Bringing Ultra-long Leases To An End

Legislation to complete a programme of property law reform in Scotland was published today.

The Long Leases (Scotland) Bill will bring an end to ultra-long leases (let for more than 175 years and with more than 100 years to run) by converting them to ownership.

The Bill forms part of a programme of property law reform put forward by the Scottish Law Commission. This included the reform of feudal tenure through the Abolition of Feudal Tenure etc (Scotland) Act 2000.

The Bill will:

• Convert ultra-long leases to ownership
• Implement a Scottish Law Commission report, part of their series on property law reform
• Protect landlords' rights by providing for compensation
• Clarify the position for lenders (e.g. mortgage providers)
• Move away from an unnecessarily complex form of land tenure

Environment Minister Stewart Stevenson said:

"This Bill will simplify Scotland's land tenure system. Ultra-long leases are so long that the tenant is, in effect, the owner in all but name. This legislation will simplify property law and convert virtual ownership into actual ownership."Because these leases are so rare, lenders and solicitors may be unfamiliar with them. This legislation will, therefore, resolve any confusion for mortgage purposes.

"Landlords will also be able to claim compensation but this will reflect the low rates of rent paid, with average compensation expected to be in the region of £200.

"Implementing the Scottish Law Commission report will help to further modernise Scotland's property law and bring it into the 21st century."

The Scottish Government estimates that there are around 9,000 ultra-long leases in Scotland. Two thirds of ultra-long leases have annual rents of £5 or less.