Heritable Property – Title Conditions – Discharge or Variation – Modern housing estate – Deed of Conditions – Prohibition of multiple occupancy – Proposal to let house out to group of students at university which had moved to new campus nearby – Reasonableness – Title Conditions (Scotland) Act 2003, Sections 98, 100

Heritable Property – Title conditions – Discharge or variation – Expenses – Application refused – Sanction for counsel – Sanction for experienced residential conveyancing solicitor as skilled witness

Thomas Smith and Another v Norman Lawrence and Others
31 October 2008

The applicants purchased a 4 bedroom house in a modern housing estate as an investment with a view to letting it out as a 5 bedroom house to groups of students at a university which had, since the housing development was completed, moved to a new campus nearby. The estate Deed of Conditions regulated occupation and use in close detail and in particular prohibited occupation by more than one family at a time. Letting the house out to families, in compliance with the title conditions, would achieve a very much lower rental level. Several neighbouring proprietors, backed by an overwhelming majority of proprietors, opposed the application for discharge. As the applicants agreed, it was likely that if multiple occupancy were permitted such tenancies would gradually increase. The applicants argued that the need for such accommodation amounted to a relevant change of circumstances which the residents could not simply ignore. Although the applicants suggested that this might have the effect of increasing values, there was a substantial risk that over time it would adversely affect property values.

On expenses, the application having been refused, the applicants accepted liability in expenses but opposed certification of counsel, arguing that the case had been straightforward, with no dispute on the law to be applied, or alternatively that counsel should only be sanctioned for the hearing itself; and also opposed certification as a skilled witness of an experienced residential solicitor and estate agent who gave general evidence about the use and purpose of such title conditions and possible effects on values.

Held, (1) refusing the application, although this case might seem important as the first recorded challenge to this common type of residential title condition, it must be considered on its own facts and circumstances. The title condition was clear and unambiguous, and its purpose of creating and preserving full residential amenity in a modern family-oriented housing estate was easily discerned. It was clearly in the interests of purchasers in this tightly developed estate. On the evidence it was capable of being fulfilled. The applicants had clearly identified a demand, so that if the application were granted it would be difficult to resist a gradual growth of this change of use. The applicants frankly said that it would be naïve to expect no change in the character of this estate. Although the respondents’ generalized fears were overstated, serious anti-social behaviour should not be anticipated, and the HMO licensing regime would provide some protection, there was at least a real risk that the amenity of the estate would be adversely affected. The particular proposal to have 5 students in one house was a considerable imposition on immediate neighbours. There were also reasonable concerns about the effect on property values in the medium to long term. The development of the university campus so close was a significant change of circumstances but did not necessarily support the application: it could be seen as just the type of threat to the amenity which the condition was designed to guard against. There was no change of circumstances within the estate itself. Weighing the statutory factors up, and acknowledging that the public interest in the provision of student accommodation was a factor, the respondents also had a legitimate community interest and the application had not in the particular circumstances been shown to be reasonable.

(2) the employment of junior counsel would be sanctioned. This was not always appropriate in title condition cases and it was true that this case did not involve any dispute about the law itself. However, its application was not necessarily straightforward. The issue in this case was not one which had previously arisen and was of importance to quite a large number of householders. Sanction should, however, be limited to conduct of the hearing itself, including reasonable preparation: this was not one of the very occasional cases under this jurisdiction where it would be reasonable to include instructing counsel to draft pleadings in the award of expenses.

Sanction would not be granted for the employment of the solicitor and estate agent as a skilled witness. There was no doubting the experience and expertise of the individual, but his evidence fell just on the side of more general evidence on matters within the Tribunal’s expertise and experience rather than particular expert opinion.

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

See full decision:  LTS/TC/2008/18 (Merits) and LTS/TC/2008/18 (Expenses)