Scottish Law Commission (Reports)

 


Appendix C

Survey of long leases

Aim of the survey

1. The aim of the survey was to investigate the incidence and use of long leases in Scotland.

Methodology

2. During the period 20 March to 26 April 2000 information was obtained on 2679 leases from the Land Register of Scotland for the counties of Ayr, Clackmannan, Lanark and Renfrew.^[1] The information was then stored on a computer database.^[2] Some of the leases comprised a part only of the property originally leased, and as a result there is likely to have been a certain amount of double-counting, with the survey taking in both (or some or all) parts of an originally undivided lease and classifying each as a separate lease.
3. Ayr and Lanark were chosen because at the time of the survey carried out for the Guthrie Report in 1951^[3] they were the counties with the most recorded leases in terms of numbers and, in the case of Lanark, as a percentage of all titles in the county.^[4] They have also been operational for the Land Register for some time.^[5] Clackmannan was preferred because it had a high incidence of recorded leases as a percentage of all titles in the county. Although Kirkcudbright and Wigtown had a slightly higher percentage of recorded leases than Clackmannan, Clackmannan was chosen because it has been an operational area for the Land Register for longer.^[6] Renfrew was also chosen for this latter reason,^[7] and while it had a lower percentage of leases, in 1951 Renfrew was ahead of Kirkcudbright and Wigtown in terms of numbers of leases.
4. Table 1 shows the number of leases examined in each county together with a comparison of the numbers which existed in 1951.

	Number of leases examined	% of leasehold titles examined	Number of leases in 1951
Ayr	303	100	1988
Clackmannan	193	100	305
Lanark	1220	25	4153
Renfrew	963	50	655

Table 1: Number of leases examined

It will be seen that the survey examined all leasehold title sheets for Clackmannan and Ayr, one half of the title sheets for Renfrew, and one quarter of the title sheets for Lanark. For practical reasons, the search did not include the Register of Sasines. There is therefore excluded from the survey any pre-existing lease which saw no activity during the period under review of a kind which would induce first registration in the Land Register.

5. Information was taken from the title sheets about:

•    title number

•    date of registration

•    address of property

•    name of original landlord

•    consideration

•    start year of lease

•    duration

•    rent

•    partial assignations and allocations of rent

•    subleases

•    whether the minerals had been excepted.

6. Some information was not available, namely:

•    name of original landlord for 55 leases

•    consideration for 114 leases

•    start year for 57 leases

•    duration for 80 leases

•    original rent for 268 leases

•    whether the lease had been assigned in part or not for 71 leases^[8]

•    whether on a partial assignation the rent under the original lease had been allocated for 27 leases^[9]

•    the amount of the allocated rent, where the rent had been allocated, for 12 leases^[10]

•    whether the lease was a sublease for 244 leases and

•    whether the minerals had been excepted for 37 leases.

7. In addition to searching the Land Register we placed a notice in the Journal of the Law Society of Scotland and also contacted a number of persons with knowledge and experience of long leases. We are grateful to those solicitors and others^[11] who helped us in various ways. 51 further leases were received from this source, and while they are not included in the survey, they were useful in supplementing and explaining the information obtained from the Register.
8. The estate search for that part of the Seafield Estate which is in Moray was also examined as it was known that the Estate had a practice of granting long leases at the end of the 19^th century.

Incidence and distribution

9. The number of title sheets examined (2360) was smaller than the total number of leases (2679). In other words, some title sheets included two or more leases. This was usually because two distinct properties were registered under the same title or because a second lease extended or re-granted the first. In general the total number of leases has been used as the base figure for this survey, but in considering the incidence of leases it is more helpful to focus on the number of title sheets. We know that the total number of title sheets on the Land Register for the counties of Ayr, Clackmannan, Lanark and Renfrew at the time of the survey was 278,200. If the incomplete figures for Lanark and Renfrew are grossed up to 100, we also know that the total number of leasehold title sheets for the four counties was 6454. This means that only 2.3% of property titles in the four counties were held on leasehold tenure. That compares with the 6.9% in the same four counties disclosed by the 1951 survey.^[12] It is, of course, a matter of speculation as to whether the 2000 figures are representative for the country as a whole; but in view of the fact that the 1951 survey found that the average incidence of leases throughout the country was considerably less (only 2.8%) than the incidence in the four counties under scrutiny, it seems likely that 2.3% over-states the incidence of leasehold titles in Scotland today.
10. So far as distribution is concerned, the survey suggests that long leases were used only by certain landed estates,^[13] with the result that it is a normal form of land tenure only in certain distinct geographical areas.^[14]

Initial duration^[15]

11. A number of charts are given at the end of this survey. Chart 1 shows the overall distribution of leases by length while charts 2 and 3 show the same information in closer focus.^[16] On the basis of these charts it appears that:

•    1786 leases had an initial duration of more than 175 years while the remaining 813 leases had a duration of 175 years or less. Thus the ratio of "ultra-long" to "ordinary" leases is approximately 2:1.

•    Most leases were granted for either 20, 25, 60, 99, or 999 years.

•    Only 2 leases were granted for between 126 and 175 years.

•    No leases were granted for between 176 and 199 years.^[17]

•    Only 21 leases were granted for between 200 and 299 years.

•    1765 leases (68%) were granted for 300 years or longer.

•    380 leases were granted for between 700 and 998 years.^[18]

•    1269 leases (49%) were granted for a period of 999 years.

•    The longest duration was 1,000,000 years.^[19]

12. Table 2 gives further information about the most popular lengths of lease.

Initial duration	20	25	60	99	999
Number of leases	60	313	51	60	1269
% of total	2.31%	12.04%	1.96%	2.31%	48.83%
Average number of years to expiry	12	14	50	74	860
Shortest number of years to expiry[20]	1	1	30	55	745
Longest number of years to expiry	18	24	59	98	995

Table 2 Initial duration

Unexpired duration

13. Chart 4 (at the end of this survey) shows the unexpired duration of all leases examined other than

•    86 leases for which there was insufficient information

•    25 leases which may be continuing on tacit relocation, and

•    35 leases with 1645 or more years remaining.

14. Table 3 shows the numbers and categories of lease covered by the various periods.

Unexpired duration (in years)	Number of leases	% of total[21]	Number of leases of 175 years or under	Number of leases of more than 175 years
0 – 49	671	25.88%	671	0
50 – 175	184	7.10%	141	43
176 – 199	7	0.27%	0	7
200 – 500	34	1.31%	0	34
500 – 700	166	6.40%	0	166
700 – 999	1496	57.69%	0	1496
1000 – 1000000	35	1.35%	0	35

Table 3 Unexpired duration

15. It is instructive to bring together the figures on initial and on unexpired duration. These show that most leases of more than 175 years were granted for at least 700 years and have at least 700 years remaining.

Initial duration by year of grant

16. Charts 5 to 10 (at the end of this survey) show the minimum and maximum lengths of leases granted in particular periods of time.^[22] They bring out the popularity of the 999-year lease from about 1750 until about 1930. 151 such leases were granted between 1746 and 1800, and 932 between 1801 and 1900; but only 173 were granted between 1900 and 1974, and a mere 10 since then. The explanation for the post-1974 decline is probably the change in the law to prevent new residential leases for more than 20 years.^[23] Certainly it appears that practically all of the 999-year leases granted between 1900 and 1974 were of residential property.^[24] Conversely the fact that only 10 of the 755 leases in the survey granted since 1974 were 999-year leases suggests that ultra-long leases were not favoured in commercial circles.

Rent^[25]

17. Leases of more than 175 years. The rent is known for around 95% (1705) of the leases granted for an initial period of more than 175 years. Only 26 leases (1.52% of the sample) have a rent of more than £50, and of those a mere 7 have a rent of much more than £100. Of the other leases:

•    1160 (68.03%) have a rent of £5 or less

•    505 (29.62%) have a rent of between £5.01 and £30, and

•    14 (0.82%) have a rent of between £30.01 and £50.

18. Leases of 175 years and under. The rent is known for around 79% (644) of the leases granted for an initial period of 175 years and under. The rents vary enormously ranging from one pence to over a million pounds:

•    99 leases (15.37%) have a rent of £10 or less

•    33 leases (5.12%) have a rent of between £10.01 and £100

•    54 leases (8.39%) have a rent of between £100.01 and £1000

•    133 leases (20.65%) have a rent of between £1000.01 and £5000

•    250 leases (38.82%) have a rent of between £5000.01 and £50000

•    73 leases (11.34%) have a rent of between £50000.01 and £400000

•    1 lease has a rent of £700000, and

•    1 lease has a rent of £1152750.

The rent depends both on the date when the lease was granted and on the nature of the property leased. However, the amount of the rent is not always a reliable indicator of the date of the grant. For example, two 999-year leases were granted in the 1990s for a rent of £1 and £0.01 respectively.

19. Charts 11 to 14 (at the end of this survey) show the average rent for leases granted during different periods. For leases prior to 1950 the average rent rarely rose above £20.^[26]

Leases of more than 175 years

20. Two thirds of the leases in the survey were granted for more than 175 years. There are 1694 leases of more than 175 years for which the rent, start date and length are all known, and which have not expired. 95% of those (1612) were of 700 years or more with at least 200 years remaining^[27] and a rent of less than £120; and practically all (1692) were of 175 years or more with at least 100 years remaining and a rent of less than £120.

Residential leases of 175 years or less

21. The information from the Land Register did not indicate which properties were residential. However an attempt has been made to estimate the number of leases of 175 years or less which might be of residential property.
22. The first step was to exclude leases granted after 1974, the year in which it ceased to be possible to grant residential leases for more than 20 years.^[28] Of the 813 leases for 175 years or under, only 76 were granted before 1975; and of those 76, and taking a generous view as to what might be residential, 46 may have a residential address. This suggests that leases of this length are rarely residential in character, and that most residential ground leases were granted for much longer periods, such as 999 years.
23. Chart 15 shows the lengths of the 46 leases, and chart 16 the number of years remaining under the leases disregarding those which might be continuing by tacit relocation. Most of the 46 leases were granted by a public or local authority, or by particular landed estates. The properties are mainly in East Kilbride, Girvan, Greenock, Glasgow or Hamilton.
24. Evidence provided by solicitors suggests that the duration of a residential lease generally depends on location. For example, leases in Saltcoats have tended to be granted for 99 years, sometimes with an option to extend for a further 99 years; leases in Stevenson have tended to be granted for 369 years (19 x 19); leases in Ardrossan and Wishaw for 999 years;^[29] and leases in Alva for 999 years^[30] with a break option for the landlord every 99 years.
25. The rents for those leases for which information was available ranged from £0.97 to £193,500. More precisely there were

•    8 leases with a rent of £10 or less

•    2 leases with a rent between £11 and £100

•    7 leases with a rent between £101 and £500

•    3 leases with a rent between £501 and £1000

•    4 leases with a rent between £1001 and £2000

•    3 leases with a rent between £2001 and £3000

•    1 lease with a rent between £3001 and £4000

•    2 leases with a rent between £4001 and £5000

•    2 leases with a rent between £5000 and £8500

•    3 leases with a rent over £8500.

Chart 1 – Distribution of leases of 1030 years or less



Chart 2 – Distribution of leases of 175 years or less



Chart 3 – Distribution of leases of between 175 and 998 years



Chart 4 – Years remaining for unexpired leases with less than 1645 years to run



Chart 5 – Minimum/Maximum length of lease for each year of grant for period 1692–1750



... Minimum length for year ( Maximum length for year

Chart 6 – Minimum /Maximum length of lease for each year of grant for period 1750–1800

Minimum length for year ... Maximum length for year



Chart 7 – Minimum/Maximum length of lease for each year of grant for period 1800–1850



Minimum length for year ... Maximum length for year

Chart 8 – Minimum/Maximum length of lease for each year of grant for period 1850–1900



Minimum length for year ... Maximum length for year

Chart 9 – Minimum/Maximum length of lease for each year of grant for period 1900–1950



Minimum length for year ... Maximum length for year

Chart 10 – Minimum/Maximum length of lease for each year of grant for period 1950–2000



Minimum length for year ... Maximum length for year

Chart 11 - Average annual rent (in £s) for leases granted between 1692 and 1870



Average rent for year

Chart 12 – Average annual rent (in £s) for leases granted between 1870 and 1950



Average rent for year

Chart 13 – Average annual rent (in £s) for leases granted between 1950 and 1964



Average rent for year

Chart 14 – Average annual rent (in £s) for leases granted between 1964 and 2000



Average rent for year

Chart 15 – Length of residential leases of 175 years or less granted before 1975



Chart 16 – Years remaining for residential leases of 175 years or less granted before 1975



Note

In Chart 16:

The 10 leases with less than 20 years to run were granted for less than 60 years.

The 5 leases of between 25 and 54 years to run were granted for between 60 and 98 years.

The 9 leases with between 55 and 70 years to run, and 2 of the leases with 73 years to run were granted for 99 years.

The lease with 20 years to run, that with 72 years to run, 2 of those with 73 years to run and the 5 leases with more than 80 years to run, were granted for longer than 99 years.

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Note 1   We are grateful to the staff of Registers of Scotland for supplying a list of the leasehold titles for each county, providing information on each title, and allowing the title sheets to be inspected. In particular we wish to thank Mr Ian Davis, Mr John Marshall, Mr Marcus MacKenzie, Mr Douglas Pentland, and the staff in Customer Services, for their advice and assistance.    [Back]

Note 2   We wish to thank Ms Marina Miller for creating a database for the survey.    [Back]

Note 3   In April 1951 the Keeper of the Registers of Scotland carried out for the Guthrie Committee a survey of all search sheets in the Register of Sasines for the period 1905–1951. Its findings were published in appendix II of the Guthrie Report.    [Back]

Note 4   In both categories Lanark was in first place. This is probably still the case. O’Donnell and Rennie found that the greatest concentration of leasehold titles was in Lanarkshire: see D O’Donnell and R Rennie, “Non-Feudal Landholdings in Scotland” (1998) 3 SLPQ 31 at 49.    [Back]

Note 5   Lanark became an operational area on 3 January 1984, and Ayr on 1 April 1997.    [Back]

Note 6   Clackmannan became an operational area on 1 October 1992. Kirkcudbright and Wigtown became operational areas on 1 April 1997.    [Back]

Note 7   Renfrew became an operational area on 6 April 1981.    [Back]

Note 8   There were 1503 assignations in part.    [Back]

Note 9   1.80% of the 1503 assignations in part.    [Back]

Note 10   2.05% of the 586 leases for which the rent had been allocated.    [Back]

Note 11   See para 1.4 n 12 of the discussion paper.    [Back]

Note 12   This figure is the percentage of search sheets attributable to surviving leases. In calculating this percentage there has been excluded from the total number of search sheets the search sheets of the 1024 leases in those counties that had expired by 1951.    [Back]

Note 13   Research in files from the early 1950s in the National Archives of Scotland suggests that various estates around Scotland granted 99-year leases of residential properties, such as the Breadalbane Estate, the Buccleuch Estate, the Hamilton & Kinneil Estate, the Kippendavie Estate, the Macdonald Estate, and the Seafield Estate.     [Back]

Note 14   This is supported by the evidence received from practitioners with experience of long leases. They referred to pockets of leases in Alva, Ardrossan, Saltcoats, Stevenson, and Wishaw.     [Back]

Note 15   It was not possible to ascertain the duration of 80 leases so the sample here is 2599 leases.    [Back]

Note 16   For practical reasons the charts exclude leases with an initial duration of more than 1030 years, of which there were 44 ranging from 1,037 years to 1,000,000 years.    [Back]

Note 17   The break between 125 years and 200 years may be due to the practice of granting commercial leases for 125 years to encompass the three 40-year cycles of building, trading and demolition.    [Back]

Note 18   14.62% of the sample leases. Some of the 380 leases may be subleases granted for the remaining term of leases originally granted for 999 or 900 years. 41.35% (184) of all leases identified as subleases for which the length was known (445 leases) were granted for over 125 and under 999 years. Others may be re-grants of original 999 or 900 year leases which have been lost or not recorded.    [Back]

Note 19   11 leases were granted for 1,000,000 years. All were of properties in Paisley and were granted between 1825 and 1892.    [Back]

Note 20   Disregarding those which may be continuing on tacit relocation.    [Back]

Note 21   The base figure is 2593 leases. This is derived by subtracting from the full total of 2679 leases the 86 leases in respect of which the unexpired duration is uncertain. The figure includes leases which may be continuing by tacit relocation.    [Back]

Note 22   But, for practical reasons, excluding leases of more than 999 years.    [Back]

Note 23   Land Tenure Reform (Scotland) Act 1974 ss 8 to 10.    [Back]

Note 24   Based on the address of the property and the name of the landlord, we estimate that all but 11 of the 173 999-year leases were of residential property.    [Back]

Note 25   Rent here is the original unallocated rent under the lease, as most allocations do not appear to have had the landlord’s approval. See para 3.14 of the discussion paper.    [Back]

Note 26   The average rent of £60 in 1873 is due to the 10 properties which form part of a lease granted in 1873 for a rent of £101.54. The average of £24.17 in 1924 reflects a single lease granted for £24.17. 5 properties in the survey are held under partial assignations of this lease.    [Back]

Note 27   However there were no such leases with between 200 and 500 years remaining.    [Back]

Note 28   Land Tenure Reform (Scotland) Act 1974 ss 8 to 10.     [Back]

Note 29   This was borne out by the survey. 318 leases in Wishaw were examined, of which 263 leases were granted for 999 years and 298 were granted for at least 812 years. The length of 3 leases in Wishaw was unknown. 18 leases in Ardrossan were examined, and the lengths of 14 of these leases was known. 11 were for 999 years, and 2 for 855 years.     [Back]

Note 30   This was borne out by the survey. 171 leases in Alva were examined. Of the 163 leases of which the length was known, 161 were granted for 999 years and 1 for 979 years.    [Back]