Heritable property – Title conditions – Validity and enforceability – Abolition of feudal tenure – Ancillary burden in common scheme – Retirement housing development – Procedure on sale or disposal, in order to satisfy restriction to use and occupation as retirement home – Requirement to notify, satisfy and obtain approval of superior – Whether still valid and enforceable - Whether gap caused by abolition of feudal superior filled by legislative provisions – Abolition of Feudal tenure (Scotland) Act 2000, Section 73(2),(2A) – Title Conditions (Scotland) Act 2003, Sections 2, 3, 52-54, 62

Heritable Property – Title Conditions – Discharge or variation –Retirement housing development – Ancillary burden – Requirement to notify, satisfy and obtain approval of superior, in relation to age restriction on use and occupation – Identifiable purpose of condition requiring prior satisfaction, of benefit to other proprietors - Burden on proprietors proposing to sell, if required to obtain approval of all owners – No effort made to introduce alternative procedure, e.g. involving factor – Title Conditions (Scotland) Act 2003, Sections 98,100

At.home Nationwide Limited v Morris & Others
11 December 2006

A 1993 deed of conditions in relation to a retirement housing development contained a clause (3(d)) restricting use and occupation of the flats to use as retirement flats and in particular required at least one occupant to be at least 60. A further clause (3(j)) required a proprietor desiring to sell or dispose of a flat to notify the superiors, who had to be satisfied as to compliance and give approval in writing before the sale could proceed. The proprietor of 9 of the 19 flats applied for discharge of Clause 3(j), and also submitted that that clause was no longer valid and enforceable following abolition of the superior’s interest. They argued that Clause 3(j) had no separate purpose, and conferred no separate benefit, from clause 3(d), which would remain enforceable. Two other flat proprietors opposed the application.

Held (1) Clause 3(j) was no longer valid and enforceable. The question was how far the legislation allowed other proprietors in property communities to enforce feudal real burdens. There could be new enforcement rights under Sections 53 and 54 of the 2003 Act whatever the original deed had provided. However, if the reference to the superior could not be taken after November 2004 as a reference to anyone else, the condition had become impossible. The particular provisions in Section 73(2) of the 2000 Act did not apply, and on a consideration of the nature of the burden, the Tribunal held that Clause 3(j) was also not covered by Section 73(2A). Although this was an ancillary burden under Section 2(3) of the 2003 Act and might appear to be a community burden with special status under the Act, the fact remained that there was no superior to carry out the certification procedure. Section 73(2) specifically applied only to facility and service burdens, confirming a discriminatory intention in the legislation. Although the burden had a clear purpose separate from Clause 3(d), it would undoubtedly be unsatisfactory to require sellers of flats in a property community to obtain the approval of all co-proprietors. The Tribunal saw no good reason why responsibility for operating a certification procedure should not pass to the factors, but that would need to be achieved by agreement or resort to one of the Act’s provisions.

(2) However, if the condition had been held valid and enforceable, the Tribunal would not have discharged it. Contrary to the applicants’ submissions, Clause 3(j) did have a clear separate purpose which had been thought important in a recent deed with modern provisions. There had clearly been a substantial change of circumstances, viz. the statutory removal of superior’s rights, and if enforceable by all the proprietors the condition was burdensome. The procedure needed to be changed, but there was no indication of any effort made to introduce an alternative procedure. It would not have been appropriate simply to discharge the provision. The Tribunal would, however, have been prepared to vary it so as to allow the particular transaction, in respect of which the applicants had conditional missives which were in danger of being lost, to proceed. Clause 3(j) would then have continued to apply to future sales until either discharged or varied, preferably by agreement.

See full decision:  LTS/TC/2006/12