Agritourism And Real Burdens – Unlocking The Development Potential Of Rural Land

What real burdens could rural landowners face when diversifying rural land for agritourism?

With the summer season in full swing, many landowners are exploring ways to make the most of their land for agritourism. As this continues to grow in popularity, diversification of rural land and estates to generate new income streams is becoming more common. From glamping sites and wedding venues to festivals and children's outdoor experiences, the potential for development of rural land for agritourism is vast. However, for many landowners, their ambitions may be affected by real burdens which limit the use that can be made of the land. These burdens can pose a significant obstacle to development.

What is a real burden?

In short, a real burden is an obligation affecting land which usually requires something to be done or not to be done. For example, a burden may exist restricting the use of the land to agricultural only, or preventing the land being used for the purpose of brewing alcohol or alcohol sales. Other common burdens may prevent landowners from lopping trees or provide restrictions on sub-division or trade. Some may prevent any commercial use being made of the land at all. Real burdens are governed by the Title Conditions (Scotland) Act 2003 ("2003 Act").

Real burdens:

• run with the land and can be enforced against any owner;

• must be praedial, which means that they must benefit the property and not the person owning the property which has the benefit of the burden;

• cannot be contrary to public policy;

• cannot create a monopoly;

• cannot be illegal; and

• cannot be repugnant with the ownership of the burdened property, for example a burden cannot prevent someone selling or leasing their property.

Understanding what options exist for dealing with real burdens to allow development is crucial for anyone looking to unlock the full development potential of their land.

1. Title and interest

Section 8 of the 2003 Act provides that only those having both title and interest to enforce a real burden can do so. If, for example, a rural landowner wishes to diversify and open a glamping site on an estate contrary to a burden which states that the land may only be used for agricultural use, any party wishing to enforce the burden and prevent the development must show they have both title and interest to do so.

Title

Title to enforce is tied to the property having the benefit of the burden. Those having title are set out in Section 8(2) of the 2003 Act. It is usually the owner of the benefited property (and this extends to tenants, liferenters and non-entitled spouses) but may in some cases be a developer or local authority.

Interest

Section 8(3) of the 2003 Act provides that someone has interest to enforce a real burden if the breach of the burden is resulting in or will result in material detriment to the value or enjoyment of the benefited property.

It may be open to a landowner to establish that a neighbour does not have title and interest to enforce a burden.

2. Negotiate a consensual discharge

It is always open to the person having the benefit of the burden to grant a discharge or a variation of the burden.

3. Sunset rule

If the burden is very old, the owner of the burdened property may be able to rely on the "sunset rule", a special type of termination procedure brought in by Section 20 of the 2003 Act. This allows the owner of a property burdened by certain real burdens created more than 100 years ago to discharge it. The sunset rule is not available for certain types of burdens including conservation burdens, maritime burdens, facility burdens, and service burdens.

A notice needs to be drawn up and intimated to the owners of the property having the benefit of the burden, who have eight weeks to decide whether to apply to the Lands Tribunal for Scotland for a renewal of the burden. If the application to preserve the burden is successful, the burden survives. Where no application to preserve is made, the notice of termination can be registered with Registers of Scotland provided it is endorsed with a certificate from the Lands Tribunal conforming the lack of applications to preserve. When endorsed and registered the burdens are extinguished.

4. Negative prescription

If a real burden is breached to any extent without challenge for five years running from the date of the breach, it is extinguished to the extent of the breach in terms of Section 18 of the 2003 Act. There must be no relevant claim or a relevant acknowledgement made and it is only extinguished to the extent of the breach.

5. Acquiescence

Acquiescence, both in terms of the common law and by virtue of the operation of the acquiescence provisions in Section 16 of the 2003 Act may also extinguish a burden.

Acquiescence can occur where a benefited proprietor stands back and watches while the burden is breached and chooses not to do anything about it. It is very difficult for them to later try and challenge the breach.

Section 16 of the 2003 Act sets out specific circumstances that must be met for acquiescence to prevent a benefited proprietor objecting:

• material expenditure is incurred by the burdened proprietor;

• the benefit of the expenditure would be substantially lost if the burden were now to be enforced;

• either the benefited owner consented to the work – and the consent can be formal or informal – or did not object within twelve weeks after substantial completion; and

• the work is sufficiently obvious that those with the right to enforce knew, or should have known, about it.

If these criteria are satisfied then the burden will be extinguished to the extent of the breach.

6. Confusion

Confusion naturally prevents the enforcement of the burden but the burden isn't extinguished – it is suspended so that if the properties come into separate ownership in the future, the burden can be enforced. This is in terms of Section 19 of the 2003 Act.

7. No interest to enforce

Section 17 of the 2003 Act provides that a real burden which is breached at a time when there is nobody with an interest to enforce is extinguished to the extent of the breach.

8. Application to the Lands Tribunal for Scotland

The Lands Tribunal has the power to discharge or vary real burdens and other title conditions such as servitudes in terms of Section 90(1)(a) of the 2003 Act.

If any application to the Lands Tribunal is unopposed by any interested parties, it is granted as of right (Section 97(1) of the 2003 Act), although this is only the case for certain real burdens including neighbour burdens, but not servitudes or certain other kinds of personal real burdens (Section 97(2)).

On the other hand, if an application was opposed by any interested parties then the Lands Tribunal can only grant the application if, having regard to certain factors set out in Section 100 of the 2003 Act, it is reasonable to do so. These factors are:

1. any change in circumstances since the title condition was created (including, without prejudice to that generality, any change in the character of the benefited property, of the burdened property or of the neighbourhood of the properties);

2. the extent to which the condition-

   1. confers benefit on the benefited property; or

   2. where there is no benefited property, confers benefit on the public;

3. the extent to which the condition impedes enjoyment of the burdened property;

4. if the condition is an obligation to do something, how-

   1. practicable; or

   2. costly,

   it is to comply with the condition;

5. the length of time which has elapsed since the condition was created;

6. the purpose of the title condition;

7. whether in relation to the burdened property there is the consent, or deemed consent, of a planning authority, or the consent of some other regulatory authority, for a use which the condition prevents;

8. whether the owner of the burdened property is willing to pay compensation;

9. if the application is under section 90(1)(b)(ii) of the 2003 Act, the purpose for which the land is being acquired by the person proposing to register the conveyance; and

10. any other factor which the Lands Tribunal consider to be material.

There is no order of ranking and the Lands Tribunal will weigh up all of the factors as a whole. It is not required to assess whether the application succeeds or fails under each factor. The Tribunal will look at the evidence about the various factors and then weigh them up as a whole, judging the strengths and weaknesses of the application and whether it is reasonable to grant it.

Every application is different and the weight to be given to any factor will always depend on the circumstances.

An order from the Tribunal varying or discharging the burden can be registered in the Land Register of Scotland.

Conclusion

Agritourism presents an exciting opportunity for landowners to diversify and future-proof their income but the presence of real burdens can create a legal hurdle which needs to be overcome before development can commence. Seeking legal advice on the options at an early stage is key as it may be possible to vary or discharge the burden, or design a work around that does not fall foul of the burden, to allow development to proceed.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.