Compulsory Acquisition

Table of Contents

Useful Links

Personal Real Burdens - Real Burdens Part 1

General

Compulsory acquisition or purchase is the process whereby public bodies such as local authorities and government departments can acquire title to heritable property from private owners, without the owners’ consent, but only with the payment of appropriate compensation. It entails an involuntary transfer of ownership in the interests of allowing the needs of society as a whole to override the individual’s right of ownership. Without compulsory purchase, important public works such as the construction of roads might never happen. Nearly all jurisdictions allow compulsory acquisition for that reason, though many other countries use the alternative term ‘expropriation’.

Statutory Authority for Compulsory Acquisition

The legislation governing compulsory acquisition is covered by the Lands Clauses Consolidation (Scotland) Act 1845 as amended and expanded on by the Abolition of Feudal Tenure etc. (Scotland) Act 2000 and the Title Conditions (Scotland) Act 2003. The amendments came into effect on either 1 November 2003 or 28 November 2004, the appropriate date is given in the detail following.

The Lands Clauses Consolidation (Scotland) Act 1845 in schedules A and B, provided two forms of conveyance for the purpose of completing title under a compulsory purchase order. The form in schedule B, which is in the form of a feu, ceased to have effect from 28 November 2004. The form in schedule A is the most commonly used means of completing title under compulsory powers. Section 80 of the 1845 Act provided that if a schedule conveyance is recorded in the Register of Sasines, or registered in the land register, within sixty days of its last date of execution, the land will vest in the acquiring authority and that certain effects will follow.

The 60 day limit for recording/registering the deed was abolished with effect from 28 Nov. 2004.

It is well established now, that where compulsory powers exist and where the Act authorising compulsory acquisition incorporates a reference to the 1845 Act, a schedule conveyance may be used, even although a compulsory purchase order has not been promulgated, and the effect of that conveyance will be the same as if it had followed a compulsory purchase order. For example, section 70 of the Local Government (Scotland) Act 1973 incorporates a reference to the 1845 Act. Current legislation relating to infrastructure projects frequently include provisions for the acquisition of land for the specific project (e.g. part 2 of the Airdrie-Bathgate Railway and Linked Improvements Act 2007).

Sections 74 and 76 of the 1845 Act made provision for the recording of a notarial instrument in cases where there might be difficulty in obtaining a schedule conveyance, e.g., if it was not possible to trace the party entitled to grant a schedule conveyance. It also provided that the recording of such a notarial instrument would have the same effect as the recording of a schedule conveyance. Since the Conveyancing (Scotland) Act 1924, notarial instruments, although they may still be used, have been superseded by notices of title.

A notice of title is registrable by virtue of section 4A of the Conveyancing (Scotland) Act 1924. Schedule BA of that Act provides the statutory form which is to be used for a notice of title being submitted for registration in the land register.

In order to expedite procedure, a number of recent enactments authorising compulsory acquisition have made provision for the use of a general vesting declaration which is stated to have the same effect as a schedule conveyance (section 195 and schedule 15 of the Town and Country Planning (Scotland) Act 1997).

From 1 November 2003 sections 106 and 107 of the Title Conditions (Scotland) Act 2003 impact on the law regarding the effect of compulsory purchase on real burdens and servitudes, this includes allowing for any real burden or servitude to be preserved if so specified within the terms of the conveyance. From 28 November 2004 the 2003 Act has the effect of consolidating and clarifying the existing legislation that related to compulsory acquisition. The existing legislation was not repealed at that date and accordingly references to provisions in earlier Acts remains competent.

Compensation for Compulsory Acquisition

Under section 48 of the Land Compensation (Scotland) Act 1973 (as amended by section 73 of the Planning and Compensation Act 1991), an acquiring authority which has taken possession of land or any interest in land shall, if so requested, make an advance payment of compensation equal to 90 per cent of the agreed amount of compensation or, in the absence of agreement, 90 per cent of the compensation as estimated by the acquiring authority.

Notice of Advance Payment of Compensation

In terms of section 48, the acquiring authority shall cause notice of the advance payment to be registered. Following registration, the claimant can still dispose of the land to, or create an interest in the land in favour of, a person other than the acquiring authority, but the amount of the advance payment will be set off against any compensation payable to that other person in respect of the compulsory acquisition.

The notice is given effect to in the title sheet by the entering of a note in the proprietorship section in the following general style, adapted as appropriate for specific cases:

Style of Notice of Advance Payment of Compensation

A Notice of Advance Payment of Compensation by .... Council in accordance with the provisions of Section 48 of the Land Compensation (Scotland) Act 1973, registered .... gives notice that an advance payment has been made of the sum of £.. being 90 per cent of the compensation estimated by [the said Council *] to date to be £.. due in respect of acquisition of the subjects in this Title*.

* Or as otherwise stated in the Notice.

On the eventual registration of the acquiring authority as proprietor of any registered subjects covered by a notice of advance payment in terms of section 48, the note referring to the notice falls to be deleted from the title sheet.

Methods of Compulsory Acquisition

In Scotland, the traditional mechanism of compulsory purchase is often described as a two-stage process. First the acquiring authority makes an order, called a compulsory purchase order, specifying the land to be acquired, which is advertised publicly and served on owners and tenants. A compulsory purchase order does not by itself transfer the property which it affects. It must be followed by the registration of a title in favour of the acquiring authority, often by means of a general vesting declaration or notice of title.

Compulsory Purchase Order

Effect on proprietorship, burdens and property sections

A CPO does not transfer ownership in the affected property and therefore no update to the proprietorship section should be made.

An entry for the deed should be made in the burdens section. Inclusion of the deed in the title sheet acts as a warning that the subjects are the subject of compulsory acquisition:

If the CPO affects only part of a registered title and the affected subjects are identified in the deed by reference to a plan, a plans reference should be added for the affected area.
If the CPO includes rights of access that are identified in the deed by reference to the deed plan, a plans reference should be added for the rights of access and the burdens section entry for the CPO should reflect these rights. However, no cross reference should be provided in the property section.

Burdens section entry: example style

The burdens section entry should reflect the information contained in the deed:

"Compulsory Purchase Order, being xxx Council xxx Compulsory Purchase Order (date) by xxx (Council), registered (date) affects [inter alia] the part of the subjects in this title tinted xxx on the cadastral map [and includes a right of access over the area tinted xxx on the said map]."

GVD/Notice of Title/Notarial Instrument

Where the acquisition is by general vesting declaration, notice of title or notarial instrument, it is essential that a compulsory purchase order had been made and that all the statutory procedures have been correctly followed: otherwise, the instrument is ineffective. The registration officer can rely on the applicant having satisfied themselves of these facts prior to submitting the application.

Effect on proprietorship, securities and burdens sections

All existing occupancy rights, charges, burdens and conditions will be regarded as discharged. The proprietorship, securities and burdens sections should be completed accordingly.

A conveyance in terms of the Land Clauses Consolidation (Scotland) Act 1845 does not carry minerals unless they are expressly included. Reservation of minerals clauses in burdens section entries (and corresponding property section notes) should therefore remain in the title sheet.

Acquisition in terms of sections 106/107 of Title Conditions (Scotland) Act 2003

Sections 106 (in respect of compulsory acquisition) and 107 (in respect of acquisition by agreement) of the 2003 Act came into force on 1 November 2003. They are intended to clarify the law in respect of the extinction of burdens, and servitudes, following on compulsory acquisition and also in the case of acquisition by agreement. In addition provisions are made which allow burdens to be saved or varied on such acquisition, provided that certain procedures are followed. The acquiring authority is now required to notify, in addition to owners, lessees and occupiers of a property, those parties with rights to enforce real burdens which would be extinguished or varied as a result of the compulsory acquisition. Provided there is no contrary indication within an application the registration officer can accept that the necessary notices have been served.

Section 106 provides that if land is acquired compulsorily following on a compulsory purchase order then, except as provided otherwise, any real burden or servitude over the land shall be extinguished and any development management scheme shall be disapplied. Section 107 makes similar provisions in respect of acquisition by agreement.

Section 107 - Acquisition by agreement

Section 107 provides that a disposition, notice of title or notarial instrument can be used in the case of acquisition by agreement, and have the effect of extinguishing real burdens and conditions, provided that two conditions are met. These are that appropriate reference is made to section 107 and that a certificate in appropriate terms has to be obtained from the Lands Tribunal and accompany the application.

For a statutory conveyance the requirements are that the deed must make reference to the Act authorising the compulsory acquisition and that the certificate in appropriate terms has been obtained from the Lands Tribunal and accompanies the application.

If these conditions are met, and provided there is no provision within the deed or a previously recorded/registered undertaking that a condition would not be extinguished, then all real burdens and conditions can be removed from the title sheet.

Note: If the certificate from the Lands Tribunal is not submitted with the application the title can be registered but the existing encumbrances would still be disclosed. However, if the applicant believes that section 107 will have applied, but has not provided the certificate, then it is unlikely that the relevant encumbrances will have been submitted with the application. Accordingly the application falls to be rejected on the basis that the necessary documents have not been provided to the keeper to meet the requirements of registration.

Section 106 - Acquisition following on compulsory purchase order

In addition to the existing methods of completing title, in such a way as to extinguish real burdens and servitudes, following upon a compulsory purchase order, section 106 provides that it will also be possible to use a disposition, notice of title or notarial instrument.

Subject to the important note below, where such a disposition, notice of title or notarial instrument making reference to section 106 is registered, subject to there being no provision to the contrary in the compulsory purchase order or in the deed being registered, and subject to any undertaking that may have been registered it will have the effect of extinguishing real burdens and title conditions.

Note: If a disposition is used and no reference to section 106 is made there are no grounds to presume that any burdens or conditions are extinguished and the application should be completed in the same manner as any ordinary disposition.

Registration of undertakings in terms of sections 109 and 110 of the 2003 Act

Sections 109 and 110 of the 2003 Act (which amend the First Schedule to the Acquisition of Land (Authorisation Procedure) (Scotland) Act 1947 and Schedule 5 to the Forestry Act 1967 respectively) introduce a new procedure which provides that the acquiring authority (in some cases this will be Scottish Ministers) may grant a person with a right to enforce a real burden, who has made an objection, a written undertaking that the title condition in question will not be varied or extinguished, or that the development management scheme will not be disapplied.

Irrespective of the section under which a particular undertaking is made, and in addition to the other usual registration requirements (such as self-proving execution), they must:

identify the benefited property (if any) and burdened property (or the development to which the development management scheme applies)
identify the order
set out the manner in which the conveyance will fulfil the undertaking

The effect of registering such an undertaking against the burdened property will be that the subsequent conveyance will be subject to the terms of the undertaking, irrespective of the terms of the conveyance.

There will not be a benefited property in the case of a personal real burden.

Statutory conveyance

Where the acquisition is by statutory conveyance, provided compulsory powers are available to the acquiring authority it does not matter whether a compulsory purchase order has been made or not, the effect of the statutory conveyance is the same. The registration officer can accept that the applicant has satisfied themselves that the enabling Act under which the acquisition is made contains appropriate powers of compulsory acquisition.

If the party granting the conveyance was not the party with a recorded or registered title to the subjects, or the question on the application form regarding links in title has not been answered in the affirmative, the application should be referred to a senior caseworker who will consider whether cancellation of the application is appropriate.

Effect on proprietorship, securities and burdens sections

All existing occupancy rights, charges, burdens and conditions will be regarded as discharged, however servitudes in favour of the acquired property should carry forward. The proprietorship, securities and burdens sections should be completed accordingly.

Where a deed contains intermingled rights and burdens which cannot be edited (e.g a Deed of Conditions which contains inter alia rights which are cross referred to in the property section by reference rather than being shown in full) the burdens entry should be retained and an explanatory note added to that entry:

Note: The foregoing [insert deed type} is affected by a Statutory Conveyance to xxx, registered DD/MM/YYYY.

Enabling Acts for compulsory acquisition of property, such as:

Local Government (Scotland) Act 1973 (s70/71)
Water Industry (Scotland) Act 2002 (s47) which repealed s99 of the Local Government (Scotland) Act 1994
Title Conditions (Scotland) Act 2003 (s.106/107)

incorporate reference to the Lands Clauses Acts (Land Clauses Consolidation (Scotland) Act 1845 / the Railways Clauses Consolidation (Scotland) Act 1845).

A conveyance in terms of these Land Clauses Acts does not carry minerals unless they are expressly included.

Where the Statutory Conveyance refers to one of the enabling Acts, or to either of the Land Clauses Acts as noted above and does not include the minerals, any reservation of minerals clauses in burdens section entries (and corresponding property section notes) should remain in the title sheet.

Dates of entry

The style of conveyance provided in schedule A of the Land Clauses Consolidation (Scotland) Act 1845 (the schedule A statutory conveyance) does not contain a clause of entry, however one may be included. If the statutory conveyance does contain a date of entry, it should be inserted in the title sheet in the normal way. If however the statutory conveyance contains no clause of entry, all reference to entry date should be omitted from the title sheet.

The provisions contained in section 28 of the Conveyancing (Scotland) Act 1874 (see Proprietorship Section Entries) are inappropriate for a statutory conveyance.

Schedule conveyance presented outwith 60 days (Prior to 28 Nov. 2004)

Prior to 28 Nov. 2004, a schedule conveyance registered outwith 60 days of the final date of execution did not comply with the requirements of section 80 of the Lands Clauses Consolidation (Scotland) Act 1845 and instead operated as an ordinary disposition. It is unlikely that a schedule conveyance executed prior to that date will be submitted for registration. If such an application is received, the schedule conveyance can be registered as a normal disposition: any occupancy rights, charges and burdens are not automatically discharged. Instead, they would continue to be disclosed in the relevant section of the title sheet.

For the avoidance of doubt, the 60 day limit for recording/registering the deed was abolished with effect from 28 Nov. 2004.