DESCRIPTIVE RUBRIC

Heritable Property – Title Conditions – Tenement deed of conditions apportioning common charges on basis of values fixed under rating system – Validity – Whether condition void or values as at 1 April 1989 to be applied – One property apparently not on 1989 Valuation Roll – Local Government Finance Act 1992, Section 111 – Title Conditions (Scotland) Act 2003, Section 90(i)(a)(ii)

Heritable Property – Title Conditions – Discharge or Variation – Competency – Tenement deed of conditions apportioning common charges under rating system – Effect of variation order on other properties – Tribunal expressing doubt about competency of application by individual proprietor and allowing opportunity for further submissions – Title Conditions (Scotland) Act 2003, Sections 33-34, 35-37, 90(1)(a)(i), 90(5) and 91

Heritable Property – Title Conditions – Discharge or variation – Reasonableness – Tenement deed of conditions apportioning common charges on basis of values fixed under rating system – Ground floor properties residential at time of deed, commercial in April 1989 and subsequently again residential – Local Government Finance Act 1992, Section 111 – Title Conditions (Scotland) Act 2003, Sections 98, 100

Patterson & Let’s Direct v Drouet & Ors
20 January 2011
LTS/TC/2010/09, 11

Proprietors of two ground floor properties in a tenement sought a determination that the condition in a deed of conditions apportioning common charges on the basis of rateable values was void; or alternatively, for variation to provide a more equitable apportionment. They argued (1) the condition no longer provided any method of apportionment, section 111 of the Local Government Finance Act 1992 being inapplicable where one property in the tenement was apparently not on the Valuation Roll on 1 April 1989; (2) alternatively, variation under Section 90(1)(a)(i) would be competent because, although it would necessitate a change in the apportionment among all the properties and the Tenement (Scotland) Act 2004 provisions would come into operation, the actual order would merely reduce the liabilities of the applicants’ properties and not impose any new obligation on other properties; and (3) in the situation where the ground floor properties had been residential when the deed was executed, commercial as at April 1989 but subsequently again residential, variation was reasonable. The application was opposed by some other proprietors, who acknowledged to varying degrees the unfairness from the operation of the 1992 Act but pointed out that there was apparently widespread acceptance of that provision and the prices paid for the applicants’ properties had been consequentially depressed.

Held (1) refusing the determination sought, Section 111 applied, it not having been demonstrated that the one property did not appear on the April 1989 Roll and in any event Section 111, which had been operated at the properties for many years, should be construed as being applicable [Note: the Tribunal was not referred to Section 111(11) of the 1992 Act];

(2) continuing the application, the Tribunal doubted the competency of application under Section 90(1)(a)(i) where the clear understanding was that the effect of an order would be to increase the burden on other proprietors. The Tribunal noted that the 2003 Act provided other mechanisms for varying community burdens. Reference was made to authorities not referred to at the hearing, viz Murrayfield Ice Rink Ltd v S.R.U. and Mrs Young & Ors Applicants and the application would be continued to give parties the opportunity of making further submissions on the matter; (3) it was appropriate, despite the doubts on competency, to indicate that the application, if competent, would be held reasonable. The purpose of the condition was to produce certainty in the apportionment but stay in line with current values, and the particular changes in circumstances in this case, including the enactment of section 111, made the current situation unfair and inequitable. However, compensation might be appropriate if an effect on the values of other properties could be demonstrated.

Authorities referred to:-

Murrayfield Ice Rink Ltd v S. R. U. 1973 SLT 99
Macdonald Applicant 1973 SLT (Lands Tr) 26
Mrs Young & Ors Applicants 1978 SLT (Lands Tr) 28
Kennedy v Abbey Lane Properties, 29.3.2010, LTS/TC/2009/26


See full decision:  LTS/TC/2010/09 and 11