So can a developer overcome the challenge of those types of title condition? Often it can. There are seven ways to neutralise the effect of such title conditions.
Express waiver or discharge
A burden can be discharged or varied by registering a deed to that effect in the Land Register - signed by all those with a right to enforce that burden. Usually this discharge is only obtained in exchange for a price.
Order from the Lands Tribunal for Scotland to vary or discharge the title condition
This is probably the most commonly used option in practice. If no objection is made, then the Tribunal must grant the order, unless it relates to certain protected burdens.
If there is an objection to the application then the Tribunal has discretion as to whether or not to grant a variation or discharge.
Termination using the 100 Year Rule
For any burdens which were created more than 100 years ago there is a fairly simple process for discharge. A notice must be sent to any person who is entitled to enforce the burden confirming the intention to terminate the burden and giving the recipient not less than 8 weeks in which to apply to the Lands Tribunal for Scotland to retain the burden.
If no application to retain is submitted to the Tribunal within the 8 week period, a further notice can be registered to terminate the burden.
If an application to retain is submitted, then the relevant burdens covered by such application can only be terminated using this route if the Tribunal decides against the objector.
Acquiescence
Most title burdens can be extinguished by the acquiescence of the party with title to enforce. This route to extinguish will operate if:
- the breach is an activity involving material expenditure;
- the benefit of that material expenditure would be substantially lost if the burden was enforced; and
- the person entitled to enforce the burden has consented to the activity or, being aware of the activity, has not objected by the expiry of a reasonable period (not more than 12 weeks)
This route is not without it is risks as to the achieving the desired outcome as some of the terminology hasn't been further defined and so relying on this ground will not always give the developer the certainty it requires.
Prescription
A person will lose a right to enforce a breach of a burden, if he doesn't object to the breach (and the breacher doesn't acknowledge the breach having occurred) within 5 years after the date of the breach. If the breach occurred before 28 November 2004, then the cut off date is the earlier of (1) 20 years after the breach and (2) 28 November 2009.
Evidencing the breach - and when it occurred will be key in this respect.
Compulsory Purchase Order
When a property is acquired by a public authority by a CPO, all title conditions affecting the property are extinguished. Compensation requires to be paid by the authority for extinguishing the title conditions.
This route can, in rare cases, be used by private sector developers involved in a project which has the support of a public authority as being a highly desirable development for an area.
Defective Title Insurance
Finally, in circumstances where none of the above routes are suitable, defective title insurance cover might be available.
Such cover would be against losses arising from any potential future successful enforcement of the relevant title condition against the developer or its successor owners (and secured funders). This route is becoming increasingly popular - particularly where a developer is under a time pressure to quickly complete an acquisition from a financially distressed/insolvent landholder.
Summary
So while on the face of the title to a site - there may appear to be conditions which would be a barrier to development proceeding - a well advised developer would have a number options available to it, to enable the conditions to be removed and allow the development to proceed. What option is ultimately pursued will depend on the nature of the condition and the time available to go through the processes to have it removed/neutralised.
