Thu 07 Jan 2016

Greenbelt residential development landscape maintenance burden fails

A recent 

In most residential developments a method needs to be put in place to deal with the upkeep of areas such as landscaping, which relate to a development as a whole rather than to any of the individual houses. Almost always, the cost of maintenance is shared among the owners of the various houses in the development - but there are different ways of setting up ownership and obligations to maintain.

Common ownership model

Sometimes each house owner is given a share of ownership of such areas and all house owners are responsible for doing the maintenance and paying for the cost. In practice, it is often a factor for the development who instructs a maintenance contractor and bills the various owners on a quarterly or half yearly basis. The issue with this model is that, except for very small developments, it can be difficult to identify the exact extent of such areas until all, or almost all, of the houses have been sold.

Before 2008, many developers dealt with this issue by describing such areas using an "everything that is left after we've completed and sold off all of the houses" type of description. However, the 2008 PMP Plus Ltd case, which looked at such a description, decided that it didn't work and that therefore the house owners' titles to the common areas were ineffective.  

That case covered the rules on describing a property in the conveyance transferring ownership of that property.

Greenbelt model

The other frequently used route, if the relevant areas are only landscaping around the edge of a development, is for title to such areas to be transferred to a third party, such as the Greenbelt Group Limited ("GGL"). The usual terms of this solution are that:

  • Once the development is completed, the developer transfers title to the landscaped areas to GGL, subject to an obligation on GGL obliged to maintain these areas. In turn, GGL is entitled to recover the costs of such maintenance from the house owners.
  • The house owners are entitled to require GGL to maintain the areas - and are all bound to pay a share of the costs of such maintenance.
  • In some cases the house owners might have rights to use the areas, but not always.

I'll call this route the "Greenbelt Model".

This solution avoids transferring any shares of ownership of the landscaped areas until their extent is clearly identifiable. 

A case reported last month has, however, raised a difficulty with the Greenbelt Model - related to identifying not the extent of the property transferred but the extent of the property whose owner is entitled to enforce a burden (so the extent of the benefited property in a title burden).

Michael Joseph Marriott and Another v Greenbelt Group Limited

In 2014, owners of a development on which the Greenbelt Model had been used, applied to the Lands Tribunal to challenge the validity of the burden imposed upon them to pay shares of the costs of maintenance of amenity woodland, landscaped open spaces and other areas (all the "Landscaped Areas") which were, by then, owned by GGL.

There were numerous grounds of challenge, all but one of which failed. 

The ground which was successful, and resulted in the obligation to pay shares of maintenance being declared invalid, was that the benefited property (ie the Landscaped Areas) had not been adequately identified in the deed of conditions which set out the maintenance burden. That deed of conditions was referred to for burdens in all of the conveyances by the developer of the various houses in the development.

It is essential, for the valid creation of such a Scottish title burden, that the constitutive deed (ie the deed of conditions) nominates and identifies the benefited property. In this case the benefited property was the Landscaped Areas, as it was the owner of the Landscaped Areas that was entitled to demand payment from the house owners.

The deed of conditions was registered at the outset, before the final extent of what would be the Landscaped Areas was known. It described the Landscaped Areas by reference to what was required in terms of a planning permission, as that permission might be varied or supplemented. It was not possible to identify the exact extent of the areas without referring to the planning permission, as it might be varied or supplemented (after the date of the deed of conditions).

The way forward?

The Lands Tribunal put forward a suggestion as to how to cure the difficulty of uncertainty as to the extent of the benefited property in the maintenance burden. They noted that for most larger developments there will be an indicative layout plan available at the outset, which could be incorporated into the deed of conditions - with wording to the effect that the area to be maintained will not exceed that shown on such a plan. They comment that this might be sufficient to solve the problem but express no concluded view.

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