"In the Feu charter there are usually special conditions that the vassal shall erect buildings of a certain value, say of an annual value equal to six times the feu duty, and also that the buildings shall conform to the general plan for the laying out of the estate as an urban district, and also providing for roads, drains, etc."
Mr. Sargant points out the legal differences in the case of the English freehold rentcharge system and the Scottish system of feu duties: "According to the law of England, a landowner who disposes of his land for the whole duration of his estate is unable to create any tenure between himself and the person who deals with him, and is unable, therefore, to reserve any rent strictly so called, since rent is only one of the incidents of tenure. Rent can only be reserved if the landowner parts with something less in point of duration than his whole estate in the land, so that he has left what is called a reversion - that is, some period of time of whatever length at the commencement of which the land will revert or come back to him on the expiration of the lesser estate which he has granted away.
"Whenever then an English landowner is minded in accordance with a custom in the locality, or for any other reason, to grant land for ever for building purposes in consideration of a periodical payment, he does not attempt to reserve a rent, but limits to himself a rentcharge of the agreed amount, with special provisions (now given by Statute) for securing its payment. And from this time forth he is considered in law not as having any estate whatever in the land (which would be the case if he had granted a lease for however long a period, short of the duration of his own estate), but as merely entitled to a rentcharge issuing out of the land. And this system of payment, or development for building purposes, is conveniently known as the 'freehold rentcharge system,' while the rentcharges created under it are often (though inaccurately) known in Manchester and other places where the system is prevalent as 'chief rents.' In Scotland a difference of law allows landowners, while granting away their land for ever, to create a tenure between themselves and the grantees, and to reserve a perpetual periodical payment of the nature of rent. These payments are generally known as 'feu duties' and the system as that of 'feuing.'"
Urban Rating by Sargant, pp. 9, 10.
The following observations from the Report of the Committee on "Town Holdings" may perhaps be quoted with advantage: "It is frequently the case that the original feuar (usually the builder) realises his profit by granting subordinate feus, reserving increased or improved feu duties of a larger amount than he himself pays. In such cases he fills a double relation, viz., that of feuar to the original superior, and of superior to his subordinate feuars. In former times it was often a condition in the original charter that the vassal should not thus sub-feu, and in order to evade this restriction, the practice arose of creating what are called ' ground annuals ' instead of subordinate feu duties. In the case of these ground annuals, the feudal relation of superior and vassal does not exist but they are purely 'conventional,' or, in other words, are dependent entirely upon the contract of the parties. Like the feu duties, they consist of a perpetual yearly charge of a fixed amount, and, except that they do not carry with them the incident of casualties, they are, for the purpose of our inquiry, practically in the same position as feu duties. When we do not specially mention them, it is to be understood that our observations referring to feu duties are to be taken as applying to ground annuals also.
"In the case of both English fee-farm grants and of Scotch feus, the rights of the parties appear to us (with one exception, hereafter mentioned) to be substantially the same. There are technical differences between the two cases, but the interest of the ground landlord in England, and the superior in Scotland is (subject to the exception referred to) practically limited to the fixed annual sum agreed to be paid to him in perpetuity and to the remedies he possesses for its recovery, which may be described as the right to sue for the rent as a debt, to seize and sell the movable property on the premises, or, in certain cases, to resume or recover possession of both land and building.
House of Commons Paper, No. 214 of 1892, p. xxvii.
"There is one important point in which the two systems differ. In Scotland, in consequence of the continued existence of the feudal tenure, it is usual to contract for certain payments to become due from the feuar or vassal to the superior, known as casualties. Formerly these payments accrued upon a change in the ownership of the vassal's interest by death, alienation, or otherwise, and were frequently indefinite in time and amount. By a statute passed in 1874 it was made illegal to contract for indefinite casualties in feu charters thereafter granted, and as regards casualties under charters of earlier date, powers were given by which the casualties could either be redeemed or restricted in amount and time. The casualty now most prevalent is a payment of one or two extra years' feu duty, made at fixed periods, such as every 19th or 25th year, although in a more limited number of cases the payment consists of a year's rent or value of the subjects as they stand."
The amount of the feu duty annually paid cannot be increased by any expenditure of local rates, by the aggregation of population, or any other cause, but its selling value may possibly be increased by the improvement of the security, but this is not important, because a feu duty is usually secured by about five or six times its value. The increase of selling value, due to improvement of the security, should be distinguished from that due merely to the fall in the rate of interest, which has affected all investments of a somewhat similar character.