L14 – Liferent - Scots property law lecture notes 2021/22 PDF

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Scots property law lecture notes 2021/22...

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L14 – Liferent

What is liferent? “A right that one has to enjoy a subject during life, without destroying or wasting its substance.”

Erskine, An Institute of the Law of Scotland, II,9,39

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Note: They have the right to use property for the rest if their lives providing, they do not destroy it

Note: Even though rent is used in term, it is not necessary

An example

A is very old and wants to transfer ownership of house to B, however C is living in the house and A does not want B to kick out C when the house is transferred so A grants C a liferent. This gives C the right to live in house until they die, at that point B’s ownership is unincumbered and he can use house themselves.

General Principles (1) Who? -

Natural persons only Companies, LLPs etc cannot have them [because they cannot die]

Duration:  

lifetime – default or shorter? – for a certain number of years, granted deoending on a particular condition/circumstance being fulfilled e.g. given to child until they reach certain age/get married etc.

Right: -

entitled to enjoy possession, use and fruits (usus + fructus: “usufruct”) e.g. if you have liferent of farm, you can enjoy the crops etc.

Obligations:  

Responsible for debts/burdens related to property e.g. taxes, repair/maintenances Must preserve the “substance” of the thing (“salva rerum substantia”) – must leave it is leasable state so owner can enjoy property

Note: there are issues enforcing these however they are there

General Principles (2) Objects of liferent: must be non-perishable   

Heritable property / Land Corporeal moveables – rare Incorporeals? – argued by scholars that it is not possible to grant life rent on these and there are other mechanisms you can use to allow others to enjoy the use

“Proper” v “Improper” Liferents 



Proper = 2 Real Rights: o Fiar has ownership (“fee”) o Liferenter has subordinate real right of “liferent” Improper/Trust = 1 Real Right and (at least) 2 Personal Rights: o Trustee has ownership o “Liferenter” has personal right vs trustee o “Fiar” has personal right vs trustee

Another example: (Improper liferent)

Creation

Two ways: (i) by grant or (ii) by reservation

May be preceded by:

 

contract (grant / reservation) or by testamentary writing (grant only…) [a will etc.]

If over land? 



Conveyance: Disposition [transferring land and granting life rent] / Deed of Liferent [retaining ownership of property and granting liferent] (and any preceding contract) must be in writing – ROW(S)A’ 95, s1(2)(b) External Act: Deed must be registered in Land Register – LR(S)A’ 2012, s51

Remedies Liferenter vs 3rd parties? -

probably usual private law remedies available to an owner.

Fiar v Liferenter? Note: remember 2 obligations – pay debts/burdens, preserve substance of property -

what happens if they fail these obligations? Specifically damaged property



“…there are complexities and difficulties about how the fiar can enforce [the liferenter’s obligations].” Gretton & Steven, para 22.09



In theory: o Expect usual private law remedies o Interdict; Damages; Specific Implement (decree ad factum praestandum)



In practice: Stronach’s Exrs v Robertson 2002 SC 540 o During liferent: [must wait till liferent dies before solving any repair obligations?]  No specific implement to force repairs  No damages payable to fiar o o

Only remedy = provide monetary security (cautio usufructuaria) – they put money up and that is set aside which can be used to remedy repair obligation. E.g. they are not obliged to immediately repair of pay damages, however, they put aside money which can be used at the end of liferent to enforce obligations

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Note: For as long as the liferenter is still in the life rent, the fiar is not entitles for a specific implement to enforce repairs. Also no damages payable even if property is damaged, the liferenter is under no obligation to pay damages because fiar does not have unincumpeted ownership yet.

Transfer(?) / Termination Note: can a liferenter alienate a liferent the same way a tenant can alienate a lease? -

Short answer: no Although they have a subordinate real right, it is personal to them They CANNOT transfer liferent to someone else or grant subordinate real right However they can do something similar:

Transfer of liferent / grant of subordinate real rights?   

Lease – PERSONAL RIGHT/ NOT SUBORDINATE REAL RIGHT. Not a real lease. Any leases granted by liferenter will come to an end at end of liferent “Sale” / assignation? – NOT SUBORDINATE REAL RIGHT/ PERSONAL RIGHT – come to end at end of liferent Note: they cannot alienate as such but they can extend the use to others

Does not end a liferent:

  

Sale of subjects by Fiar – anyone who buys from fiar would be subject to the liferent, no one could have actual possession of property until liferent is over Death of Fiar – doesn’t affect liferenters rights, dealt with following rules of succession, those who succeed the property are also subject to the liferent Insolvency of: o Fiar? o Liferenter? – they are affected but the liferent does not come to an end, the subordinate real right of a liferent is an asset and it can be used by the creditors. Creditors also limited by the alienation policy. They can take liferenter out of actual possession of property/they can lease or sell liferent to someone else but regardless of this the liferent is still limited to the life of the liferenter

Ends a liferent:  

Death of liferenter – the fiar is then entitled to unincumbered possession of property, also brings to an end any leases or contractual agreements by liferenter Renunciation of liferent / “Sale” to Fiar -

References Essential Reading  Gretton & Steven, Property, Trusts & Succession (4th edn, 2017) Further reading  W J Dobie, Manual of the law of liferent and fee in Scotland (1941)  SC Styles, Liferent (SME vol 13)  Cochrane’s Executrix v Cochrane1947 SC 134  Stronach’s Executors v Robertson 2002 SLT 1044  P Hellwege, “Enforcing the liferenter’s obligation to repair” (2014) 18(1) Edin LR 1-28...