Philip Buchan, Associate with Murray Beith Murray, writes an article entitled ‘Countryside building plots – sales and acquisitions’ in this month’s edition (December 2018) of Scottish Land & Estates LandBusiness magazine.
Read the full article below:
‘When a plot of land is sold from a farm or estate and the remainder is retained by the seller, a relationship in law is almost invariably created between the seller and the purchaser and their respective successors in title. The rights and conditions that benefit and burden the plot owner and the landowner regulate the relationship between the parties and yet, despite the importance, it is surprising how often there is either a lack of awareness of such rights and conditions or a lack of clarity in the provisions themselves leading to dispute.
Preferably, the landowner should produce a deed plan that meets the requirements of the Registers and marks out the site clearly in accordance with this. A planning application site plan may be suitable if it is sufficiently detailed. Otherwise, a plan can be obtained from a mapper. Either way, the legal agent should obtain a plans report to check that the boundaries of the plot do not conflict with neighbouring registered titles or the features on the Ordnance Survey Map.
If the plot is being marketed for sale, it is wise to consider and document full details of the intended rights and title conditions. The sales particulars or advertisements should alert potential purchasers that the sale is subject to a set of title conditions that are available from the agents. Alternatively, if it is an off-market or private deal the title conditions should be detailed in heads of terms. Any proposal for a clawback should also be mentioned at the earliest possible stage.
If the plot is not adjacent to a public road, a servitude right will be required over the neighbouring property for access. If this is not wholly over the seller’s own property, the seller should be sure he has the necessary right to transfer to the purchaser. The access right should be sufficient in scope to allow the purchaser to use the plot for his intended purpose, including the construction phase.
Planning consents often contain conditions which require road widening or resurfacing or the installation of a bell-mouth, visibility splays, passing place(s) or lay-by(s). The purchaser may require rights from the landowner so that he can comply with these conditions.
In so far as they are located outwith the boundaries of the plot, the plot owner will require rights from the landowner for pipes, drains, septic tank, cables etc. Similar considerations arise as in relation to access. There is a balance to be achieved between giving the plot owner freedom to install his services and safeguarding operations on the landowner’s land.
It may be necessary to create real burdens for the installation of water meters or requiring the landowner to enter into an agreement with an electricity or telecommunications distributor, or to carry out works such as undergrounding cables or relocating an electricity transformer.
In so far as services which currently - or will after installation - serve the landowner’s land are located within the boundaries of the plot, rights should be reserved which allow the landowner to use them. It is a principle of Scots law that the benefited owner cannot increase the burden on the burdened property by increasing the use of a servitude right so the landowner should be advised to consider carefully whether he or his successors in title may require to reserve rights over the plot for future development on his land.
Responsibility for the cost of maintaining the access road and services should be clearly documented. ‘According to user’ may be difficult for a legal agent to ascertain without input from the landowner’s other advisors but specifying e.g. a one-third share can become unfair if there is further development. It should also be clear who will actually arrange the maintenance work.
The sale deeds should direct who is responsible for erecting and thereafter maintaining the boundary features. The specification of the features e.g. wall, stock-proof post and wire fence, height etc. should be stated together with the timescale for erecting them. A landowner may wish to make a plot owner solely liable for fences.
It is important that any restrictions on use e.g. single house, design, pre-emption (right of first refusal), are validly created and fit for purpose. Creating too many conditions may reduce the appeal of the plot to potential purchasers. Under certain circumstances, land obligations may be lost or altered or, subject to determining factors, varied or discharged on application to the Lands Tribunal.
If a plot is being sold for a single house but may have potential for further development a clawback arrangement should be considered. The terms of the arrangement will dictate whether it is more appropriate to do this via an agreement and Standard Security by the plot owner rather than a title condition.
If dispute is to be avoided, careful consideration is required by the parties at an early stage.’
At Murray Beith Murray, our rural property lawyers have considerable experience in plot sales and acquisitions. For further information about this, or any other rural property matter, please get in touch using our Contact Form or call us on 0131 225 1200 . Our highly personal service reflects our culture, which is centred on integrity, trust and expertise, and the guidance we provide has been designed to be an investment rather than an expense.