[1] This is an application under Section 90(1)(a)(i) of the Title Conditions (Scotland) Act 2003 (“the Act”) for partial discharge and variation of a title condition which burdens office premises known as 22 Abbey Lane, Edinburgh (“the subjects”). The applicant believes he should not be responsible for maintaining and renewing the common entrance, doors, passageways and stairs to which he has no access and from which, he argues, he derives no benefit. The application is opposed by the single owner of three separate flats within the block forming 22, 24 and 30 Abbey Lane.
[2] Having visited the subjects, considered the evidence and the written submissions from both parties and applying the test of reasonableness set out in sections 98 and 100 of the Act, the Tribunal has decided to refuse the application.
[3] The title condition is contained in a Deed of Conditions by Tipperlinn Development Company Limited registered in the Land Register of Scotland on 22 July 2004. The deed contains rights and burdens affecting a total of 32 properties comprising 31 flats (at Nos. 24 and 30 Abbey Lane) and the subjects of this application (22 Abbey Lane).
[4] The title condition in question is in the following terms:-
“THIRD Each Block Proprietor shall be responsible in all time coming for upholding and maintaining in good order and repair and from time to time renewing if and in so far as necessary the Core Common Parts jointly with all other Block Proprietors in accordance with the share of liability allocated in the Core Common Parts Liabilities”.
[5] The terms ‘Block Proprietor’, ‘Core Common Parts’ and ‘Core Common Parts Liabilities’ are defined within the deed at condition “FIRST” which (in its entirety) is in the following terms:
“FIRST In these presents where the context so admits the expressions following shall have the meanings hereinafter ascribed to them that is to say:- (a) "the Block" shall mean the block accessed by two stairwells and comprising thirty one flatted dwellinghouses and one unit of commercial premises constructed or to be constructed on the Development. (b) "Flat" shall mean any or each of the thirty one flatted (single or double floor) dwellinghouses including any garden ground, patio, verandah or balcony effeiring exclusively thereto forming part of the Block. (c) "the Car Parking Areas" shall mean such area or areas as may be laid out for car parking on the lower ground and upper ground floors with relative ramps and accesses thereto and associated access gates and barrier and any areas or parts deemed to relate exclusively or predominately to the car parking, to include the private car parking spaces. (d) "Private Car Parking Space" shall mean any parking space in relation to which a right of exclusive use is granted to a flat proprietor in any disposition or conveyance. (e) "Proprietor" shall mean the party in whose favour a disposition or other conveyance of Subjects is granted together with his representatives and assignees whomsoever or in the case of a corporate persona together with its successors and assignees whomsoever, the singular including the plural. (f) "Subjects" shall mean any flat or the Commercial Premises with all and any rights effeiring thereto and generally the whole subjects in respect of which any Disposition or other conveyance has been granted to the proprietor. (g) "Commercial Premises" means the two storey unit of commercial premises forming part of the Block and numbered or to be numbered 22 Abbey Lane, Edinburgh. (h) "Block Common Parts" means the Core Common Parts, the Car Parking Areas, the Lift Apparatus and the Intercom Apparatus. (i) "Core Common Parts" means the solum on which the Block is erected; the foundations, load bearing walls and partitions, outside walls, roof and roof void and hatchways leading thereto; the rhones, conductors, water tanks and cisterns, water or other pumping systems, ducts and ventilating and waste pipes and outside lighting serving the Block; the sewers, drains, gas and main water supply pipes, electricity mains and cables, the common television aerial systems, television and telecommunications systems and all other transmitters serving the Block; all bin stores within the Block; stairwells including the external and internal doorways thereof (but not the individual door to a flat) the supply cupboards or stores and service ducts including electricity and telephone boxes and cables (if any) therein, any entrance steps and entrance canopies, the entrance hall, internal passage ways, stairs and landings, the windows therein, the internal lighting and emergency lighting systems thereof, the stairwell or other common heating systems and all radiators, appliances and apparatus relating thereto and the internal exposed surface finishes of the floors, walls, ceilings and supporting columns therein including carpeting thereof; any walls or fences or other features bounding the Development or any part thereof; any part of the Development outwith the solum of the Block (other than the Garden); and all other parts of the Block or Development common to the proprietors of the flats and the Commercial Premises but excluding the Car Parking Areas, the Lift Apparatus, the Intercom Apparatus and the Garden. (j) "Core Common Parts Liabilities" means the share of costs associated with the Core Common Parts and allocated among the flats and the Commercial Premises in accordance with the Schedule. (k) "Car Parking and Intercom Apparatus Liabilities" means the share of costs associated with the Car Parking Areas the Intercom Apparatus and allocated among the flats in accordance with the Schedule. (l) "Intercom Apparatus" means the door entry control systems located on each of the common entrance doors serving the flats with all cabling, switchgear and associated equipment and fittings (but excluding the handset/controls for said door entry control systems located within each individual flat which shall be the responsibility of the relevant flat proprietor). (m) "Lift Liabilities" means the share of costs associated with the Lift Apparatus and allocated among the flats in accordance with the Schedule. (n) "the Garden" means the area of garden ground shown edged yellow on the Plan. (o) "the Lift Apparatus" means those two lifts within the Block and all associated parts and systems including engineering and electrical parts. (p) "the Plan" means the Title Plan. (q) "Schedule" means the schedule annexed hereto. (r) "the Core Common Parts" means the Block Common Parts under exception of the Car Parking Areas, the Lift Apparatus and the Intercom Apparatus. (s) "the Block Proprietors" means all proprietors of the flats and the Commercial Premises within the Block. (t) "Flat Proprietor/s" means the proprietor from time to time of the flats. (u) "Commercial Premises Proprietor" means the proprietor from time to time of the Commercial Premises. (v) "Property Manager" means any one qualified firm or person (who may be a Block Proprietor) appointed to have charged of and perform as a property factor in the care, maintenance and management of the Block Common Parts and the Development including the making of regulations and the placing of service contract”.
[6] The ‘Schedule’ referred to at (j) above sets out the shares of liability for maintenance, in percentage terms, for each of the flats and the subjects. It is the following terms:
| Postal Address (Abbey Lane) |
Core Common parts liabilities (5 per subjects) |
Car parking and intercom apparatus liabilities (5 per subjects) |
Lift liabilities (% per subjects) |
|---|---|---|---|
| 24.01 | 3.5 | 3.5 | 3.5 |
| 24.02 | 3.5 | 3.5 | 3.5 |
| 24.03 | 2.5 | 2.5 | 2.5 |
| 24.04 | 2.5 | 3.5 | 3.5 |
| 24.05 | 2.5 | 2.5 | 2.5 |
| 24.06 | 2.5 | 3.5 | 3.5 |
| 24.07 | 2.5 | 2.5 | 3.5 |
| 24.08 | 2.5 | 2.5 | 2.5 |
| 24.09 | 2.5 | 2.0 | 2.5 |
| 24.10 | 2.5 | 3.5 | 3.5 |
| 24.11 | 3.5 | 3.5 | 3.5 |
| 24.12 | 3.5 | 3.5 | 3.5 |
| 24.13 | 2.5 | 2.5 | 2.5 |
| 24.14 | 2.5 | 2.5 | 2.5 |
| 24.15 | 4.5 | 4.5 | 4.5 |
| 24.16 | 4.5 | 4.5 | 4.5 |
| 30.01 | 3.5 | 3.5 | nil |
| 30.02 | 3.5 | 3.5 | 3.5 |
| 30.03 | 3.5 | 3.5 | 3.5 |
| 30.04 | 2.5 | 3.5 | 3.5 |
| 30.05 | 2.5 | 2.5 | 2.5 |
| 30.06 | 3.5 | 3.5 | 3.5 |
| 30.07 | 2.5 | 2.5 | 3.5 |
| 30.08 | 3.5 | 3.5 | 3.5 |
| 30.09 | 2.5 | 3.5 | 3.5 |
| 30.10 | 2.5 | 2.5 | 2.5 |
| 30.11 | 3.5 | 3.5 | 3.5 |
| 30.12 | 3.5 | 3.5 | 3.5 |
| 30.13 | 2.5 | 2.5 | 3.5 |
| 30.14 | 4.5 | 4.5 | 4.5 |
| 30.15 | 3.5 | 3.5 | 3.5 |
| 22 | 4.5 | nil | nil |
[7] The application subjects form the ground floor and basement office premises known as 22 Abbey Lane registered in the Land Register of Scotland under Title Number MID72122. The Deed of Conditions constitutes Entry 4 of the Burdens Section thereof.
[8] This application is for partial discharge and variation of the title condition. The applicant as owner of the burdened property, considers he should not be liable for maintaining and renewing the common entrance, doors, passageways and stairs to which he has no access and from which, he contends, he derives no benefit.
[9] Section 98 of the Act provides that such an application for discharge or variation “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 … it is reasonable to grant the application.” Section 100 lists the factors mentioned in Section 98.
[10] The parties agreed, under rule 26 of the Lands Tribunal for Scotland Rules 2003, that the case could be dealt with by way of written submissions and site inspection, and without an oral hearing, The applicant and owner of the subject property is Brian Ross Kennedy a partner in Warners, solicitors, Edinburgh and the respondents are a partnership, Abbey Lane Properties represented by Robert Bree, one of the members of the partnership who is also a partner in Macdonalds, solicitors Glasgow. The respondents own 3 flats being Nos. 30/1, 30/2 and 30/15 Abbey Lane. The parties have agreed that each would bear their own costs.
[11] An inspection of the subjects and the common parts to the development was carried out by the Tribunal on 18 February 2010. This was accompanied by Neil Main, of Messrs Charles White Limited, the present managing agents and factors of the building.
[12] Written submissions were lodged by both parties. The applicant’s submission included correspondence with the said Charles White Limited; an opinion letter from Anderson Strathern, solicitors; and copies of Land Certificates and Deeds of Conditions from other developments showing how maintenance costs were shared between residential proprietors and ground floor commercial property owners.
[13] All 31 residential proprietors were informed of the terms of the application. The only objection was by the respondents as owners of the 3 flats above-mentioned. All other flats appear to be in separate ownership and some appear to be let.
[14] Having considered the applicant’s submissions and the respondents’ representations and also on the basis of our visit to the subjects, the Tribunal has found the following facts established.
[15] The burdened property is a self-contained, ground floor office with store rooms and toilets at basement level. The only access is the street level entrance No.22 Abbey Lane. It is leased and occupied as an estate agent’s office and forms part of a modern flatted housing development built in 2004 by Tipperlinn Development Company, part of Elphinstone Homes. The applicant acquired his interest in the subjects in August 2008.
[16] The development comprises 31 residential flats over seven floors, the 32nd unit being the subject property. Although the building comprises one “block” there are two common entrances and stairs, each situated towards opposite ends of the development. The entrance and stair to No.24 is close to the subjects and the entrance and stair to No.30 is towards the south end of the development.
[17] There is secure car parking at upper ground floor and lower ground floor levels accessed from Abbey Lane. Each flat has one parking space and from the car park there is pedestrian access to the common stairs. The lower ground car park is mainly occupied by the owners of flats off the common stair of No.30 and the upper ground level car park is used by the owners of flats off the common stair No.24. From each car park there is access to both common stairs.
[18] The subjects do not include a car space and the owners do not have access to the car parks nor do they have access to either entrance or common stair. Lifts, accessible from each ground floor entrance, serve floors 1-6. A feature of the development is a “common” open terrace at first floor level linking both stairs and which is therefore accessible to all flat residents.
[19] The Schedule, in the Deed of Conditions, identifies the allocation of certain common liabilities between the flats and the commercial property (No.22). In most cases the individual flat owners bear the same proportion of each cost category which is split into “core common parts liabilities”, “car parking and intercom apparatus liabilities” and “lift liabilities”. According to the Schedule the subject property’s share of liability in respect of car parking, intercom and lift liability is nil but there is an allocation of 4.5% in respect of core common parts liability. The core common parts include inter alia the solum of the development, walls, roof, rainwater goods, plumbing, sewers, gas and water mains, electricity mains television aerial systems serving the block, all bin stores, stairwells, service ducts, entrance halls and landings, internal lighting, stair and passage surfaces and carpets and all other parts of the development common to the flat proprietors and the commercial premises but excluding the car parking areas, the lift apparatus, the intercom apparatus and the garden. As above mentioned, core common parts liabilities are allocated between the flats and the subjects in accordance with the Schedule. Common electricity charges are to be apportioned in terms of Clause TENTH of the deed of conditions.
[20] The applicant submits that of the 31 flat proprietors only one owner (albeit of three properties), the respondent party, actively objected to the application. He points to emails from 9 other owners stating they have “positively voted in favour of the applicant’s unit being exempted from common stair charges”. He argues that the cost implications of the proposed variation to the residents is minimal as their liability proportion would only change from a fraction, of 1/32 to 1/31, which he considers is not material. In contrast, he argues, the applicant is burdened by the costs of paying for upkeep and services which do not benefit the applicant’s property. He submits these costs include electricity charges relating to the lighting of the common stairs, repairs to common stair doors, paintwork to stairwells and the installation of common stair light sensors. Furthermore the applicant submits that the burden is not fair or equitable and is contrary to common sense. In support of this the applicant has obtained copies of five deeds of conditions of similar developments where there are commercial subjects at ground level with residential flats above. He submits that normally there would be no maintenance liability falling on the commercial property owner in respect of common stair maintenance if the commercial property derives no benefit from the common stair.
[21] This view is supported by first, an informal opinion from the new business developer manager at Charles White Limited and, second, a letter from Ian Moffett of Anderson Strathern, solicitors, Edinburgh, each of whom indicate that in their experience the commercial property owner would not normally be expected to bear costs associated with the common entrance and stair in circumstances where the commercial property had no access. In further support of his position the applicant, by way of analogy, points to the terms of the Tenement Management Scheme under the Tenements (Scotland) Act 2004 which, in the absence of specific title conditions, provides that only those units benefiting from a common stair should contribute to the associated costs.
[22] It is the applicant’s view that the Deed of Conditions is neither clear nor well drafted and no thought has been given to separating out responsibility for the common entrances and stairs from the Core Common Parts. The applicant accepts that he has interest in a well maintained development but he is not interested in the upkeep of the common stair and should not be burdened with that cost.
[23] As regards the list of statutory factors at Section 100 of the Act the applicant relies on factors (b), (c), (d), and (j). He states under (b) that there is no discernable benefit to the benefited properties in that those who are served by the entrance and stairs should properly bear the costs of upkeep. The respondents would not be substantially worse off if the application was granted due to there being 31 units required to share the additional cost currently allocated to the subjects.
[24] Under factor (c), the applicant submits that he is being economically disadvantaged by the burden which is consequently reducing the return on his investment as owner of the property, which is leased to tenants who oppose paying a charge for a facility they cannot use. Such economic disadvantage is, according to the applicant, also relevant.
[25] Factor (d) the applicant considers is relevant in that it is costly to comply with the burden and is therefore a factor in his favour. He has to contribute to the costs of stair cleaning, electricity for lighting the common stair, repairs to common stair doors, paintwork to stairwells and common stair light sensors.
[26] Under factor (j), the applicant points to the intrinsic unfairness of imposing on him costs for the upkeep of a part of the development which does not serve the burdened subjects. He believes the deed to be fundamentally flawed and inequitable and does not represent the legitimate approach claimed by the respondents.
[27] The respondents submit that there is little to be gained by looking at other examples of Deeds of Conditions as the issue is “self contained and turns on its own particular facts”; that the terms of the Deed of Conditions are clear; that the core common parts are deliberately and clearly defined; and that the burdened property owner does have an interest in and benefits from a well maintained development. They argue that, while the burdened property is not directly served by the common entrances and stairs, their interest is the same and does not significantly differ from their interest in the exterior of the building at, for example, the other side of the development or in a section of roof that is not proximate to the burdened property. They also submit that an owner of a flat in one common stair has, in a similar fashion, little direct benefit from, or interest in, the other common entrance or stairway, even though all such costs are to be shared in terms of the Deed of Conditions. The respondents submit that the approach adopted in the Deed of Conditions, whilst not to the applicant’s liking, is a reasonable and legitimate one with the outcome entirely reflecting the intentions of the granter. Any suggestion by the applicant that the there has been “sloppy drafting” of the deed should be rejected. “Full thought” was given to its terms.
[28] Addressing the same section 100 factors relied on by the applicant, the respondents argue that under:
Factor (b) - the general obligation to uphold and maintain in good order the various common parts does confer benefit.
Factor (c) - the burdened property is not impeded to any material extent, with the applicant’s personal circumstances regarding return on his investment, irrelevant to the application.
Factor (d) - it is entirely practical to comply with the condition and the charge on the burdened property is only 4.5% of the relevant costs. The condition imposes a basis for charging which was known or ought to have been known to the applicant when the subjects were acquired.
(j) The clear intention of the draftsman, so far as it is relevant, was that the costs of maintenance of all parts, other than specific, narrow and well defined exceptions, are to be shared amongst all proprietors in the development in accordance with the schedule, which represents an entirely legitimate approach, and not an unfair one.
[29] The Deed of Conditions clearly defines the “Core Common Parts” (see above) and includes elements, such as the solum, main walls, roofs, rainwater goods, other mains services and the common stairways; typically referred to as the common parts in a flatted development and in which each proprietor has a pro indiviso interest.
[30] In this development there are a number of specified shared elements, such as the lift apparatus, the intercom apparatus and the car parking which are excluded from the core common parts and the responsibility for which lies with the residential flats only with no liability borne by the ground floor commercial property. Telecommunications and television apparatus costs are to be shared equally by all proprietors in the block i.e. residential and commercial whether or not they subscribe to such services.
[31] Although we recognise that the parties have referred only to certain factors, our consideration of the relevant factors listed in section 100 of the Act is as follows.
[32] Firstly, in respect of Factor (a) we do not consider that there has been any change of circumstances since July 2004 either in the character of the benefited or the burdened property or of the neighbourhood.
[33] Factor (b), the extent to which the condition benefits the benefited, (i.e. the respondents’) property is central to the issue but it is to be balanced against factor (c), the extent of the burden on the burdened (i.e. the applicant’s property.)
[34] It is noted that 28 of the current proprietors did not object to the application. However, we do not think that failure to object should be equated with those proprietors actively and positively agreeing to the applicant’s position. Some individual flat owners may have considered that they did not wish to incur the costs of taking legal advice or that there were potential cost implications in actively opposing the application, particularly when there would be minimal financial effect on them if the application sought were granted. Accordingly, while we can accept that the comparative lack of objection is a factor of some relevance, we consider it of very little weight in the circumstances of this case.
[35] On a similar point, the various emails between residents which the applicant has lodged as productions, give an indication of some support for the applicant but the comments represent the views of less than a third of the proprietors. We do not feel that their support adds materially to the picture that emerges. What can be said is that a number of residents appear to be sympathetic to the application but a significant number have not positively expressed a view one way or the other.
[36] The extent to which the respondents’ property is benefited by the present terms of the condition appears modest in that the effect of the proposed variation would be to slightly increase the percentage of “core common parts” costs amongst all the flat proprietors, as tabled in the Deed of Conditions. The burden placed on the applicant’s property is, however, also relatively minor when seen in the context of the overall “core common parts liability” other than certain electricity/lighting costs put forward by the applicant. These costs covered a four or five year period but are rebutted by the respondents as “misplaced” since the costs had accrued prior to the applicant’s purchase of the subjects. Electricity costs are to be apportioned in terms of Clause Tenth. We have no clear evidence of the cost burden in this connection. However, regardless of actual costs, there is little obvious benefit to the applicant in having to assume a share of maintaining the common stairs and it is hard to see how a well maintained entrance or stair has any real benefit, as such, to the applicant who cannot see or access the entrance or stair.
[37] We have covered above Factor (c), the extent to which the condition impedes the enjoyment of the applicant’s property. The impediment to the applicant is plainly the additional cost liability associated with the inclusion of the common entrances and stairs in the category “core common parts”.
[38] Factor (d) - if the condition is an obligation to do something, how practicable or costly is it to comply. Clearly there is an obligation to pay the costs of the common entrances and stairs. It is practical to pay, in that relevant costs are included in the Factor’s accounts and as discussed above, in our view, the additional cost when considered in the context of other property costs is modest.
[39] Factor (e), the length of time which has elapsed since the condition was created, is important particularly as we have not found any significant change of circumstances supporting the reasonableness of the application. The condition was created in 2004 just 5 years before the application was lodged. It might be argued that, if some form of undisputed error of drafting had occurred, the issue of time would not be significant but in the Tribunal’s opinion that is not the case here. Indeed, the relative recentness of the deed and the provisions favours the respondents.
[40] Factor (f) the purpose of the condition. Clearly the overall purpose of the condition is to regulate the basis on which maintenance costs to common parts are to be managed and how these costs are to be shared between proprietors.
[41] The schedule in the Deed of Conditions shows that for many flats, but not all, the allocation of the various cost elements is equal as between “core common parts” liability, car parking and intercom liability and lift liability. There is, however, variation between flats in respect of core common parts ranging from 2.5% to 4.5%. The basis of allocation of costs between flats has not been explained, and it is curious that, for example, the percentage of garage maintenance costs are allocated differentially between flats even though each flat has only one space. While there do appear to be a number of areas where the logic behind the allocations is not easily discerned, there is also evidence of intention on the part of the draftsman.
[42] In the Tribunal’s view a picture emerges of a deed of conditions that attempts to show how costs are to be allocated with specific percentages allocated to each individual flat as set out in the table in the deed. There may be a number of allocations that are not apparently logical and may even be viewed as potentially unfair. However, our evidence on this was scant and purchasers were, of course, free to form their own view as to the extent of any unfairness and to walk away from a purchase. We can therefore assume that all current owners must have formed the view that the allocation percentages were acceptable in the context of their purchase. In many flatted developments there will be inconsistencies in the allocation of costs between proprietors. If inconsistencies have arisen, it does not follow that conditions should be lightly varied or discharged. The specific circumstances in each case have to be considered. In this situation there is undoubtedly an unusual arrangement where the commercial subjects are obliged to contribute to the maintenance of the common entrance and stair but just because it is unusual or possibly even unfair does not, by itself, mean the application is overall a reasonable one that justifies varying the deed of conditions. Indeed, without any information as to how the 4.5% figure was arrived at, it is impossible to rule out the possibility that it fairly reflects the imposition of liability for these matters for which the ground floor commercial proprietor would not normally be liable – i.e. but for this liability, the figure might, for all we know, have been higher.
[43] For whatever reason, the entrances and stairs have been included in the “core common parts” which embraces a wide range of common features such as walls, roofs, services etc and might be seen as something of a catch-all category when the only exclusions are the lift apparatus and the car parking and intercom apparatus. There is no other separately identified category of liability and it would appear that a broadbrush approach has, not unreasonably and very probably intentionally, been adopted by the draftsman. For example, all flat proprietors share the stair maintenance costs, irrespective of which stair serves which flats. Indeed the failure, in an otherwise detailed set of conditions with a comprehensive interpretation section, to differentiate the position of the commercial property owner, or for that matter flat proprietors at different levels, suggests an intentional broadbrush approach to this particular title condition.
[44] Factors (g), (h) and (i) do not appear to have relevance in this case.
[45] Factor (j) - although the allocation of cost liabilities does appear somewhat simplistic and it is accepted that normally a main door unit in a development would not be responsible for common stair maintenance costs, it is workable and is not, on the evidence submitted, comprehensively inequitable. When viewed overall, we do not consider there is any material economic prejudice to the applicant and the impact on rental value is likely to be minimal.
[46] Rightly or wrongly the deed of conditions was accepted by all the original flat owners and by both the original commercial property owner and subsequently by the applicant. Weighing up all the factors we are not persuaded that this application is reasonable. We have looked at the purpose of the title conditions which is to regulate the common costs and whilst we accept that including the entrances and stairs maintenance liability in the core common parts appears unusual and possibly slightly unfair, taken as a whole, we not consider the application should be granted.
Certified a true copy of the statement of reasons for the decision of the Lands Tribunal for Scotland intimated to parties on 29 March 2010
Neil M Tainsh – Clerk to the Tribunal