Enforcement of Title Deeds – Time for a test case?

Short-term lets and Title Deeds

Time for a test case? 

What are title deeds?

  • Title deeds are the legal papers that show the ownership of a property and any legal restrictions (sometimes known as “burdens”) that come with a building or land.
  • For example, there may be restrictions which state a property cannot be used to run a business.
  • Title deed restrictions are different to the restrictions under the planning system. These systems both control how a property can be used. Permission from one system does not grant permission from the other system. PLACE has created a guide to reporting breaches of planning here.

Which title deed restrictions might prohibit short-term letting?

  • “Use of the property as a private residence”, “carrying out a trade or business”, “multiple occupation”, “hotels and hostels”, and “nuisance” have all prohibited short-term letting businesses in England (see list at end).
  • This is yet to be tested in Scottish Law.
  • Anyone with restrictions who wishes to use a property for regular short-term letting can apply to the Scottish Lands Tribunal for the restricting title to be changed. An application is £125.

What can I do if a neighbouring property is operating a short-term let in breach of shared title deed restrictions?

  • Speak to the owners of the business about the breach – Responsible owners will want to make sure that they are conducting their business lawfully and that their business is not harming those living close by. Formally request that the owners obtain both planning and lands permission. Communicate calmly, politely and in writing. You may wish to point out that If they wish to continue to use their property as a short-term let they can apply to the Scottish Lands Tribunal to ask if it would be fair for the title deeds to be varied.
  • If there is no satisfactory response from the owners – This is disappointing but you have raised the issue politely and formally. You will have clear documentation of the date at which the owners chose to continue their business without following the processes for permission. It is then up to you to consider your options.
  • Educate yourself on title conditions and how they are enforced – Unfortunately, enforcing title conditions is not the simplest of matters. It requires legal representation and potentially court action. This sounds daunting and expensive but there are avenues that can be taken which would remove the burden of cost.
  • What are the costs? – It depends. The best case scenario is that, upon serving the court papers on the owners of the business, they immediately approach for settlement, or that they do not enter any defence of the action within the specified timeframe and a court order is granted. In such a case, it is estimated that the costs would be around £1,500 less any settlement. If the matter went all the way to court, it would cost approximately £15,000 to £25,000 or more depending on the lawyers used. If you are successful in the case it is likely that you will recover much of your legal expenses from the owner of the short-term letting business.
  • What title conditions are enforceable? – Title conditions are enforceable where it can be shown that your property and the one being used as a short-term let are “related” and part of a “common scheme”. What this means is that the properties are sufficiently close to have an impact on each other and that they have the same or similar conditions in their title deeds.
  • What would you need to demonstrate to a court? Once it is established that your properties are related and part of a common scheme it is then necessary to demonstrate “title” and “interest”. Title means there is something in the title deeds which says that the property cannot be used for that purpose. Interest exists if failure to comply with the real burden is resulting in or will result in material detriment to the “value or enjoyment of the person’s ownership of, or right in, another property.
  • How likely are we to win? The million dollar question. Until it is tested we do not know. However, we do have some overwhelming precedent being set by the high number of planning law cases currently being appealed in Glasgow and Edinburgh. Twenty one appeal cases (and counting) have found that short-term lets in flatted properties have “materially detrimental effect on the living conditions of nearby residents” under planning law. The test under civil law is the same. In a fully detached property, the impact may or may not be harmful. The successful cases listed at the end include many detached properties.
  • What evidence would be useful for a case? A diary recording issues with the let is pretty much essential; screenshots from letting sites detailing level of letting from customer reviews; reports of antisocial behaviour reported to the Community Safety Team, or Police.
  • How can I afford it? There are three options as far as we understand. Firstly, if you believe you have a strong case you may wish to risk paying legal expenses with the hope that you will be able to recover your costs.
  • Legal expenses insurance – Secondly, you can check your home or bank insurance policy for legal expenses insurance. Most policies cover title deed breaches but it is up to the insurance company to decide whether they are willing to defend the case. Given the overwhelming number of enforcement decisions which have been upheld on appeal, there is an increasing chance these cases may be taken on.
  • Crowdfunding – There is increasing discussion about our community about crowdfunding a test case. PLACE have been approached by Crowd Justice who wish to support such a case or cases. If you think you could be the test case, feel free to get in touch to see how we can help.
  • Why is a test case so important? – At the moment, residents only have the planning enforcement route to tackle unlawful short-term rentals. This means there is little motivation for short-term letting owners to comply upfront with planning regulations (other than the moral one!) because the enforcement process takes such a long time and at the end of the process there are no financial sanctions for being found in breach. A successful civil test case is crucial as short-term let owners and management companies will have to decide whether to settle or whether they are willing to risk of an even more expensive civil case plus the additional risk of being ordered to pay expenses and even compensation to affected neighbours. Lastly, a successful test case will increase access to justice by making insurance companies more likely to take these cases on.
  • I want to know more – A list of the most relevant planning appeals and civil cases can be found here.