442 c a s e s t u d i e s

The obligation of maintaining the garden can be established only as an obligation in personam. Hence, if A sells all of his/her land in the area, that obligation cannot be invoked against the acquirers of the property.

Italy

The prevailing, though not unanimous, view is that an option to purchase is not enforceable against third parties. While no case law in point can be cited, the option is probably not enforceable against C.

The duty to maintain the gardens cannot be construed as a praedial servitude, because a praedial servitude cannot consist of a facere (a positive obligation on the part of the grantor).43 Furthermore, property in rem obligations constitute a numerus clausus44 and cannot be freely expanded by the parties. The contractual provision concerning the duty to maintain the gardens therefore creates a mere personal obligation, and is not enforceable against third parties.

The Netherlands

An option to purchase is a personal right which does not have any effect vis-a`-vis third parties. In so far as it is only included in the contract, the option cannot be enforced against C who was not a party to the contract.

In so far as an obligation to maintain is included in a contract, A, but not his/her successors, will be obliged to maintain the garden, since a contract does not bind third parties. However, A can stipulate in the contract that his/her successors be obliged to maintain the garden. This is secured by a penalty clause. The construction is designated a kettingbeding (a perpetual clause) binding all successors-in-title. If A’s successors- in-title do not comply with this obligation to maintain the garden, A will be in breach of the contract with B as this construction gives rise to rights inter partes only, which are not enforceable against third parties.

Poland

If the option to purchase is registered, it will be effective against C.

43See e.g. Cass. civ. 26/06/1987 n. 5636; Comporti, ‘Voce Servitu`’, Enciclopedia del diritto, vol. 42, p. 289.

44See e.g. Bigliazzi, ‘Oneri reali’, pp. 59 ff.

444 c a s e s t u d i e s

If A binds himself/herself in the original contract that he/she and his/ her successors will maintain the gardens surrounding the development, this is only enforceable between the contractual parties and not against third parties. Thus C will not be obliged to maintain the gardens. The reason for this is that the Portuguese Civil Code, art. 1306 recognises a numerus clausus of real rights. The Portuguese system of property is characterised by a limited number of real rights which are not subject to contractual modification because this principle vetoes the establishment of new rights in rem.

In practice, if A undertakes to maintain the gardens in the contract he/she concludes with B, he/she can only sell the land to C subject to C’s agreement to assume all obligations in that regard. Otherwise, A will be liable for damages on account of breach of contract.

Scotland

If included in a lease between A and B, an option to purchase does not bind C. It is not a real condition of the lease.47 An option to purchase does not create in the option holder (B) a real right which binds C. The right of an option holder is not one of the real rights recognised by Scots law. Nor is C bound by the obligations incumbent upon A as grantor of the option. Contracts bind only the parties to them. A must, however, when transferring to C, oblige C to perform the option if it is exercised, otherwise A exposes himself/herself to an action for damages for breach of contract.

It is a topic of some debate whether the fact that C knew of the existence of the option or acquired gratuitously or for a manifestly inadequate consideration renders the option binding upon him. This will be an application of the ‘offside goals’ rule.48 In the paradigm case, this rule protects the position of a buyer (X) who has contracted to buy property from a seller (Y) against a subsequent transfer by Y to a third party (Z), in breach of the obligation owed by Y to X. An unexercised option is one stage removed from this paradigm case. Prior to exercise, the option holder does not have a right that is ‘capable of being made real’, which is often said to be one of the requirements of the rule.49 For that reason, some adopt the position that an option is not protected by

47Bisset v. Magistrates of Aberdeen (1898) 1 F 87 (IH); The Advice Centre for Mortgages v. McNicoll

2006 CSOH 58, 2006 SLT 591 [39].

48Discussed in more detail in the response to Case 2.

49Wallace v. Simmers 1960 SC 255 (IH).

the offside goals rule.50 There is, however, also judicial support for the position that one who acquires with knowledge of an unexercised option is bound by it.51 This writer prefers that position.52 The point is not yet settled. For B to protect his/her position, he/she can seek to have A’s obligations under the option secured by a standard security over the land.

C is not bound by A’s contractual obligation to maintain the gardens, unless he/she has assumed it. C’s knowledge of the obligation makes no difference. The offside goals rule does not apply to a purely contractual obligation such as this.

If A had previously transferred ownership of some land to B and retained ownership of surrounding land on which the gardens were built and A is now transferring ownership of the garden land, the maintenance obligation can be constituted as a real burden on the garden ground. The owner for the time being of the surrounding garden land (‘the burdened proprietor’) will be bound to maintain the gardens for the benefit of the owner for the time being of land currently owned by B (‘the benefited proprietor’).53

If A granted B a lease of the property (excluding the garden ground), undertaking in the lease to maintain the gardens, and A is now transferring ownership of all of his/her property to C, the obligation to maintain the gardens may bind C as A’s successor-in-title in respect of the leased property. The law as to when an obligation in a lease in respect of neighbouring property can be a ‘real condition’ of the lease so as to bind a successor-in-title is undeveloped.54 The test appears to be that if the obligation is sufficiently connected with the lease it will be a real condition. Whether a court will hold that an obligation to maintain surrounding gardens will be a real condition cannot be predicted with certainty. If the matter is sufficiently important to B, he/she must seek to protect his/her position by having the original contract of lease provide that A will oblige any successor-in-title to perform this

50The Advice Centre for Mortgages v. McNicoll 2006 CSOH 58, 2006 SLT 591, paras. 41–51; Steven, ‘Options to Purchase’, pp. 432, 436.

51Davidson v. Zani 1992 SCLR 1001 (Sh Ct); Royal Bank of Scotland v. Gibson [2009] CSOH 14, 2009 SLT 444, para. 50.

52Webster, ‘Options for the Offside Goals Rule’, p. 524. The Gibson case is also discussed by Anderson and Macleod, ‘Offside Goals’, p. 93.

53This would be an ‘affirmative burden’ (TC(S)A 03, s. 2(1)(a)).

54See generally Webster, ‘The Relationship of Tenant and Successor Landlord’, ch. 7.