Feudal burden

putout

I saw a restrictive covenants thread on this forum and realised I have a similar problem but in Scotland.


I'm buying a house, no mortgage, intending to rent it out after purchase. It's originally a council house, sold first to the council tenant (A) who then sold to my seller (B).


When the council sold to A it was by Feu Disposition and a burden was created thus:
"The dwellinghouse... shall be used and occupied in all time coming as a private dwellinghouse for the use of the Feuar and his family only and for no other purpose." The Feuar in this case being A and the Superior being the council.


My seller B bought the house from A('s estate) after the appointed day of the Abolition of Feudal Tenure etc. (Scotland) Act 2000, so there was no Feu Disposition or burden mentioned on the title deed between A and B.


My question is whether the Feu burden between the council and A applies to me, and if it applies, whether it would be interpreted as prohibiting me from renting out the house.


My solicitor says the burden still does apply, but it would not prohibit me from renting out the house since my tenants would be using the house in the burden's intended purpose. My opinion is that the 2000 Act extinguished the Feu burdens on the deeds, so they should not apply to me anyway.

sparky130a

That's not an easy piece of legislation to interpret! And several clauses have been repealed.

If you really do require full indemnity on that front i'd consult an expert on the subject and bear the cost in mind when offering.

Having said that what you do with the property is not your vendors problem and i can't see them helping you to foot the bill for your own piece of mind.

davidmcn

putout wrote: »

My question is whether the Feu burden between the council and A applies to me, and if it applies, whether it would be interpreted as prohibiting me from renting out the house.

My solicitor says the burden still does apply, but it would not prohibit me from renting out the house since my tenants would be using the house in the burden's intended purpose. My opinion is that the 2000 Act extinguished the Feu burdens on the deeds, so they should not apply to me anyway.

Did your solicitor explain their reasoning about why they think it still applies?

Firstly, such restrictions need to be clearly stated, and I'm not convinced it means "you can't rent out the house" when it doesn't actually say that - I think it was intended more to mean "it's only to be occupied by a single household" and they hadn't really considered that a tenant exercising their right to buy might want to become a landlord.

It doesn't continue as a feudal burden (i.e. the council are no longer the superiors so can't enforce it in that capacity), but such conditions can continue as community burdens (on the basis that they were applied to the other houses and were intended to be of mutual benefit). However, any neighbour seeking to enforce it would need to demonstrate that they had somehow been significantly affected by your breach, which I think would be tricky. Also would risk everybody else's houses being devalued if the same restriction is held to apply to them!

I don't think you need to worry about it, other than the possibility of a purchaser/lender in the future becoming picky. Should be able to get rid of it by going to the Lands Tribunal, but that costs money.

putout

Thanks for both of your replies! Didn't know there was anyone knowledgeable in the area on here!

sparky130a wrote: »

If you really do require full indemnity on that front i'd consult an expert on the subject and bear the cost in mind when offering.

I am reasonably confident the burden will not apply to my case, so I'm going ahead without the added costs.

davidmcn wrote: »

Did your solicitor explain their reasoning about why they think it still applies?

They just asserted it still applies, but see below.

davidmcn wrote: »

Firstly, such restrictions need to be clearly stated, and I'm not convinced it means "you can't rent out the house" when it doesn't actually say that - I think it was intended more to mean "it's only to be occupied by a single household" and they hadn't really considered that a tenant exercising their right to buy might want to become a landlord.


It doesn't continue as a feudal burden (i.e. the council are no longer the superiors so can't enforce it in that capacity), but such conditions can continue as community burdens (on the basis that they were applied to the other houses and were intended to be of mutual benefit). However, any neighbour seeking to enforce it would need to demonstrate that they had somehow been significantly affected by your breach, which I think would be tricky.

The solicitor explained that it is intended to stop the house being used against its intended purpose, which is a single family residential dwellinghouse, so no subdivision into additional units or using it as a place of business. They did say it would only be material if the use bothered surrounding neighbours, for example if it became a business and there were people turning up constantly.

davidmcn wrote: »

I don't think you need to worry about it, other than the possibility of a purchaser/lender in the future becoming picky. Should be able to get rid of it by going to the Lands Tribunal, but that costs money.

I'm not too worried about it at this point (largely because my solicitor and I agree on the result, if not the reasoning), but thanks, good to know there is a way to challenge it.