17 Oct 2014

Analysis: Key changes in The Land Registration etc. (Scotland) Act 2012

Analysis: Key changes in The Land Registration etc. (Scotland) Act 2012

Michael Sinclair, Partner, looks at the key changes to Land Registration in Scotland under the Land Registration etc. (Scotland) Act 2012, which comes into force on 8th December 2014.

Michael Sinclair, Partner, looks at the key changes to Land Registration in Scotland under the Land Registration etc. (Scotland) Act 2012, which comes into force on 8th December 2014.

The Land Registration etc. (Scotland) Act 2012 comes fully into force on 8th December 2014.  The changes that the 2012 Act brings will have significant impact on conveyancers and anyone buying a property with a date of entry of 8th December 2014 or afterwards should be aware of these.

In real terms, the 2012 Act gives legislative substance to the process of Land Registration which has been developed by Registers of Scotland over the past 35 years, subject to some key changes and improvements. The key changes to the act are explained below.

Title Deeds

Under the 2012 Act no physical title deeds will be issued by Registers of Scotland.  All titles will be available online via the secure Land Register website portal and electronic Registration Receipts will be emailed to submitting solicitors and their clients should they so wish. There is a real benefit here in that some historic title deeds, if lost or destroyed, can be very costly to reconstitute.  By removing the need for physical title deeds, the risks of loss or destruction are removed completely.

The “One Shot Rule”

Under the current law, the Keeper of the Land Registers of Scotland is able to hold over applications for registration pending correction of minor discrepancies, typically spelling errors in deeds, wrong references, etc.  Over time, the Keeper has amassed quite a volume of applications in “hold over”.  As a result there is a very real risk that there will be subsequent transactions held up by the one in hold over. This could mean that current owners of properties can be affected by historic errors in applications for registration long before they took possession of their property.  Clearly this is unacceptable and the 2012 Act dictates that any application not deemed suitable for acceptance to the Land Register upon receipt is rejected straight away and must be corrected before being re-submitted.

The 2012 Act creates a duty on applicants and those acting for them, to take reasonable care not to cause an inaccuracy in the Register. An offence of making a materially false or misleading statement or intentionally failing to disclose material information in connection with an application is also created.

Advance Notices

Advance Notices are completely new under the 2012 Act and are intended to improve the security of registration by offering a period of protection for any deed registered which has been preceded by an Advance Notice.  There is a 35 day priority period and this costs £10 per notice.  Only the party with an interest in the deed to be protected can register an advance notice and it will become common practice for those selling properties to register these in favour of the buyers prior to the date of entry. The Advance Notices are an important addition to the process and will reduce the risks of competing title to properties if used correctly.

The Keeper’s “Midas Touch” 

Under the current law, if a title is registered without exclusion of indemnity in the Land Register, then the title becomes unchallengeable subject to very limited exceptions. This quirk of the Land Registration (Scotland) Act 1979 acts contrary to Scots Property Law and could deprive true owners of their property simply by operation of the registration process.  This has been corrected in the 2012 Act and the midas touch is gone.  The indemnity is replaced by a warranty to the applicant only that the title sheet of his property is accurate. This warranty may be limited or excluded, or a lesser category of warranty may be extended to full warranty.

Cadastral Mapping

Cadastral Mapping is being introduced in the 2012 act. Effectively, this is a method of identifying a single property or title by reference to a map, which map can also contain other information about that property. The interesting point here is that common or shared areas will have their own cadastral unit reference and their own title sheet and should be able to be clearly identified.  This should make it much more clear to those buying property which common areas are attached to their properties and which areas they can use and are bound to maintain.

What Does This Mean For Buyers & Sellers?

In real terms, consumers should benefit from the new rules due to there being a more accurate Land Register of Scotland, with more accurate titles and clearer information available regarding both the properties themselves but also the common or shared areas.  Although there is a cost for the advance notice, this is a very small price to pay for the added security and assurances offered by the notice to protect the title being registered.  The fact that no physical title deeds will be issued may be one which people will take time to come to terms with, but there are real benefits from this in reducing the risks and costs of replacing title deeds which have gone astray.

Michael Sinclair, Partner

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