S13.4 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.

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.

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.

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 form of the Notices are prescribed under The Long Leases (Prescribed Form of Notices etc.) Scotland Regulations 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.

As all Notices/Agreements are in a prescribed form, no deviation from the styles provided for in The Long Leases (Prescribed Form of Notices etc.) Scotland Regulations 2013 is allowed.

In terms of section 76 of the Act, the Keeper does not have any duty to verify certain matters of which the Keeper could not reasonable by expected to check. These include whether a Notice has been correctly served or sent, whether any statement contained in a Notice is true, whether any qualifying condition is actually enforceable by the person submitting the Notice and whether a sporting right or qualifying condition is still enforceable and whom it is that can enforce it.

Examiners are required to ensure that each part of each Notice/Agreement has been correctly completed, contains no identifiable errors and that each deed is correctly signed (where appropriate, by all parties) and correctly witnessed.

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.

Suggested Minute Style:

NOTICE (in terms of Section 8(2) of the Long Leases (Scotland) Act 2012) by ?p?nLandlord?z affecting Lease by AAAA to BBBB, recorded CCCC of subjects ?q?nX?z, converting the right to sporting right(s) as thereinmentioned. Dated ddmmyy.

The examiner should check the following points:

Landlord under the qualifying lease is named and designed.
Land affected by sporting rights is sufficiently identified.
Terms of reserved sporting rights are narrated.
Terms of any counter-obligation(s) are narrated. Can either be set out in full or by reference to deed.
Title details of Landlord are narrated.
Service section has been completed.
Signed by person sending notice.
Notary Public both signs and is named and designed.

The deed can be recorded against either the landlord’s interest (see Title details of Landlord) or the tenant’s interest (see land affected by sporting rights). Deed may be a joint recording and may affect multiple search sheets. Deed must be shown on all affected search sheets.

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.

Suggested Minute Style:

NOTICE (in terms of Section 14(2) of the Long Leases (Scotland) Act 2012), by ?p?nLandlord?z, prospectively nominating ?q?nZ?z as benefited subjects in respect of conditions contained in Lease by AAAA to BBBB, recorded CCCC of subjects ?q?nX?z and converting said conditions into real burdens as thereinmentioned. Dated ddmmyy.

The examiner should check the following points:

Person sending notice is named and designed.
Burdened property is sufficiently identified.
Benefited property is sufficiently identified.
Links in title of benefited proprietor are narrated (if required).
Specification of condition(s) met are narrated. Can either be set out in full or by reference to deed.
Terms of qualifying condition(s) are narrated. Can either be set out in full or by reference to deed.
Terms of any counter-obligation(s) are narrated. Can either be set out in full or by reference to deed.
Title to enforce qualifying condition(s) is narrated.
Service section has been completed.
Signed by person sending notice.
Notary Public both signs and is named and designed.

The deed must be recorded and/or registered against both benefited and burdened properties (Dual Registration). If registration required for one of properties but deed not so presented at same time, deed cannot be accepted in Sasines. Deed may be a joint recording and may affect multiple search sheets. Deed must be shown on all affected search sheets.

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).

Suggested Minute Style:

AGREEMENT (in terms of Section 17(1)(c) of the Long Leases (Scotland) Act 2012) between ?p?nLandlord?z and /?p?nTenant?z, affecting the Lease by AAAA to BBBB, recorded CCCC of subjects ?q?nX?z, prospectively nominating ?q?nZ?z as benefited subjects in respect of conditions contained in said Lease as thereinmentioned. Dated ddyymm.

The examiner should check the following points:

Person serving notice is named and designed.
Tenant under qualifying lease is named and designed.
Burdened property is sufficiently identified.
Benefited property is sufficiently identified.
Links in title of benefited proprietor are narrated (if required).
Terms of qualifying condition(s) are narrated. Can either be set out in full or by reference to deed.
Terms of any counter-obligation(s) are narrated. Can either be set out in full or by reference to deed.
Title to enforce qualifying condition(s) is narrated.
Service section has been completed.
Signed by person serving notice.

The deed must be recorded and/or registered against both benefited and burdened properties (Dual Registration). If registration required for one of properties but deed not so presented at same time, deed cannot be accepted in Sasines. Deed may be a joint recording and may affect multiple search sheets. Deed must be shown on all affected search sheets.

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

Suggested Minute Style:

NOTICE (in terms of Section 23(1) of the Long Leases (Scotland) Act 2012), by ?p?nLandlord?z, prospectively converting the right of pre-emption/right of redemption contained in the Lease by ZZZZ to AAAA, recorded BBBB of subjects ?q?nX?z into a personal pre-emption/personal redemption burden as thereinmentioned. Dated ddmmyy.

The examiner should check the following points:

Person serving notice is named and designed.
Burdened property is sufficiently identified.
Terms of qualifying condition(s) are narrated. Can either be set out in full or by reference to deed.
Terms of any counter-obligation(s) are narrated. Can either be set out in full or by reference to deed.
Title to enforce qualifying condition(s) is narrated.
Service section has been completed.
Signed by person serving notice.
Notary Public both signs and is named and designed.

The deed must be recorded against burdened properties. Deed may be a joint recording and may affect multiple search sheets. Deed must be shown on all affected search sheets.

Notice for conversion of qualifying condition into economic development burden

An economic development burden may lay down how the property should be used or may require money to be paid to the local authority or the Scottish Ministers. Section 24 allows a local authority, or the Scottish Ministers, with the right to enforce a qualifying condition which was imposed for the purpose of promoting economic development to convert that condition into an economic development burden in their favour.

Suggested Minute Style:

NOTICE (in terms of Section 24(1) of the Long Leases (Scotland) Act 2012) by ?p?nLocal Authority?z/ /p?n Scottish Ministers?z, prospectively converting the condition contained in the Lease by AAAA to BBBB, recorded CCCC of subjects ?q?nX?z, into an economic development burden as thereinmentioned. Dated ddmmyy.

The examiner should check the following points:

Body serving notice is named and designed.
Burdened property is sufficiently identified.
Terms of qualifying condition(s) are narrated. Can either be set out in full or by reference to deed.
Terms of any counter-obligation(s) are narrated. Can either be set out in full or by reference to deed.
Statement that the qualifying conditions is imposed for the purpose of promoting economic development is narrated.
Title to enforce qualifying condition(s) is narrated.
Service section has been completed.
Signed by body serving notice.

The deed must be recorded against burdened properties. Deed may be a joint recording and may affect multiple search sheets. Deed must be shown on all affected search sheets.

Notice of conversion of qualifying condition into health care burden

The Scottish Ministers when they have the right to enforce a qualifying condition which was imposed for the purpose of promoting the provision of facilities for health care can convert that condition into a health care burden in their favour.

Suggested Minute Style:

NOTICE (in terms of Section 25(1) of the Long Leases (Scotland) Act 2012) by ?p?nScottish Ministers?z, prospectively converting the condition contained in the Lease by AAAA to BBBB, recorded CCCC of subjects ?q?nX?z, in into a health care burden as thereinmentioned. Dated ddmmyy.

The examiner should check the following points:

Body serving notice is named and designed.
Burdened property is sufficiently identified.
Terms of qualifying condition(s) are narrated. Can either be set out in full or by reference to deed.
Terms of any counter-obligation(s) are narrated. Can either be set out in full or by reference to deed.
Statement that the qualifying conditions is imposed for the purpose of the provision of facilities for health care is narrated.
Title to enforce qualifying condition(s) is narrated.
Service section has been completed.
Signed by body serving notice.

The deed must be recorded against burdened properties. Deed may be a joint recording and may affect multiple search sheets. Deed must be shown on all affected search sheets.

Notice for conversion of qualifying condition into climate change burden

A public body or trust or the Scottish Ministers with the right to enforce a qualifying condition which was imposed for the purpose of reducing greenhouse gas emissions can register a notice to convert that condition into a climate change burden in their favour.

Suggested Minute Style:

NOTICE (in terms of Section 26(1) of the Long Leases (Scotland) Act 2012) by ?p?nPublic Body/Trust or Scottish Ministers?z, prospectively converting the condition contained in the Lease by AAAA to BBBB, recorded CCCC of subjects ?q?nX?z into a climate change burden, as thereinmentioned. Dated ddmmyy.

The examiner should check the following points:

Body serving notice is named and designed.
Burdened property is sufficiently identified.
Terms of qualifying condition(s) are narrated. Can either be set out in full or by reference to deed.
Terms of any counter-obligation(s) are narrated. Can either be set out in full or by reference to deed.
Statement that the qualifying conditions is imposed for the purpose of reducing greenhouse gas emissions is narrated.
Title to enforce qualifying condition(s) is narrated.
Service section has been completed.
Signed by body serving notice.

The deed must be recorded against burdened properties. Deed may be a joint recording and may affect multiple search sheets. Deed must be shown on all affected search sheets.

Notice for conversion of qualifying condition into conservation burden

A conservation body, or the Scottish Ministers, with the right to enforce a qualifying condition which promotes conservation can register a notice to convert that condition into a conservation burden in their favour.

Suggested Minute Style:

NOTICE (in terms of Section 27(1) of the Long Leases (Scotland) Act 2012), by ?p?nConservation Body or Scottish Ministers?z, prospectively converting the condition contained in the Lease by AAAA to BBBB, recorded CCCC of subjects ?q?nX?z into a conservation burden, as thereinmentioned. Dated ddmmyy.

The examiner should check the following points:

Body serving notice is named and designed together with, in the case of a conservation body, the year and number of the statutory instrument under which conservation body status was conferred.
Burdened property is sufficiently identified.
Terms of qualifying condition(s) are narrated. Can either be set out in full or by reference to deed.
Terms of any counter-obligation(s) are narrated. Can either be set out in full or by reference to deed.
Title to enforce qualifying condition(s) is narrated.
Service section has been completed.
Signed by body serving notice.
Deed is signed by witness.
Witness signing notice is named and designed.

The deed must be recorded against burdened properties. Deed may be a joint recording and may affect multiple search sheets. Deed must be shown on all affected search sheets.

Notice for conversion of qualifying condition into conservation burden by nomination of conservation body or Scottish Ministers to have title to enforce real burden

Registration of this notice allows a person with the right to enforce a qualifying condition which promotes conservation to convert that condition into a conservation burden in favour of a conservation body or the Scottish Ministers. The entitled person is usually the landlord (of the qualifying lease or a superior lease) but in some circumstances is a neighbour.

Suggested Minute Style:

NOTICE (in terms of Section 28(1) of the Long Leases (Scotland) Act 2012) by YYYY, prospectively converting the condition contained in the Lease by AAAA to BBBB, recorded CCCC of subjects ?q?nX?z into a conservation burden in favour of ?p?nDDDD Conservation Body/Scottish Ministers?z as thereinmentioned. Dated ddmmyy.

The examiner should check the following points:

Person serving notice is named and designed.
Name and address of the Nominee is narrated together with, in the case of a conservation body, the year and number of the statutory instrument under which conservation body status was conferred.
Burdened property is sufficiently identified.
Terms of qualifying condition(s) are narrated. Can either be set out in full or by reference to deed.
Terms of any counter-obligation(s) are narrated. Can either be set out in full or by reference to deed.
Title to enforce qualifying condition(s) is narrated.
Service section has been completed.
Signed by person serving notice.
Deed is signed by witness for person sending notice.
Witness signing notice for the person is named and designed.
Deed is signed by consenting nominee.
Deed is signed by witness for consenting nominee.
Witness signing notice for consenting nominee is named and designed.

The deed must be recorded against burdened properties. Deed may be a joint recording and may affect multiple search sheets. Deed must be shown on all affected search sheets.

Notice seeking exemption from conversion of a qualifying lease

The tenant of a qualifying lease (which includes sub-leases) can opt out of conversion so that it becomes an “exempt lease” by registering a notice of exemption at least two months before the appointed day (being 28 Nov. 2015).

Suggested Minute Style:

NOTICE (in terms of Section 63(b) of the Long Leases (Scotland) Act 2012) by ?p?nTenant?z, Tenant under the Lease by AAAA to BBBB, recorded CCCC of subjects ?q?nX?z, seeking exemption from automatic conversion of said Lease under said Act as thereinmentioned. Dated ddmmyy.

The examiner should check the following points:

Tenant under the qualifying lease is named and designed.
Qualifying lease is narrated.
Land subject to the qualifying lease is sufficiently identified.
Title of tenant is narrated.
Name and address of landlord under qualifying lease is narrated.
Name and address of landlord(s) under any superior lease is narrated.
Service section has been completed.
Signed by tenant.
Deed is signed by witness.
Witness signing notice is named and designed.

The deed must be recorded against tenant’s interest (see Title as Tenant). Deed may be a joint recording and may affect multiple search sheets. Deed must be shown on all affected search sheets.

Agreement for exemption for leases with an annual rent of over £100

A landlord can allocate cumulo rent before the appointed day which allows them to claim an exemption from the Act, if the annual rental for an individual lease after the cumulo rent has been allocated is over £100. The landlord must register an agreement with the tenant or an order made by the Lands Tribunal no later than 2 months before the appointed day. The term lease also includes sub-leases.

Suggested Minute Style:

AGREEMENT (in terms of Section 64(2)(a) of the Long Leases (Scotland) Act 2012) between ?p?nLandlord?z,, Landlord under the Lease by AAAA to BBBB, recorded CCCC of subjects ?q?nX?z and ?p?nTenant?z, Tenant under said Lease, seeking exemption from automatic conversion of said Lease under said Act as thereinmentioned. Dated ddmmyy.

The examiner should check the following points:

Landlord under the qualifying lease is named and designed.
Tenant under the qualifying lease is named and designed.
Qualifying lease is narrated.
Land subject to the qualifying lease is sufficiently identified.
Title of tenant is narrated.
Statement regarding annual rent payable is narrated.
Name and address of landlord(s) under any superior lease is narrated.
Signed by landlord.
Deed is signed by witness.
The witness signing agreement is named and designed.
Signed by tenant.

The deed must be recorded against tenant’s interest (see Title as Tenant). Deed may be a joint recording and may affect multiple search sheets. Deed must be shown on all affected search sheets.

Notice of Recall of exemption notice (without limit of time)

The tenant under an exempt lease (including a sub-lease) can register a recall notice, so long as the lease is not exempted under section 64 by the landlord. The tenant may register a recall notice before or after the appointed day. This will allow the lease to convert.

Suggested Minute Style:

NOTICE (in terms of Section 67(1)(a) of the Long Leases (Scotland) Act 2012) by ?p?nTenant?z, Tenant under the Lease by AAAA to BBBB, recorded CCCC of subjects ?q?nX?z, recalling the Notice made under Section 63(b) of said Act, recorded DDDD as thereinmentioned. Dated ddmmyy.

The examiner should check the following points:

Tenant under the qualifying lease is named and designed.
Qualifying lease is narrated.
Unexpired duration of qualifying lease is narrated;
Land subject to the qualifying lease is sufficiently identified.
Title of tenant is narrated.
Name and address of landlord under the qualifying lease is narrated.
Name and address of landlord(s) under any superior lease is narrated.
Details of prior recorded Notice of Exemption (or reasons for lease being exempt) are narrated.
Service section has been completed;
Signed by tenant.
Deed is signed by witness.
Witness signing Notice is named and designed.

The deed must be recorded against the tenant’s interest (see Title as Tenant). Deed may be a joint recording and may affect multiple search sheets. Deed must be shown on all affected search sheets.