ABOLITION OF FEUDAL TENURE (SCOTLAND) ACT 2000

Some explanation of the legal terms may be helpful:-

• the feuar or vassal is the owner of the land held on a feudal title. The feuar's interest is known as the dominium utile;
• the feudal superior has certain rights in the same land. His interest is known as the superiority or dominium directum and includes a right to enforce the title conditions;
• feuduty is an annual cash payment by the feuar to the superior. Most feuduties have now been redeemed;
• a feudal grant of title such as a Feu Charter or a Feu Disposition is a conveyance of land whereby the granter of the deed becomes the feudal superior of what is conveyed and the grantee becomes the feuar;
• a Disposition is a conveyance of land which does not create the relationship of superior and feuar.

Title conditions have been imposed not only by feudal grant but also by Disposition. The Abolition of Feudal Tenure (Scotland) Act 2000 does not affect title conditions which were created otherwise than by feudal grant. A separate J. & H. Mitchell Fact Sheet will explain the Title Conditions (Scotland) Act 2004 which deals with the enforceability of title conditions which either (a) have been created by Disposition or (b) are feuing conditions which, for one reason or another, have been preserved following the abolition of the feudal system.

The Abolition of Feudal Tenure Etc. (Scotland) Act 2000 abolishes all the remaining aspects of the feudal system as at 28th November 2004. On that date the feuar as owner of the dominium utile of the feu becomes the absolute owner, equivalent to the English freehold system. The feudal superiority and concept of feudal superior will simply cease to exist.

The main implications are:
(a) feuduty will cease to be payable although, as mentioned below, the former superior can require a payment from the former feuar equivalent to the feuduty redemption payment;
(b) the former superior will no longer have a right to enforce title conditions, but as mentioned below, can, in some circumstances, take steps to preserve some of these conditions; and
(c) sporting rights which have been reserved in a feudal grant will cease to be exercisable by the former superior.

Looking at these in more detail –

Feuduty
The number of remaining feuduties is relatively small. After 28th November 2004 feuduty will cease to be payable but during the period 28th November 2004 to 28th November 2006 the former superior has the right to serve notice on the former vassal requiring a "compensatory payment" in respect of feuduties abolished at 28th November 2004.

The compensatory payment is calculated by reference to the price of 2½% Consolidated Stock, i.e. the same basis on which the present redemption of feuduty operates, which gives rise to a payment equivalent to about twenty times the annual feuduty. The compensatory payment will simply be a monetary debt payable by the former feuar and will not be attached to the land in any way.

If the compensatory payment is £50 or less it must be paid within 56 days of service of the Notice. If the compensatory payment is more than £50 the former feuar is given the opportunity to pay by way of equal six monthly instalments as follows:-
(a) if the compensatory payment is £500 or less, by way of five equal instalments;
(b) if it is between £500 and £1,000, by way of ten equal instalments;
(c) if it is between £1,000 and £1,500, by way of fifteen equal instalments; and
(d) if it is more than £1,500, by way of twenty equal instalments.
The instalment dates are 28th May and 28th November in each year following service of the Notice. Where a payment is by way of instalments the former superior may charge an additional 10%.

There are special rules relating to cases where a feu has been sub-divided and where the feuduty is either "allocated" or "apportioned". This is common in the case of tenement flats.

Feuing Conditions
Feudal titles commonly include title conditions relating to (a) reservations of minerals, (b) restrictions on use of the property and on alterations to buildings etc. and (c) conditions relating to maintenance of access roads, water supplies and other services and of boundary fences etc. A reservation of minerals in a feudal title remains valid notwithstanding the abolition of feudal tenure but some ancillary rights connected with the minerals may be lost.

As at 28th November 2004 all burdens which were enforceable only by the feudal superior are extinguished. Burdens in Category (c) above will no longer be enforceable by the former superior, as superior, but may still be enforceable by him (and possibly by others) in their capacity as owners of other land. Feudal titles also commonly reserve rights of access in favour of other parts of the superior's landed estate. These are in effect servitudes and continue to be enforceable after the abolition of feudal tenure so long as the rights are expressed to be in favour of the relevant other land.

Preservation of Title Conditions
As mentioned earlier, the 2000 Act does not affect title conditions established other than by feudal title. The 2000 Act provides a mechanism for re-allotting feudal title conditions to other land in the superior's ownership so that the present superior may have the benefit of enforcing them in his capacity as owner of that other land after the feudal superiority has ceased to exist. In order to do so, the superior must register the appropriate notice in the Land Register prior to 28th November 2004.

The circumstances in which re-allotment of burdens may be effected are severely restricted, to the following circumstances:-
(a) The land to which the burden is re-allotted must have on it a permanent building which is used wholly or mainly as a place of human habitation or resort and that building must be within 100 metres of the boundary of the feu. The building must be in the superior's ownership. A dwellinghouse, hotel, shop, workshop or office would meet the relevant criteria but it is unlikely that agricultural buildings are relevant.
(b) The burden comprises a right to enter, or otherwise make use of the feu. In this case there is no requirement for the superior to have a permanent building within 100 metres of the feu. This category is intended to deal with reserved rights of access which are expressed to be in favour of the superior (in his capacity as superior) rather than reserved in favour of the owner of neighbouring ground (who happens to be the superior). In recent titles it has been normal for such rights to be reserved in favour of the superior in his capacity as owner of the adjoining ground rather than in his capacity as superior.
(c) The burden comprises a right of pre-emption or right of redemption. In this case there is also no need for there to be a permanent building within 100 metres of the feu.
(d) The superiority interest comprises mineral rights or salmon fishings. Such cases are rare. The Act does not affect the ownership of mineral rights or salmon fishings themselves.

In order to preserve and re-allot burdens in any of the foregoing cases, the superior must register the appropriate notice in the Land Register before 28th November 2004. Careful consideration should be given as to whether to do so. In many cases the superior will need to obtain updated Searches in the Register of Sasines or Land Register to identify correctly the present owners of the feus. The notice to be registered must clearly identify both the feu and the superior's property to which the burden is to be re-allotted so that these can be identified on the Ordnance Survey map, and accordingly new plans will be required in many cases. In cases where superiors are interested in preserving and re-allotting feuing conditions the estate titles will need to be searched to identify precisely the cases where re-allotment of burdens may be appropriate and may be worth implementing. This can be time consuming and costly.

Before registering the notice, the superior must execute an Affidavit in the presence of a Notary Public certifying that the information contained in the notice is true. A copy of the notice must be served on the feuar.

Registers of Scotland charge £25 for registering the notice, or £50 if it requires to be registered both in the Register of Sasines and Land Register.

In cases where the burdens are re-allotted, it should not be assumed that the title conditions will necessarily continue to be enforceable as the former superior will still need to demonstrate an interest to enforce should he wish to do so. However, as the circumstances in which re-allotment of burdens is possible are so restricted, the former superior will probably be able to demonstrate an interest to enforce in almost all such cases. The attitude of the Courts to this matter remains to be seen.

Re-allotment of Burdens by agreement or by Order of the Lands Tribunal for Scotland
If none of the circumstances mentioned above for the re-allotment of burdens apply, the burden may still be re-allotted by agreement of the parties so long as the Agreement is registered before 28th November 2004. It is hard to envisage feuars being willing to enter into such Agreements with their superiors and if the burden does not meet one of the categories mentioned earlier it may be unlikely that the burden would be of sufficient benefit to the superior's property as to remain enforceable.

If the superior has tried unsuccessfully to re-allot a burden by agreement he may apply to the Lands Tribunal for Scotland for an order re-allotting the burden to a particular property in the superior's ownership. It is thought unlikely that the Lands Tribunal will be willing in many cases to grant such applications.

Rights of Pre-emption and Rights of Redemption
As mentioned earlier, a right of pre-emption may be re-allotted to a particular property in the superior's ownership. The 100 metre rule does not apply. The superior should choose the property in his ownership which is to have the benefit of the right and must register the appropriate Notice at the Land Register before 28th November 2004. If the superior no longer owns property in the area he may convert the right of pre-emption or redemption to a new personal right by registering the appropriate Notice in the Land Register before 28th November 2004. Thereafter the former superior may assign (or even sell) the right should he wish to do so.

Development Value Burdens
In cases where land has been conveyed by feudal grant at a price lower than the full market value because of some restriction on development imposed by the superior in the title, the superior may register a Notice in the Land Register prior to 28th November 2004 to register an interest in a claim for compensation in the event of the development which is at present prohibited taking place in the future. The claim to compensation is, however, restricted as follows:-
(i) it applies only if the development occurs in the period 1999 to 2024; and
(ii) the amount of compensation payable relates to the reduction in price which the development value burden would have produced at the time the feu was granted, with no adjustment to take account of the subsequent rise in property values or any other factors.

Conservation Burdens
Certain specified bodies will have the right to continue to enforce "conservation burdens" which are considered to be for the benefit of the public. A typical case would be burdens imposed by Deed of Conditions by the National Trust for Scotland where a number of houses have been restored. Such burdens will remain enforceable if the relevant conservation body registers the appropriate notice prior to 28th November 2004.