Attributed to Christopher Taylor, Chief Executive Officer, Titlesolv
From December this year the Scottish property market will be subject to a seismic shift of a kind not seen since 1979. The Land Registration Act (Scotland) 2012, which will come into force on 1 December 2014, will fundamentally change the way that property and land in Scotland is registered and administered.
It reforms the law on the registration of rights to land and enables electronic conveyancing and the registration of electronic documents in the Land Register. This will eventually lead to the closure of the General Register of Sasines – the register, begun in 1599, of property transactions relating to land in Scotland.
While at first glance this may not have obvious repercussions for the property market, looks are deceiving, as with many things in life. The Act contains some changes that could seriously impact property transactions for the unaware.
The intention of the Act is to realign the law around registration with wider property law and to make the registration system faster, more efficient and, ultimately, allow the completion of the Land Register of Scotland. Since the introduction of the Land Register in 1981, registration of property titles has been moving from traditional records to a map-based system (known as a cadastral map), as used in England and Wales. However, at the moment, only about a quarter of Scottish land is actually registered in the Land Register. The Act looks to rectify this by increasing the number of events that will automatically trigger the transfer of property from the General Register of Sasines to the Land Register, with the aim of completing the register by 2024. Some of these new proposed triggers include the compulsory first registration of re-mortgage deeds and mandatory registration of the landlord’s title when a long leasehold deed is submitted for registration.
In addition to the reforms to the Land Register, the Act also establishes a new system of “advance notices” for conveyancing transactions. The period between the delivery and the registration of a deed disposing an interest in land is the period in which the grantee of the deed (normally the party purchasing the land) faces most risk, the most common being either the granter of the deed (the seller) entering insolvency; or a competing deed registered before the deed in favour of the purchaser. This risk is currently underwritten by insurance, but the new regime will give solicitors the ability to safeguard a purchaser by applying for an Advance Notice, the absence of which creates more insurable risks such as the possibility of a third party acquiring an interest in the property through fraud prior to registration of the deed.
Finally, the Act introduces amendments to the Requirements of Writing (Scotland) Act 1995, which will allow Scottish Ministers to introduce legislation enabling electronic conveyancing and electronic registration. This is a major step forward in bringing conveyancing into the 21st century.
Titlesolv is a trading name of London & European Title Insurance Services Limited authorised and regulated by the Financial Conduct Authority.
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