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Manager Burdens

Manager Burdens

Section 63(1) of the Title Conditions (Scotland) Act 2003 (“the 2003 Act”) defines ‘manager burdens’ as burdens which either appoint a particular party as a manager of related properties or vest in such a party the power to appoint another person to be such manager and dismiss that manager. Section 63(2) of the 2003 Act provides that a power conferred by a manager burden can be exercised only if the person on whom the power is conferred is the owner of one of the related properties.

It is typically used by a developer to appoint a manger in the initial years of a housing or other development.  It stipulates who has the power to appoint or to act as the manager for the scheme and to administer and enforce the burdens imposed.

In some manager burdens the power to appoint may be tied to one of the properties in particular. Much more usually, however, the power will be conferred on a person without any reference to a benefited property. This is because typically developers will not know which of the properties on the estate will be the last to be sold. But the benefited proprietor must still own a property within the scheme: it is just that no one unit need be singled out as benefiting from the manager burden.

Calculation of duration of manager burdens

Section 63(4) and (5) of the 2003 Act provide the maximum possible duration for all manager burdens. This duration will run from the registration of the deed creating the manager burden (usually at the time of the first sale). Provided that the holder of the burden owns at least one of the properties being managed, and where the constitutive deed that created the burden does not specify that it shall expire sooner, the burden will normally expire after:

  • 30 years in right to buy cases under the right-to-buy legislation for council houses;

  • 3 years in relation to sheltered or retirement housing; or

  • 5 years generally.

It is possible to specify in the constitutive deed that the burden expires after a shorter period, but not a longer period.

Section 63(7) of the 2003 Act makes provision on how the period of a manager burden is to be calculated.   As paragraph 286 of the Explanatory Notes to the Act  says, when “the manager burden is created in a series of dispositions containing the same burdens, the duration of the burden will be calculated from the registration date of the first constitutive deed that created a manager burden in respect of one of those related properties, i.e. the first sale”.

Right to Buy

Prior to the repeal of the right to buy in 2014, a social housing provider (such as a local authority or a Registered Social Landlord had the power to appoint a manager for a maximum of 30 years from the date of registration of the deed creating the “manager burden” (which was usually at the time of the first sale).

If the social housing provider had sold off all of the units before the 30 years had elapsed, the right of appointment  would cease to be exercisable with the final sale and the burden would be extinguished 90 days later. The 30 year rule applies to any right to buy (RTB) sale.

The owners of two-thirds of those properties can dismiss and then appoint a property manager at any time within that 30 year period – although in practical terms this exception will only be effective once two thirds of the properties have been sold (see section 63(8)(b) of the 2003 Act).

Sheltered or Retirement housing

It is not possible for a manager burden in sheltered or retirement housing to last longer than 3 years from the date the burden was created. The power will end sooner if the association sells all of the units off before the end of this period (not including a warden’s flat).

Housing - General

In all other cases, the manager burden will last at most 5 years from its creation.  Again, the power will end sooner if the association sells all of the units off before the end of this period.

Variation or discharge of burden

An owner may apply to the Lands Tribunal for Scotland under section 90 and 91 of the 2003 Act seeking variation or discharge of a real burden.

For further information on Manger Burdens you can refer to the Title Conditions (Scotland) Act 2003 http://www.legislation.gov.uk/asp/2003/9/contents and the explanatory notes http://www.legislation.gov.uk/asp/2003/9/notes/contents

Manager Burden Flowchart

Manager Burden