servitudes of usufruct, use and habitation as well as the institution of heritable building lease (superÞcies) are recognised as real rights in Portuguese law. Hence, if A conveys the property to C, the right of B, if duly registered, remains enforceable against C, irrespective of whether he/she acquired the property for value or not. An unregistered personal servitude or heritable building lease, although valid and enforceable inter partes, cannot be enforced against C.

Scotland

Only a lease and proper liferent give B a real right protected against transfer of ownership of the subjects by A.

At common law, a lease is a contract. The tenant (B) is simply the personal creditor of the landlord (A).36 If A transfers to C, B has a contractual claim against A,37 but none against C. Since the coming into force of the Leases Act 1449, tenants have been protected against transfer by the landlord. The precise effect of that Act is disputed: some take the view that the tenant’s right is only akin to a real right, others that it is a fully fledged real right.38 There has not been the debate on this point in Scots law that there has been in other systems and the point has not been resolved.39 Certainly, when a lease is registered, the tenant obtains a real right, for the statute says so.40 For ease, this scenario refers to the tenant having a ‘real right’, acknowledging that it may not be strictly accurate.

The law distinguishes between ‘short’ and ‘long’ leases. A short lease becomes real by possession and a long lease only by registration. A long lease is a probative lease with a duration exceeding twenty years (or which contains provisions which allow the tenant to extend the duration of the lease to more than twenty years).41 All other leases are short

claim with regard to the same property with preference given to the successor who registers his/her interest first. Registration in the Land Register raises a presumption of title. Conversely, if there is no registration, the presumption is that there is no right or that the right has been cancelled and does no longer exist (Law on Registration, art. 7).

36Stair, Institutions, I. xv. 4; Rankine, Leases, p. 132; Paton and Cameron, Landlord and Tenant, p. 103.

37Bankton, Institute, I. xx. 1–2; Erskine, Institute, III. iii. 15; Bell, Commentaries, I. 64; Bell,

Leases, p. 88.

38See, generally, Guy, ‘Registration of Leases’, p. 234.

39Hugo and Simpson, ‘Lease’, pp. 306–8. 40 LR(S)A 79, s. 3(3).

41LR(S)A 79, s. 28(1). So the position is not, as contended by e.g. Gloag and Henderson, Law of Scotland, para. 36.04, that leases which exceed twenty years are long leases. The lease must also be probative. The existing terminology is therefore inaccurate: a ‘short’

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leases. The tenant of a short lease acquires a real right if he/she meets the requirements of the Leases Act 1449, viz.:42

(a)if the lease is for more than one year, it must be in formal writing;

(b)the lease must have an ish;

(c)the subjects of the lease must be land;

(d)the tenant must possess the property by virtue of the lease;

(e)there must be a rent which is not merely elusory; and

(f)the grantor of the lease must have title to grant it.

In some respects, these requirements are narrower than those for a contract of lease to be constituted. Whereas there can be a valid contract of lease which does not have a definite duration in order to be protected by the 1449 Act, the ish of the lease must be definite.43 The lease must be of land, that is to say, of ‘heritable subjects’, which are ‘capable of such open and continuous possession as may naturally suggest to a singular successor the existence of a lease’.44 The Act applies to urban and rural property. The tenant must have entered possession of the property on or after the date of entry in order for the Act to apply. Possession prior to the date of entry will not suffice.45 Possession can either be natural (where the tenant himself/herself possesses the subjects) or civil (where the tenant possesses by another, namely a sub-tenant).

If the lease is a long lease, it can only be made real by registration in the Land Register.46 The possibility of registering a long lease was first introduced in 1857, when it was optional. The benefit of registration was that it enabled the tenant to grant security over the lease. Now it is mandatory in order to obtain a real right in respect of a long lease. It has been held that if a long lease has not been registered, the tenant has no claim in damages against the landlord if he subsequently transfers ownership of the property and the tenant’s possession is interfered with.47

The date which determines whether B’s right binds C is the date when C registers title to the land. In order for C to be bound there must either

lease could, in fact, be very long. ‘Registrable’ and ‘non-registrable’ would be better suited to the task.

42See, on interpretations of these requirements, Rankine, Leases, pp. 134–47; Paton and Cameron, Landlord and Tenant, pp. 104–14; McAllister, Leases, paras. 2.24–2.29.

43Carruthers v. Irvine (1717) Mor. 15 195.

44Campbell v. Mackinnon (1867) 5 M 636 (IH) 651.

45Paton, Hume, vol. 4, p. 81; Erskine, Institute, II. vi. 25. Nor will acts preparatory to taking possession: Millar v. McRobbie 1949 SC 1 (IH) 7–8.

46LR(S)A 79, s. 3(3). See generally Scottish Law Commission, Report on Land Registration, Part 9.

47PalmerÕs Tr. v. Brown 1989 SLT 128 (OH) 131F.

be possession (in a short lease) or registration (in the case of a long lease) by that date. No distinction is drawn between a successor who acquires for value or gratuitously: both are bound by the lease. Nor does it matter whether C was aware of the lease. Possession or registration provides sufficient publicity to alert C to the lease. There is academic support for holding that knowledge of B’s right or a gratuitous transfer would make a difference if, when C acquired, B had not yet taken the required steps to make his/her right real. Scots law recognises a rule (known as the ‘offside goals’ rule) in respect of competitions of title in which a right which has not yet been made real can affect a singular successor if he/she knew of the right before he/she completed his/her own title.48 So, if A grants a disposition (a deed of transfer) of land to B on day one and then fraudulently also to C on day three, and C registers its disposition on day five, C’s title will be voidable if C knew49 of the prior grant to B or acquired gratuitously or for a manifestly inadequate consideration.50 Existing case law, such as it is, holds that rule not to apply to leases.51 If A grants a lease to B on day one and a disposition to C on day three, and C registers the disposition before B either takes possession or registers the lease, B’s right does not bind C even if he/she is aware of it. That position has been criticised52 and the majority of academic opinion supports changing the law to provide B with a claim in those circumstances.

The effect of B’s right being real is that when C acquires title, C steps into A’s shoes in the contract of lease. The contract runs with the land. C ‘comes into the place of his/her predecessor (A) in all leases existing at the date of his/her purchase, and is entitled to all the future rents and other benefits of such leases, and liable in all the obligations prestable against the landlord subsequent to the date of his/her entry’.53 However, it is not every term of a lease which will run with the land. The law distinguishes between ‘real’ and ‘personal’

48Reid et al., Property, paras. 695–700; Wortley, ‘Double Sales’, p. 29; Rodger (Builders) Ltd. v. Fawdry 1950 SC 483 (IH) 499–501.

49The point in time at which knowledge is assessed is important but not yet finally resolved: cf. Alex Brewster and Sons v. Caughey 2002 GWD 15–506; Anderson, ‘“Offside Goals”’, pp. 290–1.

50The Advice Centre for Mortgages v. McNicoll [2006] CSOH 58, 2006 SLT 591, para. 45.

51Johnston v. Monzie (1760) 5 Brown’s Supplement 877; Birbeck v. Ross (1865) 4 M 272 (OH) 276–7; Jacobs v. Anderson (1898) 6 SLT 234 (OH); Reid et al., Property, para. 697. Cf. previously Richard v. Lindsay (1725) Mor. 15 217.

52Reid et al., Property, para. 697; Brand, Steven and Wortley, Conveyancing Manual, para. 32. 60.

53Barr v. Cochrane (1878) 5 R 877 (IH) 883.

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conditions: only real conditions form part of the contract of lease which runs with the land.54 Personal conditions bind and benefit only the original landlord (A). The issue has arisen mostly in respect of leases of commercial premises where it has been held that an option in favour of the tenant to purchase the leased property does not bind a successor landlord.55 Stated abstractly, the distinction is between terms of the original parties’ agreement which are ‘referable to their relationship as landlord and tenant’ (which are real conditions and do transmit to C) and those which are extrinsic to that relationship (which are personal conditions and do not transmit).56

Once constituted as a real right by registration, B’s liferent is enforceable against the world. It therefore remains enforceable against C. Although there appears to be no decision on the point, it is thought that the ‘offside goals’ rule would apply to protect B’s position prior to registration. If, therefore, after the grant of a proper liferent to B, A, in breach of that grant, subsequently grants a disposition to C and C registers before B, C will be bound by B’s right if C knew of B’s right or acquired gratuitously or for a manifestly inadequate consideration.

South Africa

In the case of a lease, the tenant (B) will be protected against C if he/she has converted his/her contractual right into a real right by obtaining possession of the property (short lease) or by registration of a long lease over ten years.57 Under an unregistered long lease, a tenant in possession is protected for a period of up to ten years.58 This protection is based on the reception of the Germanic and later Roman-Dutch rule huur gaat voor koop (hire trumps sale) into modern South African law.59 This rule covers not only sale but all kinds of alienations such as legacies, donations and the constitution of a usufruct. In terms of the rule, B’s lease, which was established first, would prevail over the

54Paton and Cameron, Landlord and Tenant, pp. 95–7; McAllister, Leases, paras. 2.31–2.38. This area is considered in Webster, ‘Relationship of Tenant and Successor Landlord’, chs. 3–7.

55The Advice Centre for Mortgages v. McNicoll [2006] CSOH 58, 2006 SLT 591, para. 39.

56Montgomerie v. Carrick (1848) 10 D 1387 (IH) 1396.

57Canavan and Rivas v. New Transvaal Gold Farms 1904 TS 136.

58Cooper, Landlord and Tenant, pp. 275, 280, 310; Kerr, Lease, para. 191.

59See Cooper, Landlord and Tenant, p. 275 n. 16 citing twenty-six decisions of the High Court of South Africa and seven of the Supreme Court of Appeal, in support.

real right (ownership) acquired by C by virtue of the prior in tempore principle. This is the position even though C had no knowledge of the lease60 and even though he acquired the property for value.

However, even if B’s contractual right has not been converted into a real right by registration or occupation, A’s successor C could still be bound by the lease contract. In this situation we must look at whether C is a universal or particular successor and whether he/she had knowledge of the lease or not. Based on a misinterpretation of a passage of the Roman-Dutch writer Voet,61 South African courts have placed a successor by lucrative title (titulo lucrativo) (without any consideration) in the same category as a universal successor who inherits both the rights and obligations of an estate. The courts held that both these kinds of successors are bound by the contract of lease between the landlord (A) and the tenant (B).62 But a universal succcessor is bound because he/she succeeds to both rights and obligations and not because he/she received something for nothing. Therefore, on this reasoning, the acquirer without value (titulo lucrativo) will not be bound by the lease by reason of his/ her lucrative title only.63

A particular successor is, however, bound to the extent of his/her knowledge by the contractual obligations of the lease if he/she (C) had actual knowledge thereof at the time of transfer.64

A duly registered usufruct creates a real right in the property enforceable against the whole world and thus against C, irrespective of C’s knowledge or whether he acquired the property for value or not. Without registration, the usufructuary (B) only has a personal right to have the usufruct registered and C will only be bound by the usufruct if he/she acquires the property with actual knowledge of the unregistered usufruct.65 In such an instance, C will be required to assist in having the usufruct registered.66 The legal position will be the same if C acquired the property by lucrative title.67

60See Cooper, Landlord and Tenant, p. 284 n 82; FryeÕs Pty Ltd. v. Ries 1957 3 SA 575 (A) 582.

61Voet, Commentarius, 19.2.1. 62 Kessoopersadh v. Essop 1970 1 SA 265 (A) 273 285.

63Voet, Commentarius, 19.2.17; De Wet and Van Wyk, Kontraktereg, p. 375; Cooper, Landlord and Tenant, pp. 283–4.

64See Formalities in Respect of Leases of Land Act 18 of 1969, s. 1(2)(b); Cooper, Landlord and Tenant, pp. 284–8, 309–11.

65Van der Merwe, ‘Servitudes’, para. 457.

66See Erasmus v. Du Toit 1910 TPD 1037 qualified in Frankel Pollak Vinderine Inc v. Stanton

2000 1 SA 425 (W).

67Oliver v. Matzner and Matzner 1942 TPD 324 330.