Diploma in Professional Legal Practice (DPLP) Conveyancing and Property Transactions Flashcards

24 sample cards from the Conveyancing and Property Transactions deck

Sampled from the end of the deck, so these are different cards from the ones shown on the syllabus page.

1. What is a servitude in Scots law?

   A real right held by the owner of one property (the dominant tenement) to make limited use of, or restrict use of, a neighbouring property (the servient tenement), such as a right of access, way, or drainage.

2. State three ways a positive servitude can be created.

   By express grant or reservation in a registered deed; by prescription (open, peaceable use as of right for 20 years); and by implied grant or reservation (e.g. on division of a property where reasonably necessary).

3. What is the prescriptive period for creating a servitude by positive prescription in Scotland?

   $20$ years of continuous, open, peaceable possession as of right, under the Prescription and Limitation (Scotland) Act 1973.

4. Distinguish a servitude from a real burden.

   A servitude confers a right of limited use over neighbouring land and can arise in several ways (including prescription and implication); a real burden imposes an obligation/restriction and must be expressly created in and registered in a deed. Servitudes are generally praedial use-rights; burdens are conditions of title.

5. Under the Title Conditions (Scotland) Act 2003, how can a real burden or servitude be varied or discharged?

   By a registered 'deed of variation or discharge' agreed with the benefited proprietor(s) (minute of waiver), by 'sunset rule' for burdens over 100 years old, or by application to the Lands Tribunal for Scotland.

6. What is the 'sunset rule' for real burdens under the 2003 Act?

   A burden that is at least $100$ years old (and not a conservation, maritime or facility/service burden) may be discharged by the burdened owner registering and intimating a notice of termination, subject to the right of benefited owners to object to the Lands Tribunal.

7. On what grounds may the Lands Tribunal for Scotland vary or discharge a title condition?

   Applying statutory factors such as change in circumstances, the burden being unduly burdensome compared to its benefit, whether it impedes reasonable use of the land, its age, and the purpose it was intended to serve — i.e. whether it is reasonable to vary or discharge it.

8. What is a 'tenement' as defined by the Tenements (Scotland) Act 2004?

   A building or part of a building comprising two or more related but separately-owned flats divided horizontally from each other (i.e. flats one above another sharing the structure).

9. Under the Tenements (Scotland) Act 2004, when does the 'Tenement Management Scheme' (TMS) apply?

   It applies as a default scheme to regulate management and maintenance of the tenement to the extent that the title deeds do not make adequate provision (i.e. it fills gaps left by the titles).

10. Under the Tenement Management Scheme, how are 'scheme costs' for shared maintenance generally allocated between flats?

    Generally equally among the flats sharing liability; but where the floor area of the largest (relevant) flat is more than $1\tfrac{1}{2}$ times that of the smallest, liability is apportioned according to floor area instead.

11. Under the default Tenements (Scotland) Act 2004 boundary rules, who owns the 'solum' and the roof of a tenement (absent contrary title provision)?

    The solum (ground beneath) and the airspace/roof are generally owned with the bottom and top flats respectively; the roof goes with the top-floor flat and the solum with the ground-floor flat, though structural parts and maintenance may be shared as 'scheme property'.

12. Compare an 'asset sale' and a 'share sale' in a commercial property/business transaction.

    In an asset sale the buyer purchases specific assets (e.g. the property itself), leaving liabilities behind and triggering a conveyance of the heritable title. In a share sale the buyer acquires the shares in the company that owns the property, so the property stays in the same legal owner — affecting LBTT, due diligence and warranties.

13. In a commercial property purchase, what is the purpose of 'commercial property standard enquiries' / due diligence?

    To investigate title, leases, planning, environmental issues, VAT status, service charges and statutory compliance so the buyer fully understands the property's legal and physical position before committing — risk allocated through the contract, warranties and price.

14. What is 'irritancy' in a Scottish commercial lease?

    The landlord's right to terminate the lease early for the tenant's breach (e.g. non-payment of rent or insolvency); monetary irritancy is subject to statutory pre-warning notice requirements under the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985.

15. What is an 'FRI' lease in commercial leasing?

    A Full Repairing and Insuring lease, under which the tenant bears the full cost of repairing/maintaining the premises and reimbursing the landlord's insurance, so the landlord receives a 'clear' rent free of property outgoings.

16. What is a 'standard security' in Scots law?

    The only competent way to create a fixed (heritable) security over land in Scotland, under the Conveyancing and Feudal Reform (Scotland) Act 1970, by which a creditor (lender) obtains a real right in security over the debtor's property to secure a loan.

17. What are the two forms of standard security under the Conveyancing and Feudal Reform (Scotland) Act 1970?

    Form A — which combines the personal obligation to repay and the security in one deed; and Form B — the security deed alone, where the personal obligation to repay is contained in a separate document.

18. What are the 'standard conditions' applicable to a standard security?

    The conditions set out in Schedule 3 to the 1970 Act, which regulate the rights and duties of debtor and creditor (e.g. maintenance, insurance, default), and which apply unless validly varied (some cannot be varied).

19. What steps must a lender take to enforce a standard security on a residential property in default?

    Serve the prescribed default notices (e.g. calling-up notice or notice of default), comply with pre-action requirements, and obtain a court order for repossession (under the 1970 Act as amended by the Home Owner and Debtor Protection (Scotland) Act 2010) before exercising the power of sale.

20. What is a 'ranking agreement' between standard securities?

    An agreement regulating the order of priority in which two or more securities over the same property rank for payment out of the sale proceeds, varying the default rule that securities rank by date of registration.

21. What is Land and Buildings Transaction Tax (LBTT)?

    The devolved Scottish tax (replacing UK Stamp Duty Land Tax from April 2015) charged on the acquisition of land and buildings in Scotland, administered by Revenue Scotland and calculated on a progressive, banded basis.

22. How is LBTT calculated across its bands?

    It is progressive: each portion of the chargeable consideration falling within a band is taxed at that band's rate and the amounts summed, so the total is $\text{LBTT}=\sum_i (\text{amount in band}_i)\times r_i$, not a single flat rate on the whole price.

23. What is the Additional Dwelling Supplement (ADS) under LBTT?

    An extra LBTT charge payable on the purchase of an additional residential dwelling (e.g. a second home or buy-to-let), calculated as a flat percentage of the total price on top of the standard residential LBTT.

24. Within what period must an LBTT return be made and the tax paid after a notifiable transaction?

    An LBTT return must be made to Revenue Scotland, and the tax paid, within $30$ days of the effective date of the transaction (usually the date of settlement/entry).

What this deck covers

Conveyancing and Property Transactions flashcards FAQ