19.1 Introduction

A contract of lease (or tack, as it was often called in the past) is one whereby the use of heritable subjects is given to a lessee (or tenant) in return for the annual payment of a rent (or tack-duty). The lessee has the use of the property subject to the conditions laid down by the granter of the lease (known as the lessor or the landlord), is subject to an annual payment, and is only for a definite number of years, after which the subjects revert to the landlord.

The leasehold relationship is constituted between two parties, the landlord and the tenant. Each party must be a separate legal persona (or an association of personae holding the interest pro indiviso). A proprietor cannot validly grant a lease in favour of himself or herself. Equally, it has been held in the case of Clydesdale Bank plc v. Davidson 1998 S.C. 51 (H.L.) that two or more pro indiviso proprietors cannot validly grant a lease in favour of one of their number. In such a case, the purported tenant’s real right to possess the property derives from the pro indiviso ownership; the purported lease may have the effect of preventing the other co-proprietors from exercising their rights of occupancy, but it cannot create a real right of tenancy which is effective against third parties.

19.2 Examination of title

There are a number of specialities connected with leases of which a registration officer must take account when examining title. In terms of section 3(3) of the Land Registration (Scotland) Act 1979, once an area has become operational, registration is essential in order to obtain a real right in a lease or transmission thereof taking effect after the operational date. Any transfer of a lease, whether for valuable consideration or not, is registrable and cannot be recorded in the Register of Sasines. Section 2(3) however applies, and a heritable security, liferent or incorporeal heritable right over a lease will not induce a first registration. A deed creating or dealing with such an interest may still be recorded in terms of section 8(2)(c) of the 1979 Act if the lease itself is not registered.

In order to allow for future registration in the Books of Council and Session, all leases which induce registration, first or otherwise, will be stamped ‘Registered’.

19.3 Positive prescription for leasehold interests (where lease granted/delivered prior to operational date for county)

Section 1 of the Prescription and Limitation (Scotland) Act 1973 (‘the Prescription Act’) applies to any interest in land (including long leases), the title to which can competently be recorded, or which is registrable in the Land Register, and enacts that where possession of that interest was founded on and follows the recording in the Sasine Register of a deed constituting a title to that interest in the land, the period of positive prescription is ten years.

By section 2 of the Prescription Act, where possession of the interest in land of the lessee under a lease was founded on, and followed the execution of, a deed (whether recorded/registered or not), the period of positive prescription is twenty years.

Prior to the coming into operation of section 3(3) of the 1979 Act, it was possible for a tenant to obtain a real right in a lease by possession without registration or recording. Section 2(2) of the Prescription Act applies to such a lease and a prescriptive progress of title can be founded on an unrecorded deed executed at least 20 years before the date of receipt of an application for registration. Even an invalidly recorded lease can be a foundation for prescription under section 2(2) of the Prescription Act.

Sections 1 and 2 of the Prescription Act are operative without prejudice to each other. The distinction between the application of these sections is that 10 years’ possession is sufficient for prescription to operate if founded on an ex facie valid deed recorded in the General Register of Sasines and that 20 years’ possession is required if founded on an unrecorded deed. The recording of a previously unrecorded deed, however, does not interrupt the 20 year period. Consequently, the recording of an unrecorded deed will give the person entitled the choice of a prescriptive period commencing from the date of execution and continuing for 20 years or from the date of recording for 10 years, whichever is more advantageous.

On first registration, therefore, the prescriptive progress will commence with a deed which may or may not have been recorded, and may be founded by the lease itself or an assignation of the lease, or it may be necessary to go back into the landlord's title to establish the foundation to the prescriptive progress.

Table of Contents

19.3.1 Interest of tenant being registered follows on unrecorded or unregistered Lease

Registration officers should note that registration takes place in respect of the interest of the tenant. There will be occasions where an applicant has applied to register their interest as tenant following on an assignation to them when the original lease has not been recorded or, in some cases, where the lease was granted after the operational date for the relevant county but the interest was not submitted for registration. There is no requirement to register the lease as well as the assignation in such cases. Such a registration following on an assignation will form the basis of a first registration for an existing interest, even where the landlord’s interest has come to be registered after the granting of the lease.

The officer will require to concern themselves as to the usual matters, but in cases where registration was required to constitute the real right by virtue of section 3(3) of the 1979 Act, they will also need to check whether the landlord has changed since the granting of the lease. In such circumstances, the new landlord must consent to registration.

The application form 1 should relate to the current assignation, however the lease will be treated as being registered on the same date for the sake of the entry in the burdens section of the title sheet.

19.4 Requirements for a registrable lease

In every case, however, it is necessary to examine the lease itself. A number of the statutory requirements for a registrable lease are such that a lease lacking them can never meet the requirements of section 2 of the Prescription Act for a deed on which prescription may be founded. The lack of these requirements cannot therefore be cured by prescription. It follows that an assignation of such a lease cannot be a foundation for prescription any more than the lease itself can.

19.4.1 Authentication

The leasehold interest must be constituted in a document or documents which are executed in self-proving form. Normally this means that a formal deed is required. However, properly authenticated and stamped missives of let are an acceptable alternative, provided they are executed by the parties themselves in self-proving form and fulfil all the other requirements for a registrable lease.

All applications relating to leasehold interests constituted by missives should be referred to the Legal Services, where they will be considered on their merits.

It should be noted that a lease for a period exceeding 20 years which falls outwith the definition of ‘long lease’ in the 1979 Act because it is not in self-proving form is not a long lease within the meaning of the Act and so is not capable of being registered in the Land Register. Neither is such a lease capable of being noted as an overriding interest (see section 6(4) of the Act). Likewise, a long lease, which is not in self-proving form, cannot be recorded in the Sasine Register because it is outwith the scope of section 1 of the Registration of Leases (Scotland) Act 1857.

19.4.2 Duration

(a) Minimum duration

In order to fall within the definition of ‘long lease’ in section 28 of the 1979 Act, the term of the lease must exceed 20 years (i.e., be at least 20 years and 1 day), or be capable of being renewed at the grantee’s request, without any subsequent agreement, so that its total duration exceeds 20 years.

It should be noted in connection with the duration of a lease, that where the period of the lease is expressed by reference to a term day (e.g. Whitsunday 1982 to Whitsunday 2002), the period does not exceed 20 years and the lease is not registrable. Where, however, the period is expressed by reference to calendar dates (e.g. 15 May 1982 to 15 May 2002) the period does exceed 20 years and the lease is registrable. The above would not apply if the period ‘20 years’ is expressly stated - the logical inference being that one of the days (whether at beginning or end) would be discounted and the lease would be regarded as non-registrable. This apparent anomaly is because the entry or ish on a term day is conventionally taken to occur at noon on each of these days, while no such convention exists where entry and ish are given as calendar dates. In the latter situation, the whole of both calendar dates is therefore included in the period of the lease.

Section 17 of the Registration of Leases (Scotland) Act 1857, as amended by the Land Tenure Reform (Scotland) Act 1974, provides that a lease for a period of 20 years or less which contains an obligation to renew which would extend the period of the lease to more than 20 years is registrable (i.e. where the lease includes a clause which expressly binds the landlord to grant an extension of the lease to a duration more than 20 years at the tenant’s request, rather than a general non-specific provision). However, where a lease for a period of 20 years or less which contains no obligation to renew has nevertheless been extended so that the total duration is more than 20 years, it is also registrable or capable of being noted as an overriding interest.

It is no bar to recording or registration that a lease starts at a future date, provided it meets the other criteria.

(b) Maximum duration

Section 67 of the Abolition of Feudal Tenure (Scotland) Act 2000 provides a maximum duration for a long lease. The provisions apply only to leases which are executed on or after 9 June 2000. Such leases may not continue for a period of more than 175 years. Any renewal period reckons towards the 175-year period, provided the lease contains provision requiring the landlord or the tenant to renew it.

A lease which infringes section 67 is not invalid; it simply terminates 175 years after its commencement date. Where such a lease is presented for registration, it should not be rejected on the grounds that its duration is more than 175 years, but indemnity should be excluded as follows:

Note: Indemnity is excluded in terms of section 12(2) of the Land Registration (Scotland) Act 1979 in respect of any loss arising from or associated with the effect or operation of section 67 of the Abolition of Feudal Tenure (Scotland) Act 2000.

The exclusion of indemnity should also be added to any other registered interests which are affected by the lease (e.g. the landlord’s interest).

Section 67 allows for the extension of the duration of a lease by statute. It also preserves the potential for the extension of a time-expired lease by tacit relocation. The legal term ‘tacit relocation’ refers to the implied consent to the renewal of a lease if notice to terminate the lease is not given timeously. The renewal is for 1 year in the case of a lease for a year or more.

Where a lease executed on or after 9 June 2000 implements an obligation entered into before that date, it is not affected by the limited maximum duration. Equally, a sub-lease granted after 9 June 2000 may exceed the 175-year limit if it is a sub-lease of part or all of the subjects in a lease which is not subject to the limitation, and which still has more than 175 years to run.

(c) Problem with Duration

Lack of information about the duration of a lease is the one factor it is impossible to get round. Where the duration of the lease is not stated in any of the documents accompanying an application for registration of leasehold subjects, there is no guarantee that a registrable interest exists. For all the Keeper knows, the lease may have expired already. Though the fact that the applicant continues to occupy the subjects suggests that the termination date of the lease has not yet arrived, there is also the possibility that the original lease has terminated but that the tenant continues to occupy on tacit relocation (see Tacit relocation). In that case, the original lease may have been for less than 20 years. In view of these doubts, where no indication of the duration of the lease can be obtained, the application to register must be rejected.

In all cases where the original lease or a copy thereof cannot be produced, the end-product of the application is going to be something less than satisfactory to both the applicant and the Keeper, especially to the latter whose indemnity may well be at risk. Unless, therefore, the case falls into the category outlined in the two immediately preceding paragraphs (i.e. the rent, extent and duration of the lease are all ascertainable from assignations and the subjects are of relatively low value), the applicant should be invited to withdraw his application and obtain title to the landlord's interest. If he knows his landlord, who is willing to co-operate, he should obtain a conveyance of the subjects from his landlord. If he does not know his landlord, the Keeper may accept an a non domino conveyance of the subjects; this will be subject to the policy guidelines in Dispositions a non domino. If the applicant seeks to register/record an a non domino conveyance, he should be advised to retain the unregistered assignations, as a back-stop in case his a non domino title is challenged. It should be pointed out that the exclusion of indemnity may not be removed at the end of the 10 year prescriptive period as, where possession can be ascribed to a lower interest (that of tenant), the a non domino title could still be challenged notwithstanding the 10 year prescriptive period. The Keeper would require evidence that the proprietor had possessed openly peaceably and without judicial interruption and that the possession had been as landlord, separately from as tenant.

Only if the applicant is unable to obtain a title to ownership should the registration officer proceed to consider and/or implement the steps narrated in section 19.6 - Application to register leasehold interest where the original Lease cannot be found.

19.4.3 Rental

A rental must be stipulated in a lease (but it may be illusory).

19.4.4 Landlord's title

(a) General

The requirement that the granter of a lease must have completed title (the facility for deduction of title has not been extended to the granting of leases) is one whose absence can be cured by prescription. A lease granted by a party without a recorded/registered title is a deed sufficient in its terms to constitute a title to an interest in land and, therefore, can be a foundation for prescription.

A lease granted by a party without a recorded/registered title can be validated by accretion, and although the validation takes place only from the date of recording of the accrescing title, the lease itself or a subsequent assignation, nevertheless, remains the foundation of the prescriptive progress.

When an application for registration includes a lease by a party who has not completed their title to the subjects, the procedure to be followed is as set out in Examination of title, section 3.21 - "Leases granted by party without a completed title".

(b) Leases granted by debtor under an ex facie absolute disposition or assignation

By the very nature of a security granted by way of ex facie absolute disposition or assignation, the debtor is not the true proprietor of the subjects. Consequently, when such a debtor grants a lease of the subjects or part of the subjects, prima facie the lease has not been granted by the owner and, on an application to register the tenant's interest, indemnity should be excluded on the grounds that the granter of the lease does not have a recorded/registered title.

There is, however, a certain amount of case law on this subject that holds that in certain circumstances the debtor under such a disposition or assignation retains an implied power or mandate to lease the subjects. If such a power or mandate exists, then the fact that the debtor is technically not the owner does not matter and there is no need to exclude indemnity. Unfortunately, however, this power or mandate can be restricted or lost entirely depending on the terms of the back letter to the ex facie absolute disposition or assignation, and may be lost if certain other circumstances pertain.

This is a very complicated area of law and it is impossible to formulate a clear instruction for the guidance of registration officers. Accordingly, any registration officer who is faced with an application to register the tenant's interest under a lease, where the granter of the lease is the debtor under an ex facie absolute disposition or assignation, and there has been no reconveyance or re-assignation of the subjects, must requisition the back letter if it is not submitted with the case and then submit the case to a senior caseworker for consideration as to whether indemnity should be excluded or not.

19.4.5 Validity of sub-leases

In a case where a head lease is not recorded, or has been recorded but the recording is invalid, a sub-lease out of it may still be registrable, provided the head lease meets the criteria for validity for an unrecorded lease and the sub-lease meets the requirements for a registrable lease.

It is not competent for the tenants in a lease to grant a sub-lease for a period exceeding the term of their own lease. Any agent presenting such a sub-lease for recording or registration should be asked to reconsider the position. If his decision is that the deed should be recorded or registered as it stands, the matter should be referred to the Legal Services for further action. Depending on the circumstances, it may become necessary to refuse to record the deed or to exclude indemnity.

The impact on a sub-lease of an attempt to terminate the head lease is discussed in Termination of lease – effect on subsidiary interests.

19.5 Former requirements for leasehold interests

Certain matters which were formerly essential requirements for a registrable lease have been abolished by subsequent legislation. These requirements cannot, however, always be ignored in relation to leases first recorded prior to the amending legislation.

The requirement of section 18 of the 1857 Act, that the extent of the lands let must not exceed 50 acres, and that the lease must contain a statement to that effect, was abolished by section 18 and schedule 6 of the 1974 Act. By that same section and schedule, the minimum duration for a registrable lease is reduced from the 31 years required by section 1 of the 1857 Act to a period exceeding 20 years. Section 18 and schedule 6 of the 1974 Act are not retrospective. Therefore, a lease recorded prior to 1 September 1974 which did not meet the requirements of the pre-1974 legislation is not validly recorded. It may, however, be validly recorded or registered after 1 September 1974, if it meets the requirements of the post-1974 legislation.

An unrecorded lease, to be enforceable against singular successors of the landlord, must be valid according to the law in force prior to the passing of the Registration of Leases (Scotland) Act 1857, i.e. according to the requirements of the Act of the Scots Parliament of 1449. The only requirement of that Act which has not been repealed in legislation relating to registration of leases is that there must have been ‘such open and continuous possession as may naturally suggest to a singular successor the existence of a lease’.

19.6 Application to register leasehold interest where the original Lease cannot be found

The Keeper may receive applications for the first registration of previously unrecorded leasehold interests where the original Lease or an extract thereof is not submitted because it is not in the possession of the applicant and he or she has been unable to trace it. This section sets out the guidelines for dealing with such a case.

As it is obviously preferable to have a sight of the original lease, the first thing the legal registration officer should do is to ascertain if there is any information in the search sheets which will assist in tracing it. There are two possible ways in which the search sheets may be helpful. Sometimes, even though the lease has not been recorded, information in an assignation submitted with the application may enable the registration officer to discover the identity of the current landlord, who may well hold a copy of the lease or even the original. In cases where the application relates only to a part of the subjects in the original lease, it may well be that the lease will have been recorded in the Sasine Register along with an assignation of another part of the subjects. Such a recording could be traced through the search sheets and will enable at least an extract of the lease to be obtained. If an initial search by the registration officer reveals information of this nature, which may assist the applicant to trace the original lease or an extract or a copy of it, this should be passed on to the applicant and the case placed in standover until the applicant has exhausted these avenues of enquiry.

Once it has been established that the original or a copy of the lease cannot be traced, the registration officer must then consider how to deal with the application. In terms of section 3(3) of the 1979 Act, a new lessee (this includes an assignee or successor) can only obtain a real right to the tenant's interest by registration; he cannot rely on possession. It is obviously of paramount importance to the applicant that some form of title to the tenant's interest be registered if at all possible, even though the original lease is missing. The want of the lease is not an insurmountable obstacle. It is the effect of the lease, not the lease itself, which is registered, so the Keeper can register the leasehold interest without necessarily seeing the lease if he is satisfied with the other documents and evidence produced.

Basically that is the key question. What documents and evidence are necessary to satisfy the Keeper in this kind of situation? A prescriptive progress of unrecorded assignations (in this case the prescriptive period is 20 years), allied to possession, is sufficient to give the applicant a title which is not open to challenge by any other person claiming the leasehold interest. In the absence of the lease, however, that is not sufficient to give him a title which is not open to challenge by the landlord.

The three principal matters on which the landlord could challenge the title are non-payment of rent; the extent of the subjects let; and the duration of the lease. If the amount of rent, extent of subjects and duration of the lease are set out in any of the deeds submitted in support of an application for registration (e.g. assignations or minutes of variation of the lease), it may be acceptable to accept that the statement of these particulars in the supporting deeds are correct and to use these in the preparation of the title sheet, depending on the circumstances and the value of the interest. Such cases should be referred to a senior caseworker, who will assess whether the application can be accepted and – if so – whether indemnity should be excluded.

In all such cases, the registration officer must remember to include a burdens section entry for the lease, in the following style viz.:

Lease referred to in the property section by A to B contains terms and conditions which burden the subjects in this Title.
NOTE - The said lease has not been produced to the Keeper. Accordingly, the terms and conditions thereof are not set out in detail.

It is normally the case, however, that assignations do not set out particulars of the three important matters of amount of rent, extent of subjects and duration of lease or at the most set out only one or two of these matters. What the Keeper can issue by way of a title sheet depends on what information is available. The effect of the omission from the assignations of each one of the important matters must be considered individually.

19.6.1 Rent

The Keeper's indemnity does not cover irritancy for breach of a term or condition, provided that that term or condition is set out in the title sheet. Obviously if the amount of the rent is not known it cannot be set out in the title sheet, but if it is clear from the title sheet that there is an obligation to pay rent, the Keeper's indemnity would seem to be protected. Accordingly, if it can be made clear in the title sheet that there is an obligation to pay rent, the tenant's interest can be registered without exclusion of indemnity on the question of rent. The same is true regarding other burdens in the lease, so the registration officer must remember to insert a burdens section entry for the lease as indicated in the immediately preceding paragraph. In fact, this must be done in all cases where the original lease or a copy cannot be produced. If it cannot be shown elsewhere in the title sheet, it is in this burdens entry that the obligation to pay rent must be contained e.g.:

Lease referred to in the property section by A to B contains terms and conditions, including an obligation to pay rent, which burden the subjects in this title.
NOTE - The said lease etc. etc.

19.6.2 Extent

In a number of cases, where the description in the deed is inadequate to enable the subjects to be identified on the O.S. Map; the Keeper may accept a supplementary plan from the applicant with a statement that the subjects delineated on the plan are the subjects in the deed (see Certified plans ). This technique can equally be applied in leasehold cases where the original lease is missing; if the applicant supplies a plan and statement, registration may proceed without exclusion of indemnity as regards extent, subject to the normal criteria for certified plans being met.

19.7 Residential long leases

In terms of section 8 of the 1974 Act, every lease granted after commencement of that Act (1 September 1974) has an implied condition that no part of the subjects let shall be used as or as part of a private dwellinghouse. Breach of that condition does not, however, make the lease void; it is merely voidable at the instance of the landlord. The Keeper's indemnity does not cover loss arising from breach of a condition set out in a title sheet or implied by law. However, in terms of section 3(1)(a) of the 1979 Act, a registered interest is subject only to the effect of any matter entered in the title sheet and to any overriding interest whether noted or not. As the said implied condition of section 8 is not an overriding interest as defined in the 1979 Act, it is necessary that the Keeper discloses within the title sheet that a lease which has been executed after the commencement date is regulated by the provisions of the 1974 Act, otherwise the implied condition will not be enforceable and the purpose of the Act may be defeated. This will be achieved by adding the following footnote to the entry for the lease as set out in the burdens section:

Note: The foregoing lease was executed after 1 September 1974 and is subject to the provisions of Part II of the Land Tenure Reform (Scotland) Act 1974.

The footnote will of course not be necessary where there is an express statement within the lease itself that the provisions of the 1974 Act apply. Where there is merely a conventional restriction as to the use of the premises let and fenced with the usual irritancy and resolutive clauses, the footnote must be added to the title sheet so that it will prevail over any subsequent waiving of the condition.

Section 1 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 permits the renewal of a residential long lease granted before 1 September 1974, provided the renewal is granted in implement of an obligation to renew contained in the original lease. This has been achieved by appropriate amendment to section 8 of the Land Tenure Reform (Scotland) Act 1974, the provisions of which had inadvertently precluded the renewal of existing residential long leases to the prejudice of the ‘sitting’ tenant. Section 1 acts retrospectively, thus validating renewals granted before 30 December 1985.

The only known area where such renewable leases exist is Rattray Estate, Blairgowrie. Any other renewals, or purported renewals, of residential long leases should be referred to Legal Services.

19.8 Lease of pro indiviso share

As stated previously, in the case of Clydesdale Bank plc v. Davidson 1998 S.C. 51 (H.L.) it was held that two or more pro indiviso proprietors cannot validly grant a lease in favour of one of their number.

Where title to subjects is held pro indiviso all proprietors have to consent to acts of management or disposal and accordingly it is not competent for one party to grant a lease only over their pro indiviso share, such an application should be cancelled.

Any instance where the individual pro indiviso proprietors grant separate leases to the same tenant, or all proprietors grant a lease of only a pro indiviso share should be referred to a senior caseworker.

19.9 Lease of roof and air space for solar panels

Under the provisions of the Energy Act 2008, the Department of Energy and Climate Change introduced a system of Feed In Tariffs (FITs) to provide incentives for generation of heat from renewable sources, one form of which is Solar Panels.

There are two main contractual models offered to householders by installers of solar panels.

The proprietor pays for the purchase and installation costs of the solar panels and benefits from reduced energy bills and the FITs or
The proprietor grants to the installer a long lease of the roof and airspace at nominal rent in return for which the installer supplies and fits the solar panels free of charge but retains most of the benefit of the FITs. The proprietor benefits from reduced energy bills.

Where the home owner simply purchases the solar panels outright there are no implications for the Keeper. Where the lease model is utilised the tenant in the lease (the installer) may seek to register the lease.

The lease will run with the property, irrespective of whether that property is sold on and thus encumbers future purchasers.

Identification of the subjects

The subjects of the lease will be a section of the roof and the air space directly above. The following examples show the description of a solar panel lease and the description of an air space lease

“The leased subjects comprising ALL and WHOLE the area of the roof of the building outlined in red on the attached Plan with the air space above” - this would be an acceptable description for a solar panel lease.

“The leased subjects comprise ALL and WHOLE those areas being the air space above the roof of the Building” – this would be a lease of air space.

For the avoidance of doubt, any description which expressly excludes the whole of the roof from the leased subjects will be a lease of air space only.

The Keeper's published Deed Plan Criteria applies to identification of the subjects of let. A lease of the air space alone should be referred to a Senior caseworker who will decide whether the application should be cancelled, depending on whether the description is sufficient to adequately describe the subjects let.

19.9.1 Registrability

It is possible, in principle, for such leases to meet the requirements for registration where they contain the essential elements of a lease (parties, subjects, rent, duration) as well as the requirements for registration (self proving, in excess of 20 years, identifiable on the Ordnance Survey map). The procedures for the Tenant’s Title Sheet and the Landlord’s Title Sheet are detailed below.

19.9.2 Tenant’s Title Sheet

It is considered that a lease of part of the roof would breach the terms of section 8(1) of the Land Tenure Reform (Scotland) Act 1974 which says:

“It shall be a condition of every long lease executed after the commencement of this Act that, subject to the provisions of this Part of this Act, no part of the property which is subject to the lease shall be used as or as part of a private dwellinghouse”.

The effect of such a breach is not to render the lease void or unenforceable but to allow the landlord to insist the tenant discontinues the breach, failing which the landlord can take steps to terminate the lease.

The Keeper does not as a matter of course exclude indemnity under section 12(2) of the Land Registration (Scotland) Act 1979 in respect of any loss resulting from reduction of a lease in the event that it is found to be in breach of the 1974 Act. This is because firstly, indemnity does not cover loss arising from breach of a condition set out in a title sheet or implied by law. In that sense the condition, although inserted by an enactment, is not different from any other condition in a lease and is a matter for the parties. Secondly in the normal course of registration, the Keeper will not be aware if the property being leased is being used as a dwellinghouse. However, in the majority of solar panel leases the property involved will clearly be residential. The Keeper's practice is respect of solar panel leases will be to exclude indemnity where the lease is granted over property which appears to be a dwellinghouse. The reason for the exclusion will be to ensure that rectification remains possible if the lease is terminated early due to a breach of s8.

For the avoidance of doubt, no exclusion is required if the property is clearly not a dwellinghouse.

The exclusion of indemnity note will appear in the proprietorship section of the tenant’s title sheet, in the following form:

Indemnity is excluded in terms of section 12(2) of the Land Registration (Scotland) Act 1979 in respect of any loss arising from or associated with the effect or operation of Part II, section 8 (1) of the Land Tenure Reform (Scotland) Act 1974.

Where the granter of a lease for solar panels has previously granted one or more standard securities over the property, prior consent of each heritable creditor in terms of condition 6 of Schedule 3 to the Conveyancing and Feudal Reform (Scotland) Act 1970 will be required. Such consent must be in writing but need not necessarily be in gremio of the lease (unless in a given case the standard condition has been varied to require this). The settler should obtain written confirmation from the submitting solicitor that consent was obtained from the creditor prior to the lease being signed. If such evidence is not submitted then the securities should be disclosed on the tenant's title sheet and indemnity excluded in the proprietorship section in the following terms.

Indemnity is excluded in terms of section 12(2) of the Land Registration (Scotland) Act 1979 in respect of any loss which may result from failure to obtain consent of X (name of Creditor) to the grant of the lease by X (the proprietors of the sitt) to Y (the Lessees - i.e. name of the company supplying the solar panels), in Entry X of the Burdens Section.

19.9.3 The Landlord’s Title Sheet

In respect of the lease, the landlord’s title sheet will show a schedule of leases in the property section together with the standard tenant's rights note in the burdens section (i.e. "the rights of the tenants under the Leases specified in the Schedule of Leases in the Property Section are burdens on the subjects in this title"). There will be no exclusion of indemnity notes on the landlord’s title sheet.

19.9.4 SDLT

HM Revenue & Customs have issued guidance to the effect that a lease of this type is a chargeable interest for the purposes of Stamp Duty Land Tax (SDLT). In line with existing practice the Keeper should not accept such a lease for registration unless the application is accompanied by the appropriate SDLT Certificate.

19.10 Breaches of leasehold conditions

Breaches of conditions or burdens in a lease are outwith the scope of the Keeper's indemnity, which indemnity will therefore not be excluded. The following examples will be considered merely as conditions of the lease:

requirements for intimation of securities to the landlords,

the consent of the landlords being obtained to the effect of accepting an assignee of the previous tenant and

automatic termination of leases on sequestration etc. of the tenant.

Evidence need not be sought that conditions have been complied with (see Rights of pre-emption).

Despite what is said in the preceding sentences about indemnity not covering loss arising from the breach of a condition, RoS should seek to avoid issuing a fully indemnified certificate of title in respect of a lease which has already terminated, or a fully indemnified charge certificate in respect of a heritable security secured over such a lease. If, therefore, a lease contains a condition that it will automatically terminate on the occurrence of a particular event (e.g. the sequestration of the tenant, or the appointment of liquidator or receiver), the registration officer should ensure, so far as possible, that such an event has not occurred before the date of receipt of the application. The occurrence of such an event should be revealed in the answers to the questions on the application form. If, however, the value of the leasehold interest is high, or the registration officer has reason to suspect the occurrence of such an event, he should ask the applicant for up to date certification before completing registration.

19.11 Disposition containing renunciation of lease

When a disposition is received that includes in gremio a renunciation of a lease by the tenant to the landlord and also a disposition to the tenant conferring the ownership of the land, the application need only be processed in the Land Register. The result of this transaction is that the two interests merge, with the lower (tenant's) interest being absorbed into the landlord's title; the effect of the deed is that no interest will remain in the Sasine Register. See section 10.10 of burdens section regarding 3^rd party rights in leases.

The form of the application and the impact on search sheets and title sheets will depend on which register the current titles are held in - fuller guidance on applications forms and the applications that will require to be created is provided in the document "A Guide to Registration of Leases" contained in the miscellaneous documents section.

19.12 Consent of landlords

The vast majority of, if not all, modern commercial leases contain a provision that the consent of the landlord must be obtained for any assignation thereof or sub-lease or that the lease is granted in favour of the tenant ‘(but excluding sub-tenants or assignees without the prior written consent of the landlord, which consent etc.)’. This provision may appear in either the destination or the burdens clauses of the lease. If it is contained in the burdens clauses, it will (as appropriate) appear either in the preamble or in the burdens text of the relevant burdens section entry.

If the requirement is contained in the destination, it will be reflected in full in both the proprietorship section and the burdens section of the title sheet. In the proprietorship section it should be disclosed as part of the destination, rather than by way of a separate permanent note.

However as a breach of such a provision falls outwith the scope of the Keeper's indemnity, registration officers need not seek evidence that the appropriate consent has been taken.

19.13 Interposed leases

Section 17 of the 1974 Act permits the creation of interposed leases. These allow a landlord to grant a lease of land already leased for a longer or shorter period than, or of the same duration as, the existing lease, but subject to the existing lease. This is presumably equivalent to a sale or lease of the right to collect the rent and enforce the conditions in the existing lease for a term of years.

From a practical point of view, where one or more of the affected interests is registered in the Land Register, the result will be that:

where the landlord’s interest is registered, the schedule of leases in the property section should disclose details of the interposed lease (details of the original lease need only be shown if its term will continue beyond the termination date of the interposed lease).

where the interposed tenant’s interest is registered, the property section of the title sheet will disclose the short particulars of the interposed lease (see Property section for style) and will also contain a schedule of leases giving details of the original lease. The conditions of the interposed lease will be disclosed in the burdens section.

where the original tenant’s interest is registered, on the grant of the interposed lease it will be necessary to consider what terms of the interposed lease require to be included in the burdens section of the title sheet.

Because of the inherent complexity of such transactions, all instances of interposed leases should be referred to a senior caseworker.

19.14 Variation of lease – incorporation of additional subjects

The Keeper is regularly asked to accept for registration deeds which purport to increase or vary the area of ground affected by a registered leasehold title. Such deeds may be styled deeds of variation (although they differ in intention from deeds of variation of the leasehold conditions) or minutes of extension (although they differ in intention from minutes of extension of the duration of the lease).

While there is no conclusive authority supporting the validity of such deeds, the Keeper's policy is that provided both landlord and tenant are parties to the variation then the presumption is that such deeds are acceptable.

Where the Keeper agrees to accept such a deed, he will do so on the basis that it has the same effect as a new lease of the additional ground, on the same terms as the original lease and for the remaining duration of that lease. It follows that such deeds can only be accepted if the original lease still has more than 20 years to run. If the remaining term of the original lease does not exceed 20 years, the variation or extension will be treated as effectively a short lease of the additional ground; it cannot therefore be given effect to in the tenant’s title sheet, nor noted in the landlord’s title sheet if the latter interest is registered, nor can the deed be recorded in the Sasine Register.

Where there are any doubts about accepting a deed purporting to increase the extent of the subjects of a registered leasehold title then the matter should be referred to a senior caseworker, who will, if necessary, seek the advice of Legal Services.

19.15 Termination of leases

Where an application for the termination of a registered lease is submitted for registration, separate applications should be created against both the landlord's and tenant's interests. This is to ensure that any pending application to terminate a lease is reflected on the Application Record and will be disclosed when searching against either of the affected interests.

In the absence of an application against one of the affected interests, an Internal Dealing application should be created against the interest for which an application has not been presented.

In all cases, the registration officer must examine the evidence of termination of the long lease submitted in support of the application to ensure that it is sufficient to terminate the lease as follows.

Further details on the types of applications required are contained in Termination of Leases.

19.15.1 Expiry of Term

The law does not presume that a lease automatically expires at the specified termination date; instead, the presumption is that it is continued by tacit relocation if neither the landlord nor the tenant has intimated a desire to terminate, by sending the other a notice to quit. If such notice is not sent it is assumed that both parties wish the lease to continue, and it is therefore automatically extended (for one year at a time in the case of registrable leases) until formally terminated by either party.

It therefore follows that, in the absence of the appropriate evidence of termination, a title sheet for a registered leasehold interest should not be cancelled, nor should the details of the relevant lease, as an overriding interest, be removed from the landlord's title sheet.

Frequently the Keeper will only become aware that a lease has expired when the property (such as a retail unit) is re-let. The registration officer should requisition evidence of the termination of the existing lease before the new leasehold interest can be registered with full indemnity.

A leasehold interest that has time-expired no longer exists and accordingly there is no interest to be absorbed into that of the landlord; the title sheet relating to the tenant's interest just falls to be closed.

If the landlord's interest is registered the notice to quit should be submitted along with a form 2 against that interest. The schedule of leases should be updated to remove the relevant entry relating to the lease (normally the title plan will also require updating); the title sheet for the tenant's interest will be closed as a consequence.

If the landlord's interest remains in the Sasine register the form 2 application should be made against the tenant's interest and that title sheet should be closed. No entry is required in the Sasine register; the initial entry should disclose that the term will have expired.

If the landlord's interest is registered but the tenant's interest remains in the Sasine register the reverse situation applies.

Whenever a title sheet is closed, a plans registration officer should cancel the title plan on the DMS.

19.15.2 Notice to Quit

Modern leases frequently include review points where it is open to either party to terminate the lease, the exercise of this option will be evidenced by service of a notice to quit on the other party. This should be dealt with in the same manner as the preceding paragraph, however as the notice to quit is not a recordable document, and the term has not expired, it will be necessary to add a note to the recorded interest in the Sasine register to publicise that the lease has been terminated. The note should be worded to clearly identify the lease e.g.

Lease by AB to CD recorded/registered dd mmm yyyy has been terminated in terms of Notice to Quit dated dd mmm yyyy.

19.15.3 Irritancy

Sections 4 and 5 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 provide forms of protection for tenants against penal enforcement of irritancies in leases. Section 4 makes it mandatory on the landlord to give notice in respect of a termination for non-payment of rent and details the need for the tenant to comply with any notice served in order to obtain protection. Section 5 makes similar provisions in respect of irritancies not relating to monetary breaches. Both sections therefore cover the possibility of termination resulting from all forms of breaches.

With regard to settling procedures it should be noted that irritancies do not become effective without a court decree of extraordinary removing, unless the tenant is willing to remove. Therefore, in the absence of a decree, evidence that the tenant has vacated the premises must be submitted before the tenant's interest is removed from the register. Due consideration must also be given to the position of sub-tenants and heritable creditors when a head lease is irritated; see 19.15.4 below.

During periods of recession it is not uncommon for tenants just to walk away from premises and in their absence the premises are re-acquired by the landlord and no court action is raised due to the absence of the tenant. In these circumstances the Keeper will consider lesser evidence than the court decree of the termination of the lease. The required evidence would be in the form of:

- Letter of demand of payment of outstanding rent (reflecting terms of lease and giving a fixed period in which to pay) - the letter may threaten irritancy;
- Notice of Irritancy terminating the lease;
- An affidavit that tenant has vacated the premises;
- If there is an outstanding security, either statement that no security granted by the tenant affecting the lease had been intimated to the landlord, or evidence that the creditor had been informed of the potential irritancy in terms of the lease (e.g. recorded delivery slip of 1 above addressed to creditor, or letter of acknowledgement from creditor).

Confirmation that the submitted evidence is sufficient should be made in consultation with a senior caseworker.

When a lessee's interest under a lease or sub-lease has been irritated by the landlord and appropriate evidence that the interests of all parties have been considered, there is no requirement to recall any land or charge certificates that had been issued.

Section 5 of the Leasehold Casualties (Scotland) Act 2001 places a further restriction on the ability of landlords to irritate certain types of lease. In any lease granted

- before 10 August 1914 and

- for a period of not less than 175 years (as provided for by S1(1) of said Act) and

- for a rent or tackduty which does not exceed £150 per annum [N.B. This relates to the original rent payable]

the irritancy clause is rendered void from 10 May 2000. In any case where the current tenant has taken entry on or after 10 May 2000 and the lease falls within the above criteria, any irritancy clause contained in the lease may therefore be omitted from the burdens section of the title sheet. The procedural implications are discussed in Irritancy clause.

19.15.4 Confusio

This is a rule of general application to obligations in Scots Law. Where the same person in the same legal capacity becomes both the debtor and the creditor in such an obligation, that obligation is said to be extinguished confusione. In relation to leasehold property, where the same person in the same legal capacity becomes both landlord and tenant in the same lease (e.g. by succession or by disposition or assignation as appropriate), there is now a generally accepted presumption that confusio operates to extinguish the lease, unless the proprietor acts in such a way as to rebut that presumption. It is settled that a lessee who obtains a disposition of his leasehold need only look thereafter to his title as owner for his rights and obligations.

Notwithstanding the foregoing, agents differ in their ways of dealing with property where their client has acquired both leasehold and heritable titles. Many continue to dispone the subjects and assign the lease, while others dispone the subjects omitting the assignation of the lease and not excepting the lease from warrandice.

The intention of the agents will normally be evident from the application for registration, but it will on occasion be necessary to obtain written confirmation from them as to the intended position. Where doubt exists, the case should be referred to a senior caseworker for consideration.

Where it is considered that a lease has been extinguished confusione but that third party rights exist in relation to some of the conditions of let, a burdens entry should be prepared which shows the subsisting conditions (see 3rd example in section 19.19 below Leasehold Titles - Burdens Section Entries - Styles of Preambles).

19.15.5 Termination of lease – effect on subsidiary interests

When a registration officer is considering whether to give effect to an application to terminate a lease (or another application which presupposes the termination of the lease), the effect of such termination on subsidiary interests must be borne in mind. For example, the tenant may have granted a standard security or a sub-lease. In some cases, there may be a presumption that the subsidiary interest continues (e.g. where a head lease is voluntarily renounced, a sub-tenant may be able to continue to hold his or her sub-lease on the same terms as tenant of the head landlord). In some cases (e.g. where the head lease is irritated), the termination of the lease may have the effect of terminating the subsidiary interest. In other cases (e.g. where the tenant wishes to renounce the lease, but there is an undischarged standard security over it), the existence of the subsidiary interest may restrict the potential for termination of the lease, unless the security is discharged or evidence of the consent of the creditor's is obtained.

In all situations where termination of a lease is being considered and there are subsidiary interests extant on the register, the case must be referred to a senior caseworker, who will if necessary seek the advice of Legal Services.

More on Termination of leases

19.16 Leases of shootings and fishings

It has long been the established practice of this agency not to accept for recording or registration in the property registers leases of shootings (‘game leases’). This practice was based on decisions in former case law to the effect that a lease of shootings was not binding on a singular successor of the landlord, and operated as ‘a mere delegation of personal privilege, not capable of being made real’.

That position has been altered by an opinion of Lord Davidson in the case of Palmer's Trustees v Brown, to the effect that a long lease of shootings qualified as a probative lease of ‘lands and heritages in Scotland’ within the meaning of section 1 of the Registration of Leases (Scotland) Act 1857 and could have been registered under that Act in order to make it binding upon singular successors of the landlord.

In the light of this decision, the Keeper feels bound to accept for registration any lease of shootings which meets the usual statutory requirements for registration. The same principle applies in the case of a lease of trout fishings, with such leases also being accepted for registration provided they meet the same statutory requirements.

Any application to register a lease of shootings or fishings (other than salmon fishings which are established as a separate tenement) should be referred to a senior caseworker for guidance. The senior caseworker should consider the fact that the interests leased are deemed to be incorporeal in nature and accordingly would not induce first registration in terms of S2(2) of the 1979 act, unless the landlord's interest is registered in which case section 2(3) of the 1979 act applies.

The one exception to this is where a notice under section 65A(9) of the Abolition of Feudal Tenure etc. (Scotland) Act 2000 has been registered. The definition of incorporeal heritable right in the 1979 Act was amended to exclude sporting rights defined under section 65A(9). The recording of a notice converts the right to a separate tenement which can then be registered in the land register without the registration of the landlord' interest.

Depending on the point in the registration process that this issue is identified will influence the approach to be taken. If early in the process the application should be cancelled and returned to the agent pointing out that the transfer does not induce registration and the deed should be submitted for recording in the Sasine register.

If the application has been with the Keeper for a significant period (if in doubt consult a senior caseworker) a letter in the following style should be sent to the submitting agent.

I refer to your application for registration of the above.

I write to draw your attention to a speciality in the registrability of leases of incorporeal subjects such as shootings and coarse fishings. Normally the grant of a new lease induces registration of the tenant’s interest in the Land Register. However section 2(3) of the Land Registration (Scotland) Act 1979 (the 1979 Act) makes an exception to the general rule in the case of incorporeal rights (which are defined in section 28(1) to exclude rights of salmon fishing and those few rights formerly reserved to superiors which were converted prior to feudal abolition.) In this exceptional case it may be that the terms of the legislation are such that the Keeper is not permitted to register a lease of incorporeal rights in the Land Register unless the landlord’s title to the subjects over which the lease is granted is already registered. If such a lease is registered there may be room for doubt as to the effectiveness of registration.

Where a lease of incorporeal rights is granted by a landlord who holds on a Sasine title, Registers of Scotland policy is accordingly that it is correct to record the lease in the Sasine Register.

Where it is identified that a Land Register application falls into this category at the time of receipt or early in the registration process the Keeper's policy is to reject the application in order that the lease may be submitted for recording in the Sasine Register, where the effect of recording will be clear. However where a lease of incorporeal rights is granted by a landlord holding on a Land Register title the Keeper's interpretation of the 1979 Act is that the lease will induce registration of the tenant’s interest in that register.

For completeness, I would mention that in the case of a sale and lease back where a Disposition conveying the landlord's interest is the subject of a first application to the Land Register and there is a further application for a lease back of sporting rights to the granter of the disposition, the Keeper’s view is that both deeds should be presented to the Land Register.

In considering the above application I note that the application was accepted by the Keeper on dd mm yyyy. In this case the Keeper considers that, were the application to be rejected from the Land Register for presentment of new to the Sasine Register, the possibility of prejudice to the tenants may outweigh the uncertainties arising from the technically erroneous application for registration in the Land Register.

Accordingly the Keeper would complete registration in this case unless you wish to withdraw the application so that it may be re-presented in the Sasine Register. If you do so you should satisfy yourself that there has been no adverse development on the Sasine Register and Register of Inhibitions such as might affect the validity of the tenant's rights. There will be no cancellation fee payable. Please advise us within 30 days if you wish the application to be cancelled

If we do not hear from you within 30 days we will proceed to register in the Land Register and the Land Certificate will be forwarded to you shortly.

For future reference, the Keeper would ask you to take note of this issue when submitting leases of incorporeal heritable rights.

It is emphasised that this instruction relates only to leases of shootings or fishings. There is considerable doubt whether a right to shootings or fishings (other than salmon fishings) can exist as a separate tenement, divorced from ownership of the land; any deed purporting to convey shooting or fishing rights separately from the land over which the rights are to be exercised should therefore be referred to a senior caseworker.

19.17 Completion of title sheet

19.17.1 Property section

The particulars entered in the property section of a title sheet for the tenant's interest in a lease differ only marginally from those entered in the property section of a title to the land. The entry under the heading ‘Interest’ is ’Tenant’.

The land affected by the registration is identified on the title plan by one of the methods described in First registration mapping principles, and the subjects are described by reference to the plan in exactly the same way as in a proprietor's title to land, using expanded verbal descriptions where necessary, and setting out exclusions of indemnity etc. However the grant of a lease does differ from the conveyance of property. When drafting the rights and conditions in a property section of a lease this distinction should be borne in mind and care should be taken not to inadvertently create a right of property when only a condition or right of use is created in the lease. In particular, a leaseholder assigning or sub leasing property cannot grant a servitude right and no reference or cross reference to servitudes should be included in the property section. (See also 19.15.4)

Parts removed from the title sheet by partial assignation are greened out or set out in a schedule of exceptions. Parts sub-let are edged in yellow, and schedules of sub-leases and the appropriate explanatory notes are entered in the property section in the same way as they are in a property title to the land. The major difference is that after the description and specification of conditions but before any notes of exclusion of indemnity, removals or sub-leases, short particulars of the lease under which the subjects are held are inserted in the following style:

SHORT PARTICULARS OF THE LEASE UNDER WHICH THE SUBJECTS ARE HELD

Parties	Date of Registration (or Recording)	Term
Ardgowan Estates Limited to James Smith	9 Jun 1981 [GRS (Renfrew) 21 MAY 1959]	60 years from Whitsunday 1981

Where the subjects in the title are not the whole subjects in the lease, that fact will not be apparent from the property section.

The main significance of that fact, however, is in connection with liability for payment of rent and performance of any other conditions of tenure. These liabilities will be set out in the burdens section, just as they are in an ownership title to land.

Registrations of Floor Level Commercial Premises

Applications to register floor level commercial premises are often leasehold and are, in the main, dealt with using copy in certificate procedure (see Requirements for Use) with site plan method used on the title plan. Delays in mapping these applications generally stem from the poor quality of the plans submitted which fall into one of the 4 following categories:

1. By reference to a plan which is of sufficient accuracy and quality to enable it to be easily compared and reconciled with the OS map. Such a plan can normally be relied upon to plot extents precisely on the title plan or used to prepare a supplementary plan.
2. By reference to a plan which is deemed to be demonstrative only, but is still adequate for registration purposes.
3. By reference to a plan which is deemed to be demonstrative only,and due to its ‘floating shape’ quality (i.e. lack of orientation or sufficient surrounding detail) cannot safely be used.
4. By verbal description of the floor level involved, this usually includes a measured floor area which is normally the only indication of whether or not the whole floor is to be registered.

Where categories 1 and 2 apply, as necessary, a supplementary plan will be prepared and put with the title plan.

Where the plan referred to cannot safely be used to prepare the title plan or as a supplementary plan, and is deemed to be demonstrative only, as in the case of category 3 plans, a colour copy of the plan will be made for inclusion in the land certificate with the copy lease. It is implied, but not expressed, that the Keeper will take no responsibility for the accuracy of the deed plan. The property section will require to reflect this, e.g.

Subjects within the land edged red on the Title Plan, extending to 1000 square metres on the fourth floor of Argyle House, Union Street, Aberdeen, which subjects are edged blue on the plan annexed to the Lease, a copy of which is included in this Land Certificate.

Close consultation will be required between the plans and legal registration officers to resolve any ongoing difficulties, especially as regards category 3 and 4 applications.

The plans registration officer will require to set up a separate backup file with appropriate notes on the DMS when dealing with commercial development of this nature so that extents on any given floor level may be cross-checked as registrations arrive, in order to ensure no overlap exists. In category 3 cases, where the plans registration officer is unable to ascertain whether or not an overlap exists, the legal registration officer must be alerted to clarify the situation with the applicant. In category 4 cases, where there is no deed plan, plans and legal registration officers must take care to ensure that the verbal descriptions of the parts leased do not indicate an overlap.

In the event of a subsequent overlap being identified, the agent submitting the later application must be informed and the matter resolved (e.g. by submission of a new plan); if the overlap remains unresolved, the later case can proceed, subject to an exclusion of indemnity as regards the overlap area.

In the event of applications for registration of an ownershipinterest in a floor level, the criteria for accurate identification of the interests to be registered, either by deed plan or by verbal description, will be more rigorous. The plans and legal registration officers must consult and determine that the description in each case fully meets the requirements of the Land Register.

19.17.2 Proprietorship section

The particulars entered in the proprietorship section of a title sheet for the tenant's interest in a lease are identical to those entered in that section of an ownership title to the property.

The following speciality exists, however:

Where the deed giving title to the registered proprietor is the lease itself, the rental (qualified as appropriate), in the absence of any other consideration, should be entered in the ‘Consideration’ column e.g.:

Consideration:
Rent £25,000 per annum
(Subject to review)

The full details of the rental provisions will be included in the burdens section entry for the lease.

Inhibitions

The question of whether or not a lease is affected by an inhibition against the tenant hinges on whether or not the lease is adjudgeable, which in turn is determined by whether or not the lease is freely assignable (see Consent of landlords). If the lease contains a stipulation that it cannot be assigned without the consent of the landlord, then that lease is not freely assignable and cannot be adjudged. The general principle is that it will not therefore be struck at by an inhibition against the tenant. Conversely, a lease which can be freely assigned without any requirement for the landlord’s consent is adjudgeable and will be struck at by any future inhibition against the tenant.

The position as regards sub-leases is somewhat unclear, but it is generally thought that inhibitions will strike at sub-leases where there is unfettered power to sub-let. If that view is correct, it would presumably follow that, where the power to sub-let is conditional on the landlord’s consent, the reverse holds good.

It should be borne in mind, however, that this is a particularly complex area of law. For instance, it may be that a lease would be deemed to be freely assignable (and therefore struck at by an inhibition) notwithstanding a stipulation requiring the landlord’s consent, if the stipulation is qualified by such words as: ‘which consent shall not be unreasonably withheld’. Any case in which a tenant becomes inhibited and the registration officer considers that the inhibition may not strike at the interest should, therefore, be referred to a senior caseworker, who will if necessary seek the advice of Legal Services.

Any case where the landlord or tenant is sequestrated should be referred to a senior caseworker.

19.17.3 Charges section

The particulars entered in the charges section of a title sheet for the tenant's interest in a lease are identical to those entered in that section of an ownership title to the property. However, where a heritable proprietor has granted a standard security over his property and then leases the property in whole or in part, the written consent of the creditor must be obtained to the lease (see standard condition 6 in schedule 3 to the Conveyancing and Feudal Reform (Scotland) Act 1970). A copy of the consent must therefore be submitted with the application for registration of the leasehold interest, or requisitioned if it is not submitted.

Standard condition 6 may also be varied or disapplied to allow the granting of the lease without consent, but again evidence of such variation or disapplication must be supplied.

When such evidence of consent, variation or disapplication has been supplied, the standard security will not be entered in the charges section of the tenant's title sheet. In cases where it is not supplied, registration officers must warn applicants' agents that, unless such evidence is produced, the landlord's security will be disclosed in the tenant's title sheet.

If consent, variation or disapplication of standard condition 6 is not supplied and the standard security is not disclosed in the charges section of the tenant's title sheet, it is considered unlikely that the tenant could pursue successfully a claim upon the Keeper's indemnity, for the latter could rely on section 12(3)(n) of the Land Registration (Scotland) Act 1979, the carelessness of the claimant having caused the loss. The area of concern is that the loss may be suffered by a third party who acts in reliance upon a title sheet for the tenant's interest which does not disclose the risk that the lease is voidable at the instance of a pre-existing heritable creditor of the landlord.

In such cases therefore, the disclosure of the landlord's standard security on the tenant's title sheet should be sufficient to put a third party dealing with the tenant upon enquiry as to whether or not standard condition 6 affects. It is considered unnecessary to exclude indemnity from the tenant's title sheet in respect that such a standard security has been disclosed in the charges section of that title sheet, even although standard condition 6 may render the lease voidable as above described.

19.17.4 Burdens section

(a) Rentals (Tack duties)

It should be noted that there is no provision in the Conveyancing and Feudal Reform (Scotland) Act 1970 for service of notice of allocation of rent, and that neither Part I of the Land Tenure Reform (Scotland) Act 1974 (redemption of feuduties etc.), nor section 56 of the Abolition of Feudal Tenure etc. (Scotland) Act 2000 (extinction of certain annual monetary payments) apply to leases. Rentals, however, may be allocated by means of memoranda and altered by minutes of agreement.

Notwithstanding the fact that the foresaid 1974 and 2000 Acts do not apply to leases, it is not uncommon for so-called ‘tack duty redemption receipts’ to be included in an application for registration. Whilst undoubtedly a convenience for both landlord and tenant, these documents are legally ineffectual as they purport to erase one of the essential requirements of a registrable lease; they should therefore be ignored (although the practice is to archive them). In such cases, the rental provisions will, therefore, remain in the text of the relevant burdens section entry.

(b) Leasehold casualties

A leasehold casualty is a provision in a lease which imposes a requirement for payment of a lump sum additional to the rent to the landlord, on the occurrence of specified events or at specified times. Unfortunately, the lease itself rarely, if ever, uses the specific word ‘casualty’, so, for the avoidance of doubt, a leasehold casualty can be simply described as any obligation in a lease to pay money to the landlord on the happening of any specific event. For the avoidance of doubt, a penalty is not a casualty.

Registration officers must take great care when they encounter leasehold casualties. First and foremost, they have to remember that it is not the case that all leasehold casualties are extinct. Several times in the past, registration officers wrongly edited out leasehold casualties that were still subsisting, which left the Keeper exposed to very large indemnity claims.

Section 16 of the Land Tenure Reform (Scotland) Act 1974 rendered casualty provisions in leases executed on or after 1 September 1974 unlawful, but landlords remained entitled to enforce casualties in leases executed before that date. The Leasehold Casualties (Scotland) Act 2001 (hereafter ‘the 2001 Act’) provides for extinction of many, but not all, casualties which survived the 1974 reform.

Which casualties are rendered extinct?

The 2001 Act declares that any casualty provision in a ‘relevant lease’ is void. A ‘relevant lease’ is defined as a lease granted before 1 September 1974 and for a period of not less than one hundred and seventy five years. Where a lease contains a provision requiring the landlord to renew, the renewed period is to be added to the original duration when determining whether or not the lease period exceeds one hundred and seventy five years.

Which casualties remain subsisting and enforceable?

Casualties in leases having durations of less than one hundred and seventy five years which were executed prior to 1 September 1974 remain subsisting and enforceable and must, on registration of the tenant’s interest, be entered in the burdens section of the title sheet.

Date of extinction

The date of extinction of those casualties rendered void by the 2001 Act is 10 May 2000.

Registration implications

First registration and transfer of part applications

If the date of entry of the assignee in the assignation or partial assignation which induces registration is on or after 10 May 2000, any void casualty provisions contained in the lease or parent title should be omitted from the burdens section of the new title sheet.

Dealings with Whole

Where an assignee has taken entry after 10 May 2000, the Keeper will edit any void casualty provisions out of the burdens section if requested to do so at the time of a dealing with the whole. If no request for removal is made, the Keeper’s policy is not to devote any time to checking for extinct casualty provisions at this stage. Any extinct terms which remain on the register will be addressed during any re-examination of burdens sections in consequence of the Abolition of Feudal Tenure and Title Conditions Acts.

Request for removal of casualty without dealing

Any tenant of a registered interest who wishes a casualty provision removed other than at the time of a dealing with the subjects may apply for rectification. Such applications should be made on Form 9 and the appropriate fee will be payable.

Copy in certificate

In any instances where the lease is bound into the Land Certificate ‘copy in certificate’ and casualty provisions would otherwise be omitted or removed, as appropriate, the following note may be added to the entry for the lease in the burdens section:

Note: The casualty provisions in the foregoing lease were rendered void from 10 May 2000 by section 1(1) of the Leasehold Casualties (Scotland) Act 2001.

(c) Irritancy clause

Any irritancy clause in a lease should normally be included in full in the relevant entry in the burdens section. The only exception is where the irritancy clause is rendered unenforceable by virtue of section 5 of the Leasehold Casualties (Scotland) Act 2001 (see Irritancy). In that exceptional case, the irritancy clause will be handled as follows:

First registration and transfer of part applications

If the date of entry of the assignee in the assignation or partial assignation which induces registration is on or after 10 May 2000, any void irritancy clause contained in the lease or parent title should be omitted from the burdens section of the new title sheet.

Dealings with Whole

Where an assignee has taken entry after 10 May 2000, the Keeper will edit any void irritancy provisions out of the burdens section if requested to do so at the time of a dealing with the whole. If no request for removal is made, the Keeper’s policy is not to devote any time to checking for extinct irritancy provisions at this stage. Any extinct terms which remain on the register will be removed during the before-mentioned re-examination of every burdens section as a consequence of the 2000 act.

Request for removal of irritancy clause without dealing

Any tenant of a registered interest who wishes an irritancy provision removed other than at the time of a dealing with the subjects may apply for rectification. Such applications should be made on Form 9 and the appropriate fee will be payable.

Copy in certificate

In any instances where the lease is bound into the Land Certificate ‘copy in certificate’ and irritancy provisions would otherwise be omitted or removed, as appropriate, the following note may be added to the entry for the lease in the burdens section:

Note: The irritancy clause in the foregoing lease was rendered void from 10 May 2000 by section 5(2) of the Leasehold Casualties (Scotland) Act 2001.

It is stressed, however, that the omission or removal of irritancy provisions is appropriate only where the lease fulfils the three requirements in section 5 of the 2001 Act.

(d) Conditions of let

Conditions may be discharged, modified, etc. by minutes of agreement or waiver etc. and also (under certain exceptions) by an order of the Lands Tribunal (see Part I of 1970 Act).

(e) Creation of real conditions in leasehold property

In the past, considerable doubt existed as to whether it is competent to create conditions which will affect leasehold property in any deed other than the lease itself. Accordingly the original practice was to insert a note after any burdens entry for a partial assignation or deed of conditions which purported to impose conditions on leasehold property, to the effect that the conditions contained therein had not been made real. When a registration officer is processing a dealing with whole application where the existing title sheet contains such a note, the note should be removed.

Section 3 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 provided that it shall always have been competent to impose conditions in an assignation or deed of conditions affecting leasehold property. The conditions in partial assignations and deeds of conditions affecting property held on a long lease can therefore be treated in the same way as conditions in dispositions or deeds of conditions affecting heritable property. The leaseholder cannot create heritable servitude rights however and where a deed purports to create these they should be referred to a Senior Caseworker.

(f) Burdens affecting the landlord’s title

When the landlord’s title is subject to title conditions and/or other burdens, such conditions are capable of being enforced against the tenant and must therefore be disclosed in the tenant’s title sheet. Failure to disclose title conditions etc. could mean that a benefited proprietor, although able to enforce burdens against the burdened property, would be unable to proceed against the tenant’s interest and consequently would have a claim upon the Keeper’s indemnity. The burdens section of a leasehold title should therefore reflect the various burdens appearing in the landlord’s title sheet subject only to the elimination of burdens which are irrelevant e.g. because of geographical location.

When a real burden is created in a deed relating to the landlord's interest after the creation of the lease then the burdens will only be reflected in the tenant's title sheet if the tenant was a party to the deed and application is made to register the deed against their interest.

(g) Burdens section of the landlord’s title sheet

In view of the terms of Section 12(3)(m) of the 1979 Act, where the landlord’s title is registered, no attempt will be made to disclose in the landlord's title sheet any of the conditions of lease which he has a right to enforce, or obligations in favour of the lessee which he undertakes. There will, however, be inserted in the burdens section an entry in the following form:

The rights of the tenants under the Leases specified in the Schedule of Leases in the Property Section are burdens on the subjects in this title.

Any rights granted in leases over unleased parts of the landlord's title will be disclosed in the burdens section of the landlord’s title sheet in addition to the above note. The entry will be in the following style:

Lease referred to in the property section by A to B, registered … of the area edged and numbered … in yellow on the title plan contains the following rights which affect the subjects in this title:

19.18 Deeds which include colour photographs

There have been several instances where one or more pages of colour photographs have formed part of a schedule in a lease forming the deed inducing registration. These photographs are being used to show pictorially the state of repair of the property at the time of granting the lease, as a basis for the maintenance provisions between landlord and tenant. In registering such cases, the copy in certificate method is the norm.

Initially, a procedure was devised whereby the applicant’s agent was asked to supply the requisite number of colour copies of such photographs for land registration purposes or to pay the cost of the Agency’s providing such copies. After further consideration, it has been decided that colour reproduction of such photographs as part of the Land Register process is not justified in relation to any perceived benefit arising therefrom.

Therefore, where such colour photographs appear in any deed which accompanies an application for registration these will be archived and subsequently reproduced in monochrome (black and white); this will apply for all purposes, e.g. copy in certificate, subsequent office copies etc. The legal registration officer will insert a note under the appropriate entry in the burdens section of the title sheet, e.g.:

The photographs referred to in the schedule annexed to the said lease have been reproduced in black and white.

The one exception to the above rule will be where the deed identifies a feature by referring specifically to a colour or colours in a photograph annexed to the deed. In such a case, the legal registration officer must consider if some other method of identification of the feature is possible, only in exceptional circumstances should the photograph be included in colour (e.g. by utilising the scanned supplementary plan procedure; in this instance an appropriate note should be added to the burdens section entry.

19.19 Leasehold Titles - Burdens Section Entries - Styles of Preambles

Lease (Sub-lease) (referred to in the Property Section) (for ------ years from -------) by A to B and his heirs and assignees, recorded (or registered) --------, of ------------, of which the subjects in this title form part, contains the following leasehold conditions and rights:
[ ]

Assignation of the (Lease ) in Entry ----- [but only to extent of ---------, of which the subjects in this title form part] by A to B and his heirs and assignees, recorded (or registered) -------------, contains the following leasehold conditions and rights:
[ ]

Lease for xxx years from xxx by A to B recorded xxx of xxx contains the following conditions and rights which subsist notwithstanding the extinguishment of said Lease confusione, viz.

Note that the reference to the deed containing " conditions and rights" should be amended to reflect the specifics of the application being processed.

19.20 Long Leases (Scotland) Act 2012

The purpose of the Long Leases (Scotland) Act 2012 (“the Act”) is to

(a) Convert tenants rights under qualifying ultra-long leases to ownership on the appointed day being 28 November 2015

(b) Enable some leasehold conditions to become real burdens

(c) Enable landlords to preserve sporting rights in relation to game and fishings

(d) Enable tenants to opt out of converting their interest to ownership if they wish

(e) The Act also makes provision for compensatory payments to former Landlords

19.20.1 Definition of qualifying Lease

Section 1(1) of the Act defines a qualifying lease as a lease which is let for more than 175 years. In the case of residential leases they will qualify to convert to ownership if they have more than 100 years left to run on the appointed day. For non-residential leases to convert, they must have 175 years left to run on the appointed day.

Following conversion on the appointed day any pre-existing right of ownership is extinguished together with any superior lease. Conversion of qualifying leases to ownership is automatic unless the tenant chooses to opt out.

19.20.2 Leases that do not qualify

Section 1(4) provides that a lease does not qualify if

(a) The annual rent payable under the lease is over £100. The Act includes provisions dealing with specific circumstances where there is a single rent payable in respect of two or more leases

(b) The subjects of lease include a harbour in relation to which there is a harbour authority

(c) It operates for the sole purpose of allowing the tenant to install and maintain pipes and cables or

(d) It is a lease (i) of minerals; or (ii) which includes minerals in respect of which a royalty or other payment of rent determinable by reference to the exploitation of the minerals, is or may be payable

This initial update to the manual is to provide information on the first provisions being introduced in terms of the Act, being the registration of Notices or Agreements seeking to preserve and convert leasehold conditions to real burdens. In terms of the Act these Notices or Agreements are in a prescribed form and fall to be recorded/registered. As the deeds are in a prescribed form they will not be witnessed.

19.21 Qualifying Leasehold conditions

Where certain leasehold conditions under the Act qualify to convert into real burdens, those burdens will be subject to the Title Conditions (Scotland) Act 2003 (“the 2003 Act”). Such burdens must relate directly or indirectly to the burdened property and must not be contrary to public policy. Exclusions apply such as obligations which operate solely between landlord and tenant e.g. an obligation to pay rent and restrictions on assignation and sub-letting, rights of irritancy and penalty clauses.

Prior to the appointed day and the introduction of the main elements of the Act provisions are made for registration of Notices or Agreements to preserve various rights and burdens. The forms of the Notices are prescribed under The Long Leases (Prescribed Form of Notices etc.) ScotlandRegulations 2013. Under section 13(4) of the Act, Notices are registrable by an “entitled person” (i.e. a person who is entitled to enforce a qualifying condition – usually the landlord of the qualifying lease or a superior lease, but in some circumstances a neighbour). The Notices under section 14-20 of the Act become registrable on or after 21^st February 2014.

19.21.1 Notice for Conversion of Reserved Sporting Rights

Where a right of game or fishing is reserved expressly or by implication from a qualifying lease or superior lease, a notice may be registered by the landlord converting reserved sporting rights into a separate tenement.

This Notice can be recorded against either the landlord’s interest or the tenant’s interest.

Where the deed has only been registered over either the tenant's or the landlord's interest in the Land Register and the other interest is also registered in the Land Register, a Title Update (TU) application must be created to amend the other Title Sheet (unless a pending application against that Title Sheet can be used).

Where the deed has only been registered over either the tenant's or the landlord's interest in the Land Register and the other interest is still recorded in the Sasine Register, a Sasine TL should be contacted and asked to add a note to the Search Sheet for the other interest.

The following is an example of the style of note to be used:

Note: Notice (in terms of Section 8(2) of the Long Leases (Scotland) Act 2012) by xxx (ie the landlord) affecting Lease by xxx to xxx, recorded xxx of subjects xxx, registered xxx, converting the right to sporting right(s) contained in said Lease.

Suggested Version for tenant's title sheet

Notice in terms of Section 8(2) of the Long Leases (Scotland) Act 2012, recorded/registered dd mmm yyyy by YY, Landlord of [describe subjects] under the Lease in Entry [no] of this Section/Lease by BB to CC, recorded/registered dd mmm yyyy, converting into a separate tenement of land the [e.g. reserved sporting rights], enforceable by said YY, contained in said Lease into a separate tenement in land.

Suggested Version for landlord's title sheet

Notice in terms of Section 8(2) of the Long Leases (Scotland) Act 2012, recorded/registered dd mmm yyyy by YY, Landlord of [describe subjects] under the Lease by BB to CC, recorded/registered dd mmm yyyy, converting into a separate tenement of land the [e.g. reserved sporting rights], enforceable by said YY, contained in said Lease into a separate tenement in land.

19.21.2 Notices for conversion of qualifying condition by nomination of benefited property

An entitled person can convert the condition into a real burden in favour of neighbouring land. This will normally be the owner of the land but can also be the landlord under a sub-lease or a neighbour if they are entitled to enforce the condition in the lease.

The deed must be recorded and/or registered against both benefited and burdened properties (Dual Registration). The deed cannot be accepted for either recording or registration if the dual registration requirement is not complied with.

Suggested Version for tenant's title sheet

Notice in terms of Section 14(2) of the Long Leases (Scotland) Act 2012, recorded/registered dd mmm yyyy by YY [describe capacity e.g. Landlord/proprietor of XYZ], prospectively converting the condition(s) [describe as necessary] contained in the Lease in entry {no} into real burdens and nominating [describe subjects] as the benefited subjects for said real burdens, in respect of which real burdens the subjects in this Title shall be the burdened subjects.

Suggested Version for Benefited Subjects

Notice in terms of Section 14(2) of the Long Leases (Scotland) Act 2012, recorded/registered dd mmm yyyy, by YY, prospectively converting the condition(s) [describe as necessary] contained in the Lease in Entry AA of this Section into real burdens and nominating [describe subjects] as the benefited subjects for said real burdens, in respect of which real burdens [description of leased subjects] shall be the burdened subjects.

Or

Notice in terms of Section 14(2) of the Long Leases (Scotland) Act 2012, recorded/registered dd mmm yyyy, by YY, prospectively converting the condition(s) [describe as necessary] contained in the Lease by BB to CC, recorded/registered dd mmm yyyy into real burdens and nominating [describe subjects] as the benefited subjects for said real burdens, in respect of which real burdens [description of leased subjects] shall be the burdened subjects.

Note: It may be necessary to create an entry for the Lease itself so that the terms of the Notice make sense, in which case the Lease should be requisitioned from the submitting agent if not submitted with the application.

19.21.3 Conversion by Agreement

The entitled person can serve a notice on a tenant of the qualifying lease for the purpose of converting a qualifying condition into a real burden in favour of neighbouring land. The concluded agreement between the parties requires to be dual registered against both the burdened and the benefited property. This is likely to be the owner of the land but can also be a landlord under a sub-lease or neighbour if they are entitled to enforce the condition.

If agreement cannot be reached an application may be made to the Lands Tribunal within one year of section 21 coming into force (i.e. the application must be made by 21 Feb. 2015).

The deed must be recorded and/or registered against both benefited and burdened properties (Dual Registration). The deed cannot be accepted for either recording or registration if the dual registration requirement is not complied with.

Suggested Version for Burdened (tenant's) Subjects

Agreement in terms of Section 17(1)(c) of the Long Leases (Scotland) Act 2012, recorded/registered dd mmm yyyy by YY and ZZ, Tenant under the Lease in Entry [no] of this Section, prospectively converting the [specify conditions as necessary] contained in said Lease into real burdens and nominating [describe subjects] as the benefited subjects for said real burdens, in respect of which real burdens the subjects in this Title shall be the burdened subjects.

Suggested Version for Benefited Subjects

Agreement in terms of Section 17(1)(c) of the Long Leases (Scotland) Act 2012, recorded/registered dd mmm yyyy, by YY andZZ, Tenant under the Lease by BB to CC, recorded/registered dd mmm yyyy , prospectively converting [specify conditions as necessary] in said Lease into real burdens and nominating [describe subjects] as the benefited subjects for said real burdens, in respect of which real burdens [describe subjects] shall be the burdened subjects.

Note: It may be necessary to create an entry for the Lease itself so that the terms of the Notice make sense, in which case the Lease should be requisitioned from the submitting agent.

19.21.4 Notice for conversion of qualifying condition into personal pre-emption burden or personal redemption burden

An entitled person may register a notice to convert a right of pre-emption or redemption into a real burden to be known as a personal pre-emption burden or a personal redemption burden. This is likely to be the owner of the land but can also be a landlord under a sub-lease or neighbour if they are entitled to enforce the condition

This Notice must be recorded/registered against the burdened property.