|A pilot study was undertaken to identify the different types of non feudal landholdings in Scotland; their approximate scale and geographical location; and to identify any problems associated with different types of tenure. Interviews were undertaken with institutional lenders, solicitors and other key figures concerned with land tenure. Thirty three firms of solicitors and 6 financial institutions were interviewed as were staff from the Law Society of Scotland, Registers of Scotland and 2 firms of surveyors. The research was undertaken by Professor Robert Rennie from the University of Glasgow and Mr David O'Donnell from the University of Aberdeen.|
- The vast majority of property in Scotland is held on feudal tenure.
- Most non feudal tenures are found in particular regions where they have arisen for historical reasons.
- There was some confusion amongst respondents as to what property could properly be considered as non feudal.
- Lenders tended to assume that matters of title would be dealt with by solicitors, but were increasingly aware of the problems which could arise with respect to leasehold titles.
- Solicitors preferred to deal with feudal titles and tended to convert non feudal titles where possible.
- The major problem with non feudal tenure related to leasehold titles.
- Consideration of land reform in Scotland should consider both feudal and non feudal tenure.
|Background to the study|
|There are 2 main types of land tenure: feudal and non feudal. The former is the most common form of ownership found in Scotland. Under feudal tenure, the sovereign, in principle, owns the land. The occupier pays a superior below the sovereign a return in money (feu duty). If this is done and the conditions of the feu observed, the occupier is the effective owner of the land. Conditions might include how the land is used or what buildings are erected. The Land Tribunal for Scotland has the power to vary or discharge such conditions. It is now illegal to create new feus and existing feu duties must be redeemed on sale.|
|The Scottish Law Commission is considering the abolition of feudal tenure, one aspect of which has already been the subject of a CRU report 1. This study was undertaken to examine non feudal tenure in order to ascertain some of the aspects and problems which arise.|
|Non feudal land holdings|
|Non feudal tenures are of various kinds.|
|These are: |
- Allodial Where land is held absolutely (for example, by the church) - found across Scotland. This type of tenure may also be said to include udal tenure.
- Leasehold 2 Where there is a right to occupy the land for a set period. Leasehold tenancies were reported as present across Scotland and instances were reported to be most prevalent in Lanarkshire, with pockets elsewhere, for example, Strathaven and Blairgowrie. Solicitors also reported such tenure in Ullapool and Montrose.
- Tenants at will Where the person occupies through custom or usage land on which ground rent is paid for the land only. These tenancies exist in Leadhills in Lanarkshire, Pennan in Aberdeenshire, Hopeman in Moray, Avoch in Ross and Cromarty and Golspie in Helmsdale.
- Udal Where the landowners can hold land without a written title. Still found in Orkney and Shetland, but appears to be declining.
- Kindly tenants Where the person holds the land under a hereditary lease directly from the Crown in perpetuity. Kindly tenancies are now only to be found in a small area of Dumfries - Lochmaben and Kirkyetholm areas - where the tenants are known as 'rentallers'. This type of tenure will probably be affected when Dumfries becomes an operational area for land registration purposes.
- Commonty Where ground is held under common ownership, usually for grazing or peat cutting. This type of tenure now appears almost extinct.
- Statutory title Land ownership can also be acquired by statutory conveyance - where land is acquired by a Local Authority or some other statutory body. This form of ownership is sometimes referred to as allodial, but there is some debate as to whether such titles are strictly non feudal in law.
- Other tenures Finally, the study found that practitioners in rural areas in the North East, such as Harris and Johnshaven and Gourdon near Montrose, reported certain rights which were claimed as ownership but which were based on no title whatsoever. However, these appear to be best regarded as property held without title where, in some cases, no superior could be traced.
|Solicitors in general preferred to deal with feudal properties than non feudal ones.|
|Aims of the research|
|The research was commissioned as an exploratory study in order to: |
- Identify the different types of non feudal landholding in Scotland
- Identify the scale and geographical location of different tenures
- Identify any problems associated with different types of tenure
- Consider the need for further research
|Crofting tenure was excluded from the scope of the study as it was felt to be too large an area and would merit a study of its own.|
|As there are no central records of the number or location of land tenures, the pilot study drew on the experiences of solicitors, lenders and those with key interests in the area for their responses to the questions raised by the study.|
|Leasehold tenure can apply to commercial and domestic property and is the most common form of non feudal tenure in Scotland.|
|The most common length of tenancy was reported to be 999 years and one lease of 1,000,000 years was reported in Paisley. Ninety nine year leases were common in Blairgowrie. Ninety nine year leases also varied in terms of whether they were automatically renewable (for example in Blairgowrie) or not (for example in some areas of Lanarkshire).|
|Lending policies on leases|
|Financial institutions which lent money on properties were generally unaware of the tenure of the properties they dealt with. They did not collect information on the number and characteristics of leasehold properties nor on whether there were conditions relating to the lease. They expected solicitors to deal with such matters, and if the solicitor was prepared to certify that the title was valid and marketable, the lender would make funds available. Lenders thought that they might have lent on the security of non feudal property without being aware of the fact.|
|This lack of awareness was found regardless of the actual prevalence of leasehold tenure in the area covered by the lender. However, where lenders were made aware of the length of a lease, this did affect decisions on whether to lend on a property or not. Lenders reported that they would be unlikely to accept medium or short term leases as security for a loan over a residential property if the duration of the lease was below ninety nine years and the lease had a short period of say twenty years to run.|
|Solicitors have to be aware of the tenure of a property and most said that they now informed potential purchasers and lenders of leasehold tenure because the purchaser could refuse to accept a lease (however long). However, this had not always been the case and it was reported that previously, 999 year leases had tended to be treated as if they were feudal and neither clients nor lender had been advised that the property was a leasehold. The reason for this change is probably to protect the solicitor from claims in the future if the leasehold title causes problems on the resale.|
|However, those that practised in areas where leasehold tenure was common reported that purchasers were generally unaware of the distinction between leasehold and feudal tenure.|
|Current Problems With Leasehold Tenure|
|The main problems with leasehold tenure related to casualties 3. In some instances, these could be severe - for example, in Wishaw and Clelland leases included a casualty payment on the entry of a new tenant amounting to a year's full value rent for the property.|
|Historical factors could exacerbate the impact of these and less onerous casualties. For example, in ex coal mining areas, the original landlord had passed his interest in the property leases to the National Coal Board following nationalisation. Following that, leases were then passed to the NCB's property owning subsidiary. Solicitors working in such areas reported that the subsidiary had often failed to enforce all or some parts of the leases and this had come to be accepted as normal practice. Prior to privatisation of NCB, estate interests, including superiorities and landlords' titles, were sold. Practitioners in certain areas, particularly in Lanarkshire, reported that following change in ownership, the conditions in leases were being (legitimately) enforced by the new landlords, including the right to demand casualty payments.|
|Purchasers were also said to be reluctant to take a leasehold title where there was a casualty payable on each occasion the property changed hands. In Lanarkshire, solicitors said that the new landlords were prepared to sell their interests to purchasers at rates, it was said, between 2 to 4 times the casualty payment. For domestic properties, this could range from (£1,000) depending on the size and nature of the property and for commercial ones, casualties of up to £25,000 were reported.|
|Regardless of geographical location, leasehold tenures raised problems with different land owners taking different approaches to the enforcement of conditions, including whether or not the rent or casualty was collected. Changes of ownership could exacerbate this. Solicitors felt that, increasingly, landlords saw the acquisition of land as an investment and so felt entitled to maximise their return. It has to be accepted that this is their legal right.|
|A final problem raised in relation to leasehold tenure is that even the longest lease runs out. In practice, even with a lease of 99 years, this simply meant negotiating with the land owner to obtain a feudal title or a renewal of the lease. In some areas, landowners could not be traced with the obvious problems associated with this. Where the lease is for, say 999 years, the owner can be approached with a view to granting a feudal title. Renewable leases were common in Blairgowrie and Fife. Whilst there are legal provisions to ensure that such cases can be resolved where problems arise (for example, if the landlord fails to renew the lease), practitioners in Fife reported that in such cases, leases were dealt with as if they were always ninety nine year leases no matter how long they had to run because of the right to renew for a further ninety nine years. Little account appears to have been taken of the potential difficulties in the exercise of the right to renew.|
|Most land in Scotland is held on feudal tenure and this type of tenure is regarded most favourably by practitioners. Non feudal tenure of different types tends to be concentrated in particular geographical locations, mainly for historical reasons.|
|Of all the types of non feudal tenure, it was clear that leasehold tenure was that most commonly experienced by solicitors and the one which raised the most problems for them and their clients. These problems related to the conditions included in the lease, primarily regarding the payment of casualties when, for example, the land was sold. Other factors such as the length and type of lease were seen as less problematic.|
|Lenders tended not to be aware of the tenure of a property, but there was some suggestion from interviewees that this might be changing, particularly regarding awareness of conditions in leases.|
|Land tenure is not fixed. It is clear that changes are afoot. For example, in Orkney and Shetland, solicitors' conveyancing practices were to feudalise what had been udal land and in other areas other non feudal leases were in effect feudalised.|
|This exploratory study has raised some of the issues and concerns of those who have experience of dealing with different kinds of non feudal tenure. Further study is required of the issues raised and to consider both how landlords in particular view these matters and to consider leasehold reform in other jurisdictions, in particular England. The research suggests that any consideration of land tenure in Scotland must embrace both feudal and non feudal tenure.|
|About the study|
|This study was undertaken to identify some of the issues related to non feudal land tenure. The study was commissioned by The Scottish Office Legal Studies Research Group and was undertaken by Professor Robert Rennie of the University of Glasgow and Mr David O'Donnell of the University of Aberdeen.|
|Samples of those with a key interest in this area were selected in order to collect the views of those most likely to have direct experience of working with non feudal landholdings. Questionnaires were sent to 33 solicitors in various parts of Scotland and these were followed by personal interviews. Also contacted were 4 main Scottish clearing banks and 2 of the largest building societies. Questionnaires were sent to this group and were followed up by interviews. Also included were appropriate officials from the Law Society of Scotland and from Registers of Scotland, plus 2 firms of surveyors practising in an area with a high proportion of leasehold properties.|
|1 Cusine and Egan, Feuing Conditions in Scotland, The Scottish Office Central Research Unit, 1995.|
|2 This refers to long leaseholds of 20 years or more|
|3 Payments due to the landlord when certain events occur (e.g. death or change of tenant of the property|
|Copies of the full report are available from the authors at the School of Law, University of Glasgow.|
|This Research Findings was written by the Legal Studies Research Branch.|
|Further free copies or information about the Central Research Unit's Research programmes can be obtained by contacting: |
The Scottish Office Home Department
Central Research Unit
The report can also be ordered online from:www.thestationeryoffice.co.uk