Abolition of Feudal Tenure etc (Scotland) Bill: Stage 1

Part of the debate – in the Scottish Parliament at 2:37 pm on 15th December 1999.

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Photo of Jim Wallace Jim Wallace Liberal Democrat 2:37 pm, 15th December 1999

It is a genuine privilege to speak to the motion to approve the general principles of the Abolition of Feudal Tenure etc (Scotland) Bill. This is a truly historic piece of legislation that will bring to an end 800 years of feudalism in Scotland. It will benefit the vast majority of people who think of themselves as owner-occupiers in Scotland but whose homes are in reality held subject to the rights of one or more feudal superiors.

This is the kind of detailed law reform that would have been delayed for years waiting for a legislative slot at Westminster, but is ideally suited for consideration by this Parliament. I am therefore delighted that it is one of the first major pieces of legislation to be discussed by MSPs.

I would like to express the Executive's thanks to the various committees of Parliament that have played a part in the progress of the bill to date. The Finance Committee carefully scrutinised the bill, fulfilling its important duty. The Subordinate Legislation Committee played its role in examining the provisions for subordinate legislation. It is a tribute to that committee's care in that task that the Executive has accepted two of the points it made; we will introduce amendments to that effect during stage 2.

We all know of the very heavy load that the Justice and Home Affairs Committee has been labouring under. Only last week we considered another bill on which it has produced a report. Despite that, the committee has produced a most thorough and thoughtful stage 1 report on this bill. I congratulate the convener and the members of the committee on their excellent work. Subject to the approval of members, I look forward to working with them when we move on to detailed consideration of the bill at stage 2.

The Justice and Home Affairs Committee asked me for clarification on a specific point. In our policy memorandum, we said that the bill would have no effect on sustainable development. I understand that the committee received representations to the effect that a bill that affects land ownership must inevitably have some effect on sustainable development. The committee suggested that the Executive might be using a definition of sustainable development that is different from that used by those from whom it heard evidence.

There are a number of definitions of sustainable development. Perhaps the best way I can put it is that sustainable development is about economic growth, social development and environmental protection. I can certainly see that the ownership of land might have some impact on all of those matters, but the reform of the feudal system will not change who owns the land, nor can it be expected to alter the pattern of land ownership. It is a technical and legal matter that affects the way in which people own their property.

I should like to take this opportunity to pay tribute to the work of the Scottish Law Commission and to its document, "Report on Abolition of the Feudal System", which forms the basis of this bill. The commission deserves our thanks for its care and diligence in formulating its proposals. As the committees that have studied the feudal system will readily appreciate—and will, no doubt, appreciate more as we go through stage 2 of the bill—this is a complex subject. The commission had to take the views of a wide range of often conflicting interests as well as assess the state of statutory and common law running back to medieval times.

The commission's main recommendation was that the feudal system should be abolished and replaced by a system of simple ownership of land. The bill would implement that simple recommendation, which I personally commend to members, as such a system already exists in relation to certain allodial land in Scotland. Udal land in Orkney and Shetland is held outright, with no feudal superiors. It gives me particular pleasure to introduce a bill that extends to the rest of Scotland the freedoms that my constituents have enjoyed for centuries.

The bill is divided into seven parts. Part 1 contains the major provisions abolishing the feudal system. Section 1 has a huge resonance:

"The feudal system of land tenure, that is to say the entire system whereby land is held by a vassal on perpetual tenure from a superior is, on the appointed day, abolished."

Scotland has waited an awful long time to hear that sentence.

Feudal tenure is, of course, the technical and legal way in which many of us own our property. The documents that prove that we own our houses are often feudal deeds. They have to be registered so that there is a public record of who owns what and of exactly what they own and what the limits of their ownership are. Part 2 relates to the transfer of ownership and registration of deeds, and is not intended to change the substance of the law. It makes provision to continue the law in a post-feudal context.

Perhaps the best known aspect of the feudal system is the feuduty. Most members probably recall the annual payment of small and rather peculiar sums of money each year to our feudal superiors. The majority of them have disappeared because, from 1974, the feuduty has been redeemed on the sale of most property. However, some properties have not changed hands during the past 25 years and the owner has not voluntarily redeemed the feuduty.

Part 3 would abolish all remaining feuduties. It also provides that if the superior claims compensation for their extinction, it will be paid by the vassal on the same basis as the redemption of feuduty under the Land Tenure Reform (Scotland) Act 1974. The Scottish Law Commission estimates that only 10 per cent of feuduties are left and we suspect that most of those will be apportionments of larger feuduties that have been informally imposed on tenement flats and did not have to be redeemed on sale. The feuduties involved will be small: perhaps £2 to £5 per flat. When the compensation exceeds £100, the bill provides for payment by instalments. The Justice and Home Affairs Committee referred in its report to possible amendments to the compensation provisions, which we will be happy to consider during the stage 2 debates.

Part 4 deals with real burdens, which is one of the most perplexing features of the feudal system. While real burdens can be oppressive, they can also be beneficial and helpful. I will return later to the issue of real burdens, because it is an important and, I accept, somewhat complicated matter.

The next two parts of the bill deal with a variety of subjects. Part 5 covers the subject of entails, which are to be abolished. Part 6 is a miscellaneous part, which deals with a number of matters, including various archaic methods of holding land and the extinction of other payments that are akin to feuduty. I may confess to a certain sadness in abolishing the charming concept of the kindly tenancies of Lochmaben but, along with other anachronisms, they will have to go.

We are also taking the opportunity in this part of the bill of abolishing any remaining feudal privileges attaching to a baronial title. I draw the Parliament's attention to section 51 which, by abolishing rights of irritancy, removes the right of superiors, in certain circumstances, to evict vassals who are in breach of feudal conditions.

Part 7 deals with technical matters such as the appointed day on which the feudal system will finally be abolished. I will return later to the matter of the appointed day, which has given rise to some interest in the Justice and Home Affairs Committee. As well as prescribing several forms that are to be used in the various processes of registration, the schedules repeal many obsolete acts or parts of acts. The bill plays an important role in modernising and cleansing property law.

It might be helpful to give a short explanation of the way in which the feudal system has operated in Scotland and the way in which it operates at present, as there are widespread misconceptions concerning what it means. The feudal system is nothing to do with leasing, and the feudal superior should not be confused with a landlord. A person who owns land under a feudal disposition owns it in law. However, he or she does so as the vassal of a feudal superior who retains an interest in the land in the form of a right to feuduty and a right to enforce conditions on its use.

With the phasing out of feuduties, the main use of the feudal system is to allow the imposition and enforcement of conditions on property, which are otherwise known as feudal real burdens. A vassal who wants to breach a burden will normally have to obtain the superior's consent. Often, the superior will grant consent only in exchange for payment. A typical modern example of that might be when the vassal wants to build a greenhouse or a garage. Real burdens can give superiors the opportunity to charge fees for waivers. The superior can say, "Yes, you can build your garage, but only if you pay me a fee." Some speculators have acquired superiority interests with the specific intention of deriving an income from waivers. That practice has been strongly criticised.

However, there are two sides to real burdens. Real burdens are often used to ensure that property is kept in good repair, to prevent nuisance and to safeguard the rights of neighbours. The Scottish Law Commission has therefore given careful thought to which burdens should be abolished and which should be retained. It has also thought carefully about the arrangements that will need to be made to retain burdens, which is a matter to which I shall return. The commission has recommended that it should be possible to retain four types of burden. I do not want to say much in detail about those, as they are set out in detail in our policy memorandum.

Broadly, the four types are as follows. First, maritime burdens are burdens that relate to important facilities such as piers and harbours. They will be saved by the bill. Secondly, common facility burdens are burdens that, as the name suggests, relate to a common facility on one property which benefits another property or set of properties. They might be concerned with a private access road or the common passages in a block of flats. Such burdens will also be saved, but the superior will lose the right to enforce them; they will pass to the properties that benefit from the burden.

Thirdly, conservation burdens exist where a burden preserves for the benefit of the public the architectural, historical or other special characteristics of land or buildings. An example would be an historic building that is restored by a conservation trust and feu'd subject to burdens that are designed to preserve the restoration work.

Finally, there is the neighbour burden. Under section 17, superiors may retain the right to enforce certain burdens on neighbouring land. The most common example of that will occur when the superior owns neighbouring land that contains a building of human habitation or resort within 100 m of the land that is affected by the burden. The bill would, for example, allow the superior to continue to preserve a view from his home. The commission recognised that the 100 m rule was arbitrary but considered that the line had to be drawn somewhere.

In reaching policy decisions on the bill, we were concerned that the provisions for saving neighbour burdens did not go far enough. For example, the superior may own land but not yet have built on it. He or she may be planning to build a retirement home and might want to preserve the open aspect of the site. The Executive has therefore decided to give the superior an opportunity to reach agreement with the vassal on which burdens can be saved. As a last resort, the superior can take the matter to the Lands Tribunal for Scotland. The superior will, however, have to satisfy the tribunal that his property would suffer substantial loss or disadvantage if the burden was lost.

There is a fifth category that I want to mention. Although the bill does not propose that they be saved, it provides a compensation package for the loss of development value real burdens—burdens that have been deliberately used to reserve development value for the superior where land has been sold at a discount.

When the bill was referred to the Justice and Home Affairs Committee, I made it clear that there would be scope for reviewing whether those would be the only categories of burden that should be retained. We have received some representations from commercial interests that the bill may not do enough to protect the interests of commercial developers. It is clearly important that we get that aspect of our proposals right; we all want to ensure that nothing is done to discourage commercial investors from investing in Scotland.

The commission has received representations from commercial interests in connection with its current review of real burdens. It is right that I should emphasise at this stage that we will continue to monitor carefully whether what the bill proposes in this matter covers adequately all the burdens that need to be saved.

Another issue that will be familiar to members and the Justice and Home Affairs Committee—it has been raised by those interested in commercial transactions—is the proposed limit of 125 years on long leases. I want to assure the Parliament that we do not have a closed mind on that figure or, generally, on the detailed numbers and quantities that are prescribed in the bill. We fully expect those figures and any suggested alternatives to be properly and fully debated in committee at stage 2.

I turn now to the associated subject of the future of real burdens after the feudal system is abolished and to the package of property reforms that we will present to the Parliament over the next few years. It is important to take some time over that, because the Justice and Home Affairs Committee sought clarification on, and referred to, it in its stage 1 report.

When I announced in June that we would introduce this bill, I explained that it would be very closely related to the report on real burdens that the Law Commission is preparing. I said that part of the feudal bill would be commenced at the same time as the bill on real burdens. The Justice and Home Affairs Committee has—with some justification—said that it had some difficulty dealing with one part of the package when it could not see the rest. However, there are good reasons for dealing with the matter in this way.

Not all burdens in Scotland are imposed through feudal deeds; many are set out in ordinary, non-feudal deeds of conditions and dispositions. Those burdens will not be affected by the Abolition of Feudal Tenure etc (Scotland) Bill. During its consideration of feudal real burdens, the Scottish Law Commission readily recognised that the general law of real burdens and conditions on property also required modernisation and simplification. It carried out work on the subject and issued a discussion paper in October 1998.

The Executive is committed to introducing a second bill to implement the recommendations in that report. The subject has two corresponding halves. The Abolition of Feudal Tenure etc (Scotland) Bill will abolish many feudal burdens but allow some to be saved and converted into ordinary real burdens. The title conditions bill—as it is to be known—will then introduce a new and modern system for all burdens or conditions on land. Taken together, the two bills will effect a radical reform of this area of Scots law. Obviously, it would have been easier for us all if we could have seen both bills together, but there are reasons why we did not want to hold up the Abolition of Feudal Tenure etc (Scotland) Bill.

I said that I would say more about the date of abolition of the feudal system. As I have explained, superiors will be given the opportunity to register notices if they wish to preserve certain burdens. They will also be given the opportunity to register notices if they wish to claim compensation for feuduty and the loss of development value burdens. If they wish to claim compensation for feuduty, they will have to prepare notices to be served. That will, inevitably, take time.

Superiors will have to identify the cases in which they want to preserve burdens or claim compensation. They will then have to go through the mechanics of registration. The length of the transitional period is a matter of some concern. The commission recommended no less than two years. We took the view that if we were to wait for the publication of the title conditions bill, we would postpone the date on which the transitional period could start and, therefore, the date on which the feudal system would finally be abolished. That is why we have proceeded now with the Abolition of Feudal Tenure etc (Scotland) Bill.

Considering one bill in advance of a sight of the other might not be ideal, but it is possible that the title conditions bill will have to amend the Abolition of Feudal Tenure etc (Scotland) Bill. There may need to be further consideration of how the two bills are linked, and the commencement dates may need to be re-examined. I assure Parliament that we will not commence any aspect of the Abolition of Feudal Tenure etc (Scotland) Bill until we are certain that the time is right to do so. As we proceed through stage 2, we will keep the committee in touch with Law Commission developments.

The Executive is aware that the bill requires some further amendment during its passage, but much of that will be largely technical—I do not think members will wish to be troubled with that at this stage.

For the purposes of rule 9.11 of standing orders, I advise the Parliament that Her Majesty and His Royal Highness the Prince of Wales as Prince and Steward of Scotland, have been informed of the purport of the Abolition of Feudal Tenure etc (Scotland) Bill, and have consented to place their prerogatives and interests, so far as they are affected by the bill, at the disposal of the Parliament for the purposes of the bill.

I know that these matters have sounded very technical. They are technical, but at the heart of them is a very simple proposition: after centuries, we are moving towards the abolition of the feudal system. Today's debate marks an important milestone on that journey.

I move,

That the Parliament agrees to the general principles of the Abolition of Feudal Tenure etc. (Scotland) Bill.