Bell & Scott Property Update, November 2007

Welcome to the November 2007 issue of Bell & Scott’s Property Update.

In this month's issue we comment on a case where the terms of a lease meant that the landlord could not charge the tenant for the new roof he put on. Then we comment on the House of Lords’ final word in the drawn-out battle between the Moncrieffs and the Jamiesons over parking rights.

We also update you on (1) the Environment Agency’s carbon footprint measuring tool for the construction industry; (2) new regulations for SDLT relief on zero-carbon homes; (3) the Scottish Government’s new guide to developers on controlling light pollution and reducing lighting energy consumption; (4) proposals for fixed penalties on developers who flout planning laws; and (5) the Housing Task Force calling for more homes in Edinburgh and the Lothians.

Recent Decisions

In the March 2005 issue of Property Update, we commented on the epic case of Moncrieff v Jamieson which had made its way from Lerwick Sheriff Court to the Court of Session in Edinburgh. Not happy with the decision of Scotland’s most senior civil court, the Jamiesons took their cause to the House of Lords. The aim of the Jamiesons’ campaign was to prevent the Moncrieffs parking on Jamieson land.

The origins of the grudge are straightforward:

The Jamiesons own a large and isolated bit of land by the sea on Shetland. They sell off part of it to a Mrs Stuart in 1973. She buys it with a view to renovating and converting the existing shop buildings into her home. In the disposition, the Jamiesons give Mrs Stuart and her successors, a servitude of vehicular access to her property over retained Jamieson land. Due to the location of the piece of land sold, no vehicle can get onto or park on it. Mrs Stuart can stop on Jamieson land for a short time near the entrance to her property, to let off or pick up passengers and to load and unload goods. She sells the land to the Moncrieffs and over the years they develop the buildings into a family home. The Moncrieffs go to and fro in their cars over the Jamieson land and park on it for many years. Then relations sour.

The Jamiesons maintain that the Moncrieffs have no right to park and that a right of parking is not included in the right of vehicular access. The Moncrieffs argue that the right to park is necessary in order to make the right of vehicular access useful and, therefore, the right to park was included in the right of vehicular access granted in 1973.

The view of the courts in Scotland was that the right of access necessarily carried with it a right to park vehicles to a limited extent on the Jamieson land. The five Law Lords came to the same conclusion.

Stephen McDonagh, Associate in our Knowledge Management Team comments:

To every Shetlander, his land is his castle. Ten years of litigation with weighty QCs embroiled in appeals from one judge to three in the Court of Session and then to five in the House of Lords - it seems incredible that neighbours could have stuck with their causes and endured such colossal expense for something which called out for an early commercial agreement on the ground.

Such is the nature of servitude or title conditions disputes. Quite often, it is not the property law issue itself which brings people to the court door. The legal issue is only the weapon chosen for the battle which follows a fallout between neighbours – involving wayward pets or children. In this case, the battle lines were drawn after one of the Jamiesons piled up stones for his garden wall in the area on which the Moncrieffs had openly and peacefully parked for some time. Once the trenches have been dug, it is difficult to surrender ground.

Put briefly, the Court decided that there would be no point in having a right of vehicular access if you drove to your own property, but then had to turn your car round and drive straight back out again. That would have been obvious to the original owners, so the right to park was included in the right of access from the original date of the grant of the access.

Legal academics doubted that the common law of Scotland would ever recognise any new servitudes beyond those on a restricted list developed over centuries from Roman law principles. The list did not, until the outcome of this case, include a servitude of parking.   The conclusions of the House of Lords now mean that:

• Scots law recognises a servitude right of parking.
• A vehicular right of access may, in certain circumstances, carry with it a right to park on the land to which the right of access applies.
• On the grant of any right of access it will be important to clearly set out whether this includes a right to park or not.
• Depending both on the circumstances and on the wording of the grant, any existing rights of vehicular access may include an implied right to park.

The unusual geography of the Moncrieff land, lying as it did at the foot of a steep cliff with the Jamieson land stretching from the top of that cliff to the public road, meant that no vehicle of any kind could have parked anywhere but on the Jamieson land. It was this that compelled the judges to decide that a right to park had to be implied if the right of access was to be effective.

We are unlikely to see a charge to court by parties trying to argue they can park on the private roadways over which they take access. Nor will we be advising clients to buy a property having access but no place to park on the basis that the right of access is sufficient. Issues with parking are easily avoided by carefully considering the rights required to use a particular property and ensuring that these are in place prior to purchase. Far better to consider the cards carefully before you place your money.

A full text of the House of Lords’ decision is available on its website accessible here

Sticking to new leaves bad taste for Carmel

Carmel Southend Ltd v Strachan & Henshaw Ltd

Carmel leased industrial premises to Strachan in 1989 for a period of 15 years. The lease required Strachan to hand back the premises to Carmel, at lease end, in “good and substantial repair and condition”. In 2000, Strachan sublet the premises to Metso. Metso occupied the premises until the lease ended in December 2004. Metso then negotiated and signed a direct lease with Carmel on a full repairing basis. At the end of Strachan’s lease, Carmel claimed that Strachan had not complied with the repairing obligation under the lease and that it was obliged to put the roof of the premises in proper repair and condition. Strachan accepted that it had a liability in respect of the roof, but disagreed about the nature of the works required to meet its obligation.

The roof was made up of corrugated sheeting panels, with roof lights to let in light. Those roof lights made up about 10% of the roof area. It was clear that most of the sheeting panels were, actually, in good order as a result of work done during the lease. The same could not be said for the roof lights, around which there were ongoing water leak problems. Carmel had had a Schedule of Dilapidations drawn up initially requiring patch repairs to a few individual sheeting panels and replacement of the roof lights. Although the surveyor did recommend that Carmel consider renewal of the roof, he distinguished that recommendation from the actual extent of the work which Strachan was obliged to do to meet its lease obligation. However, Metso were not prepared to take on a new lease on a full repairing basis without the roof being totally renewed or re-clad. Carmel, therefore, instructed a re-clad. It then sought to justify claiming the whole, as opposed to the more limited patch up costs, from Strachan. Strachan insisted that the patch repairs were sufficient to comply with its lease obligation.

Judge Coulson, in the English Technology and Construction Court, decided that patch repairs were adequate to meet the repairing obligation. He set out some general points to assist in determining the extent of a tenant’s obligation to hand back premises in “good and substantial repair and condition” as follows:

1. The obligation did not require tenants to put property back in perfect repair or pristine condition;
2. The standard of repair required is that of an intending occupier who judges repair reasonably with reference to his intended use of the premises;
3. Keeping a property in “good and substantial repair and condition” is different and more extensive than an obligation to repair;
4. If there is more than one method of repair, each of which complies with the required standard, it is up to the paying tenant to make the choice. If one method costs less, the landlord can only recover the lower cost option;
5. If the options are replacement or repair (both of which meet the standard), replacement would only be required if repair is nor reasonable or sensible; and
6. The standard of repair must take into account the reasonably minded incoming tenant taking a lease on the same terms. The court may take into account the actual stance of the incoming tenant. However, the standard is objective which does not depend on what the actual tenant would accept.

The fact Carmel had needed to do more than patch repairs to achieve re-letting to Metso did not mean that Strachan had to pay for that additional cost. Patch repairs were not futile, not least where Carmel’s own surveyor had considered them appropriate a matter of months before the lease expiry. It was not impractical to carry out patch repairs.

Sheila Webster, Partner, and Head of our Property Dispute Resolution Team comments:

The precise meaning of the various repair and maintenance obligations found in leases is an issue which continues to throw up new cases.

This English case, however, is particularly useful given the summary of general principles which can be applied when trying to assess what a tenant has to pay for at lease expiry. Although the English assessment of damages for breach of repair obligations can be very different from what is done in Scotland, these principles seem eminently sensible and are, in my view, reasonably likely to be applied or at least considered by a Scottish court looking at a similar obligation.

Often disputes over the nature of works required to comply with lease repair obligations do end up being about whether roofs require replacement or patching, so the reminder that patch repairs may in certain circumstances be perfectly acceptable is worth bearing in mind.

It is also important to remember that the incoming tenant’s demands are not an automatic method of assessing the obligations of the outgoing tenant. The West Castle v Scottish Ministers decision, on which we commented in May 2004 (accessible here), confirms that a similar approach could be expected from Scottish courts, finding that it is necessary to consider the requirements of the kind of tenant who might be expected to take a similar lease on the same terms.

A full text of the decision is available on the British and Irish legal Institute website accessible here.

News

Carbon footprint calculator launched for the construction industry

The Environment Agency has developed a "carbon footprint calculator" which allows it to measure the amount of carbon dioxide generated by its construction projects. It has made the calculator available to other construction companies, consultants and government bodies.

The calculator enables carbon dioxide reductions to be built in at the planning and design stages of a construction project. For completed projects, it can also be used to estimate the amount of carbon dioxide emitted by:

The raw materials used.

The transportation of raw materials and employee travel.

Site activities, such as earthworks and excavation.

The tool also allows comparison of waste management options and savings to be made.

The calculator can be accessed here

HM Revenue and Customs has confirmed that The Stamp Duty Land Tax (Zero-Carbon Homes Relief) Regulations 2007 have been laid before the UK Parliament. The Regulations will be made available to the public in the course of November. It is understood that they will set out the tests that will have to be satisfied before a dwelling can qualify as a "zero-carbon home" (ZCH) and how the relief from stamp duty land tax will operate.

The relief was introduced by the Finance Act 2007, which made provision for the Treasury to make regulations introducing a relief on the "first acquisition" of a new ZCH and gave authority for the Regulations to have retrospective effect. Once the Regulations have been made, they will apply to house purchases that took place on or after 1 October 2007.

The housing and construction industries are concerned that the definition of ZCH in the Government's Code for Sustainable Homes will not match the definition in HMRC's Regulations. Watch this space!

Controlling Light Pollution and Reducing Lighting Energy Consumption

The Scottish Government has published a Guidance Note to encourage developers, architects and lighting designers to consistently provide non obtrusive and energy efficient lighting designs. There are no legislative controls as yet on light pollution in Scotland. However, the Scottish Government considered following the example of England and Wales by adding artificial light to the list of statutory nuisances under Part III of the Environmental Protection Act 1990. That option remains open to it if the Guidance Note proves to be insufficient.

The Guidance Note can be accessed here

Fixed penalties for developers who flout planning laws?

The Scottish Government proposes that developers who flout planning laws may pay fixed penalties of up to £5000. This is just one of proposals on which the government in Scotland is consulting between now and February 2008 as part of the regulatory regime to bring in the provisions of the Planning (Scotland) Act 2006.

Draft regulations attached to the consultation paper set out the detail for implementation of key provisions of the new development planning regime.

Bell & Scott will keep you posted on the detail of those proposals as the consultation progresses.

The directions on how to contribute are contained in the consultation papers accessible here

Task Force calls for more homes for Edinburgh and the Lothians

Action has been called for to speed up the building of new housing in Edinburgh and the Lothians.

The region was put under the spotlight last week at the second meeting of the Scottish Government's Housing Supply Task Force.

House builders left the committee in no doubt over the problems they faced in securing consent for new sites.

Communities and Sport Minister, Stewart Maxwell, chairing the meeting, said that he expected to see “those with the responsibility for delivering new homes in this area to provide reassurances that all the stops really are being pulled out."

At its next meeting the task force will examine housing supply issues in rural areas.

A review of the second meeting of the Task Force is available on the Scottish Government’s website accessible here.