1(1)The provisions of this paragraph and of paragraphs 2 and 3(1) below shall have effect where a transfer to which this Schedule applies is a transfer of property, rights and liabilities of a regional or islands council and the question of allocation of the property, rights and liabilities as between the regional council’s successor, or the islands council, and the transferee arises.
(2)Any property, right or liability referable partly to the functions of the council which are transferred and partly to the functions which are retained for the regional council’s successor, or the islands council, shall (where the nature of the property, right or liability permits) be divided or apportioned between the successor, or council, and the transferee in such proportions as may be appropriate; and, where any estate or interest in land falls to be so divided, any rent payable by or to any party in respect of that land and any feu-duty, stipend or other outgoing running with the land or right shall be divided or apportioned correspondingly.
(3)Any property, right or liability referable as mentioned in sub-paragraph (2) above but the nature of which does not permit its division or apportionment as so mentioned, shall be transferred to the transferee or retained for the regional council’s successor, or the islands council, according to—
(a)in the case of an estate or interest in land, whether on the transfer date the successor, or islands council, or the transferee appears to be in greater need of the security afforded by that estate or interest or, where neither appears to be in greater need of that security, whether as from that date the successor, or islands council, or the transferee appears likely to make use of the land to the greater extent;
(b)in the case of any other property or any right or liability, whether as from the transfer date the successor, or islands council, or the transferee appears likely to make use of the property, or as the case may be to be affected by the right or liability, to the greater extent,
subject (in either case) to such arrangements for the protection of the other of them as may be agreed between them.
2(1)It shall be the duty of the council (or as the case may be the council’s successor) and the transferee, whether before or after the transfer date, so far as practicable to arrive at such written agreements and to execute such other instruments as are necessary or expedient to identify or define the property, rights and liabilities transferred to the transferee or retained for the successor, or islands council, and as will—
(a)afford to the successor, or islands council, and the transferee as against one another such rights and safeguards as they may require for the proper discharge of their respective functions; and
(b)make as from such date, not being earlier than the transfer date, as may be specified in the agreement or instrument such clarification and modifications of the division of the council’s property, rights and liabilities as will best serve the proper discharge of the respective functions of the successor, or the islands council, and the transferee.
(2)Any such agreement shall provide so far as it is expedient—
(a)for the granting of leases and for the creation of other liabilities and rights over land whether amounting in law to interests in land or not, and whether involving the surrender of any existing interest or the creation of a new interest or not;
(b)for the granting of indemnities in connection with the severance of leases and other matters; and
(c)for responsibility for registration of any matter in any statutory register.
(3)If the council (or as the case may be the successor) or the transferee represent to the Secretary of State, or if it appears to the Secretary of State without such a representation, that it is unlikely in the case of any matter on which agreement is required under sub-paragraph (1) above that such agreement will be reached, the Secretary of State may, whether before or after the transfer date, give a direction determining that matter and may include in the direction any provision which might have been included in an agreement under sub-paragraph (1) above; and any property, rights or liabilities required by the direction to be transferred to the transferee shall accordingly be regarded as having been transferred to, and vested in, the transferee by virtue of the scheme (but not until the date of the direction if that is after the transfer date).