Souvenir Plot Law

So imagine A has a kettle and wants to sell B his kettle. They would form a contract. A would agree to sell B the kettle and, in return, B would agree to pay A some money. There are two rights created here, along with two obligations:

A has a right to payment and an obligation to deliver the kettle.
B has a “right to ownership” of the kettle and an obligation to pay A.payment

It’s important to note that A and B only have these rights in relation to each other.  A can’t use the contract to get C to pay and B can’t use the contract to get D’s kettle. This kind of right is called a “personal fee”. It is only enforceable against a particular person.

But how can this ‘right to ownership’ become actual ownership? B paying the money isn’t enough – A has to physically deliver the kettle to B or advertise the fact that the kettle has been sold. This is called the ‘publicity principle’. If A refuses to deliver, B can rely on his personal right to sue him and enforce delivery. But A could decide to break the contract, sell the kettle to E instead and B cannot stop this because until delivery has taken place, A remains the owner and he can do what he wants with what he owns. Assuming E didn’t know about A’s contract with B, all B can do is sue A for the price. It may seem unfair, but that’s the law.

But imagine A gives the kettle to B (delivery).  A loses all his rights to it and B become the new owner. He now has the ‘right of ownership’. This is a special right because it is enforceable against everyone else in the entire world. This is a called a “real right”. If anyone tries to steal B’s kettle, he can recover it. If A now tries to sell it to E, B can now stop it, because he is the owner. Ownership is the supreme right.

So there are two steps involved in transferring ownership:

Contract (creates a right to ownership).
Delivery (creates a right of ownership).

Now pretend that, instead of a kettle, A wants to sell B a plot of land. The process is practically different, but the steps are the same. Firstly they would make a contract to sell the land – known in Scotland as ‘missives’ – and this gives B their right to ownership. but delivery has still got to take place for ownership to be transferred. But how do we make delivery? The land is odd in that respect – it tends to want to stay where it is. In the past, people would physically hand over a small piece of the ground in a symbolic way. But the “Publicity Principal” requires that for the sale to take place and for the purchaser to obtain a “real right”, the sale must become a public fact.

Publicity Pricipal

SCOTTISH LAW COMMISSION Discussion Paper No 121 (Scottish Government)

 

Firstly, this publicity was brought about by entering the deeds into the Register of Sasines. This register can be checked and we can see who owns the land – so the ‘publicity principle’ is met. It also saved people lugging bits of land around to “deliver” them, so it was definitely an improvement. But there was one problem: it wasn’t always reliable. What was needed was something much more definitive so the Scottish government created the Land Register.

The Land register is a much more powerful beast. The golden rule is that whoever the Land Register says owns the land, owns the land. Even if the register is ‘incorrect’ it is right. Going back to the example, if A sells the land to B and send off the deed (or ‘disposition’) to be registered but there’s a terrible mistake and the Land register says that it was sold to D instead…D would own the land. That’s it. Of course, B can ask for the register to be changed (and under the Land Registration (Scotland) Act 2012, or ‘2012 Act’, this process has become a lot easier), but as long as the Land Register says D is the owner D is the owner. The Land Register is never wrong!

However, the land registry has a glaring defect, which is relevant to anyone purchasing souvenir land in Scotland.  The 2012 Act specifically says that deeds relating to “souvenir plots” (defined as being “of inconsiderable size and no practical utility” [s.22(2)(a)]) cannot be registered. As we’ve established, if a deed cannot be registered, ownership can’t pass, since the only way you can get ownership if to have your name on the Land Register.

The elegant solution that Highland Titles have come up with is to create their own public register which meets the test of the publicity principal. Until such time as Scots law catches up with the demand for souvenir plots (as appears to already be the case in Northern Ireland), this solves the problem of delivery of the land. The souvenir plots will be defined and the owners, with their consent, will be identified. The risk of A selling the plot more than once, never likely, but always a theoretical possibility, will be prevented and the future of Scottish Souvenir plot sales as a means of raising revenue for good causes is assured for the future.

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