S14.21.4 Undertaking Not To Exercise Right of Pre-Emption

S83 makes provision for an owner of a burdened property to obtain, in advance of a sale, an undertaking that a right of pre-emption burdening their property will not be exercised for a specific period (though possibly subjects to specified conditions).

Such an undertaking will only operate to extinguish a subsisting right of pre-emption where it was created in:

A disposition executed after 1 September 1974 (after the Appointed Day a right of pre-emption has to be registered against both the burdened and the benefited property).
A feu deed for which a savings notice has been recorded/registered prior to the Appointed Day.

From the Appointed Day a right of pre-emption must be registered against both the burdened and the benefited property. Rights of pre-emption cannot be created as personal real burdens after the Appointed Day, with the one exception being a right created as a rural housing burden in favour of a designated rural housing body.

Conditions may be inserted, such as that the right of pre-emption will not be exercised if the consideration is more than a certain amount.

Where the holder of a right of pre-emption gives an undertaking not to exercise the right during a certain period, then the right shall be extinguished on the registration of the conveyance in implement of the sale registered before the end of that period (and therefore can be removed from the title sheet). This is not the case with a rural housing burden.
However, if the sale does not occur during the specified period, the pre-emption would revive after the specified period. The procedure is intended to obviate the possibility of purported offers being made by third parties purely in order for the burdened proprietor to benefit from the removal of the burden.

Where it becomes apparent to sellers that a sale may not be completed within the specified time, they have the option of obtaining a further undertaking from, or making an offer to, the holder of the pre-emption in terms of S84 of the Act.

UNDERTAKING (in terms of Section 83 of The Title Conditions (Scotland) Act 2003) by (1), - Whereby said (1) as holder of right of pre-emption imposed in (2) {for benefit of (4)} undertakes not to exercise said right of pre-emption in respect of (3) in terms as thereinmentioned. Dated (5).

Or

UNDERTAKING (in terms of Section 83 of The Title Conditions (Scotland) Act 2003) by (1), - Whereby said (1) as holder of right of pre-emption imposed in (3) undertakes not to exercise said right of pre-emption in terms as thereinmentioned. Dated (6).

– Name and designation of granter of deed (holder of right of pre-emption).
– reference to deed that created right of pre-emption.
– description of burdened property.
– description of benefited property.
– date of execution.
- Note that in style 1 the text between {} is only required if there is a burdened property, i.e. the pre-emption is not a personal real burden.

Legal Examination

The Legal Examiner should check the following points

burdened property is sufficiently identified;
benefited property is sufficiently identified (if praedial pre-emption);
holder of right is named and designed;
deed in which right of pre-emption was created is narrated;
witness is named and designed as per 1995 Writings Act;
The Act does not specify that the Deed requires to be dual registered (although Keeper should suggest that it may be preferable to record/register against both properties where the constitutive deed/savings notice was dual registered). If both properties are still in Sasines the deed is entered on both search sheets. If one property is in the Land Register then contact Agent. Agent will usually only be acting on behalf of burdened property proprietor.

Example Minute:
MID 08867 (No.65) 18 May.2005 Fi 391.4
UNDERTAKING (in terms of Section 83 of The Title Conditions (Scotland) Act 2003) by TARRAS PARK PROPERTIES LIMITED, - Whereby said Granter as holder of right of pre-emption imposed in Feu Disp. to Shortbread House of Edinburgh Limited, recorded 7 Aug. 1998, for the benefit of said Granter, undertakes not to exercise said right of pre-emption in respect of land adjoining 5 WEST HARBOUR ROAD, GRANTON, EDINBURGH as thereinmentioned. Dated 11 Apr. 2005; with application on behalf of SHORTBREAD HOUSE OF EDINBURGH LIMITED.