What happens when the title conditions affecting a property no longer reflect the current layout of the property?

For those not familiar with Scottish property title conditions, it seems to me that the easiest way to understand title deeds are that the quality of the terms generally reflect the age of the property, i.e. the older a property is the more likely the titles conditions will need to be deciphered. This often results in more time being spent considering and interpreting the implications.

What happens with older title deeds?

We, as solicitors, are often asked to translate what the provisions contained in a – sometimes over 100 years old – deed mean and how they may affect the use of the property. The practical issue is that the title conditions may not reflect the current use of the property or contain provisions that are not enforceable.

The conditions that burden a property are normally created when a property is sold for the first time. For example, a house in a development or a flat and the seller/developer would seek to add title provisions to set out the day-to-day practicalities of owning such a property. This is all fine and well for modern developments/conversions but what about the older properties? Thankfully, the Tenements (Scotland) Act 2004 (2004 Act) introduced the tenement management scheme to assist when title deeds are silent on essential provisions, such as common repairs.

Why it’s important for the deeds to be accurate

In a recent case, the title had no gaps but did not reflect the current formation of the property due to an amalgamation of two flats. The titles provided for an equal six-way split for common repairs, as there were originally six properties in the tenement.

An application was made to the Land Tribunal to vary the title conditions of the owners’ title within a tenement to set out that the share of common repair liability is in line with floor area. This type of solution of using the floor area is already contained in the 2004 Act when the largest flat in a tenement is more than one and a half times larger than the smallest flat.

In this case, a flat was divided into two but the titles were not amended, then another flat was split into two and, you guessed it, the titles weren’t amended but it was agreed that each would be liable for one eighth share each because at this point there were eight separate flats. An unassuming purchaser bought two of the formed flats to restore the original flat to its true glory, and then there were seven. The bone of contention for the owners within the tenement was that the provision in the titles only reflected the properties before they were sub-divided, namely one sixth share per property, and whether it should be based on floor area now that there were flats of different number, shapes and sizes.

What happens when the Lands Tribunal is asked to vary a title condition

When somebody asks the Lands Tribunal to vary a title condition, several factors will be considered. One of these is whether there has been a change in circumstances since the title condition was created. A change had clearly occurred in this case, and the proposal to base the new share of contributions on the floor area was reasonable and fair since it was the same scheme as would have been applied if the 2004 Act had been used to “plug a gap” in the title deeds. Applying that new scheme to the tenement, the owners of the large flats had their maintenance liability increased from 14% to 26%.

What to consider if you’re purchasing an older property

What this case means for anyone looking at purchasing a property within an older building that is larger than the others within the tenement, or one that has been formed by way of a sub-division or amalgamation, you need to be alerted to what the title conditions say, if they’re clear, and whether they are fair. It could be that you purchase a flat with a favourable share of common repairs only to find that it can be increased later.

If you have questions relating to any of the information shared in this article, please get in touch via the above contact form.

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