Consequences of conversion
Section 5: Extinction of certain rights and obligations
25.Subsection (1) extinguishes all rights and obligations arising from the qualifying lease and any superior lease. The rights and obligations may be set out expressly in a deed or be implied by virtue of the landlord and tenant relationship. There is a saving for any rights or obligations that survive the appointed day in one form or another under sections 6 and 7 and Part 2.
26.Subsection (2) provides an exception for personal rights and obligations.
27.Subsection (3) makes it clear that the obligation to pay rent for any period before the appointed day remains enforceable.
28.Subsection (4) prevents any proceedings being raised or continued after the appointed day for the enforcement of any rights and obligations extinguished by subsection (1). It does not matter that the breach occurred before the appointed day. Any decree or interlocutor already pronounced does not survive the appointed day. For instance, an interdict enforcing a use restriction would cease to apply.
29.Subsection (5) provides that subsection (4) does not apply to rights and obligations which survive the appointed day under sections 6 and 7 and Part 2. It will also remain possible after the appointed day to enforce a right to recover damages or a right to the payment of money (such as unpaid rent due before the appointed day). Subsection (5) further provides that subsection (4) does not apply to a right of irritancy. (“Irritancy” means a landlord’s right to terminate a lease). Section 73 contains specific provision on the extinction of right of irritancy in certain leases.
Section 6: Subordinate real rights, reservations and pertinents
30.This section sets out the subordinate real rights and encumbrances that burden the right of ownership of the converted land from the appointed day. It also makes provision in respect of pertinents (matters belonging to the lease) and reservations (matters excluded from the lease). In this section, “converted land” is the land in which a right of ownership is created through the conversion of a qualifying lease under section 4(1)(a).
31.Subsection (2) lays down that on the appointed day subordinate real rights over the qualifying lease (such as a standard security or a mortgage) become subordinate real rights over the right of ownership.
32.Subsections (3) and (4) provide that the right of ownership created under section 4 is subject to any encumbrances and subordinate real rights, other than heritable securities, proper liferents (a right to use and enjoy a thing during life) or any superior leases, which burdened the head landlord’s ownership immediately before the appointed day. Servitudes, real burdens, and public rights of way, for example, will all continue. Subsection (4) does not affect the personal obligation of the debtor under the heritable security.
33.Subsection (5) defines the extent of the converted land by reference to pertinents and reservations of the lease. On the appointed day, a pertinent of the qualifying lease becomes a pertinent of the converted land provided that it is of a type that is recognised as a pertinent of land. Excluded from the converted land is anything reserved from the qualifying lease (or any superior lease), provided that it is capable of being held as a separate tenement in land (i.e. capable of being owned separately). If the reservation is not capable of being held as a separate tenement, it is disregarded on conversion and forms part of the converted land.
34.The main example of a reservation is a minerals reservation. Where the minerals are not already separate tenements, they become separate tenements on the appointed day when ownership of the surface is separated from ownership of the minerals. The reservation clause will continue to regulate the relationship between the owner of the minerals (the former landlord) and the owner of the surface (the former tenant).
35.Subsection (5) interacts with section 8. Under section 8 a notice may be registered converting reserved sporting rights into a separate tenement. If a notice is registered, the sporting rights will not form part of the converted land. If a notice is not registered, the converted land will include the sporting rights. If such rights have been leased out separately, the lease in question is not affected by conversion of the qualifying lease but there would be a change of landlord.
Section 7: Creation of servitudes on conversion
36.The effect of this section is to create those servitudes (e.g. rights of access over neighbouring land to maintain a water supply or a drainage pipe) which would have been created (whether expressly, impliedly or by positive prescription) had the deeds referred to been a conveyance of land leading to separation of ownership.
37.The deeds referred to are the qualifying lease, any lease higher in the hierarchy of leases (where there is such a hierarchy), or any partial assignation relating to the qualifying lease. The latter, for example, covers the case where a single lease is divided into two by assignation. The assignation may include rights and obligations which affect the part of the lease that is assigned and also the part that is retained.
Section 8: Conversion of reserved sporting rights
38.This section provides for landlords to preserve sporting rights: i.e. rights to game and to fish.
39.Section 8 does not apply to exclusive rights to fish for salmon. Exclusive rights to fish for salmon are separate tenements in land: i.e. they are capable of being owned separately from the land or river in which they subsist. This means that either exclusive rights to fish for salmon are included in the qualifying lease or they are not. Given this, no special provisions are required for exclusive rights to fish salmon.
40.Subsection (2) provides for the execution and registration of a notice by the landlord.
41.Subsection (3) sets out requirements as to the content of the notice. This includes the terms of any counter-obligation to the right.
42.Under subsection (4), registration can be either against the interest of the landlord (i.e. the owner of the land) or the tenant of the qualifying lease.
43.Subsections (5) and (6) provide that the notice must be sworn or affirmed before a notary public. In the normal case this must be done personally by the landlord but some exceptions are set out in subsection (6).
44.Subsection (7) converts the sporting right into a separate tenement on the appointed day provided that the requirements of the section have been complied with and the right is still enforceable. It also prescribes the content of the separate tenement.
45.Where the right has been expressly reserved in the lease, the operation of subsection (7) clarifies the types of game which may be included in the right to take game. First of all, it comprises the rights and obligations set out in the lease in question. Secondly, insofar as consistent with those express rights etc. it comprises, in the case of game, an exclusive right to take hares, pheasants, partridges, grouse and ptarmigan, and, in the case of fishing, an exclusive right to fish for freshwater fish. Freshwater fish is defined in section 80. The definition mirrors that in section 69(1) of the Salmon and Freshwater Fisheries (Consolidation) (Scotland) Act 2003.
46.Subsection (8) qualifies subsection (7) by providing that any exclusive right to game is subject to the right of the occupier under the Ground Game Act 1880 to take or kill hares and rabbits.
47.Subsection (9) provides that the separate tenement continues to be subject to any existing counter-obligation. It also provides that a counter-obligation is extinguished on the extinction of the right.
48.Subsection (10), as read with the definition of landlord in section 80, makes clear that only the owner of the land can serve a notice converting the right into a separate tenement. Where the right is held in common each co-owner must sign the notice.
49.The section is subject to section 75 which deals with pre-registration requirements for notices.
Section 9: Further provision for section 8
50.Subsection (1) provides that where a right affects more than one qualifying lease a landlord has to register a separate notice in respect of each lease. However, where the same qualifying lease is affected by different rights subsection (2) allows one notice to be used.
