Freedom or Control? Variation of Title Conditions by the Lands Tribunal

Most owners of heritable property would like to think that they are entitled to do what they like on their own property, but planning, building regulation and environmental considerations quickly enter the picture when erection or demolition of buildings is contemplated. These are not the only hurdles however, and many owners find themselves faced with restrictions or prohibitions in their title deeds as well. So what can you do if you want to put up additional buildings or extend your property, but there is a prohibition in the title that prevents it?

29 September 2006

Most owners of heritable property would like to think that they are entitled to do what they like on their own property, but planning, building regulation and environmental considerations quickly enter the picture when erection or demolition of buildings is contemplated. These are not the only hurdles however, and many owners find themselves faced with restrictions or prohibitions in their title deeds as well. So what can you do if you want to put up additional buildings or extend your property, but there is a prohibition in the title that prevents it?

In recent years, changes in property law, which were intended to make it easier for an owner to deal with his property in an unfettered way, haven't necessarily had that effect, at least not as far as property lawyers are concerned. The abolition of the feudal system extinguished many purely feudal title conditions, meaning that the anachronistic entitlement of the feudal "superior"  - often geographically distant from the affected property – to enforce such conditions has disappeared.  But there are still many title conditions that continue to be enforceable today, either by neighbours whose property may be affected by a breach of the condition, or in communities where a number of properties are subject to the same type of condition, and changes made to the law by the Title Conditions (Scotland) Act 2003, have resulted in a degree of uncertainty in some cases about whether there is anyone with rights to enforce the conditions, and if so, who they are.

The Lands Tribunal for Scotland has had the power for over 25 years to vary or discharge land obligations, which include title conditions, on the application of a property owner whose title is affected by burdens, and its powers were extended by the 2003 Act, allowing a greater degree of flexibility in the matters it is able to take into account when arriving at its decisions.

A number of its decisions this year have been reported recently and each of these can assist our understanding of the factors that the Tribunal will consider during their deliberations. That said, the Tribunal is at pains to point out that each case has to be looked at individually, and that a site investigation often plays a significant part in their deliberations, so that an apparently similar set of facts may not result in the same outcome.

Division of a large flatted dwellinghouse

The case of Regan v Mullen (J N Wright, QC, K M Barclay, FRICS, 17 February 2006) concerned an application by the owner of a double penthouse flat in a development in a former warehouse, looking for a variation of conditions in the title that prevented sub-division of the penthouse into two smaller units. A significant number of other proprietors in the development objected to the proposal, suggesting that the creation of an additional flat would unsettle the status qua and could cause problems with the management of the development, and there had been no change in circumstances which would make it reasonable to depart from the conditions for this property. The view of the Tribunal was that it was perfectly reasonable to permit a sub-division of this flat, despite there being no material change in circumstances.

Demolish one house and build two

The proposal in the case of Daly v Bryce (J N Wright, QC, K M Barclay, FRICS, 28 April 2006) was for a bungalow to be demolished and two two-storey houses built in its place. The neighbours objected principally on the ground that their light would be partially restricted, although it was also the case that the title condition in question, while allowing building of two storeys, only referred to one dwellinghouse. Although the Tribunal acknowledged that the building restriction would be likely to include an element of physical amenity, because it was able to consider other factors as well and weigh them against each other, issues such as the fact that the existing house was old fashioned and in need of significant upgrading, that the actual benefit to the neighbours of the original condition was limited, and that planning permission had already been granted for the proposed houses meant that on balance it would be reasonable to allow the condition to be varied, since the balance between the benefit to the neighbours of the condition and the burden on the owner fell on the side of the owner.

Amenity or consent

There were several objectors to the application in Faeley v Clark (J N Wright, QC, I M Darling, FRICS, 28 June 2006).  The proposal was to build a two storey house with extension and a granny flat in the garden of the applicant. One of the objectors had the benefit of a condition in the title requiring his consent to any buildings.  Another objector complained about the damage to her amenity including the disruption of the view from her property.

The Tribunal refused the application on the basis that it was unreasonable to override the requirement of the neighbour's consent and in this particular case, the proposed height of the building would have a significant adverse effect. It did not however consider that the other neighbour's amenity would be affected in any significant way by the proposals, although this view is somewhat academic given that it determined to uphold the objections of the other neighbour.

What are the factors that the Lands Tribunal will consider?

The full details of each of these cases needs to be looked at in more detail, to identify which of all of the factors that the Tribunal is now able to take into account are the ones which have prevailed in any given case. Whereas previously, the factors which could be considered by the Tribunal were alternatives, now the approach that the Tribunal can take is based on a cumulative consideration of all relevant factors, weighing each one against the others, although much of its current approach is similar to the method that it had evolved under the previous more restricted regime.

Section 100 of the 2003 Act identifies for the Lands Tribunal ten factors to which it is to have regard when determining applications. In the case of Ord v Mashford, one of the early cases determined by the Tribunal after assuming its new powers, it took the time to set out in some detail the relative weight it attributed to each of the factors, and the approach it would take generally. 

The Tribunal has said that it does not consider that the order in which the factors are set down in the Act implies any order of ranking, and that it will look first at the purpose or intention behind the original imposition of the title condition, which happens to be the fifth factor in the list.  In the order in which they are set out in the Act, the factors are:

Change in circumstances

The Tribunal is to consider any change in circumstances since the title condition was originally created, and this can include any change in the character of either the property benefiting from the condition, or the property burdened by it, or a change in the neighbourhood of the properties. Under the previous regime, the factor only related to changes in the character of the neighbourhood, and this often led to a considerable amount of debate as to the precise extent of the "neighbourhood" in question, but neighbourhood is now much less significant a factor, circumstances now being the key feature.

Extent of benefit

The second factor in the list is the extent to which the condition confers benefit on the benefited property, or the public, if there is no benefited property. Previously this factor was approached by looking at the balance between a condition being unduly burdensome, as against any benefit that might be enjoyed from compliance with the condition, and little benefit was required to justify refusal of an application to discharge the burden.  The Tribunal now considers this factor to be one of the main factors that will have a say in the decision to refuse an application, and while the purpose of the burden is key, identifying that there is a present benefit will be fundamental.

Impediment to enjoyment

The third factor also echoes one of the three factors which the Tribunal could consider in the alternative, under the old regime, that of the extent to which the condition impedes enjoyment of the burdened property. As the old options available to the Tribunal were alternatives, if there was any significant benefit from the burden, then that would be likely to outweigh any impediment on the burdened property. Now the Tribunal can consider both elements among the range of factors available to them to consider in each application.

In Ord v Mashford the Tribunal indicates that they do not think this is a factor which can he expected to carry much weight, particularly since the burden would have been accepted, initially, as part of a negotiated arrangement, and the restriction reflected in the price. The reality for subsequent purchasers however, is that burdens in the title will play little or no part in what they initially decide to pay for a property, unless during the due diligence process they consider that the burdens are so onerous as to merit a re-negotiation on price. It is to be hoped therefore that this and the preceding factor will be able to be given equal weight in appropriate circumstances.

Practicability and cost of compliance

The next factor for consideration is that, where the condition is an obligation to do something, the Tribunal should consider how practicable or costly it is to comply with the condition. This factor will not apply to all conditions and generally is likely to be a matter for the particular circumstances of the case.

How long ago was the burden created

The Tribunal can have regard to the length of time which has elapsed since the condition was created. However, just because a burden was imposed many years ago does not mean that it is necessarily obsolete or out-of-date by virtue of that reason alone.  So the age of a burden is likely to be relatively unimportant, although it may be more likely that if the burden is very recent, the Tribunal will give more weight to that fact.  This would certainly reflect the approach of the Act, which allows parties, when negotiating the creation of a burden, to agree that there will be no attempt to apply to have that burden discharged for up to a five-year period from the date of creation.

Purpose of condition

The Tribunal has said that they see this as being usually the most important factor for consideration, and will look at "the purpose or intention behind the imposition of the original condition". The interaction of original purpose with changes in circumstances, or the length of time since the condition was imposed will often be significant, although not always relevant. Purpose also has an important role to play in deciding on the weight to be given to the benefit conferred by the condition.

Planning and other permissions

The existence of consent from the planning, or other authority for a use which the title condition prevents, is seen by the Tribunal as a relatively neutral factor.  Their concern is with private rights created by contract, whereas the planning system deals with the public interest. Under the old regime it was frequently the case that the existence of a planning consent for a different use would be regarded as persuasive by the Tribunal, although this could be regarded as no more than accepting that such use would be reasonable from the viewpoint of the public.

Willingness to pay Compensation

The Tribunal expresses a little puzzlement as to what role willingness on the part of the owner of the burdened property to pay compensation is supposed to play in their assessment of all of the factors. It suggests that it may be assumed in every case that an applicant would be prepared to pay compensation, and they would not necessarily expect this to be raised as an issue in the application. If however it was apparent to the Tribunal that a party was objecting to the proposed discharge of a title condition purely to obtain some monetary gain, then this could be taken into account by the Tribunal.

New purpose under compulsory acquisition arrangements

The Act provides for parties whose land may be acquired by compulsory purchase to reach agreement with the acquiring authority to convey the land, instead of going through the CPO procedure. Where this will result in burdens affecting the land being extinguished, the owner of the land has to notify the benefited proprietor, who then has the right to apply to have the conditions preserved. In such cases the Tribunal can consider the purpose for which the land is being acquired among the factors in reaching its decision.

Any other material factor

The Tribunal must take into account any other factors which they regard as material to the individual circumstances of the case. They were able to do this under the previous law, and it gives them a general discretion as to what other factors they can consider. They make a point of saying, however, that purely personal interests do not fall into this category, and they will give no weight to personal matters.

A reasonable approach overall

The Tribunal sees the list of factors provided in the Act as helpful in allowing applicants to identify the type of factors that are likely to be regarded as significant by the Tribunal, but its general discretion means that the range of factors it may regard as relevant to any particular case is not confined to the list.  Overall the Tribunal requires to assess reasonableness, and it expects that while decisions will still involve a degree of discretion, its approach under the new regime can be expected to be considerably more straightforward. Comparison with decisions in previous cases is likely to give way to evaluating and analysing the facts and circumstances of each case.

The decision in Ord v Mashford can be downloaded from the website of the Lands Tribunal at: