does not require you to take any action; but if you think that there is a mistake in it, or if you wish to challenge it, you are advised to contact your solicitor or other adviser.
Notes for completion of the notice
"A copy of this notice has been sent by [specify whether by recorded delivery or registered post or by ordinary post] on [date of posting] to the tenant under the qualifying lease at [state address]."; or
"It has not been reasonably practicable to send a copy of this notice to the tenant under the qualifying lease for the following reason: [specify the reason].".
To: [name and address of former tenant].
This notice is sent by [name and address of former landlord]. You are required to pay the sum of £ [amount] as a compensatory payment for the extinction of the cumulo rent of £ [amount] per annum due under the lease of [give sufficient identification of the land leased] dated [give date of the lease] and for the extinction of the other rights under the lease.
The attached appendix shows how I have allocated the cumulo rent among the leases to which it applied.
(If the lease was subject to a cumulo premium, then add:
Because the premium payable under the lease was a cumulo premium shared among several leases the attached appendix also shows how I have allocated the cumulo premium among the leases to which it applied.)
(If arrears of the rent are also sought, then add:
You are also required to pay the sum of £ [amount] as arrears of the rent.)
Signed: [signature either of the former landlord or of the former landlord's agent; and if an agent signs the agent should put the word "Agent" after the signature]
Date:
(If payment is to be made to an agent of the former landlord then add:
Payment should be made to: [name and address of agent].)
Total cumulo rent of £ [amount] is allocated as follows:
| Tenant/former tenant | Property leased | Allocated rent |
| (see note for completion 1) | (see note for completion 2) | (see note for completion 3) |
(If the lease was subject to a cumulo premium, then add:
Total cumulo premium of £ [amount] is allocated as follows:
| Tenant/former tenant | Property leased | Allocated premium |
| (see note for completion 1) | (see note for completion 2) | (see note for completion 3) |
This notice is being sent to you as a former tenant under a long lease.
On [insert date of appointed day] the lease of which you were a tenant was converted or extinguished by the Long Leases (Scotland) Act 2006. The Act applies to all leases of more than 175 years which on that day had more than 100 years left to run. By this notice your former landlord is claiming statutory compensation from you for the extinction of the rent and the other rights under the lease.
If no other lease to which the Act applies affected the property, your lease is converted by the Act into ownership. This means that you are now owner instead of tenant. The same is true if there was more than one lease over the property but your lease was the lowest such lease. If your lease was a higher lease it is now extinguished but you are able to make a parallel claim for compensation against your own former tenant.
To be valid this notice must have been sent within two years after the date on which the lease was converted or extinguished.
The amount due by you as compensatory payment is set out in the notice. It is calculated as that sum which would, if invested in 2½% Consolidated Stock at the middle market price at the close of business on [insert the date of the day before the appointed day], produce an annual sum equal to the rent. In practice the sum is arrived at by multiplying the rent by a factor known as the "compensation factor". This factor is [insert factor]. Because your rent was a cumulo rent – that is to say, was shared with the tenants of one or more other properties – it was first necessary for your landlord to divide the rent among those properties. The way in which this has been done is set out in the appendix to the notice.
If the lease contained an obligation by the landlord to grant a renewal of the lease at fixed periods and for a premium not exceeding £100 (after division by the landlord), the rent may be treated as being increased by the amount of the premium divided by the number of years between each renewal. Because the premium was shared with the tenants of one or more other properties it was first necessary for the landlord to divide the premium (like a cumulo rent) among those properties. The way in which this has been done is set out in the appendix to the notice.
Where your lease has been converted the compensatory payment cannot exceed £500 unless you (or your predecessor) were given prior written notification by the former landlord (or the former landlord's predecessor). Such notification must have been given not later than six months before the date on which conversion took place.
If the compensatory payment is £50 or more you can choose to pay the sum due by instalments. You may do this by signing, dating and returning, within eight weeks, the enclosed instalment document. If, having returned the instalment document, you later sell, or transfer for valuable consideration, the property or any part of it you will lose the option of paying by instalments.
Unless you are paying by instalments you must pay the compensatory payment within eight weeks.
Your former landlord may also be claiming arrears of rent for the period before [insert the appointed day].
If you were not the tenant on [insert the date of the day before the appointed day], then this notice has been served on you in error and no payment will be due; but you nevertheless have to provide the person who sent you the notice, if you can, with such information as you have which might enable that person to identify the person who should have received notice instead of you.
If you think that the amount required from you is not due for that or any other reason, you are advised to consult your solicitor or other adviser.
To: [name and address of former tenant].
This notice is sent by [name and address of former landlord]. Under the Long Leases (Scotland) Act 2006 part of the lease of [give sufficient identification of the land leased] dated [give date of the lease] is extinguished.
You are required to pay the sum of £ [amount] as a compensatory payment for the extinction of the rent of £ [amount] per annum due under the extinguished part of the lease and for the extinction of the other rights under that part of the lease.
The attached appendix shows which part of the lease is extinguished and shows how I have allocated the rent [and the renewal premium] between the extinguished part and the remainder of the lease.
(If the lease was subject to a cumulo rent, then add:
Because the rent payable under the lease was a cumulo rent shared among several leases the attached appendix also shows how I have allocated the cumulo rent among the leases to which it applied.)
(If the lease was subject to a cumulo premium, then add:
Because the premium payable under the lease was a cumulo premium shared among several leases the attached appendix also shows how I have allocated the cumulo premium among the leases to which it applied.)
(If arrears of the rent are also sought, then add:
You are also required to pay the sum of £ [amount] as arrears of the rent.)
Signed: [signature either of the former landlord or of the former landlord's agent; and if an agent signs, the word "Agent" should be put after the agent's signature]
Date:
(If payment is to be made to an agent of the former landlord then add:
Payment should be made to: [name and address of agent].)
Subjects of lease
[Repeat identification of the land leased]
Converted subjects
[Give sufficient identification of the property (including, where appropriate, the postal address) in respect of which the lease is extinguished]
Continuing subjects
[Give sufficient description of the property (including, where appropriate, the postal address) in respect of which the lease continues]
Rent under the lease of £ [amount] is allocated as follows:
Converted subjects Continuing subjects
(If lease was subject to a cumulo rent, then add:
Total cumulo rent of £ [amount] is allocated as follows:
| Tenant/former tenant | Property leased | Allocated premium |
| (see note for completion 1) | (see note for completion 2) | (see note for completion 3) |
(If lease was subject to a renewal premium, then add:
Premium under the lease of £[amount] is allocated as follows:
Converted subjects Continuing subjects
(If lease was subject to a cumulo premium, then add:
Total Cumulo premium of £[amount] is allocated as follows:
| Tenant/former tenant | Property leased | Allocated premium |
| (see note for completion 1) | (see note for completion 2) | (see note for completion 3) |
This notice is being sent to you as a former tenant under a long lease.
On [insert date of appointed day] the lease of which you were a tenant was partially extinguished or converted by the Long Leases (Scotland) Act 2006. The Act applies to all leases of more than 175 years which on that day had more than 100 years left to run. By this notice your former landlord is claiming statutory compensation from you for the extinction of some of the rent and the other rights under the lease. By this notice your former landlord is also fixing the rent (and renewal premium) for that part of the lease which continues in force (as a result of exemption or otherwise).
If no other lease to which the Act applies affected the converted subjects, that is to say the property in respect of which part of your lease is extinguished, that part of your lease is converted by the Act into ownership. This means that you are now owner instead of tenant. The same is true if there was more than one lease over that property but your lease was the lowest such lease. If your lease was a higher lease it is now extinguished but you are able to make a parallel claim for compensation against your own former tenant.
To be valid this notice must have been sent within two years after the date on which part of the lease was extinguished or converted.
The amount due by you as compensatory payment is set out in the notice. It is calculated as that sum which would, if invested in 2½% Consolidated Stock at the middle market price at the close of business on [insert the date of the day before the appointed day], produce an annual sum equal to the rent no longer due. In practice the sum is arrived at by multiplying the rent by a factor known as the "compensation factor". This factor is [insert factor]. The way in which the whole rent due under your lease has been divided between the property in respect of which your lease is extinguished or converted and the property in respect of which your lease continues is set out in the appendix to the notice.
(If the lease was subject to a cumulo rent, then add:
Because your rent was a cumulo rent – that is to say, was shared with the tenants of one or more other properties – it was first necessary for your landlord to divide the rent among those properties. The way in which this has been done is set out in the appendix to the notice.)
If the lease contained an obligation by the landlord to grant a renewal of the lease at fixed periods and for a premium not exceeding £100 (after division by the landlord), the rent may be treated as being increased by the amount of the premium divided by the number of years between each renewal. Because your lease is a partially continuing lease, it was necessary for the landlord to divide the premium between the part of the lease that is extinguished or converted and the part that continues in force. The way in which this has been done is shown in the appendix to the notice.
(If the lease was subject to a cumulo premium, add:
Because the premium (like a cumulo rent) was shared with the tenants of one or more other properties, it was first necessary (before division between that part of the lease that is extinguished or converted and that part that continues in force) for the landlord to divide the premium among the properties. The way in which this has been done is set out in the appendix to the notice.)
Where part of your lease has been converted the compensatory payment cannot exceed £500 unless you (or your predecessor) were given prior written notification by the former landlord (or the former landlord's predecessor). Such notification must have been given not later than six months before the date on which conversion took place.
If the compensatory payment is £50 or more you can choose to pay the sum due by instalments. You may do this by signing, dating and returning, within eight weeks, the enclosed instalment document. If, having returned the instalment document, you later sell, or transfer for valuable consideration, the property or any part of it you will lose the option of paying by instalments.
Unless you are paying by instalments you must pay the compensatory payment within eight weeks.
Your former landlord may also be claiming arrears of rent for the period before [insert the appointed day].
If you were not the tenant on [insert the date of the day before the appointed day], then this notice has been served on you in error and no payment will be due; but you nevertheless have to provide the person who sent you the notice, if you can, with such information as you have which might enable that person to identify the person who should have received notice instead of you.
If you think that the amount required from you is not due for that or any other reason, you are advised to consult your solicitor or other adviser.
To: [name and address of former tenant].
This notice is sent by [name and address of former landlord]. You are required to pay the sum of £ [amount] as a compensatory payment for the extinction of the rent of £ [amount] per annum due under the lease of [give sufficient identification of the land leased] dated [give date of the lease] and for the extinction of the other rights under the lease.
(If arrears of the rent are also sought, then add:
You are also required to pay the sum of £ [amount] as arrears of the rent.)
Signed: [signature either of the former landlord or of the former landlord's agent; and if an agent signs the agent should put the word "Agent" after the signature]
Date:
(If payment is to be made to an agent of the former landlord then add:
Payment should be made to: [name and address of agent].)
This notice is being sent to you as a former tenant under a long lease.
On [insert date of appointed day] the lease of which you were a tenant was converted or extinguished by the Long Leases (Scotland) Act 2006. The Act applies to all leases of more than 175 years which on that day had more than 100 years left to run. By this notice your former landlord is claiming statutory compensation from you for the extinction of the rent and the other rights under the lease.
If no other lease to which the Act applies affected the property, your lease is converted by the Act into ownership. This means that you are now owner instead of tenant. The same is true if there was more than one lease over the property but your lease was the lowest such lease. If your lease was a higher lease it is now extinguished but you are able to make a parallel claim for compensation against your own former tenant.
To be valid this notice must have been sent within two years after the date on which the lease was converted or extinguished.
The amount due by you as compensatory payment is set out in the notice. It is calculated as that sum which would, if invested in 2½% Consolidated Stock at the middle market price at the close of business on [insert the date of the day before the appointed day], produce an annual sum equal to the rent. In practice the sum is arrived at by multiplying the rent by a factor known as the "compensation factor". This factor is [insert factor].
If the lease contained an obligation by the landlord to grant a renewal of the lease at fixed periods and for a premium not exceeding £100, the rent may be treated as being increased by the amount of the premium divided by the number of years between each renewal.
Where your lease has been converted the compensatory payment cannot exceed £500 unless you (or your predecessor) were given prior written notification by the former landlord (or the former landlord's predecessor). Such notification must have been given not later than six months before the date on which conversion took place.
If the compensatory payment is £50 or more you can choose to pay the sum due by instalments. You may do this by signing, dating and returning, within eight weeks, the enclosed instalment document. If, having returned the instalment document, you later sell, or transfer for valuable consideration, the property or any part of it you will lose the option of paying by instalments.
Unless you are paying by instalments you must pay the compensatory payment within eight weeks.
Your former landlord may also be claiming arrears of rent for the period before [insert the appointed day].
If you were not the tenant on [insert the date of the day before the appointed day], then this notice has been served on you in error and no payment will be due; but you nevertheless have to provide the person who sent you the notice, if you can, with such information as you have which might enable that person to identify the person who should have received notice instead of you.
If you think that the amount required from you is not due for that or any other reason, you are advised to consult your solicitor or other adviser.".
To: [name and address of former tenant].
This notice is sent by [name and address of former landlord]. You are requested to pay compensation to me for the extinction of the right mentioned below. The right arises under the lease of [give description of the land leased] dated [give date of the lease]. I estimate the compensation due as being £ [amount]. The reasons for my estimate are given below.
Details of right extinguished:
[Specify which of the rights listed in section 40(1) has been extinguished and on which a claim is founded. Where the right is expressed in the lease, set out its terms in full.]
(Where the right extinguished is the right to receive a premium and the premium is a cumulo premium and /or the lease is a partially continuing lease, give details of the way in which the premium has been divided.)
(Where the right is a right to development value, add:
Explanation of how development value reserved from lease:
[Set out or identify the condition or conditions of the lease which reserve development value and explain how development value is reserved.])
Basis of estimate of compensation:
[Give a full explanation of how the compensation is calculated.]
Signed: [signature either of the former landlord or of the former landlord's agent; and if an agent signs the agent should put the word "Agent" after the signature]
Date:
(If payment is to be made to an agent of the former landlord then add:
Payment should be made to: [name and address of agent].)
This notice is being sent to you as a former tenant under a long lease.
On [insert date of appointed day] the lease of which you were a tenant was converted or extinguished by the Long Leases (Scotland) Act 2006. The Act applies to all leases of more than 175 years which on that day had more than 100 years left to run. A compensatory payment may already have been claimed for the extinction of rent and other rights arising under the lease. By this notice the former landlord is claiming additional compensation in respect of the particular right mentioned in the notice.
If no other lease to which the Act applies affected the property, your lease is converted by the Act into ownership. This means that you are now owner instead of tenant. The same is true if there was more than one lease over the property but your lease was the lowest such lease. If your lease was a higher lease it is now extinguished but you may be able to make a parallel claim for compensation against your own former tenant.
To be valid this notice must have been sent within two years after the date on which the lease was converted or extinguished.
The amount claimed in the notice is an estimate by the former landlord. You are free to accept or reject this estimate. If you reject it, and no agreement can be reached, the Lands Tribunal can be asked to decide the correct figure.
Where your lease has been converted the amount claimed cannot exceed £500 unless you (or your predecessor) were given prior written notification by the former landlord (or the former landlord's predecessor). Such notification must have been given not later than six months before the date on which conversion took place.
If you accept the estimate you have a choice of paying the whole amount within eight weeks or (if the amount is £50 or more) of paying by instalments. To elect to pay by instalments you must sign, date and return the enclosed instalment document within eight weeks. If, having returned the instalment document, you sell, or transfer for valuable consideration, the property or any part of it you will lose the option of paying by instalments.
If you were not the tenant on [insert the date of the day before the appointed day], then this notice has been served on you in error and no payment will be due; but you nevertheless have to provide the person who sent you the notice, if you can, with such information as you have which might enable the person who sent you the notice to identify the person who should have received notice instead of you.
If you think that the amount required from you is not due for that or any other reason, you are advised to consult your solicitor or other adviser.".
To: [name and address of former tenant].
This notice is sent by [name and address of former landlord]. The notice relates to the extinction of a right which arose under the lease of [give description of the land leased] dated [give date of the lease], namely [specify which of the rights listed in section 40(1) has been extinguished and on which the claim is founded].
The payment due to me for the extinction of the right has been agreed at £ [amount]. You are now required to pay this sum.
Signed: [signature either of the former landlord or of the former landlord's agent; and if an agent signs, the word "Agent" should be put after the agent's signature]
Date:
(If payment is to be made to an agent of the former landlord then add:
Payment should be made to: [name and address of agent].)
This notice is being sent to you as a former tenant under a long lease. It follows an earlier notice in which compensation was requested by the former landlord for the extinction of the right mentioned in the notice. The amount due by way of compensation has now been agreed with you as being the amount stated in the notice.
You have a choice of paying the whole amount within four weeks or (if the amount is £50 or more) of paying by instalments. To elect to pay by instalments you must sign, date and return the enclosed instalment document within four weeks. If, having returned the instalment document, you sell, or transfer for valuable consideration, the property or any part of it you will lose the option of paying by instalments.
To be valid this notice must have been sent within 5 years after the date on which the lease of which you were a tenant was converted or extinguished. ".
To: [name and address of tenant].
This notice is sent by [name and address of landlord]. When the Long Leases (Scotland) Act 2006 (asp 00) comes fully into force you will be required to make a compensatory payment for the extinction of the rent of £ [amount] per annum due under the lease of [give sufficient identification of the land leased] dated [give date of the lease] and for the extinction of the other rights under the lease. I estimate the amount payable at £ [amount].
No money is due now. When the 2006 Act comes into force a request for payment will be sent.
Please keep this notice and, if you sell the property before the Act comes into force, give it to the buyer (who will be liable in your place).
Signed: [signature either of the landlord or of the landlord's agent; and if an agent signs, the word "Agent" should be put after the agent's signature]
Date:
This notice is being sent to you as a tenant under a long lease.
The Long Leases (Scotland) Act 2006, when it comes fully into force, will convert your lease into ownership. This means that you will become owner instead of a tenant, and that rent will no longer be payable. In exchange for the conversion, however, compensation is due to your landlord. This notice warns you of the amount of compensation that is likely to be claimed.
No payment is due now. Payment is due only after conversion takes place. (If the appointed day has already been fixed, add: Conversion is due to take place on [insert date of appointed day]. A separate notice requesting payment will be sent at that time. Payment can usually be made by instalments payable twice yearly on the term days of Whitsunday (28 May) and Martinmas (28 November). The number of instalments depends on the total amount due as follows:
Amount due Number of instalments
between £50 and £500 5
between £501 and £1000 10
between £1001 and £1500 15
more than £1500 20
If you fail to pay an instalment within 42 days after the day on which it is due, the whole balance of the payment will be due at once.
If you would rather remain as tenant than make the compensatory payment, you can choose to have your lease exempted from conversion. This is done by registration of a notice of exemption in the Land Register or Register of Sasines no later than 2 months before the date on which conversion would otherwise take place. If you wish to do this, you are advised to consult your solicitor or other adviser without delay.
If you have sold or transferred the property and are no longer the tenant, please give this notice to the new tenant.".
To: [name and address of tenant].
This notice is sent by [name and address of landlord]. When the Long Leases (Scotland) Act 2006 (asp 00) comes fully into force you will be asked to pay compensation to me for the extinction of the right mentioned below. The right arises under the lease of [give description of the land leased] dated [give date of the lease]. I estimate the compensation due as being £ [amount]. The reasons for my estimate are given below.
No money is due now. When the 2006 Act comes into force a request for payment will be made.
Please keep this notice and, if you sell the property before the Act comes into force, give it to the buyer (who will be liable in your place).
Details of right being extinguished:
[Specify which of the rights listed in section 40(1) will be extinguished and on which a claim will be founded. Where the right is expressed in the lease, set out its terms in full.]
(Where the right extinguished is the right to receive a premium and the premium is a cumulo premium and /or the lease is a partially continuing lease, give details of the way in which the premium has been divided.)
(Where the right is a right to development value, add:
Explanation of how development value reserved from lease:
[Set out or identify the condition or conditions of the lease which reserve development value and explain how development value is reserved.])
Basis of estimate of compensation:
[Give a full explanation of how the compensation is calculated.]
Signed: [signature either of the landlord or of the landlord's agent; and if an agent signs, the word "Agent" should be put after the agent's signature]
Date:
This notice is being sent to you as a tenant under a long lease.
The Long Leases (Scotland) Act 2006, when it comes fully into force, will convert your lease into ownership. This means that you will become owner instead of a tenant, and that rent will no longer be payable. In exchange for the conversion, however, compensation is due to your landlord. A basic compensatory payment is due for the extinction of rent and other rights arising under the lease. If this exceeds £500 you will be warned by a separate notice. The present notice warns you that the landlord will claim additional compensation in respect of the particular right mentioned in the notice.
No payment is due now. Payment is due only after conversion takes place. (If the appointed day has already been fixed, add: Conversion is due to take place on [insert date of appointed day]. A separate notice requesting payment will be sent at that time. Payment can usually be made by instalments payable twice yearly on the term days of Whitsunday (28 May) and Martinmas (28 November). The number of instalments depends on the total amount due as follows:
Amount due Number of instalments
between £50 and £500 5
between £501 and £1000 10
between £1001 and £1500 15
more than £1500 20
If you fail to pay an instalment within 42 days after the day on which it is due, the whole balance of the payment will be due at once.
The amount mentioned in the notice is an estimate by the landlord. When the time comes you will be free to accept or reject this estimate. If you reject it, and no agreement can be reached, the Lands Tribunal can be asked to decide the correct figure.
If you would rather remain as tenant than make the payment, you can choose to have your lease exempted from conversion. This is done by registration of a notice of exemption in the Land Register or Register of Sasines no later than 2 months before the date on which conversion would otherwise take place. If you wish to do this, you are advised to consult your solicitor or other adviser without delay.
If you have sold or transferred the property and are no longer the tenant, please give this notice to the new tenant.".
To: [name and address of former landlord or agent].
I [name and address of former tenant] opt to make the compensatory
payment [or as the case may be additional payment] of £ [amount] due under the notice dated [date] by [number of instalments: see note for completion] equal half-yearly instalments of £ [amount] on 28 May and 28 November each year, commencing on [28 May or 28 November] [year].
I enclose payment of £ [amount] as an amount payable in addition to the compensatory payment [or as the case may be additional payment].
Signed:
Date:
You can choose to pay by instalments by signing, dating and returning this form within [eight weeks or in the case of notice under section 43(2) four weeks], but if you do so you must enclose the further amount (10% over and above the payment) mentioned in this notice.
The amount due will be payable in 5, 10, 15, or 20 equal instalments (depending on the total amount). The first payment will be made at the first term day of Whitsunday (28 May) and Martinmas (28 November) which follows the return of the instalment document. Payments will be due half-yearly thereafter on 28 May and 28 November until payment in full has been made.
If you fail to pay an instalment within 42 days after the day on which it is due, the whole balance of the payment will be due at once.
If, having chosen to pay by instalments, you sell, or transfer for valuable consideration, the property or any part of it the whole balance of the payment will be due seven days after the sale or transfer.
If, after you receive this document, you sell, or so transfer, the property or any part of it without having signed, dated and returned this form, you will lose the right to obtain the option to pay by instalments and the entire amount due will be payable in accordance with the notice which accompanied this document.
If you have difficulty in making the payment you may be able to make arrangements with your former landlord different from those you would obtain by signing, dating and returning this form; but that is a matter on which you are advised to consult your solicitor or other adviser without delay.
You should fully complete all the blank parts of this form so that the former tenant only has to sign and date it.
Insert the number of instalments in accordance with the following table:
Payment Number of Instalments
£50 but not exceeding £500 5
exceeding £500 but not exceeding £1,000 10
exceeding £1,000 but not exceeding £1,500 15
exceeding £1,500 20".
I, [name of tenant or former tenant], acknowledge receipt of a notice under section [31, 39, 43 or 45] of the Long Leases (Scotland) Act 2006 [requiring a payment or claiming a payment or giving warning of a prospective claim for payment] [add if applicable, of an instalment document together with the explanatory note relating to that document] and of an explanatory note relating to the notice.
Signed: [signature of tenant or former tenant]
Date:
Notice under section [31, 39, 43 or 45] of the Long Leases (Scotland) Act 2006 [requiring a payment or claiming a payment or giving warning of a prospective claim for payment] was posted to [name of tenant or former tenant] at [address], together with [add if applicable, an instalment document, the explanatory note relating to that document and] the requisite explanatory note relating to the notice, on [date].
Signature: [signature either of the landlord or former landlord or of the landlord or former landlord's agent; and if an agent signs, the word "Agent" should be put after the agent's signature]
Date: ".
Name and address of tenant under the qualifying lease:
Qualifying lease:
(see note for completion 1)
Description of land subject to the qualifying lease:
(see note for completion 2)
Title as tenant:
(see note for completion 3)
Name and address of landlord under the qualifying lease:
Name and address of landlord(s) under any superior lease:
Service:
(see note for completion 4)
Signature of tenant:
(see note for completion 5)
Signature of witness:
Name and address of witness:
Date:
Explanatory note for landlord
When it comes fully into force the Long Leases (Scotland) Act 2006 will convert certain very long leases into ownership. This notice is being sent to you as a person who is believed to be a landlord under such a lease.
The lease described in the notice is eligible for conversion under the Act. This means that in the ordinary course of events the tenant under that lease would become the owner of the land. By this notice the tenant is exercising that person's right to have the lease exempted from conversion. Once the notice is registered in the Land Register or Register of Sasines the lease will cease to be eligible for conversion.
A notice of exemption can be recalled in the future. This is done by a notice of recall which will also be sent to you. Once an exemption is recalled, the lease is again eligible for conversion into ownership.
This notice is for information only and no action is required.
Notes for completion of the notice
"A copy of this notice has been sent by [specify whether by recorded delivery or registered post or by ordinary post] on [date of posting] to [state name of landlord] at [state address]."; or
"It has not been reasonably practicable to send a copy of this notice to [state name of landlord] for the following reason: [specify the reason]."
Name and address of tenant under the qualifying lease:
Qualifying lease:
(see note for completion 1)
Unexpired Duration:
(see note for completion 2)
Description of land subject to the qualifying lease:
(see note for completion 3)
Title as tenant:
(see note for completion 4)
Name and address of landlord under the qualifying lease:
Name and address of landlord(s) under any superior lease:
Notice of Exemption [or description of reasons for lease being exempt]:
(see note for completion 5)
Service:
(see note for completion 6)
Signature of tenant:
(see note for completion 7)
Signature of witness:
Name and address of witness:
Date:
Explanatory note for landlord
The Long Leases (Scotland) Act 2006 provides for the conversion of certain very long leases into ownership. This notice is being sent to you as a person who is believed to be a landlord under such a lease.
The lease described in the notice is not currently eligible for conversion under the Act. This is because [a notice of exemption was previously registered] [the lease had not been registered][the lease is a sublease of a lease which itself is not eligible for conversion because [a notice of exemption in relation to that lease was registered][that lease had not been registered]] in the Land Register or Register of Sasines. On registration of the current notice, eligibility will be acquired, and the lease will automatically be converted into ownership [after an interval of six months] [on (state the date of the appointed day)]. This means that the tenant will become the owner of the land and that you will lose any rights under the lease or in the land.
It may be possible to preserve certain rights under the lease by registration of an appropriate notice before the date of conversion. Compensation for loss of rent and other rights may also be due, and must be claimed not later than two years after the date of conversion. If you wish to pursue these matters further you are advised to consult your solicitor or other adviser without delay.
Notes for completion of the notice
"A copy of this notice has been sent by [specify whether by recorded delivery or registered post or by ordinary post] on [date of posting] to [state name of landlord] at [state address]."; or
"It has not been reasonably practicable to send a copy of this notice to [state name of landlord] for the following reason: [specify the reason]."
| Years of age of person |
Period of life expectancy (years) |
Period of life expectancy (years) |
| Male Life |
Female Life |
|
Birth to 4 |
74 |
79 |
| 5 to 9 | 69 | 75 |
| 10 to 14 | 64 | 70 |
| 15 to 19 | 59 | 65 |
| 20 to 24 | 55 | 60 |
| 25 to 29 | 50 | 55 |
| 30 to 34 | 45 | 50 |
| 35 to 39 | 41 | 45 |
| 40 to 44 | 36 | 40 |
| 45 to 49 | 31 | 36 |
| 50 to 54 | 27 | 31 |
| 55 to 59 | 23 | 27 |
| 60 to 64 | 19 | 22 |
| 65 to 69 | 15 | 18 |
| 70 to 74 | 12 | 15 |
| 75 to 79 | 9 | 11 |
| 80 to 84 | 7 | 8 |
| 85 and over | 5 | 6 |
NOTES TO SCHEDULES 1 TO 20
Schedule 1
NOTE
This is the form of notice referred to in section 7(2) for the conversion of reserved sporting rights into separate tenements. It contains an explanatory note and notes for completion of the notice.
Schedule 2
NOTE
This is the form of notice referred to in section 13(1) for use by landlords and other persons entitled to enforce qualifying conditions who wish to convert such conditions into real burdens. It contains an explanatory note and notes for completion of the notice.
Schedule 3
NOTE
This is the form of notice referred to in section 14(1) for use by landlords and other persons entitled to enforce qualifying conditions who wish to enter an agreement converting such conditions into real burdens. It contains an explanatory note and notes for completion of the notice.
Schedule 4
NOTE
This is the form of notice referred to in section 18(1) of the bill for use by landlords and other persons entitled to enforce a qualifying condition who wish to convert the condition into a personal pre-emption burden or personal redemption burden. It contains an explanatory note and notes for completion of the notice.
Schedule 5
NOTE
This is the form of notice referred to in section 19(1) of the bill for use by a local authority or Scottish Ministers who wish to convert a qualifying condition into an economic development burden. It contains an explanatory note and notes for completion of the notice.
Schedule 6
NOTE
This is the form of notice referred to in section 20(1) of the bill for use by Scottish Ministers where they wish to convert a qualifying condition into a health care burden. It contains an explanatory note and notes for completion of the notice.
Schedule 7
NOTE
This is the form of notice referred to in section 21(1) of the bill for use by a conservation body or Scottish Ministers who wish to convert a qualifying condition into a conservation burden. It contains an explanatory note and notes for completion of the notice.
Schedule 8
NOTE
This is the form of notice referred to in section 22(1) of the bill for use by landlords and other persons entitled to enforce a qualifying condition who wish to convert the condition into a conservation burden in favour of a conservation body or Scottish Ministers. It contains an explanatory note and notes for completion of the notice.
Schedule 9
NOTE
This is the form of notice (with appendix) referred to in section 31(2) for claiming compensation where the rent payable was a cumulo rent. It contains instructions for completing the form, an explanatory note, a copy of which must be served with the notice (see section 31(4)), and notes for completion of the Appendix.
Schedule 10
NOTE
This is the form of notice (with appendix) referred to in section 31(2) for claiming compensation where the lease is a partially continuing lease. It contains instructions for completing the form, an explanatory note, a copy of which must be served with the notice (see section 31(4)), and notes for completion of the Appendix.
Schedule 11
NOTE
This is the form of notice referred to in section 31(2) for claiming compensation in cases not involving a cumulo rent (schedule 9) or a partially continuing lease (schedule 10). It contains instructions for completing the form, and an explanatory note, a copy of which must be served with the notice (see section 31(4)).
Schedule 12
NOTE
This is the form of notice referred to in section 39(2) for claiming an additional payment. It contains instructions for completing the form, and an explanatory note, a copy of which must be served with the notice (see section 39(4)).
Schedule 13
NOTE
This is the form of notice referred to in section 43(2) for claiming an additional payment following agreement. It contains instructions for completing the form, and an explanatory note, a copy of which must be served with the notice (see section 43(3)).
Schedule 14
NOTE
This is the form of preliminary notice referred to in section 45(2) for a compensatory payment. It contains instructions for completing the form, and an explanatory note, a copy of which must be served with the notice (see section 45(4)).
Schedule 15
NOTE
This is the form of preliminary notice referred to in section 45(2) for an additional payment. It contains instructions for completing the form, and an explanatory note, a copy of which must be served with the notice (see section 45(4)).
Schedule 16
NOTE
This is the form of instalment document referred to in section 46(2). It contains notes for completing the form, and an explanatory note, a copy of which must be served with the document.
Schedule 17
NOTE
This schedule provides the form of acknowledgement of service (Form A) and the form of certificate of posting (Form B) referred to in section 47(3) which section regulates the service of notices in respect of a compensatory or additional payment.
Schedule 18
NOTE
This is the form of notice referred to in section 54(1) for use by the tenant of a qualifying lease who wishes to opt out of conversion. It contains an explanatory note and notes for completion of the notice.
Schedule 19
NOTE
This is the form of notice referred to in section 57(1) for use by the tenant of an exempt lease who wishes to recall the exemption. It contains an explanatory note and notes for completion of the notice.
Schedule 20
NOTE
This is the table of life expectancy referred to in section 60(1)(c)(ii) for use in certain circumstances in calculating the period of a lease where the period is expressed by reference to the lifetime of a person.
Conveyancing and Feudal Reform (Scotland) Act 1970 (c.35)
NOTE
This amendment extends the rule in section 9(2B) of the 1970 Act which prevents a standard security being granted over a personal pre-emption burden or a personal redemption burden resulting from conversion under section 18A of the 2000 Act to a burden of that type which results from leasehold conversion.
Land Registration (Scotland) Act 1979 (c.33)
(2) In section 3(6) (special provision as respects completion of title)—
(a) the word "and" immediately preceding paragraph (c) is repealed; and
(b) after that paragraph insert "; and
(d) section 18(9)(a) of the Long Leases (Scotland) Act 2006 (asp 00).".
(3) In section 6 (title sheet)—
(a) in subsection (1)—
(i) in paragraph (e), for "section 18, 18A, 18B, 18C, 19, 20, 27 or 27A of the Abolition of Feudal Tenure etc. (Scotland) Act 2000 (asp 5) or section 4(5), 50, 75 or 80 of the Title Conditions (Scotland) Act 2003 (asp 9)" substitute "any enactment mentioned in subsection (1A) below"; and
(ii) in paragraph (ee), for "section 18, 19 or 20 of that Act of 2000 or 4(5), 50, 75 or 80 of that Act of 2003" substitute "any enactment mentioned in subsection (1B) below"; and
(b) after subsection (1) insert—
"(1A) The enactments referred to in subsection (1)(e) above are—
(a) sections 18, 18A, 18B, 18C, 19, 20, 27 and 27A of the Abolition of Feudal Tenure etc. (Scotland) Act 2000 (asp 5);
(b) sections 4(5), 50, 75 and 80 of the Title Conditions (Scotland) Act 2003 (asp 9); and
(c) sections 13, 14, 18, 19, 20, 21 and 22 of the Long Leases (Scotland) Act 2006 (asp 00).
(1B) The enactments referred to in subsection (1)(ee) above are—
(a) sections 18, 19 and 20 of the Abolition of Feudal Tenure etc. (Scotland) Act 2000;
(b) sections 4(5), 50, 75 and 80 of the Title Conditions (Scotland) Act 2003; and
(c) sections 13 and 14 of the Long Leases (Scotland) Act 2006.".
(4) In section 9 (rectification of the Land Register of Scotland), subsection (3B)—
(a) the word "or" immediately following paragraph (a) is repealed; and
(b) after paragraph (b), insert "or
(c) any provision of the Long Leases (Scotland) Act 2006 (asp 00),".
(5) In section 12 (indemnity in respect of loss), subsection (3)(gg), after the words "Abolition of Feudal Tenure etc. (Scotland) Act 2000 (asp 5)" insert "or as the case may be section 7 of the Long Leases (Scotland) Act 2006 (asp 00)".
(6) In section 28(1) (interpretation), in the definition of "incorporeal heritable right", in paragraph (b), after the words "Abolition of Feudal Tenure etc. (Scotland) Act 2000 (asp 5)" insert "or as the case may be by section 7(1) of the Long Leases (Scotland) Act 2006 (asp 00)".
NOTE
This paragraph amends certain sections of the Land Registration (Scotland) Act 1979.
The amendment in subparagraph (2) makes clear that it is not necessary to expede a notice of title in the case of a personal pre-emption burden or personal redemption burden which is already on the Land Register.
Sections 6(1)(e) and (ee) of the 1979 Act were respectively amended and added by section 112 of the 2003 Act so as to require the Keeper, when altering the title sheet of a benefited or burdened property in order to take account of changes in respect of the preservation of feudal real burdens, to give details of the other property. The amendment in subparagraph (3) imposes on the Keeper a similar duty to cross-reference benefited and burdened properties when updating the Land Register to take account of leasehold conversion.
The amendment in subparagraph (4) makes clear that the Keeper can alter the Land Register to take account of leasehold conversion. As with the 2000 Act it does not permit the reinstatement of an encumbrance which has been deleted in error. Indemnity is excluded in respect of any changes made by the Keeper (see section 12(3)(cc) of the 1979 Act which applies to section 9(3B)). The amendment implements recommendation 41. See paragraphs 8.1 to 8.6 of the report.
The amendment in subparagraph (5) extends the exclusion of indemnity with regard to the enforceability of sporting rights converted into separate tenements under section 65A of the 2000 Act to those converted under the bill.
The amendment in subparagraph (6) allows the registration of sporting rights that are converted into separate tenements under section 7 of the bill. The amendment matches the amendment made to s 28(1) for sporting rights converted into separate tenements under s 65A of the 2000 Act. The amendment enables a separate title sheet to be opened for such rights under s 5(1)(a) of the 1979 Act.
Title Conditions (Scotland) Act 2003 (asp 9)
(2) In section 12 (division of a benefited property), in subsection (4)(a), after "Act" insert "or sections 23 or 25 of the Long Leases (Scotland) Act 2006 (asp 00)".
(3) In section 63 (manager burdens)—
(a) in subsection (4)(d), for "the case mentioned in subsection (6)" substitute "either of the cases mentioned in subsection (6) or (6A)";
(b) in subsection (5)(a), for "the case" substitute "either of the cases";
(c) after subsection (6), insert—
"(6A) The case is where—
(a) a leasehold condition is imposed on the disposal, by virtue of section 61 of the Housing (Scotland) Act 1987 as modified by section 84A of that Act (application of right to buy in cases where landlord is lessee), of a landlord's interest in a property by—
(i) a person such as is mentioned in any of the sub-paragraphs of subsection (2)(a) of section 61; or
(ii) a predecessor of such a person,
to a tenant of such a person; and
(b) that condition is converted into a manager burden under section 24 of the Long Leases (Scotland) Act 2006 (asp 00) (conversion of qualifying conditions into manager burdens)."; and
(d) in subsection (8)(b)—
(i) for "that" substitute "those"; and
(ii) for "subsection (6)" substitute "subsections (6) or (6A)".
(4) In section 105 (consequential alterations to Land Register)—
(a) in subsection (2), for the words from "section", where it first occurs, to "Act", where it second occurs, substitute "—
"(a) section 18, 19 or 20 of the 2000 Act;
(b) section 13 or 14 of the Long Leases (Scotland) Act 2006 (asp 00); or
(c) section 4(5), 50, 75 or 80 of this Act,"; and
(b) in subsection (3), after paragraph (a) insert—
"(aa) any—
(i) notice under section 13 of the Long Leases (Scotland) Act 2006; or
(ii) agreement under section 14 of that Act,
which converts a qualifying condition (within the meaning of that Act) into a real burden;".
(5) In section 122 (interpretation), subsection (1)—
(a) in the definition of "conservation burden" the word "or" immediately following sub-paragraph (a) is repealed and after sub-paragraph (b) insert—
"(c) obtained by virtue of section 21 of the Long Leases (Scotland) Act 2006 (asp 00) (conversion of qualifying condition to conservation burden); or
(d) obtained by virtue of section 22 of that Act (conversion of qualifying condition to conservation burden where conservation body or Scottish Ministers nominated to enforce);";
(b) in the definition of "economic development burden", at the end insert "and to a real burden created under section 19 of the Long Leases (Scotland) Act 2006 (asp 00) (conversion of qualifying condition to economic development burden)";
(c) in the definition of "health care burden", at the end insert "and to a real burden created under section 20 of the Long Leases (Scotland) Act 2006 (asp 00) (conversion of qualifying condition to health care burden)";
(d) in the definition of "personal pre-emption burden" and "personal redemption burden" after the word "Act" insert "and section 18(1) of the Long Leases (Scotland) Act 2006 (asp 00)".
NOTE
This paragraph amends certain sections of the Title Conditions (Scotland) Act 2003.
Subparagraph (2) amends section 12(4)(a) of the 2003 Act. Section 12(1) of that Act provides rules for what happens where part of a benefited property is divided. Subsection (4)(a) disapplies the rules where the property is a benefited property only by virtue of sections 52 to 56 of the Act. The equivalent provisions in the bill to sections 52 to 56 are section 23 (facility and service burdens) and section 25 (common schemes). Subsection (4)(a) is amended to refer to these sections. In these cases both parts of the benefited property are to have the right to enforce.
Subparagraph (3) amends section 63 of the Act. That section regulates manager burdens. A manager burden which was imposed on a sale under the right to buy provisions of the Housing (Scotland) Act 1987 is given a maximum life of 30 years. Also in such a case, as an exception to the general rule, the manager can be dismissed under s 64 of the Act. Section 63 is amended so that a qualifying condition which was imposed on a sale of the landlord's interest under the right to buy legislation and which is converted to a manager burden under section 24 of the bill is to be treated in exactly the same way.
Subparagraph (4) provides for alterations to be made to the Land Register following registration of a notice or agreement under this bill converting a qualifying condition into a real burden. The paragraph extends section 105 of the 2003 Act which made equivalent provision in the feudal context.
Subparagraph (5) amends the definition of certain personal real burdens in section 122(1) of the 2003 Act to make clear that they include burdens of that type that result from conversion under the provisions of this Act. The burdens in question are conservation burdens, economic development burdens, health care burdens, personal pre-emption burdens and personal redemption burdens.
