Jane Henderson and Rachel Grant, of Brodies LLP, explain what the Land Registration Act means for IPs in Scotland.

The Land Registration etc (Scotland) Act 2012 came into force on 8 December 2014. It introduced substantial changes to Scottish property law and practice.

Though there has been a Scottish Land Register for some time, this has been operating alongside the General Register of Sasines, a vast and ancient deeds register.

Transfer of land into the Land Register has been slow; about 70% of Scotland’s land mass remains unregistered. The new act aims to change this, with the target being to have all land in Scotland mapped and registered within 10 years.

The key changes and their effects

• All transfers of land will now trigger registration, as will the grant of some deeds. The Keeper of the Registers of Scotland also now has the power to register any title without any application having been made by the owner.
• Advance Notices have replaced Letters of Obligation. Similar to English provisions, an Advance Notice will protect a deed from the registration of a competing deed, and will also alert insolvency practitioners (IPs) to proposed transactions relating to a property relevant to them. Advanced Notices last for 35 days, and additional Notices can be applied for to provide further periods of protection.
• Before the act came into force, if a deed was registered, the proprietor named on the title sheet was the legal owner of that property. That position has changed, and now the person named as the proprietor on the Register is not necessarily the owner of that property. Challenges can be brought and the Register can be rectified if there is a ‘manifest inaccuracy’. Disputes relating to the extent of ownership of property can be referred to the courts.
• Previously, the Keeper could indemnify any person who suffered loss as a result of rectification of the Register or a refusal/omission by the Keeper to make a rectification. This indemnity has been replaced by a warranty, to the applicant only, that the title sheet is accurate at the time of registration.
• A new system of caveats supplements Notices of Litigiosity. A caveat appearing on a title sheet will act as a warning that civil court proceedings relating to that property are ongoing. A caveat is obtained by a party to those proceedings applying to the court. Caveats must be registered in the Land Register to have effect and expire after 12 months, unless renewed.
• A new statutory duty of care owed to the Keeper has been introduced. Persons granting deeds, applicants and their agents must take reasonable care to ensure that the deed to be registered and all information and documentation supplied with an application do not induce the Keeper to make the Register inaccurate. Additionally, it is now a criminal offence to knowingly or recklessly make a materially false or misleading statement, or to intentionally or recklessly fail to disclose all material information in relation to an application for registration.
• There have also been a number of changes made to conveyancing practice. The new ‘one shot rule’ means that incomplete or defective applications will be rejected without further enquiry, making it very important for conveyancers to get it right first time. New forms and search reports have been introduced, Land and Charge Certificates are now in electronic format, and notification of registration will (usually) be via email.

It will take some time to see the full effect of the substantial changes introduced by the act, but this overview highlights some of the key changes and how these changes may affect those working in restructuring and insolvency in Scotland.

About the author

Jane Henderson is a solicitor, and Rachel Grant is a partner, in the corporate restructuring and insolvency team at Brodies LLP, @BrodiesLLP.