What are Title Deeds?

Your Title Deeds are the formal legal document that prove your ownership of your property. They should define the property’s extent, its boundaries (often shown on a Title Plan), and any associated rights or obligations. As our subject is factoring and shared obligations with others in the building, or development, it is the obligations sections that are our prime concern. Just to confuse you these obligations are normally called “Burdens” or “Deed of Conditions” in the Deeds.

Most properties will have Title Deeds, copies of which are available in the Land Register of Scotland. BUT, if yours is an old property and it hasn’t been sold since 1981, or leased for more than 20 years, or voluntarily registered at Land Register, then rather than Title Deeds you will have an entry in the old Sasine Register. The Sasine Register is a topic that’s outside the scope of this website but it will make your life a bit more complicated, not least just understanding the old language used. The Sasine Register isn’t based on maps; rather boundaries tend to be described along the lines of “bounded on the south by Mr McGregor’s farm…”

You need to be able to search through them!

Title Deeds tend to be long, wordy and full of rather archaic “legalese”. It’s most likely that you have your Deeds in the form of an electronic file, a PDF document. Hopefully, that PDF will be searchable, as we are going to want to search for some key words, rather than give ourselves a headache reading every word.

But it is quite possible that you have a PDF that is basically just a photo of a hardcopy document, in which case it won’t be searchable until you’ve done a touch (of really easy) manipulation. If you do find that you’ve got basically a photo rather than a searchable PDF (open it on your computer, can you select words using your mouse?) then you’ll need to put it through a character recognition program.

There are plenty of free tools that will do this for you, free, online; one example being LovePDF where you can convert an “image PDF” into a “word searchable PDF”. Do bear in mind that it can’t work miracles – if the scanned PDF is low quality, then it’ll struggle to successfully convert it to recognisable text.

Specifically the “Burdens” sections

The Burdens or Deed of Conditions sections are the key areas where you’ll find out about the areas of shared responsibility and “factoring”. The topics typically addressed in the Burdens section include:

Definition of Common Parts

There should be a clear definition of every part of the building or land that is shared (for instance roof structure, foundations, common stairs, external walls, gardens, boundary fences, pipework and shared service infrastructure). The point being that if the deeds don’t define something as “common”, then the factor usually cannot instruct repair works to it as a common cost.

Apportionment of Costs

This should define how common repair and maintenance costs are split among owners. Costs could be equal shares, or based on individual property floor area, or specific percentages allocated to individual properties. And different common areas might well have their costs apportioned using different calculations. So, for instance, maintenance of a common garden might be by equal share to each individual property (for instance 1/20th), whereas the apportionment of the buildings insurance might be based on the floor area of each individual flat as that might be considered a more equitable way of apportioning that cost (insurance is often calculated by floor area in square feet multiplied by a rate per square foot.

However you choose to manage things (external factor or self-factoring) it is important that you (and your factor) pay very close attention to these apportionment formulae. Sadly, some factors just don’t seem to have the wherewithal to manage any degree of complexity.

Decision-Making Mechanism

What number of owners are required to be quorate at a General Meeting? How can a General Meeting be called? What decisions can be made on the basis of a simple majority? What, if any, require a “super majority” (a majority of all those eligible to vote, regardless of whether they are at a General Meeting)? What, if any, require total agreement of all owners? Indeed who can vote? It’s very likely that it will be one vote per property, regardless of how big or small, but you need to check.

Appointment and Powers of the Property Factor

There may be a requirement to appoint a factor and outlining the factor’s powers, such as the authority to enter into contracts for maintenance, recover expenses, and issue common charges. Before deciding that self-factoring looks good, check whether your Deeds “allow” it. Seek a legal opinion if necessary.

It may be that the Deeds specify the degree of financial authority delegated to the factors on a day to day basis. For instance maybe up to £500 per repair without needing to refer to the owners association or a General Meeting. But it’s probably more usual for that level of detail to be in the minutes of a General Meeting, rather than in the Deeds.

The Duty to Maintain

Almost certainly there will be an obligation on owners to maintain the common parts to a good standard and contribute appropriately to the cost. This often specifies the required frequency or standard of maintenance (maybe painting common stairwells every five years).

Dispute Resolution

The Deeds often include clauses setting out how disagreements between owners should be resolved (for instance, through arbitration) before resorting to court action.

If the Deeds are silent or unclear

This is a really key concept, and in my experience one that even well established factors fail to understand. If your Title Deeds are silent (or unclear) about an issue it does not mean that you the owners, or the factor, can make the rules up themselves.

A good example of the misunderstanding around this is sinking funds. It may be that the factor and/or a few owners decide that a sinking fund would be a good idea (more on sinking funds elsewhere). It may be that your Deeds address sinking funds – how they can be set up, how the funds must be held, what proportion each property owner should pay and at what periodicity etc.

But, it’s very likely that your Title Deeds are silent on the subject of sinking funds. A casual observer might say “OK let’s vote on a sinking fund at the next AGM, a simple majority will decide it”.

The solution to Title Deeds being silent on a sinking fund is that the Title Deeds need to be amended to address a sinking fund. Amending the Title Deeds requires a high bar to be reached (more on that elsewhere) – a simple majority at an AGM doesn’t crack it!

Some useful links

• Registers of Scotland, Title Documents
• Under One Roof, A short guide to title deeds
• Tenements (Scotland) Act 2004, Common Law applies if Title Deeds are silent or unclear
• Title Conditions (Scotland) Act 2003, newer deeds are created under the Act’s rules, older deeds were adapted and preserved by the Act.

Get to know your Deeds. You’ll be one of the few!