PTS Compiled

Introduction to Property Law

•Property law encompasses the rights that individuals have in things, with ownership being the most significant right.

•Property law includes other types of property rights such as servitudes and leases.

•It involves the nature, creation, transfer, and extinction of these rights.

•Property law also has a broader sense that includes contractual rights, which can behave like property rights.

•Contractual rights and rights in physical property are both considered patrimonial assets.

•Succession law, which deals with property upon death, is sometimes seen as part of property law.

•Trust law is closely linked to property law but is treated separately.

•Scots property law is primarily based on Roman law, with some English influence.

Scottish Property Law and its Origins

•Scotland's land law is still based on the judicial development of the laws of Rome, despite being a highly developed economy.

•Systems like Louisiana and South Africa, which have mixed legal influences, can be more interesting compared to English law.

•Scottish lawyers can easily understand property law in countries like Germany but struggle with understanding English property law.

•Feudal law had a significant impact on property law in Scotland, but it has been gradually abolished over time.

•Udal law, deriving from Norwegian law, applies in Orkney and Shetland and is non-feudal in nature.

•Property law in Scotland is a combination of statute law and common law.

•Unlike in countries with civil codes, Scotland does not have a single core statute that comprehensively covers property law.

•Basic concepts in Scottish property law, such as distinctions between real/personal and heritable/moveable property, are largely non-statutory.

•Depending on the circumstances, ownership transfer of certain items like bicycles can be governed by both statutory and common law.

Introduction to Property Law and Law Reform

•In property law, ownership can pass without delivery if the property is sold, but delivery is required for ownership to pass through donation.

•The statutory material for property law is scattered and includes both common law and statute.

•The sources of property law can be difficult to navigate due to the scattered nature of the statutes.

•The law of real burdens has been quasi-codified.

•Law reform is a continuous process in property law and has been happening since the fifteenth century.

•Major reform in property law occurred in 2004 with the Abolition of Feudal Tenure etc. (Scotland) Act 2000, the Title Conditions (Scotland) Act 2003, and the Tenements (Scotland) Act 2004.

•Scottish Law Commission (SLC) projects contribute to law reform, such as the Report on Moveable Transactions and the Report on Trust Law.

•Law reform can also come from government policy and civil service departments.

•Examples of recent law reform include the Land Reform (Scotland) Act 2003, the Home Owner and Debtor Protection (Scotland) Act 2010, and the Community Empowerment (Scotland) Act 2015.

•SLC recommendations require approval from the Scottish Government to be enacted.

•Various chapters and paragraphs in the text refer to specific sections and reports related to property law and law reform.

Estate Act 2019

•The Scottish Land Commission, established by the Land Reform (Scotland) Act 2016, conducts research on land issues and provides advice to the Scottish Government.

•Property protection clauses are common in constitutions worldwide, and in Scots law, this role is played by the European Convention on Human Rights.

•The European Union has not affected property law in the UK, but EU law could cover property contracts.

•A patrimonial right is a right with economic value, such as ownership of land or moveable property.

•Non-patrimonial rights, such as the right to vote or marry, are not associated with economic value but can still give rise to a right to be paid damages when violated.

•Patrimony refers to a person's assets (patrimonial rights) and liabilities, and a company's balance sheet represents its patrimony.

Private Law and Patrimony

•Patrimony is like a suitcase with two compartments, one for assets and the other for liabilities. It is the container, not the contained.

•Every person has a patrimony, whether a natural person or a juristic person. A newborn baby has a patrimony, but it may be empty initially.

•In certain special cases, a person may have more than one patrimony, such as when there is a trust.

•Property, trusts, and succession belong to private law, but they may also straddle the private/public boundary, especially property law.

•Law relating to immovable property includes planning law, licensing law, environmental law, property taxation, and human rights, which are part of public law.

•The law of delict distinguishes damages for patrimonial harm and non-patrimonial harm. Damages themselves constitute a patrimonial right.

•"Estate" has several meanings.

•Moveable property is less subject to public law.

•The main departures from the general approach are in chapters 15, 19, and 32.

•Private law is divided into the law of persons, the law of "things" (including obligations, property, and succession), and the law of actions.

•Scots private law includes general principles, the law of persons, the law of obligations, the law of property, and the law of actions.

Distinction Between Personal Rights and Real Rights

•Personal rights are rights against a person, such as rights arising from contracts or liability in the law of delict.

•Contracts result in reciprocal personal rights, where each party has a right against the other.

•Personal rights do not have reciprocity, meaning that one party may have a right against another, but not vice versa.

•Real rights are rights directly in a thing, with ownership being the principal real right.

•When ownership is transferred through a contract, the recipient acquires the real right of ownership.

•The holder of a personal right has power over the other person, while the holder of a real right has power over the thing.

•The value of a personal right depends on the ability and willingness of the person against whom it is held to fulfill the obligation.

•The value of a real right depends on the existence and condition of the thing itself.

Personal Rights and Real Rights

•Personal rights are not universally better and their value depends on the context.

•Having physical currency like coins can be preferred over personal rights in certain situations, but they are susceptible to theft.

•Personal rights against banks are often preferred over storing cash because banks owe money to individuals just like individuals owe money to others.

•Real rights, also known as absolute rights or rights "against the world," are a set of personal rights against everyone in the world.

•Real rights, such as the right of ownership, are effective against all individuals and not just one person.

•Real rights can be seen as multiple personal rights against each of the planet's inhabitants.

•This is known as the "personalist theory," while the idea that real rights are rights in things is called the "classical theory."

•There are challenges and complexities associated with both views, but further discussion on the topic is not necessary at this level.

•Jus reale (real right) or jus in rem is a right in a physical thing.

•Jus in personam ad rem acquirendam is a personal right to acquire something.

•Sequestration is another term for bankruptcy, where the insolvent debtor's assets are transferred to a trustee for the benefit of creditors.

•Erga omnes means the right exists against everyone.

•Some argue that personal rights are ultimately real rights because they can be enforced against the debtor's assets.

•Intellectual property rights, such as copyright and patents, are sometimes considered real rights because they are not personal rights and are absolute.

•Others believe that real rights can only exist in physical things, expanding the definition of absolute rights.

•The object of an intellectual property right is also a topic of debate.

•Digital assets, particularly cryptocurrencies like Bitcoin, present challenging issues that are not extensively covered in the book.

•The analysis of cryptocurrencies within legal theory is even more problematic than that of intellectual property rights.

Distinctions in Property Law

•'Corporeal' property refers to physical items like bicycles and houses, while 'incorporeal' property encompasses everything else.

•Real rights of ownership are considered corporeal property, while personal rights and subordinate real rights are considered incorporeal property.

•Incorporeal moveable property includes debts, copyrights, shares in a company, and other similar rights.

•Transfer and rights in security are mentioned in relation to succession law.

•A literature on cryptocurrencies as property has been developed, including discussions on cryptoassets and digital assets.

•The distinction between 'heritable' and 'moveable' property is another important concept.

•Heritable property refers to land and rights connected to land, while moveable property refers to everything else.

•Contractual rights about real rights in land are considered heritable.

•Moveable property includes corporeal items, contract rights, rights under the law of delict, and the law of unjustified enrichment.

•Intellectual property rights and company shares are examples of incorporeal moveable property.

•There are exceptions to the connection between heritable property and land, such as peerages and rights with a tract of future time.

Categories and Definitions of Property in Scottish Law

•Erskine's definition of rights that cannot be immediately paid or fulfilled by the debtor and continue for a number of years, regardless of any capital sum or stock, includes annuities and pensions. These rights are considered moveable property for some purposes but heritable property for others.

•When combining the corporeal/incorporeal and heritable/moveable distinctions, four categories of property emerge. These include corporeal moveable property (e.g. a bicycle), corporeal heritable property (e.g. a house), incorporeal moveable property (e.g. contractual rights, rights arising in delict, company shares, and intellectual property rights), and incorporeal heritable property (e.g. subordinate real rights in land).

•It is a misconception that all personal rights are moveable. Some, like a contractual right to acquire land, are both personal and heritable.

•Subordinate real rights refer to real rights in land that are not ownership.

•The debt secured by security is moveable, except for some purposes. However, the security itself is heritable.

•Not all heritable rights are real rights, although most are.

•The exception to personal rights being moveable is contractual rights relating to real rights in land.

•The term "property" is often understood to refer to immoveable property, but in legal terms, it is broader and encompasses all forms of property.

•Statutory definitions of "property" in specific contexts are often of little value.

•"Land" refers to immoveable property, including houses, flats, and any other form of immoveable property.

•Legal usage follows the definition of "land" as immoveable property in land registration.

Property Law - Transfer of Rights, Constitution of Rights, Extinction of Rights

•Transfer of Rights, Constitution of Rights, Extinction of Rights

•Property law involves the transfer of rights from one person to another and the constitution and extinction of rights.

•Rights can be transferred in different ways depending on the type of right. For example, real right of ownership of land is transferred through registration in the Land Register.

•Other types of rights, like money, can be transferred through an "assignation" completed by notice to the debtor.

•The three events in the order of time are constitution (or creation), transfer, and extinction.

•Constitution refers to the creation of a new right, such as granting a servitude of way across one's land.

•Transfer occurs when a right passes from one person to another, like the assignment of a lease.

•Extinction is the termination of a right, separate from transfer. It is when a right ceases to exist, like the end of a lease.

•The same or similar steps may be required to constitute, transfer, or extinguish a right, such as with a standard security.

Patrimonial Rights and Property Law

•The text discusses the concept of registration and its requirement for all three events.

•Variation is not considered an independent category, but rather a partial extinction and partial grant of a servitude of way.

•A given right may not experience all three events, and most personal rights are never transferred.

•The transfer of rights is done through assignation, often done by larger businesses.

•The possibility of a right being transferred in the case of redecoration contracts is unlikely, but theoretically possible.

•Extinction of rights may never happen, as real rights tend to be long-lived and potentially everlasting.

•A chart is provided to illustrate patrimonial rights, including absolute rights (real rights and intellectual property rights) and relative (personal) rights.

•Various introductions to Scots property law and literature recommendations are mentioned for further reading and study.

The Principal Real Right and the Subordinate Real Rights

•The principal real right is ownership, also known as dominium or proprietorship.

•Ownership is the only real right in most corporeal moveable properties.

•Subordinate real rights, also called secondary real rights, limited real rights, encumbrances, or jus in re aliena (in Latin), exist in something owned by someone else.

•A subordinate real right requires the presence of at least two real rights in the same property: the real right of ownership and the subordinate right.

•An example of a subordinate real right is a servitude, where the owner grants someone else the right to use their property for a specific purpose.

•Subordinate real rights are registered in the Land Register and appear in both the title sheet of the property with the subordinate right and the title sheet of the property with the ownership right.

Real Rights and Ownership

•A servitude is a real right that allows someone to cross another person's land.

•A contractual right is a personal right that can be revoked if the property changes ownership.

•Encumbered ownership refers to a situation where a property has multiple servitudes and other limitations, which can decrease its value.

•Despite encumbrances, the owner still retains the right of ownership.

•Real rights are fragments of ownership that are held by someone else, but the owner retains the overall right of ownership.

•Real rights are not dismemberments of ownership, but rather additional rights attached to the ownership.

•Real rights are not affected by insolvency.

Real Rights and Subordinate Real Rights

•Real rights are created when the owner of a property grants a right to another person, who then becomes the new owner.

•The incoming owner is bound by a real right, but not by a contractual right.

•Insolvency law can be used to illustrate the concept. If a person becomes insolvent, their creditors can attach their land, affecting the rights of the contractual owner.

•In the case of insolvency, the contractual owner may not be able to enforce their right fully, even if they have a claim for damages.

•The theory of real rights is important in property law, especially considering the risk of insolvency.

•Such a sale is implemented by assignation in certain jurisdictions like France, Louisiana, Quebec, and the Netherlands.

•Diligence, as explained in Gloag and Henderson The Law of Scotland, is relevant to understanding real rights.

•In many insolvencies, ordinary creditors may not be able to recover anything.

•The law recognizes only certain types of real rights, known as subordinate real rights.

•Unlike contract law, where people can modify and create new types of contracts, property law offers a fixed list of nominate real rights, known as the numerus clausus (‘closed number’).

•The main types of subordinate real rights include servitude, negative real burden, proper liferent, right in security, and lease of immoveable property.

•Some of these types have subdivisions, such as pledge, lien, and standard security in the case of security rights.

•Additional rights, such as public rights over land, may also be recognized as real rights.

Types of Real Rights

•Real rights can be divided into three categories: absolute rights, intellectual property rights, and possession.

•Absolute rights, such as real rights, are not relative or personal rights and are not limited to physical property.

•Intellectual property rights are considered like real rights but pertain to intangible property.

•Possession, although not a true real right, has qualities that are sometimes classified as a real right.

•Legislation can create new types of rights, such as occupancy rights, which have both personal and real aspects.

•Subordinate real rights refer to additional rights held by someone other than the owner of the property.

•There can be multiple subordinate real rights in the same property.

Real Rights in Property Ownership

•A liferent is a subordinate real right that allows the holder to possess a property for their lifetime.

•There are three real rights discussed: Oliver's right of ownership, Nigella's right of servitude, and Tess's right of liferent.

•Real rights can exist independently and simultaneously on a property.

•Real rights such as servitude, negative real burden, and lease can only exist in land, not moveable property.

•Multiple real rights can exist on a property. For example, Iona owns Whitemains and grants a servitude to Nick, a ten-year lease to Larry, and a security right to Bank A.

•When a property is transferred to a new owner, the subordinate real rights remain unaffected.

•Liability for loans secured by subordinate real rights remains with the original borrower, not the new owner.

•Buyers are informed about subordinate real rights through registration or possession.

•The sale of a property does not affect the rights of tenants or holders of other subordinate real rights.

•Multiple real rights can sometimes have conflicting priorities. For example, if Iona had loans from both Bank A and Bank B, Bank A would have priority in case of insolvency and property sale.

Real Rights and Property Ownership

•Real rights are rights that are legally enforceable against others and are attached to specific property.

•The priority of real rights is determined by the date they become real, with earlier rights being stronger.

•The owner of a property is typically the only person who can grant a subordinate real right, but there are exceptions.

•Subordinate real rights include registered leases, sub-leases, servitudes, real burdens, and liferents.

•Separate tenements are rights of ownership held by someone other than the owner of the land itself.

•Examples of separate tenements include flats, mineral rights, and salmon fishing rights.

•Separate tenements are considered ownership rights, not subordinate real rights.

•Public property, such as owned by local authorities or the Crown, is treated the same as private property under property law.

•The powers and duties of public authorities with regards to property are subject to public law, not property law.

Crown Property and Common-Good Property

•Crown property is divided into two categories: Crown Public Estate and Crown Private Estate. The former is property held by the Crown as the head of state and is administered by the Crown Estate Scotland. The latter belongs to the sovereign as private property.

•Some property is owned by the Secretary of State, while others, like Edinburgh Castle, are owned by the Scottish Ministers.

•Crown property rights, known as the regalia, include corporeal and incorporeal rights. The regalia minor are property rights belonging to the Crown, such as the foreshore and sea bed. The regalia major are rights held by the Crown for the public benefit and cannot be sold.

•There are also 'community bodies' that own land, straddling the private/public divide.

•The law on common-good property is governed by the Local Government (Scotland) Act 1973, the Land Reform (Scotland) Act 2016, and the Community Empowerment (Scotland) Act 2015. Important cases in this area include Portobello Park Action Group Association v City of Edinburgh Council and Guild v Angus Council.

•The Scottish Crown Estate includes the territorial seabed, at least half of the foreshore, various mineral rights, and ordinary properties like the Glenlivet Estate.

•The division between personal and real rights, although considered 'unbridgeable,' can be debated. Occupancy rights, for example, can be enforced by one spouse against the other and sometimes against third parties.

Rights in Property

•Real obligations, or obligationes propter rem, refer to personal rights that are valid against the current owner of a property. Positive real burdens are examples of real obligations, while negative real burdens are considered true real rights.

•A security right is not a real obligation. If a property owner grants a standard security over their property to a bank in security of a loan, and then transfers ownership to another person, the new owner will not have personal liability for the debt but may lose the property if the loan is not repaid.

•Leases at common law are considered contracts. If a property owner leases their land and subsequently transfers ownership to someone else, the new owner can require the tenant to vacate, leaving them with a breach of contract claim against the original owner. However, for most leases, the common law is overridden by statute, and the lease becomes a contract between the new owner and the tenant.

•The nature of leases that are not subject to the common-law rule is unsettled. They are often called real rights in practice, but whether they should be considered true real rights, real obligations, or a mixture of both is debatable. Statutes conferring real effect on leases only apply to immoveable property.

•The 'offside goals' rule refers to situations where a buyer may be subjected to the contractual obligations of the seller. This is similar to real obligations, but the buyer's liability is passive rather than active.

•Trusts are another case where rights may have both a real and personal quality. While the rights of a beneficiary under a trust are personal rights against the trustees, they can also exhibit characteristics of real rights. Trusts will be further discussed in later sections.

•Additional references: Burnett’s Tr v Grainger 2004 SC (HL) 19, Leases Act 1449, Registration of Leases (Scotland) Act 1857.

Acquisition by Voluntary Transfer: The General Principles

•Jill contracts to sell something to Kate and contractual obligations are created by agreement.

•Kate's obligation is to pay, while Jill's obligation is to transfer ownership and possession.

•The question is how to transfer ownership from Jill to Kate.

•This chapter covers transfer inter vivos (between living persons) and does not cover transfer mortis causa (on account of death).

•The distinction between constitution, transfer, and extinction of rights have been discussed in a previous chapter.

•This chapter focuses on transfer, but also covers the constitution of new rights.

•The transfer of ownership of land usually happens by registration, as well as the constitution of subordinate real rights in land.

•The transferor of land is called the 'disponer' and the transferee is called the 'disponee'.

•The transferor of incorporeal moveable property is called the 'cedent' and the transferee is called the 'assignee'.

•The terms 'granter' and 'grantee' can also be used for both cases, as well as for the creation of subordinate rights.

•A successor, or successor in title, is anyone who subsequently acquires a given right.

•Successors can be singular or universal, with most successors being singular.

•A universal successor takes over the whole patrimony of someone else.

Capacity and Consent in Transfer of Rights

•Transfer of rights involves the passing of a right from one person's patrimony to another's.

•The terms "transfer," "alienate," and "convey" are used interchangeably to refer to the transfer of rights.

•In English law, there is a distinction between "transfer" and "transmission," with "transfer" referring to voluntary acts like sale, and "transmission" referring to involuntary cases like inheritance or insolvency.

•Capacity is necessary for both parties involved in a transfer of rights. Rights capacity allows a person to hold rights, while transactional capacity allows a person to transfer or acquire ownership.

•Persons lacking transactional capacity can have another person act on their behalf, such as a baby's parents or a guardian for an adult with mental disorder.

•Organisations have capacity if they are juristic persons, like registered companies. Otherwise, they do not have capacity.

•Juristic person's capacity may be limited by applicable legislation and the organisation's own constitution.

•Mutual consent is required for a transfer of rights, similar to the formation of a contract.

•The transferor must have the intention of transferring ownership (animus transferendi dominii).

Transferability and Specificity in Property Law

•Private law rights are generally transferable, although there are some exceptions.

•Liferent is typically not transferable.

•A servitude cannot be transferred by itself, but can be transferred as a part of the land it benefits.

•The right to real burdens, other than personal real burdens, can also be transferred as a part of the land.

•Some leases are transferable without the landlord's consent, while others are not.

•Contractual rights are usually transferable.

•Non-transferability does not imply a duty not to transfer.

•Encumbrance by a subordinate real right does not affect transferability.

•Only what can be identified can be transferred.

•This principle applies to the sale of goods as well.

•The specificity principle does not apply to contractual obligations.

•A real right cannot be acquired if it is not possible to point to the specific item in question.

Principles of Land Disposition and Transfer

•The specificity principle is applied in land registration, requiring a deed to identify the land's boundaries precisely for cadastral mapping.

•Exceptions to the specificity principle may include floating charges and certain provisions in the Sale of Goods Act 1979.

•The transfer of a pro indiviso share of goods, such as oil, operates as a transfer of a specific quantity.

•Obligation to transfer is different from an actual transfer, and a sale contract creates mutual obligations to perform.

•Obligations in a sale contract include payment, transfer of possession and ownership, and registration of a disposition in the Land Register.

Transfer of Property and Separation Principle

•Transfer of property can occur through various means, including sale, gift, or donation.

•The term "sale" is often used to encompass both the contract and transfer involved, but technically, sale refers to the contract while transfer is a separate act.

•The separation principle in property law emphasizes the distinction between contract and conveyance.

•The validity of conveyance does not depend on the validity of the contract.

•The cause or reason for the transfer is not necessary for its validity.

•Even if the contract is void or voidable, the grantee's title remains valid.

•The concept of "abstraction" refers to the independence of contract and conveyance.

•In certain cases, both contract and conveyance may be void, such as when a person with dementia enters into a contract and grants a disposition.

Acquisition by voluntary transfer: the general principles

•The requirement of an external act is needed for the transfer of ownership in property. Examples include a registered deed for land and delivery for corporeal moveables.

•The Codex states that ownership is transferred not by mere agreement but by delivery.

•Registration is sometimes an alternative to delivery in modern law, but the idea of an external act remains valid.

•The publicity principle justifies the requirement of an external act, as acts that can affect third parties should be made public.

•The principle applies particularly to real rights in land, but is weaker for real rights in moveables and intellectual property rights.

•An example is provided to illustrate the publicity principle in the context of property ownership.

•In some countries, such as France and the Netherlands, the conveyance of property is dependent on the validity of the contract.

•The transfer of corporeal moveables may not require delivery in cases of sale, but still requires it in other cases such as donation.

•Examples of cases are referenced to highlight the distinction between valid personal rights and real rights in property ownership.

•Terminology related to the external act and its timing is mentioned.

Transfer of Ownership and Instantaneous Title Completion in Property Law

•In property law, when a transferee completes the necessary steps to acquire ownership (such as making a contract, receiving keys and documents, registering the property, and making payment), they are said to "complete title" and have an "uncompleted title" before that. This phrase may be misleading, as it suggests the transferee has a partial right before title completion.

•Ownership transfer in Scots law is instantaneous, unlike the gradual transfer metaphor of honey oozing from a spoon onto bread. There is no interval between the transfer occurring. The right belongs entirely to the transferor, Julie, and then instantly to the transferee, Christopher.

•Scots property law is unititular, meaning a grant or transfer of a right cannot occur solely between the parties involved. A completed real right that is valid only between the grantor and grantee, but not against the rest of the world, is contradictory.

•The case of Wheeldon’s Exr v Spence’s Exr [2014] CSOH 69, 2014 GWD 15-267, as cited by Reid Property para 603 and Young v Leith (1847) 9 D 932, establishes the principles of instantaneous transfer of a right in Scots law.

•The Sharp v Thomson case in 1989 involved a brother and sister, the Thomsons, buying a new flat in Aberdeen from Albyn Construction Ltd. This case has generated extensive academic debate in Scots property law, though a comprehensive account is beyond the scope of this text.

•The Thomsons paid the price for the flat in June 1989 and received the keys, but the disposition (transfer document) was not handed over until August 1990, with registration taking place shortly after.

Ownership and Floating Charges in Property Law

•Construction Ltd went into receivership, which is a means of enforcing a floating charge, a security right that extends over the whole property of the debtor company.

•While the floating charge is not a real right as long as the company remains solvent, it becomes a real right when it attaches, such as through receivership.

•The Bank of Scotland, as the holder of the floating charge, obtained a real right (security) before the Thomsons acquired their real right (ownership).

•The Thomsons did become owners, but the bank's real right was only a subordinate real right.

•The Thomsons acquired ownership subject to the bank's right, making their ownership effectively worthless as the receiver could sell the property for the benefit of the bank.

•The Outer House and Inner House both interpreted the matter in the same way, but the Court of Session's decision was reversed on appeal at the House of Lords.

•The grounds for the reversal are unclear, but one theory is that the House of Lords considered the transferee acquiring a "beneficial interest" during the transfer.

•The term "beneficial interest" is commonly used in the context of a beneficiary's right in a trust, but its meaning outside of trust law is uncertain.

•The House of Lords' decision may have been related to the legislation on floating charges rather than property law.

•In the case of Burnett's Tr v Grainger, another transaction in 1990-91, Mr and Mrs Grainger entered into a contract to buy a house.

The Graingers' Dispute over Property Ownership

•Ms Burnett sold her property to the Graingers in November 1990, but the buyers' solicitors failed to register the disposition.

•In May 1991, Ms Burnett was sequestrated, which resulted in her trustee being registered as the owner of the house in December 1991.

•When the Graingers' solicitors finally sought registration, it was too late, and the deed became a non domino.

•The Graingers argued that they had already acquired the "beneficial interest" in the property upon delivery of the disposition, but the Inner House disagreed.

•The case was appealed to the House of Lords, which upheld the decision in favor of the trustee.

•The House of Lords established that property can be freed from a floating charge even before it ceases to belong to the debtor company.

•The time of delivery of the disposition is likely when immoveable property is considered to have changed ownership.

•The Graingers received damages from their solicitors.

•In the context of trust law, there is no such thing as "beneficial interest" outside of a trust arrangement.

•The disponee who does not register their title does not have a real right in the subjects according to Scottish law.

Payment and Transfer: The Structure of Insolvency Risk

•In a sale, a buyer who pays before acquiring title is at risk of the seller's insolvency, while a seller who transfers title before receiving the price is at risk of the buyer's insolvency.

•There are three possibilities in terms of payment and ownership transfer:

•In cases where there is no simultaneity, the party at risk can sometimes be protected by a priority right, such as a lien or retention of title.

•Electronic deeds have allowed for faster transfer of ownership, potentially reducing the risk period.

•Trust clauses have been developed by conveyancers to create a similar effect as the priority right established in Sharp v Thomson.

•The concept of priority rights for a buyer who has paid in Sharp v Thomson has since been interpreted differently.

•Tax law tends to be conceptualized in English terms.

•The rule for diligence against the seller is the same, illustrated by Mitchells v Fergusson.

•Letters of obligation and advance notices are mechanisms used to mitigate risk in payment and transfer.

•Further details on these topics can be found in later chapters.

Property Transfer and Warrandice

•From the seller's perspective, the greatest security is achieved by retaining ownership until payment, known as a "suspensive condition."

•It is possible to rescind the transfer of ownership if the buyer fails to pay through a "resolutive condition," but this only works contractually and is ineffective against the buyer's creditors.

•Warrandice refers to warranty or guarantee in a sale, specifically guaranteeing good title.

•Warrandice is presumed in a sale and may be expressly stated. It is implied in the sale of goods by SOGA 1979, s 12, and a matter of common law in other sales.

•Titles can be classified as absolutely good, void, or voidable. Voidable titles exist but may be made void, while void titles are either the result of the granter not having the right or a fatal defect in the process of grant.

•A void title can occur if the granter's title was void or if there was a fatal defect in the transfer process, making the juridical act of transfer void.

Voidable Titles

•A voidable title is when someone acquires property in a way that goes against the rights of another person, giving that person the option to avoid the title.

•Fraud is one example of a ground for voidability, where someone is induced to dispense their property through deceit.

•Inhibition is another ground for voidability, where a creditor restricts the owner's ability to dispose of their property, making any subsequent transfer voidable.

•Grants that prejudice the interests of the granter's creditors, transfers in breach of contractual obligations, and transfers from someone with a voidable title are other examples of grounds for voidability.

•Voidable titles should not be confused with voidable contracts, as the title refers to the ownership of property while the contract refers to the agreement made between parties.

Remedies for Voidable Titles and Contracts

•In cases where a title is voidable, there are remedies available.

•The first remedy is that the transferor (X) can demand that the transferee (Y) re-transfer ownership.

•Notice alone is not enough to avoid a voidable title, except in the case of corporeal moveables.

•If a contract involving a corporeal moveable is rescinded, ownership does not automatically pass back to the transferor.

•Instead, the transferor can demand a re-transfer, which requires re-delivery.

•Reduction is another available remedy, but it can only be used if there is a deed of transfer to be reduced.

Reduction of Voidable Titles

•Reduction of a voidable title is of two types: catholic reduction and reduction ad hunc effectum.

•Catholic reduction simply avoids the title, returning ownership to the previous owner.

•Reduction ad hunc effectum avoids the title only in relation to the person who has avoided it, remaining valid for everyone else.

•Reduction based on an inhibition is an example but other examples are unclear.

•The effect of avoidance is catholic if done by one of the parties and ad hunc effectum if done by a third party.

•Reduction of a voidable title is not retrospective.

•Inhibition is not eligible for reduction and is enforced separately.

•It is uncertain whether rescission of a contract is sufficient to transfer ownership back to the seller.

•Ownership of corporeal moveables can generally only be transferred through delivery, with sale being a major exception.

•The transfer back to Bronwen is not considered a sale.

•The rules regarding the decree of reduction under the Land Registration (Scotland) Act 1979 were complex.

•"Reduction" is also used for actions to declare void titles void, which are actually declaratory in nature and do not change rights.

•The reduction of a voidable title leads to a change in property rights.

•There are two types of reductions: declaratory reduction and operative reduction.

•It is important to consider the effect on the transferee based on the three types of title the transferor may have: absolutely good, voidable, or void.

Granter's Title and Grantee's Right

•If the granter's title is deemed absolutely good, then the grantee's right will also be considered absolutely good, except in cases where the transfer violates the rights of a third party (e.g., inhibition or offside goals rule).

•If the granter's title is voidable and has been avoided, it becomes a void title. When the title remains voidable but not yet avoided, the effect on the grantee's title depends on various factors.

•If the grantee is aware that the granter's title is voidable, the grantee's title will also be voidable.

•A grant made gratuitously results in the grantee's title being voidable, irrespective of whether the grantee knew of the voidability of the granter's title.

•In other cases, which are the majority, the grantee's title is considered absolutely good, as stated in the statutory rule for the sales of corporeal moveables.

•Timing plays a crucial role in determining the safety of a subsequent transfer. If there is a voidable transfer from X to Y, and Y then transfers to Z (a good-faith buyer), Z will be safe if Y's title had not been avoided before the Y/Z transfer.

•If the granter's title is void, the grantee's title is typically void as well, as per the nemo plus principle (nobody can transfer a better right than they have).

•The nemo plus principle, which states that nobody can transfer a better right than they possess, is a fundamental principle of property law.

•If an item is stolen from someone and then sold to a third party, ownership remains with the original owner, even if the third party acted in good faith. The thief cannot transfer the stolen item.

Nemo Plus Principle and Acquisition by Voluntary Transfer

•The nemo plus principle applies to all types of rights and states that one cannot transfer a right they do not have.

•In an example given, Gregory transfers a right to be paid money to Henrietta, but the transfer is void because Gregory did not have the right to transfer in the first place.

•The nemo plus principle has common law origins and is also restated in statutory laws.

•Another example is given where Charles grants a liferent to Doris for some land, but when Euan registers the land, Doris's application is rejected. This is because real rights in land are established upon registration, and at that moment Charles was not the owner anymore.

•Euan's title is considered a 'mid-impediment' and prevails over Doris's rights.

•The offside goals rule may determine if Euan's title is voidable if he is in bad faith.

•The result in the examples given is consistent regardless of Euan's good or bad faith.

•The difference between two cases, Morrisson v Robertson and MacLeod v Kerr, is explained where the transfer in the former was void while in the latter it was only voidable.

•Ulpian and Papinian, Roman jurists, visited Scotland, but there are no tartans named after them.

•Voluntary transfer of rights can be done through assignation.

•There are exceptions to the nemo plus principle, but it is the default rule.

•"Prior tempore, potior jure" means 'earlier by time, stronger by right' and is closely related to the nemo plus principle.

•Euan's earlier acquisition of real rights trumps Doris's rights.

Prior Tempore, Potior Jure and Real Rights of Grantees

•The principle of "expression prior tempore, potior jure" is mainly applied to security rights.

•Julius borrows £1m from Keira and £500,000 from Loretta and grants each of them a standard security.

•Julius becomes bankrupt and his land, Bluemains, is sold by his trustee for £1,100,000.

•The order of registration determines which security becomes a real right first.

•If Loretta's security was registered first, she would be paid £500,000 and Keira would receive £600,000.

•If Keira's security was registered first, she would be paid £1m and Loretta would receive £100,000.

•The grantee's right is subject to the existing real rights of third parties.

•Personal rights of third parties against the granter do not normally affect the grantee.

•Exceptions to this principle can arise if the granter's title is voidable and the grantee was aware of the third party's right and acted onerously.

Trust Law and 'Offside Goals' Rule

•In trust law, if trustees transfer trust property in breach of trust and the transferee knows of the breach or acquires gratuitously, the transferee takes subject to the rights of the beneficiaries.

•The Trusts (Scotland) Act 1961 modified the rule, stating that when trustees sell, the buyer's title cannot be challenged, but the common law still applies to gratuitous transferees.

•The 'offside goals' rule, named by Lord Justice-Clerk Thomson in Rodger (Builders) Ltd v Fawdry, refers to the idea that an acquisition made in bad faith, knowing it's in breach of a contractual right, can be reduced.

•Marjorie Bell's disposition of land was reduced because she knew of the first set of missives regarding the sale to Rodger (Builders) Ltd. The court deemed her acquisition to be in bad faith.

•The 'offside goals' rule is a case of a personal right prevailing over a real right.

•There are differing opinions on the rule, with some arguing for its abolition due to complexity and uncertainty in the law.

•Certain conditions must be satisfied for the rule to apply, but further details are not provided in the given text.

The Offside Goals Rule in Property Law

•The "offside goals" rule applies only if the second buyer (B2) actually or constructively knew of the prior personal right of the first buyer (B1).

•In the case of Rodger (Builders) v Fawdry, B2's title would have been valid if she had been unaware of B1's contract.

•It is unclear whether B2 is affected only if she knows of B1's right before acquiring the personal right, or if the information is received at any time before acquiring a real right.

•B2's title is not voidable unless there was a breach of the seller's obligation to B1, such as transferring the property to someone else.

•The "offside goals" rule applies only to voluntary grantees and does not apply to creditors doing diligence or trustees in sequestration.

•In the case of Burnett's Tr v Grainger, the "offside goals" rule could not be pled against the trustee who transferred title to his own name.

•The rule applies only if B1's right was capable of becoming a real right.

•In the case of Wallace v Simmers, the court held that even if the buyers knew of the prior right, they were not bound by it.

•The timing of personal rights and registrations plays a crucial role in determining the application of the "offside goals" rule.

•The decision in Alex Brewster & Sons v Caughey upholds the more severe form of the rule, but its soundness is questionable.

•Not every breach of the seller's obligation to B1 necessarily triggers the "offside goals" rule, as seen in Advice Centre for Mortgages v McNicoll.

•The Trade Development Bank v. [no information provided in the text to complete this note] case may provide further insights into the application of the "offside goals" rule.

Crittall Windows Ltd 1983 SLT 510

•The case Crittall Windows Ltd 1983 SLT 510 is referenced.

•Another case, 2002 SC 580, aff'd 2004 SC (HL) 19, is mentioned.

•A case from 1960, SC 255, is referenced.

•A series of numbers are listed: 95, 96, 97, 98, 99, 100, 101, 52.

•The concept of acquisition by voluntary transfer is discussed. It is stated that Margaret's right was not a lease but a personal right incapable of becoming a real right.

•Trade Development Bank v Warriner & Mason (Scotland) Ltd is mentioned, where the bank sought to reduce a lease agreement due to breach of agreement. The bank had a real right, not a personal right.

•The doctrine of accretion of title is introduced, where the title of the granter becomes void, validating the title of the grantee if the granter acquires title from the true owner.

•The scope of accretion of title is discussed, including its application to immoveable property and the requirement of absolute warrandice.

•It is stated that the transaction between X and Y must be capable of being made real for accretion to operate.

•An example case, Advice Centre for Mortgages Ltd v McNicoll 2006 SLT 591, is mentioned.

•Another case, Gibson v Royal Bank of Scotland Plc 2009 SLT 444, is referenced.

•Reference is made to a Discussion Paper on Heritable Securities by the Scottish Law Commission.

Acquisition by Voluntary Transfer: Deeds by Unregistered Holders

•'Infeftment' is a feudal term that should not be used.

•An 'unregistered holder' or 'uninfeft proprietor' refers to someone who has the power to complete title but has not yet done so.

•An unregistered holder can complete title by registering at any time.

•If someone has completed missives but has not yet received a disposition, they are not considered an unregistered holder.

•Examples of unregistered holders include executors who have obtained confirmation to immoveable property but have not completed title.

•Being an unregistered holder is usually short-lived, but there are exceptions where it can be lengthier.

•Unregistered holders have the ability to grant certain types of deeds as if they were the owner.

•Deeds connecting the currently registered owner with the applicant are called 'midcouples' or 'links in title'.

•Cases of unregistered holders often arise in trust and executry conveyancing.

•Risk is an issue that applies to sales of corporeal property and refers to who bears the loss if the property is damaged without fault.

•The passing of risk is a figurative expression and not an actual transfer of an entity.

•Contracts often include clauses about risk, especially in land transactions.

Property Law Concepts and Principles

•The term 'Uninfeft proprietor' is both inaccurate and outdated, as 'uninfeft' is a feudal term that should not be used, and an uninfeft proprietor is not actually a proprietor.

•'Unregistered holder' is a more appropriate term, though less well-known.

•When new local authorities are created, such as through the Local Government etc. (Scotland) Act 1994, section 15 is applicable.

•The general common-law rule is that risk passes when the contract of sale is made, but under SOGA 1979, the default rule is that risk passes with ownership, except in business-to-consumer sales where risk passes on delivery.

•Judicial rectification of defectively expressed documents is a remedy introduced in 1985 that allows the court to rewrite a conveyancing deed to reflect the parties' intentions. This rewriting is done retroactively from the original date, not from the present.

•The Land Register is not changed retroactively by judicial rectification; the decree must be registered for the change to take effect.

•Donation (gift) is not specifically addressed in Scots property law. The rules of transfer are the same regardless of the reason for transfer.

•Transfer of land is done through a registered deed, corporeal moveables through delivery, and ordinary incorporeal moveables through intimated assignation.

•There is a partial exception for corporeal moveables in the case of donation.

English law and the transfer of ownership

•English law applies to various types of deeds, not just conveyancing deeds.

•However, English law does not apply to testamentary deeds (s 8(6)).

•For a conveyancing perspective, refer to Gretton and Reid Conveyancing chapter 17.

•LR(S)A 2012, s 55 amends LR(MP)(S)A 1985, ss 8 and 9.

•The case of PHG Developments Scot Ltd (In Liquidation) v Lothian Amusements Ltd [2021] CSIH 12 has potentially weakened the law in this area, but it is too technical to discuss here.

•In the case of transferring a bicycle to Jill by voluntary transfer, ownership passes without the need for delivery.

•However, if the bicycle is donated, delivery is required.

•This special rule for delivery is not specific to donations but applies to sales.

•Prior to the Sale of Goods Act 1893 (now replaced by the Sale of Goods Act 1979), delivery was necessary for transferring corporeal moveables, regardless of the reason for the transfer.

•The Sale of Goods Act 1893 eliminated the need for delivery in cases of sale only.

•For transfers other than a contract of sale (such as donations or exchanges), the general rule of delivery still applies.

Immoveable Property

•Immoveable (heritable) property refers to the transfer of ownership.

•Transfer of ownership is done through registered disposition regardless of the reason for transfer (e.g., sale or donation).

•The sale of land typically involves three stages: contract, settlement, and registration.

•The contract of sale must be in writing and signed by the parties or their agents.

•Missives, or exchange of letters, are commonly used in the contract stage. It can be an offer to buy or sell, followed by acceptance or a counter-offer.

•Settlement or completion occurs after the conclusion of missives, with a timeframe of one to two months.

•There are different requirements and processes for residential and commercial property cases.

•Contracts for the sale of land now tend to be longer and cover various aspects, including parties, property, price, and physical condition.

•A standardized style is used, but can be adjusted for specific transactions.

Contractual Stages and Title Checking in Property Sale

•The core of a property sale contract involves the seller giving possession and ownership to the buyer, who in turn provides the price.

•Skipping the contractual stage and going straight to settlement is usually inconvenient as both parties want assurance that the other is bound.

•The contract usually includes provisions beyond the core elements.

•In the interval between contract and settlement, the buyer's solicitor checks the title.

•The seller's solicitor sends a copy of the title sheet, which outlines property boundaries, ownership, and encumbrances.

•The buyer's solicitor obtains a report from the Land Register to check for any changes since the copy was issued.

•Title checking becomes more complicated if the property is still registered in the Sasine Register.

•In addition to title checks, the buyer's solicitor also ensures there are no inhibitions or sequestrations on the seller through the Register of Inhibitions and the Companies Register for company sellers.

•Inhibition is an order from a court that restricts the inhibitee's power to grant deeds affecting property titles. It can be obtained by a creditor or a pursuer as a protective measure.

•An inhibition is discharged if the debtor pays the debt and is registered in the Register of Inhibitions.

•The Register of Inhibitions, like the Sasine Register and the Land Register, is administered by the Keeper and is name-based.

•It is customary to check the Register of Inhibitions when a transaction involves heritable property.

•A buyer will refuse to settle if a seller is inhibited or sequestrated, unless the disposition has the consent of the inhibitor or trustee. 

•Unrestricted power to dispone is an implied term in the contract of sale of heritable property.

•Granting a deed follows these stages.

Disposition, settlement, and registration

•A disposition refers to a deed of transfer that is duly executed when ownership of land is transferred from one party to another.

•Settlement occurs at the "date of entry," during which the buyer pays the price, the seller gives possession, and the disposition is delivered.

•Registration of the disposition in the Land Register completes the title and grants the buyer the status of an "unregistered holder" or "uninfeft proprietor" of the land.

•The English term "completion" is also used to describe the process of acquiring a real right through registration.

•Once the disposition is registered, the buyer becomes the "heritable proprietor" while the seller no longer holds ownership.

Warrandice

•Warrandice is a guarantee given by the granter to the grantee that the title is good.

•In practice, warrandice is implied by law if not explicitly stated in a deed.

•There are three levels of warrandice: simple, fact and deed, and absolute.

•Simple warrandice guarantees that the grantor will not grant any subsequent deed that could prejudice the deed being granted.

•Fact and deed warrandice guarantees the grantee's title against any future or past act by the grantor.

•Absolute warrandice is the highest level and guarantees ownership or other rights being granted.

•Title conditions are a partial exception to warrandice and are only considered a breach if they are unknown, unusual, and materially lessen the property's value.

•Lothian & Border is a controversial possible exception to warrandice.

Warrandice in Property Law

•Farmers Ltd v McCutcheon,17 established that the existence of a lease does not imply a breach of warrandice. The reasoning behind this decision is that a lease should not devalue the property, as the rental stream should equate to possession value.

•In the case of breach of warrandice in a deed, the remedy is damages.18 However, a claim based on the guarantee of acquiring ownership can only be made in the face of eviction or threatened eviction.19

•The term "eviction" in the context of warrandice does not refer to physical removal but rather a successful assertion of the true owner's right. Obtaining a declarator that the title is valid qualifies as eviction. Palmer v Beck 1993 SLT 485 is an example of a case where eviction was necessary for a successful breach of warrandice claim.20

•In contractual warrandice, the buyer has a stronger position and eviction is irrelevant. The buyer can refuse to settle until the agreed terms are met. If the defect amounts to a material breach, rescission is possible.

•The benefit of warrandice can be assigned. This means that if X transfers to Y, and later Y transfers to Z, the warrandice granted by X to Y can be assigned to Z. This allows Z to have the benefit of two warrandices.21

Standard Security and Gap Risk in Property Transactions

•Standard security granted by Y: X is not responsible for that.

•No separate process of assignation is needed for the benefit of warrandice.

•Gap risk refers to the period between settlement and registration of a property transaction.

•During the gap period, the buyer is at risk if the seller becomes insolvent.

•Letter of obligation used to be given by seller's solicitors to cover the gap risk.

•LR(S)A 2012 introduced advance notices as an alternative to letters of obligation.

•Subordinate real rights in land are transferred by assignation.

•Registered leases are assigned by registering the assignation in the Land Register.

•Unregistered leases are assigned by taking possession and notifying the landlord.

•Standard security is transferred by registration in the Land Register or the Sasine Register.

•Two sets of rules exist for the transfer of corporeal moveable property. 

•The Sale of Goods Act 1979 applies to transfers in implement of a contract of sale.

•Common law rules apply to non-sale transfers, such as transfers by barter or by way of... (the text is cut off)

Transfer of Ownership and Delivery in Common Law and SOGA 1979

•At common law, the transfer of ownership requires delivery, which is the transfer of possession.

•Delivery is necessary for ownership to pass, and mutual consent is required.

•Ownership can pass after delivery if the parties agree.

•The common law rules originally applied to sales but were changed by the Sale of Goods Act (SOGA) 1893, later replaced by SOGA 1979.

•Statutory rules in SOGA 1979 are complex and differ from common law.

•"Goods" under SOGA 1979 refers to corporeal moveable property, including immoveable property that the parties agree will be "severed."

•"Existing" goods are those the seller already has, while "future" goods are those to be manufactured or acquired after the contract of sale.

•"Specific" goods are existing goods identifiable at the time of the contract, while "unascertained" goods cannot be identified at the time of the contract.

•Delivery, whether by Santa Claus or otherwise, is required.

•Detailed methods of delivery are discussed in other sections.

•There are difficulties and complexities not addressed in this document.

•Additional resources, such as the Law Commission's recommendations, may provide further insight into the transfer of ownership and delivery.

Registered moveables: cars, aircraft, ships

•Motor vehicles, ships, and aircraft are classified as registered moveable property.

•Motor vehicles have a registration system handled by the DVLA, but registration is not necessary for transfer of ownership as a matter of property law.

•Aircraft also have a separate register for mortgages, which does have a property law role.

•The position for ships is complex and can only be briefly discussed.

•Ships have a single UK register for transfers and mortgages.

•Transfer of ownership for ships involves a three-stage process: sale form, bill of sale, and registration.

•The right to ownership is established by delivery of the bill of sale, but failure to register may make the right defeasible.

•"Small" ships and certain exceptions may have different rules.

Transfer of Ownership and Property Law Rules (SOGA 1979)

•The basic rule of transfer, according to SOGA 1979, s 17, is that the property in specific or ascertained goods is transferred to the buyer at the time intended by the parties, without the need for delivery.

•Parties have the freedom to agree that ownership passes before, at, or after delivery, and it is common for ownership to pass after delivery in credit sales to protect the seller from the risk of buyer insolvency.

•In written contracts, it is usual to specify when ownership is to pass. However, in oral contracts or in the absence of a specified provision, SOGA 1979, s 18 provides default rules.

•Rule 1 of the default rules states that ownership passes immediately when there is an unconditional contract for the sale of specific goods in a deliverable state, regardless of the time of payment or delivery.

•Rules 2 and 3 apply to specific goods that require seller's work and buyer's knowledge before ownership passes.

•Rule 4 pertains to goods delivered on approval or on sale or return, and ownership passes when it becomes clear that the buyer intends to keep the goods.

•Rule 5 is applicable to contracts for the sale of unascertained or future goods by description, with ownership presumed to pass when the goods meeting the description are identified.

Contract Requirements and Retention of Title

•Contract requirements are 'unconditionally appropriated to the contract', made identifiable.

•Under SOGA 1979, s 19, if a contract contains a 'reservation of a right of disposal' unless certain conditions are met, ownership is presumed not to pass until those conditions are satisfied.

•The seller's lien: Rule 1 of SOGA 1979, s 18 states that ownership passes immediately when parties shake hands on the deal, without payment. To protect the seller in case of buyer insolvency, SOGA 1979, s 41 provides for a subordinate real right called the seller's lien. However, this lien is lost upon delivery of the goods.

•Retention of title: SOGA 1979, s 17 allows ownership to pass when parties intend it to pass. Many written sale contracts include a provision of retention of title, where ownership passes when the buyer pays. If the buyer fails to pay, the seller can rescind the contract for material breach and demand re-delivery of the goods. The seller can include a clause stating that ownership does not pass until all sums owed by the buyer have been paid.

•Retention of title clauses can serve as protection against the risk of buyer insolvency, but they may not always be effective.

•Acquisition by voluntary transfer: The rules for various types of property depend on accession or specification. Certain goods, such as bricks or paint, are subject to these rules.

Ownership of Goods and Sales Transactions

•Goods that are processed by the buyer may result in the seller's retained ownership being defeated.

•The buyer may resell the goods to a second buyer, potentially awarding ownership to the second buyer.

•In the sale of quasi-specific goods, a quantity is sold out of a particular and identifiable bulk.

•Ownership of quasi-specific goods cannot pass until they are "appropriated to the contract" by separating them from the rest of the bulk.

•Pre-paying buyers in the sale of goods are protected from the seller's insolvency through the rules in SOGA 1979, ss 20A and 20B.

•Pre-paying buyers take a pro indiviso share of the bulk.

•The example provided illustrates how the rules for pre-paying buyers work.

•Pete owns 120,000 tonnes of oil and sells 40,000 tonnes to Rachel, who becomes the owner of 30,000 tonnes.

•Pete then sells 60,000 tonnes to Sarah on credit, with no immediate property consequences.

•After delivery of the 60,000 tonnes to Sarah, Rachel's ownership share increases to 50% and Pete's decreases to 50%.

•Rachel pays the balance of the price, resulting in her ownership share increasing to 66.667% and Pete's decreasing to 33.333%.

•Pete sells 20,000 tonnes to Tom, who pays and becomes the owner of 33.333%.

•The remaining 40,000 tonnes are delivered to Rachel, making her the owner.

Ownership and Transfer of Goods

•Pete is the sole owner of what is delivered, while Tom is the sole owner of the rest.

•If Pete were to become insolvent, buyers with co-ownership are protected.

•Rachel, for example, could still claim 25% ownership even if Pete were sequestrated.

•The nemo plus principle in SOGA 1979, s 21 states that a buyer acquires no better title to goods than the seller had, unless the owner is precluded from denying the seller's authority to sell.

•The effect of personal bar in regards to ownership is uncertain.

•In the example of Fiona's stolen clock, the antiques dealer, Donald, acquired void titles to the clock, and Fiona can insist on resuming possession without payment.

•Warrandice is an implied-in-law term in the sale of goods, entitling Donald to damages from the Earl in the previous example.

•Some European countries protect good-faith buyers more than in the UK.

Exceptions to the Rule of Nemo Plus

•The SOGA 1979 has two exceptions to the nemo plus principle: ss 24 and 25.

•Section 24 of SOGA 1979 states that a second buyer, who takes delivery in good faith, can obtain ownership of the property even if the original seller had possession but not ownership. 

•An example is provided where Leontes sells a grandfather clock to Maria, but his assistant sells the same clock to Nigel the following day. Nigel, being unaware of the prior sale, becomes the owner of the clock due to his good faith in the purchase.

•Section 25 of SOGA 1979 is another exception, stating that if a buyer delivers or transfers the property to a third party before paying, and the third party is a good faith buyer, ownership transfers to the third party. This exception is based on the Factors Act 1889.

•An example is given where Beth sells a car to Clara, but before Clara pays, she sells it to Dugald. Dugald, being in good faith, becomes the owner of the car.

•Section 25 of SOGA 1979 is an exception to section 21.

Transfer of Personal Rights and Exceptions

•The law regarding the transfer of personal rights is based on assignation completed by intimation.

•Personal rights are typically transferred when someone owes money to another party.

•The transfer involves three parties: the assignor or cedent, the assignee or cessionary, and the debtor.

•The transfer is known as assignation or cession.

•Personal rights can include contractual or non-contractual claims, such as damages claims.

•Personal rights are generally assumed to be transferable.

•Exceptions to the transferability of personal rights exist in certain cases, such as when someone has a voidable title to goods.

•In the case of a sale under retention of title, where someone sells property that belongs to another party, the buyer does not acquire good title.

•The laws governing these transfers are found in the Sale of Goods Act 1979 and the Hire Purchase Act 1964.

Assignment of Contract and Transfer of Obligation

•Assignation of contract refers to the transfer of contractual rights, not the entire contract itself.

•Contracts cannot be assigned, but contractual rights can be.

•The transfer of a contract requires both assignation of rights and delegation of duties.

•Some debts are non-transferable, either due to statutory restrictions or contractual clauses.

•Delectus personae creditoris refers to the choice of a specific creditor in a contract.

•The Scottish Ministers have the power to ban anti-assignation clauses, but they have not exercised this power yet.

•The assignation of a contract may be prohibited by a clause in the contract itself.

•English law uses the term "assignment" instead of "assignation".

•A debtor cannot assign the obligation to pay without the consent of the creditor.

•However, there are some exceptions, such as when the creditor consents or when subcontracting the performance of the obligation.

•Taking on someone else's obligation or consenting to it as a creditor may have its own motivations or benefits.

Assignation and Transfer of Property

•There is a distinction between contract and conveyance in the transfer of property.

•The contract to assign does not need to be in writing.

•Before the RoW(S)A 1995, the assignation itself had to be in writing, but this requirement was abolished by that Act.

•The Transmission of Moveable Property (Scotland) Act 1862 sets out a simple style of assignation, but it is not compulsory.

•Transfer of a claim takes place on "intimation" or formal notice to the debtor, not on delivery of the deed of assignation.

•Intimation can be done through a certified copy of the assignation sent by post to the debtor.

•The contract may prohibit certain types of assignation.

•Delectus personae debitoris refers to the restriction on substitution in a contract.

•There are different types of delectus personae.

•Acquisition by voluntary transfer: the rules for the various types of property assignation.

•The law recognizes certain alternatives to formal intimation, such as the raising of an action by the assignee against the debtor.

•Upon intimation, the personal right passes from the cedent's patrimony to the assignee's.

•The assignee replaces the cedent as the creditor of the debtor.

•All exceptions that were competent against the cedent before the assignation or intimation are relevant against the assignee.

•For example, if the debt was partially paid off before the assignation, the assignee is only liable for the remaining amount.

The assignatus utitur principle and its applications

•The assignatus utitur principle states that an assignee can only have the same rights and benefits as the assignor at the time of assignment.

•In the Buist case, Mr. Moir assigned the benefit of a life assurance policy to Mr. Buist. However, when Mr. Moir died, the company refused to pay out the policy proceeds, citing the assignatus utitur principle.

•The assignatus utitur rule applies to matters as they stand at the date of intimation.

•In Macpherson's JF v Mackay, Hugh Macpherson assigned his share in Trust 1 to the trustees of Trust 2. The assignation was intimated to the trustees of Trust 1. Later, after Hugh's death, the trustees of Trust 2 claimed £1,000 from Trust 1, and the assignatus utitur defence failed.

•The assignatus utitur principle is a defence rather than a means of obtaining rights.

•In Binstock Miller & Co Ltd v E Coya & Co Ltd, the sellers assigned their right to the balance of a sale of orange juice, but the buyers refused to pay the assignee.

Warrandice and Acquisition by Voluntary Transfer

•Warrandice refers to the guarantee that a claim being assigned actually exists in the form it appears to have.

•Default warrandice (warrandice debitum subesse) only guarantees that the claim is payable to the assignor, not that it will actually be paid.

•Example: If Percy assigns a claim to Rosie and Rosie seeks to collect from Oliver, but Oliver is bankrupt, Rosie has no remedy against Percy in terms of warrandice debitum subesse.

•In the law of negotiable instruments, a transferor not only warrants that the debt is payable, but also that it will be paid.

•The first document in an assignment is the assignation, and the second is the intimation.

•The provided text includes a sample assignation document, where Fergus Dugald Stewart assigns sums due from Airdrie Meteorological Consultancies Ltd to Holstebro Caledon Limited.

•The assignation is dated October 27, 2021, and is signed in the presence of Elizabeth van Groenewegen Cowper.

•A notice of the assignation is given to Airdrie Meteorological Consultancies Ltd on October 28, 2021, via recorded delivery.

Acquisition by voluntary transfer: the rules for the various types of property

•Fergus Dugald Stewart of 43 Maitland Street Airdrie assigned to Holstebro Caledon Ltd 1 Vierzon Way Fraserburgh all sums due or to become due to him in terms of a contract between him and yourselves dated 1 April 2021 and registered in the Books of Council and Session on 27 April 2021.

•Dated at Glasgow the 28th day of October 2021.

•Lorraine Woods, Member, Valeria Victrix LLP, Solicitors, 1 Meadow Lane, Glasgow. Agents for Holstebro Caledon Ltd.

•Attached to this will be a photocopy of the assignation with ‘Certified a true copy’ written on it and signed on behalf of Valeria Victrix LLP. Alternatively, of course, the notice and the certification could be signed by a director of Holstebro Caledon Ltd. There will also be a covering letter, which will ask Airdrie Meteorological Consultancies Ltd to confirm receipt.

•Acquisition by voluntary transfer: the rules for the various types of property 5.55 INCORPOREAL MOVEABLE PROPERTY: NON-STANDARD CASES

•(i) Negotiable instruments: If the debt has been embodied in a fully negotiable instrument, special rules apply. In particular intimation is not required and the assignatus utitur rule does not apply. The rules are in the Bills of Exchange Act 1882, which covers almost all types of negotiable instrument.

•(ii) Life assurance policies: Rights under life assurance contracts are assignable, but there exists special legislation: Policies of Assurance Act 1867, s 5. Whether this actually applies to Scotland is doubtful, but in practice it is assumed that it does.

•(iii) Financial instruments: For the transfer of certificated company shares and bonds the Stock Transfer Act 1963 applies. The transferor signs a stock transfer form and delivers it, with the share certificate, to the transferee, who then sends them both to the company, and is issued with a new certificate in his or her name. For ‘dematerialised’ shares there is a dematerialised form of transfer.

•(iv) Intellectual property: Intellectual property (IP) rights, such as copyright and patents, are patrimonial rights and can be sold, donated, bequeathed and so on. They are transferred by assignation. Unlike ordinary incorporeal moveable property, they are not personal rights: there is no person against whom such a right is held. Thus there is no third party to whom intimation should be, or could be, made. Some IP rights, notably copyright, exist without registration, and these are assigned by simple consent, provided that it is in writing. The requirement of writing applies to the transfer of all types of IP right. Most types of IP rights are registered, and in that case so must the assignation. There are uncertainties as to whether the right passes to the grantee at the time of registration (as in the case of immoveable property) or whether registration has merely the effect of delivery in the sale of goods. It may be that the standard.

Acquisition of Property by Voluntary Transfer

•IP right passes on delivery of the deed of assignation, but it must be registered for the buyer to obtain a good title.

•A good faith buyer can obtain a good title similar to SOGA 1979, s 24 until registration.

•A three volume Report on Moveable Transactions was published by the Scottish Law Commission in 2017.

•A Bill based on the report will likely be introduced to the Scottish Parliament.

•The introduction of the Bill would allow for an optional alternative method of assignation, which is registration in a new Register of Assignations.

•A registered assignation does not need to be intimated, but if the debtor pays the original creditor in good faith, the debtor is discharged.

•Transfer by intimation, as per current law, will still be available.

•Registration is likely to be chosen mainly in commercial cases.

Original and Derivative Acquisition of Property

•In 'original acquisition', the acquirer gains a brand new title to the property.

•'Derivative acquisition' refers to acquiring a property with a title that is only as good as that of the previous owner.

•Original acquisition can be categorized into two types: 

•Original acquisition is limited due to the serious consequences involved and is further restricted by the rule that abandoned property is passed to the Crown.

•Ownership of land cannot be abandoned.

•Derivative acquisition is more common and some of the original acquisition doctrines are outdated.

•Moveable property that is not already owned can be acquired by occupancy. This is done by taking possession of the property with the intention to become the owner.

•Occupancy can only happen once for most objects, except for wild animals that regain liberty and become unowned again.

•Farmed fish are not considered truly wild and are not subject to the exception.

•Animals that have freedom of movement but return to a specific place, such as bees and pigeons, remain owned as long as they continue to return.

Accession in Scots Law

•Accession (accessio) is the process by which two pieces of corporeal property become joined, with one being subsumed into the other. The property being subsumed is referred to as the "accessory," while the property it is being joined to is called the "principal."

•Three elements must be present for accession to occur: physical union, functional subordination, and permanency. The pieces of property must be physically attached to each other, with a higher level of attachment indicating a stronger likelihood of accession. The accessory must also be subordinate to the principal, serving to improve the principal in some way. Lastly, the attachment must be permanent, with more permanent attachments having a greater likelihood of accession.

•Accession has three effects: the accessory becomes part of the principal, meaning that any rights created in respect of the principal automatically apply to the accessory. Additionally, the accessory is subject to the same rules of ownership as the principal, and the accessory may be transferred separately from the principal.

•Parties cannot contract to exclude the operation of accession, as it is a mechanical doctrine dependent on objective factors.

Effects of Accession and Moveables to Land

•Accession refers to the legal principle that when an accessory becomes united with and significantly improves a principal, it becomes part of the principal and the owner of the principal gains an original title to the accessory.

•There are three effects of accession: combination, conversion, and extinguishment of existing title to the accessory.

•Combination occurs when the accessory and principal have the same owner, and the result is that the accessory becomes part of the principal.

•Conversion occurs when the accessory is moveable and the principal is heritable, making the accessory heritable as a result of accession.

•Extinguishment of the existing title to the accessory happens when the principal and accessory have different owners, and the owner of the principal obtains an original title to the accessory.

•If the accessory is severed or separated from the principal, the effects of combination and conversion are reversed, but the extinguishment of the existing title to the accessory remains.

•Moveable property that has acceded to land is known as a 'fixture,' while items found in a building that do not meet the requirements for accession are called 'fittings.'

•Physical union is necessary for an item to be considered a fixture, and items that are irreversibly attached or have significant weight can qualify.

•Functional subordination is also taken into account, with consideration given to whether the item is attached for the improvement of the land or for the better functioning of the fixture.

Accession of Movables to Land

•Brand's Trs (1876) 3 R (HL) 16, Christie v Smith’s Exr 1949 SC 572, and Elitestone Ltd v Morris [1997] 2 All ER 513 are relevant cases discussing the principle of accession in English law.

•The law regarding accession is similar in both North and South of the border.

•The installation or attachment of movable items to land can result in accession, but the determination depends on the circumstances.

•The third element for accession requires only quasi-permanency.

•In Brand's Trs v Brand's Trs, machinery installed under a mining lease was considered to have acceded, even though it was intended to be removed.

•Factors such as the physical attachment used, mutual special adaptation, and whether the item is normally left or removed when a building changes hands should be considered when assessing permanency.

•The deemed intention of the person who installed the item is not relevant when determining accession.

•Tenants have limited circumstances where they have the right to sever something that has acceded, such as trade fixtures and agricultural fixtures.

•In English law, tenants may also remove domestic and ornamental fixtures, but there is no authority on this point in Scotland.

•It is possible to include provisions in a lease that allow for the removal of fixtures.

Acquisition and Accession of Property

•Taylor [1902] AC 157, Howie’s Trs v McLay (1902) 5 F 214, Scottish Discount Co v Blin 1985 SC 216, and Brand’s Trs v Brand’s Trs (1876) 3 R (HL) 16 are legal cases referenced in the text.

•C G van der Merwe discusses "Accession by Building" in Reid and Zimmermann History vol 1, 245 at 268.

•On severance, items become the tenants' again, contrary to the general rule, as stated in para 9.7 above.

•Agricultural Holdings (Scotland) Act 1991, s 18 has a rather bizarre provision where fixtures are treated as not having acceded in the first place.

•Reid Property para 586 is another legal reference.

•Van Lynden v Gilchrist [2016] CSIH 72, 2017 SC 134 is a legal case cited.

•Original acquisition is addressed in para 9.12.

•Moveable property can accede to other moveable property, following similar rules as moveables-to-land accession. Borderline cases exist, such as tyres not acceding to a car in South Africa.

•The aviation industry consensus is that an aero-engine does not accede to the airframe.

•Fixtures present more complexity in determining the principal. Bell's analysis states that if one substance can exist separately and the other cannot, the first is the principal. If both can exist separately, the principal is the one that adorns or completes the other. Bulk and value are also factors if the previous rules don't apply.

•The South African case of Khan v Minister of Law and Order mentioned the importance of bulk in determining the principal.

•Alluvion is the term used when new dry land is created and accedes to existing land. It also applies when the extent of land under water increases.

Accession and Fruits

•Accession refers to the addition of land or property to already existing land.

•Two main conditions for accession include permanence of the addition and exclusion of temporary changes.

•Avulsion refers to sudden additions caused by natural events, such as storms, which are not considered as accession.

•Alluvion is a natural process of accession, but it can also occur through human intervention, such as the construction of a wall.

•Stirling v Bartlett case example of an altered river route due to the construction of a new channel, deemed a permanent change.

•Accession by fruits refers to the production of accessories by the principal.

•Examples of fruits include crops, trees, plants, young animals, and natural products of animals or plants.

•Ownership of a tree on a boundary is determined by the location of its trunk, with a shared ownership if it straddles the boundary.

•Young animals and natural products accede to the mother or plant until they become separate.

•Separation ends accession, but ownership generally remains unchanged.

•Apples stolen from a tree still belong to the owner of the tree.

Acquisition, Compensation, Commixtion, Confusion, Specification in Scottish Land Law

•The erstwhile owner of the accessory may be entitled to compensation for loss of title on the basis of unjustified enrichment.

•Compensation depends on who brought about the accession and why.

•If the accession was consensual, compensation is dependent on the agreement.

•The value of the materials determines the quantum of compensation, but bad faith may result in a higher level of compensation.

•If the act was that of the accessory's owner, there is generally no enrichment claim, except when the person had a reasonable belief that he or she owned the principal.

•Commixtion refers to the mixing of solids, making it impossible to distinguish them. It does not operate if the items have identifying marks and can be separated.

•Confusion is the equivalent doctrine for liquids, where different liquids are blended together.

•Mixing or fusion is the essential criterion for confusion, resulting in common property in proportion to the value of the constituent materials.

•Specification is the manufacturing of a new kind of thing using materials belonging to others.

•Examples of specification include baking a cake using someone else's ingredients or making grapes into wine.

•Wood being used to build a boat is another example of specification in Scottish land law.

Ownership of New Species in Legal Context

•The term "commingling" is referred to in DCFR Book VIII.

•Carey Miller with Irvine Corporeal Moveables discusses the concept in para 5.05.

•The DCFR Book VIII uses the term "production" in relation to new species.

•Examples of accession and new species in the production of whiskey and building of vehicles.

•Dispute over whether industrial rearing of salmon and specially hatched eggs constitute specification.

•Controversy in Roman law over ownership of new species.

•Middle view in Roman law that ownership depends on the practical irreversibility of the work.

•Manufacturer may acquire ownership or act as an agent of the owner of materials.

•The question of good faith and its relevance to ownership.

•Rules on compensation and repayment in cases of ownership acquisition.

•McDonald v Provan and Khan v Minister of Law and Order as references.

•Wylie & Lochhead v Mitchell case mentioned.

•Reference to Kinloch Damph Ltd v. case.

Original Acquisition and Property Law

•Money and bills of exchange: The acquirers of money and negotiable instruments can obtain an original title instead of a derivative title.

•Examples: If someone finds a £1 coin in the street and uses it to buy chocolate at a shop, the shopkeeper acquires an original title to the coin. Good faith is required on the part of the shopkeeper. Similarly, a 'holder in due course' of a bill of exchange, someone who takes it in good faith and for value, gains an original title.

•Positive prescription: If someone possesses land openly, peaceably, and continuously for ten years without being challenged in court, based on a registered conveyance in the Land Register or the Sasine Register, they obtain ownership of the land.

•Registration in the Land Register under LR(S)A 1979: The registration of a person as the proprietor of property in the Land Register under the Land Registration (Scotland) Act 1979 automatically makes them the owner, regardless of any issues with the previous owner or the validity of the disposition. This is not the case under the Land Registration etc. (Scotland) Act 2012, which generally follows the ordinary rules of property law. However, section 86 of that Act may be considered a form of original acquisition.

Co-ownership

•Two persons can own the same thing at the same time, such as a house. They both appear on the Land Register as proprietors.

•Co-ownership can extend to moveable property as well, where multiple people can co-own items within a house.

•Co-ownership is not limited to just two people, as multiple individuals can co-own a property or item.

•Co-ownership can be classified into two types: common ownership and joint ownership.

•Common ownership is the standard case, while joint ownership is a special case often seen in the law of trusts.

•Roman-Dutch law uses the terms 'free' co-ownership and 'bound' co-ownership to distinguish between common ownership and joint ownership respectively.

•Co-ownership can apply to other patrimonial rights, but ownership is the most important case discussed in this chapter.

•Common ownership typically arises in situations where people buy a house together, live together as spouses or cohabitants, or own parts of a building development.

•Common ownership is prevalent in situations where multiple owners have shares in certain areas or facilities, such as in tenements.

Co-ownership

•Co-ownership of a building is a situation where the building is co-owned by multiple flat owners.

•There are three situations of co-ownership, with the third being a permanent arrangement where individual units can be sold without affecting co-ownership.

•In co-ownership, the common parts of the building are shared by each flat owner.

•The law treats co-ownership cases slightly differently, with real burdens often regulating repairs.

•The terminology for co-ownership was established by the case of Magistrates of Banff v Ruthin Castle Ltd 1944 SC 36.

•Co-ownership is discussed in the book 'Mixed Legal Systems' by D. Kleyn and S. Wortley.

•Each co-owner has a pro indiviso share of the property, which is usually presumed to be equal, but can be unequal based on contributions.

•Possession of the co-owned property is shared among the co-owners.

•Co-owners have the right to use the entire property, but specific rights to exclusive use can be agreed upon.

•The principles of possession and use of common property can be variable by agreement.

Co-ownership and Rights of Co-owners

•Repairs and alterations in a co-ownership require unanimous agreement, with an exception for necessary repairs. The distinction between necessary repairs and unnecessary repairs or alterations can be challenging to determine.

•Special rules apply to common property in tenements, and the unanimity requirement is subject to real burdens.

•When a co-owner dies, their share becomes part of their estate and is dealt with according to succession law. The share can be bequeathed to someone else, and it does not automatically pass to the other co-owner.

•If a co-owner becomes insolvent, their share is available to creditors. The trustee in sequestration can offer to sell the share to the other co-owner.

•A co-owner can transfer or grant a subordinate real right to their share without the consent of the others, as long as the share can be dealt with separately.

Co-ownership and Division of Property

•Co-ownership can become unworkable due to certain factors, but there is always a solution available through the action of division.

•Examples of this rule can be found in Rafique v Amin 1997 SLT 1385, Bell Principles § 1075, Deans v Woolfson 1922 SC 221, and Barkley v Scott (1893) 10 Sh Ct Rep 23.

•Chapter 16 provides further information on the topic.

•In the case of land, shares may be subject to a special destination where the survivor would take all. Chapter 30 discusses this in detail.

•However, if Jack and Jill are spouses or civil partners, Julius would not be entitled to move in, even if he acquires Jill's share. Refer to para 11.8.

•Menzies v Macdonald (1854) 16 D 827, aff'd (1856) 2 Macq 463 is a relevant case, although the issue remains problematic. See Reid Property para 28.

•Jill has the ability to grant a standard security over her share, and a lender would typically be interested in taking security over the entire property. However, a single share can be disponed or granted in security unintentionally, through forgery. If one co-owner forges the signature of another, their share is valid but the other owner's share is void. This is illustrated in the example of Jack and Jill's house.

•A servitude cannot exist over just a share of the property and must be granted by all owners. If one owner attempts to grant a servitude individually, it would be considered void. The same applies to real burdens and leases. However, co-owners can agree unanimously to grant a lease to one of their own, although it wouldn't be classified as a contract of a lease.

•Successful co-ownership relies on mutual compatibility, goodwill, and understanding. If one party wishes to exit, arrangements can be made for the share to be bought at a fair value by the remaining owners or for the entire property to be put on the market. This is common in cases where co-owning couples separate, as they can still cooperate regarding the property. However, any common owner can demand to be let out, even against the wishes of the others, as per the law of communionem ... nemo compellitur invitus detineri.

Co-ownership

•Co-ownership can be a source of disputes.

•An action of division or sale can be taken to resolve co-ownership issues.

•The court has the power to refuse the action in certain circumstances.

•The action of division or sale involves either physically dividing the property among the owners or selling it as a whole and dividing the proceeds.

•The court has the discretion to decide between division and sale, with a presumption in favor of division.

•Actions of division or sale often end in sale rather than division.

•Certain qualifications and rules apply to the right to raise an action of division or sale.

•The right may be excluded in cases where the property is of common and indispensable use.

•Special rules apply when co-owners are spouses or civil partners.

•When one co-owner is sequestrated, the trustee in sequestration can insist on division and sale, with potential delays to protect the bankrupt's family.

•Contracting out of the right to raise an action is effective but does not bind singular co-owners.

Co-Ownership and Timeshares

•The pursuer can ask the court to order the defender to sell their share at market value.

•If both co-owners make the same demand, there would be an auction where only the co-owners can bid.

•If a debt exists between the parties, the court can adjust the distribution so that the debt is paid off from the proceeds.

•The 'right to buy-out' in co-ownership has conflicting authority.

•Thom v Macbeth (1875) 3 R 161 and Morrison v Kirk 1912 SC 44 at 47 per Lord Salvesen are relevant cases.

•Bankruptcy (Scotland) Act 2016, s 113 is applicable.

•Upper Crathes Fishings Ltd v Bailey's Exrs 1991 SLT 747; Fraser v Fraser 2014 Hous LR 66; Grant v Heriot's Trust (1906) 8 F 647 are cases to consider.

•Various legal sources such as Bankton I, 8, 40; Bell Commentaries I, 62; Reid Property para 33; C Anderson Property: A Guide to Scots Law (2016) paras 9-32-9-40 provide guidance.

•Timeshares involve dividing the right to use something among different people by time.

•Timeshare schemes can be done through common ownership or by vesting the property in a trustee or a company.

•Singular successors are not bound by timeshare contracts.

•Co-ownership timeshare schemes have challenges concerning management and upkeep payments.

•Joint ownership can arise in trusts and unincorporated associations.

Co-ownership

•In co-ownership, if one of the owners dies, the remaining owner(s) assumes full ownership, excluding any other parties.

•If a trustee resigns, there is no need for conveyance of their non-existent share to the ongoing trustees.

•If a joint owner dies, their share does not pass to the estate and the remaining joint owners have 100% ownership.

•In the case of an unincorporated association, such as a chess club, the assets are jointly owned by the members.

•Leaving or dying results in automatic cessation of joint ownership, while joining automatically grants joint ownership.

•For unincorporated associations, joint ownership is possible only for movable assets.

•Some clubs appoint office-bearers as trustees, with the members as beneficiaries.

•Real burdens cannot circumvent the automatic cessation of joint ownership.

•Ownership is equated with infeftment.

•This is confirmed by statute. (T(S)A 1921, s 20)

Landownership and Determination of Boundaries

•The chapter covers three private law aspects of landownership: determination of horizontal and vertical boundaries, parts and pertinents, and separate tenements. Related areas such as boundary walls and encroachment are covered in the chapter on neighbor law. There is also a brief account of recent statutory developments in relation to land reform at the end of the chapter.

•Land can be registered in either the Sasine Register or the Land Register. The Land Register is superseding the Sasine Register. Ascertaining the horizontal boundaries of land differs between the two registers, and the specificity principle is respected to different degrees. The Land Register uses a plan based on the Ordnance Map to identify properties and is more specific. In the case of flats, the title plan identifies the site of the building and any surrounding ground. A verbal description is used to identify the flat itself. Determining exact boundaries is easy in the Land Register.

•The Sasine Register, established in 1617, is not map-based and only became competent to record plans attached to deeds in 1924. While plans have been increasingly used in the Sasine Register, it is not a requirement, resulting in many titles to land not being based on a plan.

•There is a distinction between a 'bounding' description that states the boundaries and a 'general' description that does not. A bounding description can use various methods such as stating boundaries, using measurements, or providing a plan. If there is an irreconcilable conflict between different methods, there are rules for resolving this. The plan will prevail if declared to be 'taxative'. It is also possible to have a bounding description without a plan.

Landownership and Descriptions in Scottish Land Law

•In Scottish land law, a long verbal description or a fresh plan is not necessary for land transfer, as it can be referenced to an earlier recorded deed.

•A general description of the land is less specific than a bounding description and may be a postal address or the name of a farm. Dimensions of the title can be determined by extrinsic evidence, typically the state of possession, which includes possession for ten years without interruption.

•For registration in the Land Register, a general description is insufficient, and a plan is required to plot the property on the Ordnance Map.

•Landownership in Scotland extends from the heavens to the center of the earth, and ownership includes airspace up to a ceiling of 100 kilometers.

•In England, landownership rights in airspace are limited to the height necessary for ordinary use and enjoyment of the land, allowing action against trespass.

•The ownership of airspace in Scotland enables action against trespass, except in the case of aircraft at a reasonable height as defined by statute.

Ownership of Land and Pertinents

•Ownership of land includes ownership of "parts and pertinents" that are automatically transferred to the new owner.

•The term "parts" refers to obscure and possibly meaningless things.

•"Pertinents" are rights that can be exercised beyond the boundaries of the land, and they can be corporeal or incorporeal.

•Corporeal pertinents can be additional land or rights of common property.

•Additional land can include lock-up garages and parking spaces that serve a house or flat.

•Additional land becomes a pertinent through express grant or positive prescription.

•It is not possible to acquire title to a pertinent.

Landownership and Separate Tenements

•Land Register is a map-based system where prescription beyond the boundaries on the map is not possible.

•Common property refers to parts of a tenement or building that are owned in common by multiple owners.

•Common property can also include shared recreational areas owned by surrounding houses.

•Incorporeal pertinents, such as title conditions, can be enforced by the owner of the principal land against the owner of adjacent land.

•Separate tenements are sections of land or rights on the land that can be separately owned.

•Conventional separate tenements are sections of land separated from the remainder by express conveyance, such as minerals.

•Above ground, buildings can be divided into flats, but other items like trees or pipes cannot be made into separate tenements.

•The exception to corporeal conventional separate tenements is sporting rights reserved by superiors before November 28, 2004, under feudal abolition legislation.

Legal Separate Tenements in Scots Law

•Land in Scotland was originally owned by the Crown, and certain rights, known as the regalia minora, were impliedly reserved when land was granted.

•Legal separate tenements can be either corporeal or incorporeal and are generally Crown property if not already granted out.

•The main legal separate tenements include:

•The right to fish for salmon, which is considered the most important legal separate tenement.

•The right to gather mussels and oysters.

•Mines of gold and silver, which are rare in Scotland.

•Petroleum and natural gas.

•Coal, which is vested in the Coal Authority.

•Accession cannot take place across the boundaries of separate tenements.

Landownership and Land Reform in Scotland

•The Land Reform (Scotland) Act 2003 is legislation consisting of three parts: Part 1 deals with the right to roam, Part 2 introduces a right to buy for rural community bodies with approval from Scottish Ministers, and Part 3 grants a right to buy for crofting community bodies, with the power to compel the owner to sell.

•The Land Reform Review Group, established in 2012, published an interim report in 2013 and a final report titled "The Land of Scotland and the Common Good" in 2014, which made 62 recommendations.

•The Scottish Government implemented several recommendations from the Land Reform Review Group's report, resulting in the Community Empowerment (Scotland) Act 2015 and the Land Reform (Scotland) Act 2016.

•The Community Empowerment (Scotland) Act 2015 extended the community right to buy from rural Scotland to the entire country, including urban properties. It also introduced a right of compulsory acquisition by community bodies for specified types of land and buildings.

Community Rights to Buy Land and Asset Transfer Requests

•Community bodies in Scotland have the right to register applications to buy land, excluding someone's home.

•Applications for community buyout must be made to the Scottish Ministers to be registered in the Register of Applications by Community Bodies to Buy Land (RoACBL).

•The right to buy land can only be exercised if the land is abandoned, neglected, causing harm to the environment, or if it is in the public interest for sustainable development.

•The interpretation of the criteria by Ministers is yet to be determined.

•The decision by Ministers can be appealed to the sheriff.

•Market value must be paid for the land during acquisition.

•CE(S)A 2015 allows community bodies to request the sale or lease of land from public bodies.

•Public bodies must consider factors such as economic development, social and environmental well-being, and reducing inequality when considering the request.

•The public body must agree to the request unless there are reasonable grounds for not doing so.

•There is a right of appeal to the Scottish Ministers.

•A register of land ownership is imposed on public bodies to promote transparency and assist community bodies making requests.

Land Reform (Scotland) Act 2016 (LR(S)A 2016) - Key Points

•Key Points

•The LR(S)A 2016 requires the Scottish Ministers to publish a 'land rights and responsibilities statement', encompassing principles for land rights and responsibilities in Scotland.

•The statement considers aspects such as human rights, equal opportunities, community empowerment, and sustainable development.

•The land rights and responsibilities statement, published in 2017, aims for a Scotland with a strong relationship between land and people, recognizing and fulfilling rights and responsibilities.

•The statement includes six principles, promoting a more diverse pattern of land ownership and improved ownership transparency.

•Part 2 of the LR(S)A 2016 establishes the Scottish Land Commission, consisting of five ordinary commissioners and a 'Tenant Farming Commissioner'.

•The Commission advises the Scottish Ministers on land matters and issues papers on topics within its jurisdiction.

•The Scottish Land Commission is distinct from the Scottish Law Commission.

•Part 3 of the LR(S)A 2016 introduces a new register identifying controlling interests in land owners and tenants.

•Part 4 requires the Scottish Ministers to provide guidance on engaging communities regarding land that may affect them.

•Part 5 grants community bodies a right to buy land for sustainable development, with rules similar to acquiring abandoned or neglected land.

•Approval from the Scottish Ministers is necessary for community body acquisitions, registered in RoACBL.

Land Ownership and Sustainable Development in Scotland

•The Scottish Government aimed to have 1 million acres of land under community ownership by 2020, but this target was abandoned in 2019 based on the recommendation of the Scottish Land Commission.

•As of December 2019, the estimated figure for land under community ownership in Scotland was 191,290 hectares (472,687 acres).

•The interpretation of 'sustainable development' and the frequency of community bodies seeking land acquisition are significant factors in this context.

Neighbour Law

•Neighbour law is a part of property law that regulates the rights and responsibilities of a landowner with neighboring owners.

•The focus of this chapter is the default set of rules affecting neighbors, which are discussed under various headings.

•Boundary fences and walls are one aspect covered in neighbor law.

•There are two types of boundary fences or walls: Type 1 is wholly on one side of the boundary, and Type 2 straddles the boundary.

•Type 1 fences or walls can be erected by an owner alone, subject to certain legal restraints.

•Type 2 fences or walls usually require the consent of both landowners, unless authorized by real burdens.

•Real burdens can impose affirmative or negative obligations but cannot allow the use of a neighbor's land.

•Real burdens allowing the use of another's land were converted into servitudes in 2004 by force of law, but there are exceptions.

•New real burdens should be drafted to require cooperation between neighbors in building fences or walls, with a time limit for completion.

•There is a special rule regarding boundary fences and walls.

Ownership and Maintenance in Neighbour Law

•A 'common gable' is an end wall shared by two buildings, such as terraced houses or adjacent tenements. It is sometimes permissible for a builder to construct a straddling gable, which can be used when the adjacent plot is developed. However, the gable can only be used if the builder pays half the cost of erecting it. This rule was important in the nineteenth century when adjacent plots were granted to different builders, but it is now of little importance since one builder typically constructs a whole development.

•Ownership of a boundary fence or wall is determined by the law of accession. If the wall is built wholly on one neighbor's side of the boundary, it belongs to that neighbor. If it is built entirely on the other neighbor's side, it belongs to them. If it is a straddling wall, then each neighbor owns it to the middle line. The wall or fence is not considered common property, but each party has a right of common interest in the other's part of the wall.

•It is unclear if title deeds can alter the rule and make a boundary fence or wall the common property of the neighbors. While there is authority suggesting that it is impossible to contract out of accession, the position may be different if there is an express statement in the title deeds treating the wall or fence as a separate tenement.

•Neighbors are free to agree on maintenance and paying for its cost. This is commonly done through a real burden, which may state that each neighbor is liable to pay a half-share of the expense. For a Type 2 fence or wall that traverses the boundary, both neighbors have a duty in common interest to maintain the stability of the structure. This is a positive obligation, and if one neighbor fails to comply, the other neighbor can carry out the work and recover the cost.

Wall and Fence Ownership, Repairs, and Alterations

•A wall or fence owned in common allows either neighbor to carry out necessary repairs and recover a proportionate cost from the other based on their share.

•The March Dykes Act 1661 enables an owner to request the court to require the neighbor to pay half the cost of repairing or rebuilding the fence or wall.

•The 1661 Act applies when the fence or wall was originally erected by court order, by agreement where a court order could have been sought, or if it has always been governed by the legislation.

•Local authorities have powers to deal with defective and dangerous buildings, including repairing the property and billing the owner(s).

•The definition of 'building' includes walls and fences.

•The owner is generally free to alter, extend, or demolish a Type 1 fence or wall, unless there is an agreement or burden stating otherwise.

•For straddling walls, a common interest obligation prohibits any actions that would adversely affect the structure as a whole.

•Alterations that impair the strength or stability of the wall could be actionable, but negligible interferences may be allowed.

•The party carrying out an alteration is generally responsible for paying for it.

•Encroachment refers to something permanently or quasi-permanently invading a person's land without consent or lawful authority.

•Encroachment interferes with the right of possession and constitutes a delict.

•Encroachment is different from trespass and typically involves building beyond boundaries.

Neighbour Law and Encroachment

•Neighbour law encompasses cases where there is encroachment on a neighboring proprietor's land.

•Examples of encroachment include affixing signposts or objects to a building, laying pipes, tree roots spreading under or branches overhanging land, and leaving rubbish or movable property.

•Even trivial encroachments are considered a delict, and a proprietor is not entitled to encroach upon their neighbor's property, even to the extent of driving a nail into it.

•The remedies available for encroachment may depend on the extent of the encroachment.

•Cases such as Duke of Buccleuch v Magistrates of Edinburgh and Young v West provide examples of encroachment disputes.

•Consent and acquiescence can be defenses against encroachment. If the owner or lawful possessor of the property expressly agrees to the invasion or acquiesces in the encroachment, there is no encroachment.

•However, consent and acquiescence may not bind successors unless they have notice of the encroachment or it is obvious.

•In the case involving the Assembly Rooms, objection to the encroachment was not made for over 30 years, resulting in the claim being held as too late.

•Notice of encroachment can bar successors from objecting to the encroachment.

•Predecessor's consent to encroachment can also impact the successor's rights.

Encroachments and Judicial Remedies

•In cases where there is an encroachment on someone's land, the court will take into account the objection of the successor, which may result in an award of damages instead of removal.

•Consent and acquiescence mean that the encroachment remains in place, but in normal cases, it is likely to accede to the neighbor's land and become their ownership. This can cause issues if either piece of land is sold. The resolution to this matter is a conveyance of the relevant section of land to the encroacher, which requires the neighbor's agreement.

•There are two possible defenses to encroachments. The first is that the encroachment is lawful because the encroacher may actually own the land, resulting in a dispute over the boundary. The second defense is that the right to object is lost after a period of 20 years due to negative prescription, although this is debatable.

•Personal bar is a concept related to encroachments, but further details can be found in references such as E C Reid and J W G Blackie Personal Bar (2006) and W M Gloag Contract (2nd edn, 1929) 170-171.

•Overhanging branches and dumped rubbish are exceptions to encroachments.

•Three court remedies for encroachments are interdict, order for removal, and discretion not to make such an order. Interdict is a preventative remedy, but if the encroachment is already complete, the appropriate remedy becomes an order for removal. However, the court has the discretion to not make such an order if the encroachment was made in good faith, is inconsiderable, and does not materially impair the proprietor's enjoyment of their property. An example is given where minimal encroachment with buttresses was not stopped by the neighbor and was in their interest to prevent wall collapse.

Neighbour Law

•Self-help:

•A party can take matters into their own hands when their land is subject to an encroachment.

•Careful consideration should be given to engaging in self-help as unilateral action may lead to fights on site.

•Encroachment by accession can be destroyed by the person encroached upon.

•A building encroaching on the boundary can be demolished.

•Trees on the boundary are considered the common property of neighbors.

•Neighbors must agree before felling a tree on the boundary.

•Overhanging branches and roots can be cut off and returned to the neighbor.

•Court orders can be obtained for removal in certain circumstances.

•Support:

•Landowners have an obligation to support the land above and beside their own land.

•There is a duty of both subjacent and adjacent support.

•Subjacent support is more important, especially in cases where minerals have been worked.

•The obligation is not to withdraw support.

•Working minerals without causing subsidence is important to avoid liability for damages.

•Works that endanger support can be interdicted.

•The extent to which the duty to support includes buildings is unclear.

Support Issues in Property Law

•Support issues arise when there is a withdrawal of support, leading to strict liability without the need to prove negligence.

•Title deeds can include exclusions of the duty to support or the right to damages if support is withdrawn, and statutory restrictions can be applied to protect support.

•Coal mining has historically been important in Scotland, and the Coal Authority now has ownership of unworked coal and the power to grant licenses for mining.

•Operators with licenses can withdraw support with three months' notice, but they are then obligated to compensate the surface owner or carry out remedial works.

•Liability for damage caused by mining is also established.

•The Tenements (Scotland) Act 2004 regulates subjacent building-to-building support, where the lower part of a building must support the upper part.

•In cases where two buildings share a common gable, each owner is responsible for supporting their respective half.

•A servitude of support may be established by the title to a property, either through express terms or by prescription.

•Nuisance is a concept relevant to property law, but further details on this point are not provided.

Neighbour Law and Nuisance

•Landowners and lawful occupiers of land are protected from interference with their use and enjoyment of the land.

•Members of the public also have similar rights in relation to public places.

•A nuisance is actionable when the conduct is "plus quam tolerabile" (beyond what is tolerable) when considering all surrounding circumstances objectively.

•The determination of whether a nuisance exists is based on the perspective of a reasonable person in that situation.

•Conduct that can be classified as a nuisance can be broadly divided into instances of physical damage and interference with the use and enjoyment of land.

•Examples of physical damage include vibrations that cause structural damage, removing load-bearing walls, attracting pigeons that damage pipes, allowing plant infestation, and causing flooding.

•Examples of interference with the use and enjoyment of land include noise, disagreeable fumes and smells, excessive electric light, burning plastics causing smoke, and releasing contaminating chemicals.

•When assessing whether conduct is more than reasonably tolerable, the courts consider factors such as the nature of harm and the social value of the defendant's conduct.

•Whitty 'Nuisance' in SME (Reissue, 2001)

•Gordon and Wortley Scottish Land Law vol 1, paras 26.21-26.35

•Maguire v Charles McNeil Ltd 1922 SC 174

•Lord Advocate v Reo Stakis Organisation Ltd 1981 SC 104

•Kennedy v Glenbelle 1996 SC 95

•Allison v Stevenson (1908) 24 Sh Ct Rep 214

•National Rail Infrastructure Ltd v Williams [2018] EWCA Civ 1514, [2018] 3 WLR 1105

•Sabet v Fife Council [2019] CSOH 26, 2019 SLT 514

•King v Advocate General for Scotland [2009] CSOH 169

•Webster v Lord Advocate 1984 SLT 13, aff'd 1985 SLT 361

•Houldsworth v Wishaw Magistrates (1887) 14 R 920

•MacBean v Scottish Water [2020]

Neighbour Law and Nuisance

•Neighbour law is concerned with legal disputes between property owners and their rights towards each other.

•Liability for nuisance depends on the factors of the extent and nature of the interference, the use or enjoyment invaded, and the sensitivity to harm of the persons and property affected.

•For a defender to be liable, fault (culpa) must be proven.

•Available defenses include negative prescription of the right to object (20 years), acquiescence by the pursuer, and statutory authorization.

•Remedies for nuisance include interdict, order ad factum praestandum, and damages for the loss suffered.

•Aemulatio Vicini refers to spiteful acts by an owner towards a neighbor, which are considered unlawful.

•The doctrine of "abuse of right" has been developed in many legal systems, but not much in Scotland.

•Neighbour law may be applicable in circumstances where the respective proprietary rights of the parties have not been established, such as in a boundary dispute.

•Examples of interference in neighbour law include underground water interference and blocking of views through fences or hedges.

Neighbour Law and Use of a Neighbour's Property

•The High Hedges (Scotland) Act 2013 provides a separate statutory remedy for dealing with high hedges, with local authorities enforcing the law.

•A landowner may have limited rights to use a neighbour's property, such as servitudes and public rights of way.

•The two residual rights discussed here are drainage and access for repairs.

•A landowner has the right to let water outside of a definite channel drain onto lower-lying neighbouring land, including surface and underground water.

•However, limitations exist, such as only allowing natural water (e.g., rain) to be drained and not damaging the inferior land.

•A landowner does not have the right to collect rainwater on a roof and let it fall onto a neighbouring property.

•Hume argues that temporary interference with a neighbour's property for repair purposes is acceptable in crowded urban areas.

•In Brydon v Lewis, it was accepted that a flat owner has the right to access a neighbour's garden for repairing a gable wall from the outside.

•Lady Carmichael in Soulsby v Jones, however, disagreed with Hume's notion of this right being a servitude and expressed concerns about potential limitations on land use.

•An example scenario involves neighbouring individuals named Caitlin and Kristen.

Access and Boundaries in Property Law

•Kristen builds a hotel right up to the boundary.

•The question arises whether Caitlin can build up to the boundary as well, considering she will need access to maintain the outside wall of that side of her hotel.

•The law regarding this situation is unclear and does not provide a definitive answer.

Leases and their Definition

•A lease is a contract where one person (the landlord/lessor) grants exclusive use of property to another person (the tenant/lessee) for a certain period. In return, the tenant agrees to make payment, either in money or other forms.

•The Leases Act 1449 was an important Act of the Scottish Parliament that marked the beginning of statutory regulation of leases.

•McAllister defines a lease as a contract that allows a tenant to occupy someone else's property for a finite period. The tenant pays rent to the landlord, usually in the form of money but occasionally in goods.

•Rankine describes a lease as a contract of location (letting to hire) where one person grants another person the use or control of lands or other heritages for a defined or undefined period. The grantor is the lessor or landlord, and the recipient is the lessee or tenant. Rent is the periodical payment, and a lump sum can be referred to as grassum or foregift.

•Paton & Cameron define a lease as a contract of location where the lessee is granted the use of land or an immovable subject for a specific period. The lessee must pay rent or perform a duty to the lessor, which can be money, the fruits of the ground, or services.

•'Lease' is specifically used for land, while 'hire' is used for moveables.

•Other related terms include landlord/lessor, tenant/lessee, and subjects/premises/demise.

Requirements and Elements of a Lease

•A lease can be enforceable against successors if it is registered in the Land Register under the Registration of Leases (Scotland) Act 1857 (as amended).

•Residential leases and rural leases are subject to high levels of statutory regulation.

•Understanding the difference between a license and a lease is important.

•A license is a contract that grants the right to use a particular part of a property, while a lease confers personal rights and can grant a real right to the tenant.

•To identify a license, consider the terminology used by parties, exclusive possession, and any essential lease requirements that may be missing.

•The essential elements of a lease include parties, period, property, and price.

•In 2017, a new "private residential tenancy" was created with unique features, including the ability to create a tenancy without writing.

•A valid lease requires parties with legal capacity, heritable subjects, and a certain rent.

•Exclusive possession is vital unless the lease is for shooting rights, fishing rights, or mineral rights.

•Leases related to fishing, shooting, and mineral rights are not covered in this course.

•The rent in a lease must be definite and cannot be elusory or nominal.

Rent and Leases

•Rent is a sum of money or other form of payment, such as grain or services, given by a tenant to a landlord in exchange for possession and use of a leased property.

•Statutory regimes for tenancies in certain sectors may specify rent limits, while others may not.

•If there is no agreed rent but possession has been taken, the courts can infer a rent based on the actual value of the property.

•According to Rankine, rent is the return in money, produce, or other moveables due by a tenant for the possession and use of the leased property.

•Grassums, or premiums, are separate from the rent and are a single payment given in consideration of the lease. In the past, landlords would charge high premiums and low rents for tax advantages.

•Leasehold Casualties were penalty payments that no longer exist under the Leasehold Casualties (Scotland) Act 2001.

•Tacit relocation is a doctrine that allows leases to roll on after their planned end date if neither the tenant nor the landlord takes steps to end the relationship.

•The "ish" refers to the termination date or expiry of a lease.

Lease Duration and Restrictions in Scotland

•A lease gives rise to a temporary right, and if no duration is stated, but possession is taken, the lease will be inferred to be for a period of one year per Gray v University of Edinburgh.

•The maximum length of a lease is 175 years, by virtue of the Abolition of Feudal Tenure etc (Scotland) Act 2000 s.67. This is because the lease is a non-feudal institution. The Long Leases (Scotland) Act 2012 converted the tenant's right in most "ultra long leases" (175 years or more left to run) into outright ownership.

•The Land Tenure Reform (Scotland) Act 1974 s.8 sets the maximum period of residential leases at 20 years. However, the Private Housing (Tenancies) (Scotland) Act 2016 allows for residential leases to run for more than 20 years, and the Housing (Scotland) Act 2010, Part 13 allows residential property leases to social landlords, connected bodies, and rural housing bodies to be for more than 20 years. Residential leases by social landlords, connected bodies, and rural housing bodies to other non-exempt bodies are still subject to the 20-year limit.

•The Land Registration etc (Scotland) Act 2012 also addresses long leases.

•Interposed leases are allowed under the Land Tenure Reform (Scotland) Act 1974 s.17. Pre-1974, interposed leases were not valid, but this statute changed the position and allowed for a new level of lease to be inserted between the head landlord and the subtenant, as long as it didn't interfere with the existing tenant's situation. Any interposed leases of over 20 years would be registerable under the 1857 Act.

•The Private Housing (Tenancies) (Scotland) Act 2016 allows for a valid tenancy without a specified end date, as long as the term is certain.

•Statutory restrictions since 1974 have limited the duration of leases. If no term is agreed upon, but other cardinal elements are present and the tenant has entered into possession, a duration of one year will be implied per Gray v Edinburgh University 1962 SC 157, 1962 SLT 173.

•The required form of a lease is also determined by its duration. Leases for one year or less do not need to be in writing, while those for greater than a year must be in a written document subscribed by the granter per the Requirements of Writing (Scotland) Act 1995, ss 1(2)(b), 2(1).

•Section 3 of the Private Housing (Tenancies) (Scotland) Act 2016 allows for the constitution of a private residential tenancy without writing for residential leases entered from 1 December 2017.

Rights and Obligations of Parties in a Lease Agreement

•The distinction between a licence and a lease: A licence is a contract that lacks an essential element to be considered a lease and gives rise to a personal right. In contrast, a lease is a contract that grants possession of heritage and can be either a personal right or a real right in land, depending on certain tests and statutory regulations.

•Is a lease a real right? A lease is primarily a contract but can also confer a real right upon the tenant under certain circumstances, such as possession for short leases or registration for long leases. It creates obligations that can be enforceable against singular successors.

•Terms of the lease: The obligations of the parties in a lease are governed by the terms of the lease agreement, subject to any statutory controls. For residential and agricultural leases, detailed statutory frameworks apply, while for commercial leases, common law implied terms may come into play in the absence of specific terms.

•Exclusion of common law implied terms: If the parties wish to exclude common law implied terms, they must clearly express their intention to do so. Otherwise, these terms will still apply.

•Common law terms in commercial leases: In contemporary Scots practice, the common law terms relevant to commercial leases include the obligation of the landlord to put the tenant in possession of the subjects and maintain the tenant's possession throughout the lease term. The tenant is obliged to enter into possession, occupy, and use the subjects. In certain circumstances, the tenant may also be bound to plenish or stock the subjects.

•Rent payment: The tenant is obligated to pay rent when it falls due.

•Purposes of let: The landlord is obliged to provide subjects that are reasonably fit for the purposes of the let.

Lease Types and Statutory Regimes

•Under a lease, the tenant is obligated to use the property only for the purposes of letting, while the landlord is obliged to carry out repairs.

•The tenant is also obliged to take reasonable care of the property.

•Provision under contract and common law may be subject to variation under particular statutory regimes.

•A lease can be considered a personal contract governed by the general law of Contract.

•A 'personal' lease is still a lease, and if it falls under a statutory regime conferring security of tenure, the statutory security may replicate or exceed real rights.

•Statutory security can trump real rights in areas such as enforceability against successors and third parties.

•Certain tenants, such as those holding under the Rent Acts, crofters, small landholders, and statutory small tenants, are protected by relevant legislation against those holding in right of the landlord.

•Even with a real right, a tenant cannot grant a servitude or a standard security over the leased subjects without possession.

•The University of Strathclyde is a charitable body registered in Scotland.

•Adrian Stalker, in his book "Evictions in Scotland," mentions that under section 41 of the Housing (Scotland) Act 2001, a tenancy refers to an agreement making a house available for human habitation, and the term 'lease' and related expressions are construed accordingly. This provision prevents landlords in the social rented sector from avoiding the Act by creating a license or occupancy agreement instead of a lease, as long as the agreement meets the requirements of section 11.

Types of Residential Tenancies in Scotland

•A Scottish Secure Tenancy (SST) and a Short Scottish Secure Tenancy (SSST) are specialist types of leases for social rented residential accommodation.

•The SST is the normal form of tenancy for tenants of social rented landlords, while the SSST is a stripped-back version of the SST with certain rights excluded.

•Private rented residential accommodation in Scotland is regulated by The Private Housing (Tenancies) (Scotland) Act 2016, which offers tenants protection from eviction in most situations.

•Private Residential Tenancies (PRTs) allow tenants to stay on an open-ended basis if the property is their only or principal residence.

•The Rent Acts, starting from 1915, were introduced to prevent landlord profiteering during World War I. The Rent Act regime offered protection from eviction and included rent regulation.

•The Assured Tenancy regime under the Housing (Scotland) Act 1988 replaced the Rent Act regime. It included assured tenancies and short assured tenancies, with the latter being a simplified version.

•The private residential tenancy, introduced on 1 December 2017, superseded the Assured Tenancy regime. It is not possible to create new assured tenancies anymore.

•Both social rented housing and private renting in Scotland have seen significant developments since the establishment of the Scottish Parliament.

Residential Tenancies and Specialized Lease Types

•Landlord Registration and the licensing of HMOs and provisions for disrepair and deposit protection are key aspects of residential tenancies.

•Charging a premium for a residential let is illegal, as is imposing inappropriate administration charges on tenants.

•The case of Michael Cross & Others v Aberdeen Property Leasing, dated 20 November 2013, highlights the issue of inappropriate administration charges. More details can be found in an article by the Aberdeen Law Project in the Journal of the Law Society of Scotland, April 2014.

•The University of Strathclyde, registered in Scotland as a charitable body with number SCO15263, is mentioned.

•Further reforms in the private rented sector include the Tribunals (Scotland) Act 2014 and the Housing (Scotland) Act 2014.

•The Private Housing (Tenancies) (Scotland) Act 2016 introduced a new private rented tenancy, superseding existing PRS statutory tenancies. Tenancies starting from 1 December 2017 are subject to this new regime. More information can be found at https://www.gov.scot/publications/private-residential-tenancies-tenants-guide/.

•A suggested course for those interested in residential tenancy matters is the optional Housing Law course, with course code M9313.

•Specialist lease types, such as rural/agricultural leases, have specific rules and regulations. The course does not cover these topics.

•Commercial leases have less regulation compared to residential and rural tenancies. The Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 includes rules to regulate and mitigate irritancy in commercial leases. Specific rules regarding commercial leases are not discussed in this course.

Introduction to Securities

•Scots law allows creditors to obtain a right in relation to property owned by someone else to secure the performance of an obligation owed to them.

•The secured property, known as "collateral," can be corporeal or incorporeal, heritable or moveable.

•The constitution and nature of the security right depend on the classification of the object secured.

•A common domestic situation involving security is when someone obtains a mortgage to finance the purchase of a home.

•The borrower grants a standard security to a bank or building society.

•There is functional overlap between real securities and personal securities, but personal securities are not taught in this course.

•Securities have important considerations in property law and commercial law.

•Some securities can arise by operation of law, while others are voluntarily created by the proprietor.

•The security right of pledge requires delivery and possession of a corporeal moveable.

•A classic example of pledge is obtaining a loan from a pawnbroker with an item of jewelry pledged as security.

•Pledge is regulated by various laws, including the Sale of Goods Act 1979 and the Consumer Credit Act 1974.

•The Moveable Transactions (Scotland) Act 2023 will provide an alternative means to create a security over corporeal moveable property.

Standard Security (Heritable)

•A standard security is the only competent way to constitute a security over land in Scots law.

•It was introduced by the Conveyancing and Feudal Reform (Scotland) Act 1970 and amended by the Home Owner and Debtor Protection (Scotland) Act 2010.

•Land can also be affected by a floating charge.

•Important issues to consider include the definition of a debt, import and effect of standard forms, standard conditions, registration, ranking, and bringing the security to an end.

•The details of a standard security can be found in a Title Sheet.

•Standard conditions are outlined in Schedule 3 of the 1970 Act and can be modified by agreement.

•More than one security can affect the same property, with ranking determined by registration in the Land Register.

•Standard securities are not time-limited and can be ended through redemption or other means.

Securities and Liens in Scots Law

•Discharge: A secured creditor can discharge a security when it is no longer needed or restrict the area affected by the security.

•Enforcement: Secured creditors can realize the obligation due by selling the secured property. The case of Royal Bank of Scotland Plc v Wilson 2010 S.C. Page 3 of 4 discusses this process, including the requirement for a "calling up notice" for any debt due. Commercial properties are easier to enforce against, while residential properties have additional pre-action processes.

•Assignation (Incorporeal Moveables): Security over moveable property, including incorporeals, can be created through a registered statutory pledge under the Moveable Transactions (Scotland) Act 2023.

•Wylie's Exec. v. McJannet (1901) 4 F 195 and Scottish Widows Fund v. Buist (1876) 3 R 1078 are relevant cases in this area.

•Involuntary Securities: Lien arises by law in relation to unpaid debts, such as a garage having a lien over a fixed car until the bill is unpaid. Section 39 of the Sale of Goods Act 1979 is also relevant. Special and General Liens distinguish the lien's scope.

•Hypothecs: Covers Conventional and Legal Hypothecs, with a focus on the commercial landlord's hypothec for unpaid rent.

•Contracts for Moveables that are Functionally Equivalent to Securities (Pseudo Hypothecs): Includes creditor to debtor sales and retention of title clauses, and debtor to creditor sales and transfer of title clauses.

•Floating Charge: A security instrument granted by companies and limited liability partnerships, covered by the Companies Act 1985. Its usage has reduced after the reform in the Enterprise Act 2002.

Floating Charges

•Floating charges can affect land, but they do not require registration in the Land Register.

•When created, floating charges can encompass the entire patrimony of a company.

•The charge needs to be perfected on a certain trigger point.

•Once perfected, the floating charge operates like a fixed security over the assets.

•The manner in which the floating charge operates is determined by the type of asset involved.

•In cases involving land, when the charge "crystallizes," it functions like a standard security.

•This course will only cover the essential aspects of floating charges.

Introduction to Title Conditions and Servitudes

•People can use title conditions to agree on certain restrictions or permissions for their land.

•Title conditions "run with the land" and bind successors in title.

•Title conditions have a burdened property (subject to the condition) and a benefited property (with the benefit of the condition).

•Servitudes are commonly encountered in real estate transactions and litigation.

•Servitudes can include rights of access or use over certain areas of land.

•Developers often create servitudes to ensure proper access and services for residents and to maintain the overall attractiveness of a housing estate.

•The Tenements (Scotland) Act 2004 can be used to regulate matters among neighbors in developments with apartments.

Reform in Title Conditions (Scotland) Act 2003 (asp 9)

•The 2003 Act declares that the common law requirement for a servitude to be of a type known to the law is not applicable when the servitude is created by express grant or reservation (s.76(1)).

•However, the act also states that a servitude cannot be repugnant with ownership, meaning it cannot restrict the owner's rights to the extent that ownership becomes meaningless (s.76(2)).

•Servitudes can be "positive" or "negative".

•Positive servitudes allow the dominant proprietor to do something on the servient tenement without requiring the owner of the servient tenement to do anything.

•The most important positive servitudes at common law include rights of way, rights to park vehicles, rights to put drains or pipes, rights of pasturage for sheep and cattle, and the right of lateral and vertical support.

•Negative servitudes, which prevent certain activities, were recognized in common law but are now required to be created as real burdens according to the Title Conditions (Scotland) Act 2003.

•Two tenements in separate ownership are required for the existence of a servitude.

•The "burdened property" and the "benefited property" are usually neighboring properties, but this is not always the case.

Methods of Creation and Exercise of Servitudes

•Servitudes can be created through various methods, including creation in a deed, implied grant and reservation, exercise for the prescriptive period, creation by statute, and acquiescence.

•Implied grant and reservation occur when a farmer sells part of his land to a developer but wishes to retain servitudes to preserve the development potential of his retained land.

•Creation by prescription can involve the registration of a deed followed by 20 years' possession or 20 years' possession without reference to a deed.

•The exercise of every servitude is governed by three implied rules, including that the servitude can only be used for the dominant tenement.

Real Rights: Servitudes and Real Burdens

•Servitudes have certain requirements:

•The benefiting property cannot be used as a bridge to another site.

•The servitude must be exercised in a manner that least burdens the servient tenement.

•The servitude cannot increase the burden beyond the original anticipation.

•Servitudes can be extinguished through various means:

•Express discharge

•Acquiescence

•Negative prescription

•Abandonment

•Destruction of a building not to be reinstated

•Confusion of ownership between benefited and burdened land

•Compulsory purchase or consensual deal

•Variation and discharge by the Lands Tribunal

•Real burdens are similar to servitudes but with differences:

•Positive obligations can be imposed on the servient owner.

•Negative restraints can be inserted, such as restrictions on usage.

•General requirements for content of real burdens:

•There must be a praedial burden, related directly or indirectly to the burdened property.

•There must be a praedial benefit, for the utility of the dominant tenement.

Real Burdens and Specialized Burdens

•Real burdens give the owner of the benefited property a right of pre-emption over the burdened property, meaning they have the first refusal when the owner wishes to sell.

•Positive servitudes can be created through prescriptive exercise for 20 years, but real burdens cannot arise through use alone or implied from the circumstances of a conveyance.

•Deeds of declaration of conditions, also known as "deed of conditions," are commonly used in modern developments.

•To create a real burden, clear and precise language must be used, including the term "real burden" or an equivalent nameable type of burden.

•The Title Conditions (Scotland) Act 2003 allows for specialized burdens that serve specific public goods, such as rural housing burdens, conservation burdens, economic development burdens, health care burdens, and climate change burdens.

•Some previously feudal rights can be converted into modern real burdens that continue to affect the land even after feudal abolition.

Enforcement and Remedies for Real Conditions

•In very rare circumstances, a former feudal superior may still have a right to purchase as a "personal real burden."

•The rules regarding specialized burdens are not covered in this course and are only provided for informational purposes.

•To enforce a real burden, a person must have both a title to enforce and an interest to enforce.

•The proprietor of the dominant tenement has the title to enforce a real burden.

•Identifying the title to enforce can be challenging, especially for older burdens created before the abolition of feudalism.

•For older burdens, possibilities for identifying the title include express nomination of a benefited property or the operation of specific sections of the Title Conditions (Scotland) Act 2003.

•For new burdens, the benefited property must be clearly identified in the constitutive deed and registered against both burdened and benefited tenements.

•In addition to having a title to enforce, a party must also show an interest to enforce at the time they wish to enforce.

•An interest to enforce is present when failure to comply with the real burden results or will result in material detriment to the value or enjoyment of the person's ownership or right in the benefited property, or if the burden involves defraying or contributing towards a cost.

•The breach of a burden prohibiting trading by running a B&B may give a neighbor an interest to enforce, depending on the specific circumstances and relevant case law.

•Remedies for breach of real conditions include a personal action against the burdened proprietor for specific implement, interdict, or damages.

•Real burdens can be extinguished through express discharge, loss of interest to enforce, negative prescription, confusion, compulsory purchase, or other means.

Lands Tribunal and Tenement Management Scheme

•The Lands Tribunal has the power to vary and discharge "title conditions," which include real burdens, servitudes, affirmative obligations in servitudes, and conditions relating to land in registerable leases.

•The Lands Tribunal can grant an order to vary or discharge a land obligation if it is deemed reasonable, taking into account various factors. This order is binding on all parties with an interest once registered in the Land Register.

•The Tenements (Scotland) Act 2004 codified and reformed the management of tenement properties, also known as condominium ownership.

•The title deeds for a tenement may disapply certain rules of the 2004 Act.

•In cases where the title deeds do not provide for the management and maintenance of the building, the Tenements (Scotland) Act 2004's Tenement Management Scheme provides a solution.

•The Tenement Management Scheme allows for the management and maintenance of the scheme property of a tenement, which refers to the parts of the building that users are interested in ensuring are well-maintained.

•Certain decisions relating to a tenement can be made by a majority of flat owners under the Tenement Management Scheme, simplifying the decision-making process compared to the default Common law.

Tenement Management and Property Factors

•The owners of a scheme property have certain rights and responsibilities, including carrying out maintenance and inspections, as well as appointing a manager for the property.

•Memorizing the statute relating to tenement management is not required, but understanding its structure is necessary for its application.

•The Scottish Government provides online resources for information on tenement management.

•The Development Management Scheme (DMS) is a management scheme for large developments, with model rules that can be varied. It is set out in the Title Conditions (Scotland) Act 2003 and the Development Management Scheme Order 2009.

•Some properties in Scotland have property factors, which handle the management matters on behalf of the owners.

•The appointment or dismissal of a property factor can be addressed in the title deeds or through the Tenement Management Scheme.

•Property factors should be registered and must adhere to certain standards as per the Property Factors (Scotland) Act 2011.

•Dissatisfied owners can lodge complaints or seek dispute resolution through a tribunal.

Land Reform in Scotland

•The Land Reform (Scotland) Act 2003 introduced two community rights of acquisition: allowing rural communities to acquire land on a first refusal basis and allowing crofting communities in the Highlands and Islands to force a sale of certain croft land.

•Transfers under land reform legislation require a suitably accountable local body and consent from Scottish Ministers, based on local support and the objective of sustainable development.

•Part 2 of the 2003 Act has been used approximately thirty times to ensure assets go to a community body rather than being sold on the open market.

•Part 3 of the 2003 Act has not been used to completion but has influenced community transfers.

•The 2003 Act has been amended to extend the pre-emptive right to buy from rural Scotland to the entire country, and new powers of community acquisition have been introduced through the Community Empowerment (Scotland) Act 2015.

•The Community Empowerment (Scotland) Act 2015 inserted a new Part 3A to the 2003 Act, allowing communities to compel a sale from a landowner in cases of abandonment, neglect, or environmental mismanagement.

•The 2015 Act also introduced provisions for community asset transfers, where communities can request assets from certain public entities.

•Part 5 of the Land Reform (Scotland) Act 2016 introduced another right to buy, targeting landowners who block sustainable development of a community.

•The 2016 Act established the Scottish Land Commission, responsible for evidencing Scottish law, policy, and culture related to land reform.

•A Land Rights and Responsibilities Statement exists, containing non-binding principles for responsible land management.

Land Reform Bill and the importance of consultation with local communities

•The Land Reform Bill is anticipated soon after the "Land Reform in a Net-Zero Nation Consultation" by the Scottish Government.

•The bill will include provisions regarding land use and ownership.

•The importance of consulting with local communities is emphasized in the proposed bill.

•Landowners are urged to consult with local communities when making significant decisions regarding land use.

•Failure to adequately consult can impact the approval process for community buyouts under the 2016 Act.

ntroduction to Trusts

•The Gretton and Steven, Property, Trusts and Succession textbook is recommended for reading about trusts.

•There are several questions to be discussed in this recording, including "What is a trust?, "How are trusts created?", "Who creates them, and when?", and "How do they end?"

•Understanding the concept of a trust might be challenging for those from jurisdictions that do not recognize trusts.

•The Scottish system of trusts differs from the English system.

•A trust involves a tripartite relationship between a truster, trustees, and beneficiaries, where the truster appoints trustees to manage assets for the benefit of the beneficiaries.

•The way a trust is set up impacts its treatment and the actions of the trustees.

•Trusts and trustees have decision-making powers and specific responsibilities and duties towards the beneficiaries.

•The trust deed is the constitutive document of a trust.

•Powers and duties of trustees include investment powers and protection of the trust assets.

•Trust beneficiaries may become dissatisfied with the actions of trustees, leading to potential breaches of duties.

Trustees, Beneficiaries, and Trusts

•Trustees have a duty to act in the best interest of beneficiaries and must demonstrate that they are fulfilling their responsibilities.

•Beneficiaries have remedies available to hold trustees accountable for their actions and seek damages for any losses suffered.

•Trustees are protected from claims by beneficiaries through provisions in the trust deed and legislation, such as the Trusts (Scotland) Act 1921.

•The Trusts (Scotland) Act 1921 is the main piece of legislation governing trustees in Scotland, but there are potential updates pending with a current bill in the Scottish Parliament.

•Trustees' investment powers were updated and expanded by the Charities and Trustee Investment (Scotland) Act 2005.

•Trusts may need to be varied or updated to adapt to changes in family circumstances, tax laws, or societal changes.

•Rules govern the variation of trusts depending on the type of trust.

•Some trusts may come to an end voluntarily, either by distributing assets to beneficiaries or fulfilling their original purpose.

•Some trusts may come to an involuntary end due to specific circumstances.

•Trusts can be seen as having a life cycle, from conception to creation, ongoing existence, potential variation, and eventual termination.

Understanding Trusts in Scots Law

•A trust involves three key parties: the Truster (or settlor), trustee(s), and beneficiaries.

•The Truster is the person setting up the trust, often referred to as a settlor, and is responsible for choosing the trustees and defining the terms of the trust.

•Trustees, or a single trustee, hold the assets of the trust and are bound by the terms outlined in the trust deed.

•Beneficiaries are the individuals or groups who are entitled to benefit from the trust's assets. They can be specific individuals or broad categories such as family members or charitable purposes.

•Trusts can be created by a written declaration from the Truster, although there are situations where a trust can arise by law.

•A valid trust usually involves a transfer of property into the trust, after which the trust becomes effective.

•In Scots law, a trust is not a separate legal entity.

Trusts - Structure, Ownership, and Benefits

•Structure, Ownership, and Benefits

•Separate legal personality: Although a trust operates similarly to a separate legal entity, it technically does not have its own legal personality. This has important implications for trustees, as they may have potential unlimited liability.

•Description of a trust: A trust is described as person A, B, & C acting as trustees, rather than the trust itself being an independent entity with its own name, as seen with incorporated companies.

•Ownership in a trust: When property is transferred into a trust, the trustees become the owners and hold the real right of ownership in the trust assets. Beneficiaries, on the other hand, do not have a direct property relationship and only have personal rights to hold the trustees accountable.

•Bankruptcy and insolvency: If a trustee becomes bankrupt in their personal capacity, it should not affect the assets that they hold as a trustee. Similarly, if something happens to a beneficiary, it should not affect the assets held in trust for them. Trusts offer asset protection in these situations.

•Reasons for setting up trusts: Trusts are popular for their ability to provide asset protection and control. They offer a safe home for assets and can safeguard them in case something negative happens to beneficiaries or trustees.

•Control and tax planning: Contrary to common belief, trusts are not primarily used for tax planning. Control over the distribution of assets is often a significant reason for utilizing trusts.

Trusts and their Purpose

•Trusts allow individuals to maintain control over assets while passing them on to beneficiaries.

•Trustees have control and ownership of the assets, but have fiduciary duties to act in the beneficiaries' interests.

•Trusts are commonly used when beneficiaries have some form of vulnerability, such as age or disability.

•Personal injury claims often utilize trust structures to manage relevant assets.

•Trusts can be established during life or after death, and can be private (benefiting specific individuals) or public (benefiting the community or society).

•Setting up a trust involves a declaration of trust and the transfer of property into the trust.

•The requirements for written documentation of a trust are outlined in the Requirements of Writing (Scotland) Act 1995.

Overview of Trusts and Trust Deeds

•A trust is established through a trust deed, which is a written declaration stating the intentions of the settlor (Joe Bloggs) to make provision for certain beneficiaries and appoint trustees to hold the assets.

•The trust deed may include additional powers and terms.

•The assets transferred into the trust are subject to the normal rules of property law.

•Once the trust is established, it has its own existence, with assets, trustees, and beneficiaries.

•Trusts operate based on rules that govern their management, decision-making, trustee changes, asset investments, and distribution of assets to beneficiaries.

•Further study can be done by referring to Gretton and Steven chapters 23 to 25 and engaging with other course materials.

Variation and Termination of Trusts

•'Variation' refers to changing the terms of a trust, while 'termination' or 'extinction' means the end of a trust. The two concepts are connected because a trust can be varied in order to terminate it.

•Most trusts naturally come to an end without being varied. For example, when a trust for Letitia in liferent and Fraser in fee ends when Letitia dies, the trustees transfer the trust estate to Fraser. When all assets of a private trust are distributed, the trustees are said to have 'denuded'. Public trusts can also come to an end, such as when a relief fund is set up after a natural disaster and the money is used up. Some public trusts, however, can be long-lasting.

•The longer a trust lasts, the more likely its terms may become unsatisfactory due to changing circumstances. Changes in wealth, beneficiary positions, and laws can necessitate trust variation. Some trusts are set up with broad trustee powers that can adapt to changing circumstances, but not all. The law allows for cautious trust variation.

•The variation or early termination of trusts depends on whether they are private or public. Private trusts can be changed or terminated early by beneficiary agreement but not by the court. On the other hand, public trusts cannot be changed by beneficiary agreement but can be varied by the court within limits. Some statutory developments have expanded the options for variation, but the basic common law position should be considered.

•The rule in Miller's Trs v Miller allows for the partial or complete termination of a private trust at the request of a single beneficiary who is the sole person with an interest. This means that if a beneficial interest is vested in a specific person and the trustees have no reason to withhold payment or transfer to that person, the trust can be terminated.

Trust Deeds and Beneficiaries

•In trust deeds, there can be a provision stating that the trustees cannot transfer the trust estate to a beneficiary until they reach a specified age.

•However, if the beneficiary has reached the age of 16, they can demand that the trustees pay or transfer the assets to them, even if the trust deed forbids it.

•If the beneficiary is the sole beneficiary, the trust is terminated.

•The rule is illustrated by the case of Miller's Trs, where a trust was set up for William Miller's son John, with the condition that the trustees could not transfer the assets until he turned 25.

•This rule applies in both England and Scotland, but the dissenting opinion of Lord Young suggests that Scotland might have a different rule.

•Another example of the rule's application is seen in Smith's Trs v Michael.

•The precise statement of the rule is problematic due to the inappropriate use of the word 'fee' by the judges.

•In Miller's Trs v Miller, John successfully sued the trustees to have the property transferred to him before turning 25.

•If the trust had provided that the property would go to someone else if John died before 25, his action would have failed.

•Trustees often provide for assets to be withheld from a beneficiary until a certain age, typically 25, as they believe young adults should not be given substantial capital.

•Sole beneficiaries collectively have the power to terminate a private trust at any time by unanimous agreement.

•The beneficiaries can also make a unanimous decision for a variation of the trust, but it may require the trustees' agreement.

•If the trustees do not agree to a variation, the beneficiaries can terminate the trust and set up a new one on new terms.

Trusts: Variation and Termination

•The rule that all beneficiaries can agree to a termination or variation has two catches. The first is that beneficiaries under age 5 cannot consent, and no one can consent for them. The second is that non-existent beneficiaries may be involved, and the court can consent on their behalf.

•Alimentary trusts are trusts established for the beneficiary's alimentary support. They have special features, such as unassignable rights and limited protection from the beneficiary's creditors. The rule in Miller's Trs does not apply to alimentary trusts.

•Private trusts can be varied by the court to enlarge the administrative powers of trustees or permit them to make advancements of capital, although this is not common in practice.

•In a private trust, if the purposes have been fulfilled but there is still trust property left or if the purposes cannot be fulfilled, the remaining trust property is held on a bare trust for the truster, known as a resulting trust.

•In public trusts, consent to variation cannot be given by beneficiaries due to the nature of a public trust.

Variation of Non-Charitable and Charitable Public Trusts

•Non-charitable public trusts can be varied under the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990 (LR(MP)(S)A 1990), ss9-11.

•Variation grounds include fulfillment of trust purposes and the court's authority to vary trust purposes or transfer assets to another trust.

•The variation must align with the "spirit" of the trust deed and consider changes in social and economic conditions.

•LR(MP)(S)A 1990, ss 10 and 11 provide simplified machinery for the variation of smaller trusts.

•Charitable trusts are now "reorganised" under the Charities and Trustee Investment (Scotland) Act 2005 (CTI(S)A 2005).

•Trustees can propose a variation to OSCR, which can then approve the proposal without involving the court.

•Alternatively, OSCR can petition the court for approval without requiring trustee consent.

•The conditions for reorganisation under CTI(S)A 2005 are similar to those in LR(MP)(S)A 1990.

•The court has common law power to modify provisions of unworkable charitable trusts through a cy près scheme.

•Cy près schemes are made for cases of initial failure or supervening failure, where the trust cannot be put into operation or later becomes unworkable.

Trusts: Variation and Termination

•In cases of 'supervening failure' with trusts, the statutory system is typically used to handle these situations.

•The Law Reform (Miscellaneous Provisions) (Scotland) Act 1990, section 9(2), outlines the procedure for such cases.

•Further details on this procedure can be found in paragraphs 25.17-25.18 below.

•The Law Reform (Miscellaneous Provisions) (Scotland) Act 1990, section 15(9), as amended by the Charities and Trustee Investment (Scotland) Act 2005 (CTI(S)A 2005), Sch 4, para 7(e), defines the terms 'charity' and 'charitable' in relation to registered charities in the Register of Charities.

•CTI(S)A 2005, sections 39-43, outline the provisions for charitable trusts, with minor exceptions for chartered or statutory charities under section 42(5).

•The cy près procedure can be used for charitable trusts, as well as other public trusts, under CTI(S)A 2005, section 42(4).

•Educational endowments are partially governed by the Education (Scotland) Act 1980, with some scope changes under CTI(S)A 2005, sections 42(6) and 43. The local authority often acts as the trustee in these cases.

•The term "cy près" is pronounced "see-pray" and originates from English law, specifically "law French."

•A cy près scheme is always an option for charitable trusts in cases of "strong or compelling expediency."

•Unworkability of trusts can result from various causes, such as changes in the law or social and economic conditions.

•A testamentary trust in favor of a named charity that does not exist can lead to initial failure. If a "general charitable intention" can be proven, a cy près scheme can be approved by the court. Otherwise, the legacy will be void.

•A cy près scheme may involve directing the funds to an existing charity.