Lands Tribunal for Scotland

OPINION

Thomas Smith and Another as Trustees
for Ballantyne Property Services
v
Norman Lawrence and Others

Introduction and Summary

[1] This is an application by the owners of a semi-detached house in a modern housing estate to vary a title condition in a Deed of Conditions prohibiting occupation of the house by more than one family at a time. The applicants purchased the property, which had been substantially extended, as an investment and with a view to letting it out as a 5 bedroom house to groups of students at a university (Queen Margaret University) which has moved, since the housing estate was developed, to a modern campus very close to the housing estate. In effect, the application is to relax the Deed of Conditions so as to permit ‘multi-occupancy’ of the house, this being clearly prohibited by the title condition. The respondents, as benefited owners of other houses in the estate, oppose the application.

[2] Each such case has to be decided on its own facts and circumstances on a statutory test of reasonableness. In all the circumstances of this case we are not satisfied that it would be reasonable to grant the application and we have decided to refuse it.

The Issue

[3] The applicants Thomas Alan Smith and Gillian Ballantyne Smith, as partners and trustees of a firm, Ballantyne Property Services, own the house at 7 Denholm Drive, Musselburgh, being the subjects registered in the Land Register under Title Number MID62604 (“the subjects”). A Deed of Conditions by Ryebay Finance Ltd recorded in the General Register of Sasines for Midlothian on 11 January 1988 and registered against the subjects (“the deed of conditions”) provides inter alia:-

“(SECOND) The said houses shall be used solely as private dwellinghouses and for no other purpose whatever and none of said houses shall ever in any way be sub-divided or occupied by more than one family at a time, and without prejudice to the foresaid condition no business name, trade, advertisement board, card or plate shall be fixed or adhibited to or in any part of the said houses, relative offices, garages, ground, parapet walls or gates, with our written consent” (“the title condition”)

The applicants applied under section 90(1)(a)(i) of the Title Conditions (Scotland) Act 2003 (“the Act”) to vary the title conditions by deleting the words, “and none of said houses shall ever in any way be sub-divided or occupied by more than one family at a time”. At the hearing it was indicated on their behalf that, while not formally amending the application, they would be content with deletion of the last 10 words only, if “sub-division” was taken to mean only physical sub-division.

[4] Neighbouring owners, including Norman Lawrence, 4 Denholm Drive, Katherine Reilly, 30 Denholm Drive and Mark Livingstone, 5 Clayknowes Place (“the respondents”), maintained opposition to the application, as did one other neighbouring owner, Peter Hempseed, 11 Denholm Avenue, who however relied on his written objection and took no part in the hearing. There was no dispute that each of the respondents, as neighbouring owners, was entitled to the benefit of the title condition.

[5] Section 98 of the Act provides inter alia:-

“98. An application for the variation, discharge, renewal or preservation, of a title condition shall … be granted by the Lands Tribunal only if they are satisfied, having regard to the factors set out in section 100 of this Act, that –

(a) … it is reasonable to grant the application.”

Section 100(a) – (j) lists the factors mentioned in Section 98.

Procedure

[6] At the oral hearing of the application, the applicants were represented by Mr Maurice O’Carroll, Advocate, instructed by Messrs Morisons, Solicitors, Edinburgh, and the respondents by Mr Stephen Bell, Advocate, instructed by Messrs Garden Stirling Burnet, Solicitors, Haddington. For the applicants, John Blackwood, LLB, BD, a director of Gladstone Property Investments and of the Scottish Association of Landlords, and experienced in housing law, and the applicant Mr Smith, gave oral evidence. For the respondents, Stewart Lindsay W Hunter, Solicitor, of Hunters Residential (Gillespie Macandrew), a director of Edinburgh Solicitors Property Centre and experienced in residential property matters, the respondents Mr Lawrence, Ms Reilly and Mr Livingstone, and Mrs Jill Robertson, 8 Denholm Drive (the house adjoining the subjects), gave oral evidence. Each side also relied on a number of written productions, which were generally agreed to be what they bore to be and which included, for the respondents, a folder containing pro forma letters of support signed by 378 persons from separate households in the wider housing estate (apparently some 467 properties), supporting the objections on a narrative of understanding that the application was “to enable property to be let to groups of unrelated persons”. Each counsel provided a helpful written summary of submissions. The Tribunal carried out an unaccompanied, external inspection of the subjects and the surrounding area.

Authorities referred to:-

Bolton v Aberdeen Corporation 1972 SLT (Lands Tr) 26
Avonside Homes Ltd v Fyvie LTS/LO/1977/22, 9.11.1978
Lothian Regional Council v George Wimpey & Co Ltd 1985 SLT (Lands Tr) 2
Noble v Viscount Reidhaven & Ors LTS/LO/1989/98, 17.6.1991
Strang v Burton & Ors LTS/LO/1989/106, 19.7.1990
Anderson v Trotter 1998 SC 925
Ord v Mashford 2006 SLT (Lands Tr) 15
McPherson & Ors v Mackie & Ors LTS/TC/2005/18 & 19, 28.2.2006
Gallagher & Anr v Wood LTS/TC/2007/02, 22.8.2007
Ritchie v Douglas & Ors LTS/TC/2007/26, 11.1.2008
Verrico v Tomlinson & Anr 2008 SLT (Lands Tr) 2
Housing (Scotland) Act 2006, Part V

The Facts

[7] There was no real dispute about the primary facts and circumstances. On the basis of the oral and documentary evidence and submissions, and our own site inspection of the subjects and the locality, these can be summarised as follows.

[8] The wider residential estate, Inveresk Gardens, in which the subjects are situated, and which is all covered by the same deed of conditions, includes some 467 houses, with a primary school and neighbourhood shopping, developed over a period of very approximately 10 years, from 1990 to 2000, on the west side of Musselburgh, between the centre of the town and the main railway line.

[9] Between the railway and the main A1 dual carriageway road there has, more recently, been developed the new home of Queen Margaret University, Edinburgh, which formerly occupied a number of campuses in the city.

[10] The 1988 deed of conditions regulates in close detail the occupation and use of all the houses in the estate. For example, Clause (Second) also regulates the display of business signs; Clause (Fourth) prohibits the carrying on, without the developers’ consent, of any trade, business or profession whether or not incidental to residential occupation; Clause (Fifth) requires the ground to be used as ornamental or garden ground, with express prohibition of front ground being used to keep caravans, boats, commercial vehicles, etc.; Clause (Sixth) prohibits kennels, hutches, etc., or keeping more than one dog and one cat.

[11] Denholm Drive, in which the subjects are situated, comprises an enclosed group of about 41 houses, with the drive curving round in a cul-de-sac arrangement, on the south-west side of the development, beside the railway line, from which it is screened by landscaping. It was one of the last parts to be developed, being completed around 2000. The university campus is within close walking distance, as is Musselburgh railway station. As in the wider estate, the housing is good quality but tightly developed modern family housing, with a variety of detached and semi-detached houses and terraces of three houses, of uniform appearance, with quite limited garden spaces. There is limited car parking space, only one or two houses having garages and the predominant arrangement involving space at the front of the house for one car parked off the street with very limited parking space on the street. Denholm Drive is entirely residential. The density has already been increased by a large number of extensions to the side of houses which have, however, completely maintained the design uniformity of the houses. The area is well looked after, with tidy, well stocked gardens. The housing is family-orientated.

[12] The subjects were built around 2000 as a 3-bedroom semi-detached house, situated amongst other semi-detached and detached houses, with two terraces of three smaller houses to the rear. Before the applicants purchased it, the house had been extended both to the side and (at ground level) to the rear, converting it into a substantial four bedroom house with an extra lounge on the ground floor. For multi-occupancy letting purposes, this room could also be used as a bedroom. The house has minimal parking space at the front and on the street, and also relatively little remaining garden ground, which has been made ‘low maintenance’ by the installation of decking in preparation for renting.

[13] The applicants operate a ‘Buy-to-let’ property business and own around 25 such properties, mainly in Edinburgh. They purchased the subjects in 2007 with the intention of letting the property, as a whole, to groups of students attending the university, which is within a short walking distance. Neighbours apparently spotted such advertising of the property and called on the applicants to comply with the title condition. The steps taken towards such letting revealed a substantial market from groups of students, who would pay around £1500 per month or more, such lettings being advantageous for landlords because they are for fixed periods which tends to eliminate ‘voids’. Local authorities have private sector letting schemes, but in East Lothian are not looking for either 5 or 4 bedroom houses for that purpose. As a family house, the subjects would let for around £850 to £900 per month.

[14] The statutory House in Multiple Occupation Licence (“HMO Licence”) regime, operated by each local authority, controls standards of privately rented multi-occupancy properties by ensuring the suitability of the property owner and compliance of the property with appropriate standards. It provides some element of control over the management of the property, including management of any problems involving, for example, anti-social behaviour by tenants. Neighbours have standing both to object to the grant of the licence and to take problems up with the authority as well as with the landlord. The authority can arrange meetings to agree appropriate courses of action; cannot evict tenants; but can, ultimately, revoke licences. The applicants hold a licence in respect of an address in Edinburgh.

[15] As a result of the proximity of the university, it can reasonably be anticipated that if multi-occupancy were permitted in the Inveresk Gardens estate, such tenancies involving groups of students would gradually increase. This is likely gradually to affect adversely the amenity of the estate, increasing population density, increasing traffic and parking pressure and eroding the quiet and safe family ambience of the estate. There is a substantial risk that over time it would also adversely affect property values by making the estate less attractive to families.

[16] There is some risk of noisy and/or anti-social behaviour at owner-occupied properties, houses let to families and multi-occupancy houses let to students and others. There is a reasonable apprehension that such behaviour by students would be more difficult to control.

[17] Pro forma letters apparently prepared and distributed by the Residents Association were signed by residents at 378 houses in the estate, in the following terms:-

“I/WE residing at hereby support the objections lodged for” [the respondents] “in the Application by Thomas Alan Smith and Gillian Ballantyne Smith as Partners of and Trustees for the firm of Ballantyne Property Services, Twenty Two Braid Road, Edinburgh, in an Application to the Lands Tribunal for Scotland to enable the property at Seven Denholm Drive, Musselburgh to be let to groups of unrelated person (sic).”

Applicants’ Submissions

[18] In summary, Mr O’Carroll first submitted that the issue in Section 98 of the Act came down substantially to balancing burden and benefit, and also referred to the Tribunal’s general observations in Ord v Mashford on the significance of the purpose of the title condition, if it could be identified. The purpose of this title condition was not explicit but its effect was clear. It was similar to that in Verrico v Tomlinson & Finlay. In relation to factor (a) in Section 100, he submitted that the building of Queen Margaret University within such close proximity was a major change in relation to land use in the area, weighing in favour of granting the application: on the evidence, there was now, as there had not been in 1988, a high demand for rented accommodation for tenants not part of the same family. Further, the nature of ‘family’ had evolved in the last 20 years and there was now simply no demand for a five bedroom family home in the area. The respondents had said that they bought their homes expecting surrounding conditions never to change, but they could not simply ignore these changes. In relation to benefit (factor (b)), there was evidence from the immediate neighbour of hearing noise through the party wall but no indication how it would be different with five students or other unrelated tenants. Fears of anti-social behaviour, fast cars or falling property prices had no rational basis or evidence in support. Proper management of the property in multi-occupation would answer these concerns. Reference to the age profile of the students at this university did not add any credence to the fears of anti-social behaviour. The HMO licensing system was subject to numerous conditions and safeguards. The tranquil suburban idyll would not be despoiled, nor would this application be the ‘thin end of the wedge’. Property prices might be enhanced. On (c), Mr O’Carroll pointed to the difference in rental value if the property were let to 5 individuals, and to the restraint on land use. On (e), it was 20 years since the condition was created, although the materiality of that was linked to the factors under (a). As to (f), the purpose of the title condition, Mr Hunter had spoken to its subsumptions but these had to a certain degree been superseded by the arrival of the university. There were striking similarities with the position in Verrico, supra, in which the proposed sub-division was also by a property redeveloper,and the conclusion should be similar. Insofar as the purpose was to preserve the housebuilder’s reputation, here the granters were defunct. In relation to (g), public consents, here, there was the prospective HMO licence from East Lothian Council. The fact that this would certainly be required meant that the amenity would be safeguarded, such protection not being available if the property were let to a single family. An analogy was drawn with Ritchie v Douglas,at page 8. Under (j), other material factors, it was in the wider interest of the area that students and staff at the university were not unduly restricted in the accommodation which they might obtain.

Respondents’ Submissions

[19] Mr Bell also referred to the guidance in Ord v Mashford: the entire circumstances were to be weighed as a whole, but the pre-eminent consideration was the purpose of the title condition if it could still be achieved and if the proposed variation would directly subvert it. The purpose here was to protect the residential character of the neighbourhood: if the proposed use would lead to loss of that protection, the application should be refused. The applicants had acknowledged that it would change the character of the neighbourhood. In relation to factor (a), the applicants had failed to prove any significant change in circumstances, the creation of a demand for houses in multi-occupancy simply begging the question. In any event, if external changes would, but for the title condition, be likely to have a detrimental effect on the neighbourhood, that favoured the respondents. In relation to (b), Mr Bell submitted that it was entirely reasonable to seek to preserve the character of the estate: Anderson v Trotter. He reviewed the respondents’ evidence as to the current character of the estate and the likely effect of the proposed variation. Mr Hunter’s evidence had been that the purpose of the condition was to preserve the character of the estate as being clearly defined for family living, and his evidence also demonstrated that the respondents’ fears about deterioration of the estate with an impact on house values, were entirely justified. Mr Smith himself had agreed that the development was built as a family estate and that if the application were granted it was a ‘cast iron certainty’ that the character of the estate would change. His attitude was that this would be disruptive but that was life. There was a real risk that groups of unrelated persons were more likely to behave anti-socially than families. While Mr Smith might be an experienced landlord, there was no guarantee that others would manage properties adequately. Any limited protection from the HMO licensing regime would be cold comfort. In relation to (b), the applicant had failed to establish a high demand, but in any event conditions were not obsolete due to transient changes in demand. The condition did not impede ordinary and normal use of the house. The fact that the applicants might be prevented from achieving the maximum possible return was not a significant impediment, particularly when they had known of and accepted the condition when they bought (Bolton v Aberdeen Corporation, at pages 28-9; Noble v Viscount Reidhaven and Others, at page 10; and Ord, at page 25). Further, the applicants could relieve themselves of the restriction by selling the house (L. R. C. v Wimpey, at page 3). As to (e), the burden was of comparatively recent origin, and in any event the original purpose could still be achieved. As to (f), the purpose was generally to preserve the character of the development as residential family accommodation and in particular to prohibit multi-occupancy. Factor (g) also favoured the respondents, there being no HMO licence in existence for the property and there being no evidence that the property was likely to be deemed suitable by the authority: there were a variety of standards to be met in relation to accommodation. On (j), Mr Bell submitted that the attitude of the residents’ association and the local community as a whole should be taken into account (L. R. C. v Wimpey, at page 3). Finally, Mr Bell submitted that there had been no case in which such a prohibition of multiple occupancy had been relaxed, despite this being an extremely common and perhaps standard condition: Verrico, supra, and also Strang v Burton, tended the other way. The applicants had failed to discharge the onus incumbent on them.

[20] Mr Hempseed’s letter of objection can be summarised briefly. He argues that this would be not a variation but a ‘gross change, altering the whole nature of the family concept of the early housing provision’. The neighbourhood was already under pressures from the existence of QMU, in relation to parking. ‘Real family housing’ was at stake, with the most important aspect to be considered being children.

Tribunal’s Consideration

[21] The law which we have to apply is not in doubt. The applicants have to persuade us that it is reasonable to grant this application, and although their formal application would include permitting them to sub-divide this house the case has clearly focused only on what they actually wish to do, which is to let to groups of, almost certainly, five students at a time, i.e. multi-occupancy. Section 100 of the Act sets out factors to which we have to have regard, including a ‘catch-all’ of other factors which we consider to be material. The relative importance of factors in the list depends on the circumstances of every case, and we have to weigh the factors up as a whole. Guidance on the approach to the slightly altered formulation of our jurisdiction in the Act was given by the Tribunal in Ord v Mashford. It was there pointed out that the purpose of the title condition, if it can be identified, is often at the heart of the issue of reasonableness.

[22] The point was also made in that case that the precedent of decided cases was rarely of much assistance, each case being dependent on its own circumstances, including almost invariably the impression obtained by the Tribunal at its site inspection. The present case might seem to be important in the respect that there is no previously recorded challenge to what is indeed a very common residential title condition prohibiting occupancy by more than one family. As Mr Bell pointed out, the issue has been touched upon in two cases, Strang v Burton & Others in 1990 and Verrico v Tomlinson, earlier this year. In each case there was an indication by the tribunal that the order made would cater for concerns about multi-occupancy which would continue to be prohibited. However, in each case the actual proposal in issue was sub-division of property, not multi-occupancy. Further, these cases involved long-standing residential localities bearing little similarity to the Inveresk Gardens estate. We must consider this case in its own circumstances, and the fact that this has not been done before is not a bar to granting the application if we think it reasonable.

[23] The title condition in this case is clear and unambiguous, part of a set of discriminating provisions which clearly do not prevent letting of the property but do prevent both sub-division and multi-occupancy. There is, however, a distinction between the meaning and effect of the condition on the one hand, and its purpose on the other. A condition may be clear (and indeed would not meet the test of validity if it were not), but that does not tell us its purpose. The purpose is often not expressed, particularly in older deeds where no requirement to do so would be perceived by the drafter. It can, however, often be discerned without much difficulty. In the present case, we can see the condition in its context and we also had the benefit of the evidence of Mr Hunter, a very experienced property lawyer, about modern residential estate title conditions. We have no doubt at all that the purpose of this and other conditions in the deed of conditions is to create and then preserve, so far as it is possible to do so, full residential amenity in a modern family-oriented housing estate. This was no doubt directly in the interests of the developer, who wanted to sell the houses in the market for which they were so obviously developed and perhaps also preserve his reputation as a house builder. It was also clearly in the interests of the purchasers of the houses, the resultant benefit to whom, as benefited proprietors, is a factor to which we are specifically required to have regard. Our observations at the location confirmed the respondents’ evidence that this is, as it must have been intended to be, very much a family-oriented estate, with predominantly family houses in a setting safe for young children. That is an important starting point for our consideration, but the applicants are certainly entitled to argue that when regard is had to all the factors listed in section 100 it is reasonable to relax this title condition so as to permit a different character of occupation at this particular property.

[24] Before looking at the other factors, it is appropriate to explain our views on some aspects of the evidence, supplemented, as we have said, by our own observations in and around Denholm Drive.

[25] We had the strong impression of a good quality (although densely developed) new housing estate, predominantly occupied by families. Although garden spaces are not large, they appeared neat and tidily maintained. The provisions of the deed of conditions are clearly designed to try to maintain this quality and atmosphere. We have to try to consider the effect of removing, in the case of one house, one of the deed’s clear provisions.

[26] We accepted Mr Smith as an honest, and indeed frank, witness. He was clear that there was a demand for student tenancies, involving groups of students (or possibly university staff, although it seems rather less likely that there would be groups of staff looking for such accommodation). They would let the house as a whole, for the full year or perhaps longer. We accept Mr Smith’s evidence of the level of response when he started to try to let the house out in this way. He did indeed say that it was ‘a cast-iron certainty’ that there would be more of this type of letting in the locality if this title condition could be lifted. It is apparently a good line of business for landlords where there is a steady demand. One might wonder just how many students would look for this type of accommodation when Edinburgh is so easily accessible by public transport, but we accept that Mr Smith has identified such a demand. Although allowing this application does not of itself relieve other owners of the title condition restriction, we are in little doubt that it would be difficult to resist a gradual growth of this change of use of some houses in this estate, as indeed Mr Smith envisaged.

[27] What then, on the evidence, is the reasonably anticipated effect of this on the estate? Mr Smith, again, was frank: it would, he said, be naïve to expect that there would be no change in the character of the estate. However, he also said that in his experience students were perfectly good tenants, although he slightly contradicted himself by acknowledging that he himself would not want students or DSS families as neighbours. In summary, the respondents’ evidence clearly reflected what might be described as popular fears – prejudices might not be too strong a word – about students. In a nutshell, their image was of noisy parties and more, noisier and faster cars, threatening the peace of the neighbourhood and the safety of young children. They therefore feared a serious deterioration of the neighbourhood, which would, in time, deter families from coming to live in the estate and thus undermine property values.

[28] The applicants point to the safeguards in the HMO licensing regime, and also point out that this would not be applicable in the case of lettings to families, which might include DSS families. Mr Blackwood, whom we also accepted as a reliable witness, described the licensing regime and was cross-examined on some aspects, and possibly limitations, of it.

[29] In our view, the respondents’ generalised fears of student tenancies were somewhat overdone. Moreover, from its statistical profile produced to us, this university appears to us to be inclined towards vocational higher education which may well not attract rowdier elements of the student population. Further, we would accept that the licensing regime provides quite significant, if limited, safeguards which are at least to some extent directed at the interests of communities in which properties are situated. Mr Smith appeared to us likely to be a responsible landlord and, although we accept that this should be considered on an objective standard and not all landlords may be so responsible, there seemed, again, to be somewhat generalised concerns about landlords which we felt may have been exaggerated.

[30] These things said, we do accept that the respondents have reasonable concerns about the effects of the introduction of multi-occupancy, involving students, in this estate. We do think that it is likely gradually to affect the amenity of the estate, or at least that there is a real and substantial risk of such an effect. We note that the proposal is to have not just two or three, but five, tenants. That seems to us to be quite an imposition on the immediate neighbours, in terms both of possible noise and traffic and parking. We do think a student household may be slightly noisier and while owners, owners’ older children and tenants may all on occasions hold parties, there is, we think, a reasonable apprehension that with students this may not be so easy to control. We leave seriously anti-social behaviour out of account, but that does leave a reasonable apprehension of some effect on a neighbourhood which, at present, enjoys the peace and quiet of a well designed good quality modern housing estate. It is always difficult to estimate the contribution of particular title conditions or the effect of relaxing them, but in this case we do think that even without the extreme fears there is a reasonable apprehension as to the effect of lifting this one. It would increase the pressure of traffic and on parking facilities. It would increase population density. It would increase the risk of noise disturbance. These matters point to a gradual change in the character of the neighbourhood. Indeed, Mr Smith really accepted this, but maintained that the residents just had to accept it: they could not ignore the significant development of a university in their neighbourhood, and such changes in occupancy patterns should be accepted as reasonable land use.

[31] We also accept that there are reasonable concerns about property values, at least in the medium to longer term. The immediate effect might well be, as Mr Smith suggested, to increase values because the market would be opened to more landlords. It is no doubt impossible to predict the longer term effect, but it does seem to us entirely reasonable to think that the attraction for families may be gradually reduced, with an effect on saleability and values, if multi-occupancy is introduced into this estate.

[32] Turning to consider the statutory factors, we certainly agree that the development of the campus of a university with nearly 6000 students so close is a significant change of circumstances since the title condition was created (factor (a)). This, however, does not necessarily support the reasonableness of the application. On the one hand, we do accept, as a matter of generality, that meeting an increased need for accommodation is reasonable. On the other hand, the university may be seen as representing, in this particular way, just the type of threat to the amenity of this housing estate from which the title conditions provide protection. If the protection of that amenity is a legitimate interest of the house owners – as it clearly is – the arrival of the university reinforces the reasonableness of retaining the title condition. We also note that while the university is close to the estate, it cannot be said that there has been any change in the immediate neighbourhood of the subjects, i.e. the estate itself. This is really a change in the market for housing accommodation rather than a physical change at or in the neighbourhood of the subjects. The applicants also relied on the evolving concept of ‘family’ – now, it was argued, a “much more fluid and fractured concept”. We are not sure that we see the force of this in the present context: if anything, it presumably means that ‘family’ might now be interpreted more loosely, i.e. the condition has become less stringent. If the suggestion is that conditions have so changed since 1988 that it is reasonable to expect owners in this estate to accept the erosion of its orientation towards family living, we cannot accept that. One might also point out in relation to Denholm Drive that the first occupation of these houses was much more recent, around 2000.

[33] Factor (b) is the extent to which the condition confers benefit on the benefited properties. This of course depends substantially on our views of the evidence. In assessing this factor, we must of course bear in mind the risks from which this title condition does not protect owners. Letting out is not prohibited, and that might include families, some of whom might be thought to threaten the amenity, and of course even some owners or their families might do so. However, the evidence in this case suggests that the condition protects against an additional risk which, as a result of the development of the university, is real and substantial. Accepting that the risk can be exaggerated, we do, for the reasons indicated above, regard this protection as a substantial benefit to the respondents. This is only one of a number of tightly drawn title conditions designed to preserve residential amenity, but we consider that it contributes substantially to that.

[34] We accept that the condition impedes enjoyment of the burdened property (factor (c)) to the extent of reducing by a substantial amount its rental value. Mr Bell pointed out that it was not established that the applicants would be granted the HMO Licence which would be required, but on balance we think that this can reasonably be anticipated: the applicants themselves have been accepted in Edinburgh as suitable persons; from the information supplied, the property would appear likely, at least generally, to meet the necessary standards; and there is no reason to think that the application for a licence would be successfully opposed. However, there is nothing to prevent the house being used as a modern and spacious family house, whether owner-occupied or let out. There was also no indication of any capital loss to the applicants as property investors, there being no suggestion that the market price paid by them reflected the higher rental value. It must also be said that the applicants knew of the title condition, to which, Mr Smith said, their lawyer drew their attention.

[35] This being essentially a negative burden, factor (d) has no application.

[36] Only 20 years has elapsed since the condition was created, rather less since it was first applied to this property (factor (e)). The significance of this of course depends on the issue about change of circumstances and also whether the purpose of the condition can still be fulfilled.

[37] This brings us to factor (f), the purpose of the title condition, a matter discussed above. This is to create and then preserve full residential amenity in a modern family housing estate. What is important in considering reasonableness is whether that purpose can still be achieved. We are in no doubt that it is presently being achieved. Although the future cannot be predicted with certainty and the proximity of the university presents a slight threat, we are also of the view that the present level of amenity can continue to be achieved for the foreseeable future. This estate appears well designed, and the title conditions including this one have an important part to play in preserving amenity. Walking within the estate, we sensed from its general neat and tidy condition a communal intention to maintain its amenity. No doubt there comes a time later in the life of any estate when its original character may begin to slip away, so that retention of a title condition in a particular case is not going to further the condition’s purpose to any material extent, but we do not consider that that is the position in this case.

[38] The applicants suggested that factor (g) supported the reasonableness of the application, presumably in anticipation of receiving the HMO Licence, but the fact is that that licence has not so far been granted and indeed apparently not applied for. While it did look as if such a licence could be forthcoming, we regard this factor as neutral.

[39] There is no suggestion that factor (f), willingness to pay compensation, has any bearing on this case.

[40] Factor (i) has no application.

[41] In relation to factor (j), the applicants referred to the wider interests of students and staff at the university to have accommodation. We are prepared to accept that this is a factor to be taken into account, although it is really covered in the applicants’ case on change of circumstances. The respondents referred here to the attitude of the residents’ association who, we were told, had been strongly opposed at a reasonably well attended A.G.M. and of the community as evidenced by the numerous signatures to the letter of objection. The attitude of the majority does not necessarily determine an issue of reasonableness, and pro forma letters signed by persons who have not exercised their statutory right to make representations should be treated with caution, but in this case there does seem to be a strong and clear local opinion against this use of this property, which would be likely to be repeated at other properties. There is not the slightest indication of any acceptance within the local community of the applicants’ proposal.

[42] Weighing all the matters up, we first remind ourselves that we are considering a particular application in relation to a particular house, although it is accepted that it would be likely to have a wider implication for the estate. The factors in the applicants’ favour would appear to be the loss of the rental value increase and the more general consideration of the reasonableness of meeting a new demand for accommodation in the area. Set against this, we think that this is a title condition which contributes substantially to achieving the purpose of preserving residential amenity. We note the scale of this application – not just two or three unrelated persons but five in one house, with the clear indication that other such cases would be likely to follow. That persuades us that there would be a substantial risk of at least gradual deterioration in the amenity. The condition is of substantial benefit to the benefited proprietors. The newness of the estate – residents in this part have not been there any more than 10 years – influences us: this is not a title condition introduced in and for a different era, and it can still achieve its original purpose. We are not persuaded that the arrival of the university is a change which reasonably requires these house owners to give up an important protection in their titles. While the public interest in the provision of accommodation is a factor, the interest in maintaining residential amenity at this estate is also a community interest and is entirely legitimate. Although they are of course fully entitled to apply to have the title condition lifted, the applicants were well aware of the condition and should have been in no doubt that their proposal fell foul of it. In all the circumstances, we have reached the view that it would not be reasonable to grant this application.

[43] The application is refused.

[44] There were no submissions on expenses. Any application in that regard can be disposed of on the basis of written submissions in accordance with our usual practice.


Certified a true copy of the statement of reasons for the decision of the Lands Tribunal for Scotland intimated to parties on 31 October 2008

Neil M Tainsh – Clerk to the Tribunal