AN archaic legal relic which has allowed some landlords to inflict financial misery and distress on Scots householders should be abolished, the Scottish Law Commission has recommended.

The right to demand what are known as leasehold casualties has become a major issue because of the activities of landlords who can make large sums of money perfectly legally by enforcing rights that have lain dormant for decades.

The best known is former North Sea welder Brian Hamilton who has become known as the Raider of the Lost Titles.

Now the law commission, Scotland's law reform body, has urged that most casualties - ''an archaic, anachronistic, and undesirable feature of Scottish property law'' - should be scrapped, although small amounts of compensation would be available to landlords in most cases. However, it recommends that compensation should not be paid for the scrapping of the most objectionable form of the payment - casualties based on rental values.

A leasehold casualty is an extra amount over and above the rent which must be paid by a tenant to a landlord from time to time if the lease requires.

In practice, they are payable under very long leases such as 999 years which are common in certain parts of Scotland, particularly Lanarkshire.

Sometimes they are payable every time a new tenant takes over a lease or every time a tenant dies or the lease may provide for a duplicand or double payment of rent, typically, every 19 years.

Strictly speaking, they have nothing to do with the system of feudal tenure and the abolition of the feudal system would have no effect on leasehold casualties. Feudal casualties were abolished in 1914 but leasehold casualties somehow escaped, perhaps through ignorance of their continued existence.

Now that some landlords are turning these long forgotten rights to their financial advantage, there have been calls in Parliament for reform of the law.

The law commission says it is difficult to estimate the scale of the problem but research into 20% of registered leases in Lanarkshire revealed 290 leases with casualties out of a sample of 875. Of these, 95 were rental value leases which cause the real problems.

The commission gave examples of a shopkeeper being faced with a claim for #18,000, a woman being asked for #5000 to buy out the landlord's interest after she moved into a flat, and a tenant under a public house sub-lease facing a payment of about #10,000 to buy out the main lease from the brewery.

In a report published yesterday, the commission states: ''The first problem, and the one that has given rise to most concern in the press and Parliament, is the level of distress suffered by tenants who have suddenly and unexpectedly been faced by demands for large sums of money by landlords claiming payment for outstanding rental value casualties.

''The press and Members of Parliament have placed the blame for this situation on new landlords who have departed from the settled practice of traditional landlords and have exploited what they saw as a lawful opportunity to extract money from others without doing anything in return.

''In their submissions to us, two of these new landlords suggested the blame lay entirely on solicitors who had failed to advise their clients of the existence of a potential liability to pay casualties.

''Where a failure to inform a client of an enforceable burden which is obvious on the face of the title has led to loss and distress it is clearly incumbent on the solicitor to accept responsibility in such a way as to minimise further distress for the client.

''But landlords who have caused distress by enforcing rental value casualties cannot entirely escape responsibility by laying the blame on the legal profession. It is they who have chosen to reactivate archaic and dormant rights for their own advantage, regardless of the stress and unhappiness this may cause.''

The commission is particularly critical of casualties based on rental value, because they are basically a tax on tenants on improvements they have carried out. It says that if a house changes hands several times within a few years, the effect of a rental value casualty could be devastating.

''Each householder, although paying a price for the house in the same way as an owner, would end up paying a large rent as well.''

The law commission report on leasehold casualties is now in the hands of Scottish Secretary Donald Dewar. It contains a draft Bill providing for the extinction of casualties. At a news conference yesterday, Dr Eric Clive, a member of the commission, said: ''One year after the legislation being enacted, casualties would be a thing of the past. This is an anomaly in the law which has got to be got rid of.''

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