Ownership of Common Areas - When to Include, Omit or Reject

General

A key feature of the 2012 Act is that there can be no registration without mapping - all ownership rights to plots of land, be they exclusive or common rights, must be mapped onto the cadastral map. The exception to this rule is the registration of a flatted or tenement property, as section 16 of the Act allows any rights of ownership that fall within the tenement steading cadastral unit to be verbalised.

A large number of applications have been received since the designated day (8 December 2014) that do not define the extent of common areas. Often the common areas are described in a previously recorded or registered deed of conditions, and are not shown on a deed plan or fully described in the text of that deed. In some instances, it may be very difficult for an applicant to have a new plan drawn up that accurately shows the extent of the common areas in a development as the applicant may not know the actual location and extent of all of those areas. The Keeper has therefore developed a pragmatic solution that allows many of these applications to be processed in respect of the main plots whilst omitting the common areas from the cadastral map and title sheet, thus reducing the number of applications that require to be rejected.

Key guidance for Plans Officers

There are several scenarios that can result in the Keeper receiving an application that includes a common area that can’t be mapped onto the cadastral map. Each scenario has its own rules and decision based on the legal background, and a different way for the applicant to resolve the issue. To make them easier to understand, they can be broken down into three main groups, then broken down further into specific scenarios. These groups and scenarios are also illustrated on the decision diagram, below.

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Group 1 - no common right conveyed

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There will be applications where a common area is shown on a deed plan but the right of common ownership isn’t actually conveyed in the text of the deed. In these cases, the application should proceed without the right in common. If a plans reference is required for the common area due to a burden, then the area should be mapped and classified as Burden.

This also applies if a Deed of Conditions sets out details of common areas that could be mapped form the deed of conditions plan but the Disposition does not include a clause granting the rights. For example, when there is no clause like this in the Disposition - “together also with … the whole rights common or otherwise effeiring thereto specified in Deed of Conditions registered 22 September ….”. If, however, the Disposition does refer to the Deed of Conditions for burdens, plans references may be required for the common areas and these should be mapped and classified as Burden.

Group 2 - common area shown on a plan but plan inadequate

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The second group of applications are those where the right of common ownership is included in the text of the deed, and the extent of the common area(s) is shown on a deed plan or described with a bounding description.

• Scenario A - the deed plan meets the Keeper’s deed plan criteria or the full bounding description meets the Keeper’s requirements. As the extent of the common area can be accurately mapped onto the cadastral map, the application should proceed with the right in common being included.

• Scenario B - the deed plan does not meet the Keeper’s deed plan criteria or the full bounding description does not meet the Keeper’s requirements. There can be several reasons for this, for example, a partial reference, a poor copy or monochrome plan, or the plan is missing from an older deed. In this scenario, the Keeper could have shown the common area on the cadastral map if the original deed plan, a complete plan, or an adequate copy of the plan, had been submitted with the application. However, as the extent of the common area cannot be accurately mapped onto the cadastral map, the application should be rejected on the grounds that the full extent of the property and its common areas cannot be identified from the deeds submitted. If the application is older than 3 months old, please refer to a referral officer prior to rejection. So these could be thought of as unmappable due to inadequate plan.

Group 3 - common area never shown on a plan

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The third group of applications are the true Unmappable Common Areas - those where the right of common ownership is included in the text of the deed, but the extent of the common area(s) is not and has never been shown on a deed plan or described with a full bounding description. These can be split into three scenarios.

• Scenario A - PMP Plus. In this scenario, the style of conveyancing is affected by the decision in the court case known as “PMP Plus Ltd versus the Keeper”, or “PMP Plus” for short. The court decision in this and two subsequent cases established that the rights to the common ground could only be sold in a disposition if it was known at the time what the extent of the common ground was - if the extent was to be subject to a “future uncertain event” then the extent wasn’t known at the time of sale and therefore a right of common ownership did not transfer to the purchaser. The most common examples of this scenario are housing developments where, in the Dispositions or in a Deed of Conditions, the developer did not show the extent of the common areas on a deed plan and used phrases such as “a right in common to ….. those parts of the Development which do not comprise a plot and which we [the developer] do not dispone or intend to dispone to an individual proprietor” or “ a 1/54th share in and to …. the playpark should one be erected during completion of the development…” . In these scenarios, ownership of the ground comprising the intended common areas remained with the developer.

  • If the extent deed was registered or recorded prior to the Designated Day for the introduction of the 2012 Act, 8 December 2014, then the purported right in common should be omitted from the title sheet but the registration of the house or flat and any other rights can proceed.

  • If the extent deed was registered or recorded on or after the Designated Day for the introduction of the 2012 Act, 8 December 2014, then the application should be rejected. If the application is older than 3 months old, please refer to a referral officer prior to rejection.

• Scenario B - not affected by PMP Plus but the extent of the common area has never been shown on a deed plan/described with a full bounding description - deed for extent was registered or recorded prior to the Designated Day for the introduction of the 2012 Act, 8 December 2014. The Dispositions or Deed of Conditions refers to rights to common areas verbally but does not define the extent on a plan, however there is nothing in the wording of the deed to suggest that the intended extent was unknown at the time the deed was granted. Therefore we have a right that did transfer to the purchaser but cannot be registered under the 2012 Act as it can’t be mapped. As the deed was recorded or registered before the 2012 Act came into force, the Keeper has adopted the pragmatic course of proceeding with the registration of the remainder of the title but omits the rights to the common area that can’t be mapped.

• Scenario C - not affected by PMP Plus but the extent of the common area has never been shown on a deed plan/described with a full bounding description - deed for extent was registered or recorded after the Designated Day for the introduction of the 2012 Act, 8 December 2014. The Dispositions or Deed of Conditions refers to rights to common areas verbally but does not define the extent on a plan, however there is nothing in the wording of the deed to suggest that the intended extent was unknown at the time the deed was granted. Therefore we have a right that did transfer to the purchaser but cannot be registered under the 2012 Act as it can’t be mapped. As the deed was recorded or registered after the 2012 Act came into force when everyone was aware that there could be no registration without mapping, the application should be rejected. If the application is older than 3 months old, please refer to a referral officer prior to rejection.

Action a plans officer should take if a right in common is being omitted

1. Do not add a plans casenote in the Plan Creator, simply omit the common area from the mapping of the cadastral unit.

2. Add an LRS title note giving the legal settler details of the right in common that has been omitted - this note is very important and must be added whenever plans omit a right in common to an Unmappable Common Area, or to an area that is being omitted due to an inadequate deed plan.

3. Request that the legal settler sends the pro forma letter to the submitting agent upon completion of the registration.

How the applicant can resolve their issue

Different scenarios have different remedies for the applicant when the Keeper has had to reject an application that doesn’t clearly define common areas or when an application has proceeded with the common areas omitted.

Inadequate plans

• When an application has been rejected because the plan was poor quality, floating shape, incomplete, missing, monochrome, etc, or the bounding description was incomplete, then the applicant should provide a new plan annexed to and referred to in the deed inducing registration when a fresh application is being submitted.

• When an application with an inadequate plan or description has proceeded with the common area omitted, then the applicant can apply to have the registered title rectified if they are able to provide a plan that meets the Keepers deed plan criteria as part of their rectification application.

PMP Plus cases

• Applications that are affected by the PMP Plus court decision and have been rejected or have proceeded under omission of the purported common areas cannot be resolved by either the preparation of a new plan or by rectification. In these cases which make reference to a future uncertain event in their description of the common areas, there was no valid conveyance by the developer/builder to the individual property owners of the common areas. Instead, the ownership of the land remained with the developer/builder. An ownership right in a common area can only be included in the title sheet for the individual property if there is additional conveyancing by the developer/builder.

• If you believe you have received an attempt to add ownership rights in common areas in a development affected by PMP Plus, please refer to an HEO plans officer in the first instance, who may in turn seek guidance from a Plans SCW.

Unmapped common areas

• For those applications that tried to include ownership rights to common areas that have never been defined on a plan, the way for the applicant to resolve the issue will depend on whether the deed for extent was recorded or registered prior to the Designated Day (8th December 2014), or after the Designated Day.

• Those applications with deeds for extent that were registered after the Designated Day will most likely have been rejected as the deeds were created and submitted for registration under the 2012 Act and do not comply with the requirements of the Act. In these instances, the applicant can either submit a fresh application that omits the common areas or a fresh application with a new plan identifying the common areas annexed to the DIR. In both cases, the DIR will need to be re-written to either omit the common area or to refer to the reference on the new plan.

• Those applications with deeds for extent that were registered prior to the Designated Day will most likely have been completed with the omission of the common areas. The applicant can apply at a later date to have the registered title rectified if they are able to provide a plan that meets the Keepers deed plan criteria as part of their rectification application.

• If you are unsure that the correct approach is being used in these scenarios to add ownership rights in common areas, please refer to an HEO plans officer in the first instance, who may in turn seek guidance from a Plans SCW.

Can rectified extents of common areas be used in other titles?

• In the scenario immediately above (Unmapped common areas), if an applicant successfully applies for rectification and provides a mapped extent for the common areas, can we use that extent in other titles? Or if a rejected DIR is redrafted with a new plan that shows the extent of the common areas, can it be used in other titles?

• Although the RR was only submitted to affect the title (or titles) referred to in that RR application, the same extent can be used when registering other titles if a future applicant makes reference to the extent shown on the rectified title (or titles).

• Similarly, although the fresh DIR with new plan was only submitted for registration over the subjects referred to in that FR application, the same extent can be used when registering other titles if a future applicant makes reference to the extent shown on the registered title.

• In addition, the Keeper sometimes takes the view after consideration of the particular development that all future applications in a research area (RA) should show the mapped extent for the common areas that was provided in an RR or re-submitted FR. If your application falls within an RA that includes a mapping instruction to bring forward certain plans references for the extent of the common areas, this instruction should be followed. It should be assumed that the decision was correctly made by the appropriate plans officer, and should only be questioned if your application contains information that contradicts the mapped extents of the common areas, for example, a competing title or a different extent for the common areas.

• If you are dealing with an RR or FR with new plan that seeks to define the common areas, and you think it may be useful to add these to an existing RA, these should be referred up to a Plans SCW for consideration, who will consult with Policy as necessary, and a decision will be made on whether to accept that extent for subsequent wider use in other titles or not.

• A specific request must made in respect of any other prior individual registered title similarly affected, for that title to be subsequently amended. Such requests should be referred up to a Plans SCW for consideration.

• If, after reading the guidance, you are still unsure what to do in your particular scenario, please refer to an HEO plans officer in the first instance, who may in turn seek guidance from a Plans SCW.

Builder or developer selling all or part of land possibly thought to be common

As mentioned above, in those developments where the developer/builder used a style of conveyancing that was affected by the PMP Plus court decision, the ownership in the common areas remained with the developer/builder. There have been applications received by the Keeper where the developer/builder or their successor has conveyed all or part of the purported common areas to a third party; for example, selling unbuilt-on areas of ground within the development to someone who wishes to develop them. Whilst these applications may well be valid and correct, it is important that any applications like this are identified and referred to a Plans or Legal Senior Caseworker, who may in turn seek guidance from Policy. This is because sales such as this are quite sensitive topics in the local areas and can potentially affect large numbers of house owners in the development.