Skip to content
Law Society of Scotland
Search
Find a Solicitor
Contact us
About us
Sign in
Search
Find a Solicitor
Contact us
About us
Sign in
  • For members

    • For members

    • CPD & Training

    • Membership and fees

    • Rules and guidance

    • Regulation and compliance

    • Journal

    • Business support

    • Career growth

    • Member benefits

    • Professional support

    • Lawscot Wellbeing

    • Lawscot Sustainability

  • News and events

    • News and events

    • Law Society news

    • Blogs & opinions

    • CPD & Training

    • Events

  • Qualifying and education

    • Qualifying and education

    • Qualifying as a Scottish solicitor

    • Career support and advice

    • Our work with schools

    • Lawscot Foundation

    • Funding your education

    • Social mobility

  • Research and policy

    • Research and policy

    • Research

    • Influencing the law and policy

    • Equality and diversity

    • Our international work

    • Legal Services Review

    • Meet the Policy team

  • For the public

    • For the public

    • What solicitors can do for you

    • Making a complaint

    • Client protection

    • Find a Solicitor

    • Frequently asked questions

    • Your Scottish solicitor

  • About us

    • About us

    • Contact us

    • Who we are

    • Our strategy, reports and plans

    • Help and advice

    • Our standards

    • Work with us

    • Our logo and branding

    • Equality and diversity

  1. Home
  2. For members
  3. Journal Archive
  4. Issues
  5. November 2023
  6. Developers' casting vote as good as gold

Developers' casting vote as good as gold

This article considers the increasing use of development management schemes in housing developments, and a recent case which upheld the competence of the right of veto commonly found in such schemes
13th November 2023 | Gillian Wood

In this article, we’re going to explore the “golden vote” held by developers during the construction phase of property development. But first, it’s important to understand a key factor of this landscape – the development management scheme (DMS).

What is the DMS?

The DMS is a scheme of rules for the management of land introduced by s 71 of the Title Conditions (Scotland) Act 2003. It’s usually brought into effect as part of a deed of conditions registered against the title to the development site, before any plots are sold to homeowners.

Deeds of conditions are designed to regulate the use, management, and maintenance of the development and in particular the common parts. While DMS rules are not considered to be real burdens, they are similar and do run with the land, binding successors in title. 

The DMS also sets up a corporate entity called the “owners’ association”, which automatically includes homeowners as members and has the capacity to hold title to areas of land which are to be maintained in common. The scheme provides a management structure through the owners’ association and a manager. Homeowners have a say (via voting rights) in how the common parts are managed and pay a share of the associated costs.

Reasons to use the DMS

The DMS is now widely used in housing developments following:

(i) The case of PMP Plus Ltd v Keeper of the Registers of Scotland 2009 SLT (Lands Tr) 2. This case decided that the transfer of a share in the common parts (by the developer to each plot purchaser) was invalid if the description of the land was based on a definition that relied on an uncertain future event to identify the extent of that land. Until this decision, the usual approach for developers was to transfer a share of whatever would be left as common parts at completion of the development.

(ii) A move away from the restrictive practice of transferring shares in the common parts to homeowners based on a set development layout plan which, subsequently and inevitably, was required to change as development progressed, for example to amend the route of a road or layout of open space. The fact that shares in those common parts had already been conveyed to homeowners could lead to a corrective conveyancing mess.

What is the “golden vote”?

The “golden vote” is held by a developer for decisions made on management and maintenance of the common parts of the development. Many homeowners within housing developments may not even realise this vote exists.

It enables an overriding vote or right of veto on owners' decisions, often imposed when applying DMS rules. Developers want such a right of veto for as long as they hold title to part of the development site, to retain flexibility during development and to ensure the development is set up as they want it to be. 

A recent case heard by the Lands Tribunal, Marshall v Granton Homes Ltd LTS/TC/2021/0025 (18 July 2023) queried the competence of such a right of veto. Fortunately for many existing developments and for housebuilders generally, the Tribunal concluded that such a right was competent. Please note that other interesting points were raised concerning the DMS in the case, but it’s the golden vote aspect that we explore below.

The Lands Tribunal case

In the case, homeowners within a development site at Kingsmeadows, Peebles, affected by the DMS sought discharge of (among other rules) the golden vote held by the developer, Granton Homes Ltd. 

There is a relatively complex planning history here, but the homeowners were essentially unhappy that Granton’s updated development plans were, in their opinion, going to necessitate removal of more mature trees within the development than was envisaged when they purchased their units there. 

They therefore wanted Granton’s right of veto discharged so that the owners’ association, set up as part of the DMS, would be in a position to vote down redevelopment of the scale and design proposed since purchase.

The relevant rule of the DMS read:

“For so long as Granton owns any unit in the development or any part of the development, the final decision on any matter affecting the development will remain with Granton.” 

Reasons for decision

The Tribunal refused to discharge the rule. It stated that the rules of the DMS run with the land and therefore the subjective intentions of the parties (set out by the homeowners) are less likely to be given significant weight.

The Tribunal pointed out that the golden vote was envisaged to be temporary and was required to ensure that Granton retained flexibility in progressing with its development. Once the development was complete, Granton’s intention would be to transfer the residual common parts of the development to the owners’ association and move on. At that point, the rule would no longer apply. 

It did, however, suggest that there may be circumstances which would merit a golden vote clause having a time limit to avoid abuse. Housebuilders should bear this in mind. 

It should be noted that the Scottish Law Commission report, in respect of the 2003 Act, made no criticism of golden vote mechanisms. It said it was a matter for the market to decide whether such an arrangement is attractive to purchasers. The Tribunal agreed.

The Tribunal did not consider it justifiable to remove Granton’s right of veto, as that would turn the tables between the parties – the homeowners could veto any development proposal which involved loss of trees under the amenity conditions. 

The Tribunal did however flag that the unvaried statutory DMS tends to assume a completed project, and as such, requires amendment when put in place to regulate the development phase as well as the completed units long term.

In practice the DMS is usually varied or added to fairly extensively and the ability for housebuilders to do so is essential, given that invariably they will be a continuing presence on site with ongoing construction for some time after the first homeowners purchase their units. 

The Author

Gillian Wood is a director with Shepherd and Wedderburn LLP

Share this article
Add To Favorites
https://lawware.co.uk/

Regulars

  • People on the move: November 2023
  • Book reviews: November 2023
  • Reading for pleasure: November 2023

Perspectives

  • Opinion: Alison Hook
  • President's column: November 2023
  • Editorial: Just causes
  • Profile: James Bryden
  • Viewpoints: November 2023

Features

  • Time for due diligence on debt recovery
  • Bringing FAIs under review
  • Can we talk about periods at work?
  • Conference for change
  • "The future is now"

Briefings

  • Civil court: Cases for the connoisseur
  • Employment: ICO issues guidance on workers’ health data
  • Family: Lack of resources no longer a trump card
  • Human rights: When can we still call something “law”?
  • Pensions: Amendment void without actuary confirmation
  • Scottish Solicitors' Discipline Tribunal: November 2023
  • In-house: Life after GC

In practice

  • Public policy highlights: November 2023
  • Covid Inquiry: playing our part
  • Risk: Register of Overseas Entities – an update
  • Walking, in (almost) all weathers
  • Ask Ash: Work still means office

Online exclusive

  • Developers' casting vote as good as gold
  • It’s an emergency! A guide to time off for dependants
  • Early marriage: any need for action?
  • Manifestly unreasonable: the first QOCS disapplication

In this issue

  • Denovo’s legal software innovations in 2023
  • Cyber risks in a world of AI
  • Pioneering the future of Legal IT
  • Investment jargon busting: what you really need to know
Dec 2023
Nov 2023
Oct 2023
Sept 2023
Search the archive

Additional

Law Society of Scotland
Atria One, 144 Morrison Street
Edinburgh
EH3 8EX
If you’re looking for a solicitor, visit FindaSolicitor.scot
T: +44(0) 131 226 7411
E: lawscot@lawscot.org.uk
About us
  • Contact us
  • Who we are
  • Strategy reports plans
  • Help and advice
  • Our standards
  • Work with us
Useful links
  • Find a Solicitor
  • Sign in
  • CPD & Training
  • Rules and guidance
  • Website terms and conditions
Law Society of Scotland | © 2025
Made by Gecko Agency Limited