Although the Land Registration (Scotland) Act 2012 brought
fairly extensive changes to the registration process in Scotland,
it's fair to say that with one or two notable exceptions, those
changes are now accepted and part of day to day life for the
However, there are still a few areas where the effects of the
Act need to be borne in mind, particularly when dealing in cross
One of the main drivers behind the Act was the completion of the
Land Register of Scotland. Unlike in England, Scotland still has a
significant number of properties which remain in the older, Sasine
Register, (roughly the equivalent of unregistered property).
Under the previous regime, it took the transfer of a property for
value to induce first registration, however, under the new Act,
dealings which induce registration have been extended to the grant
of a new lease and the grant of a new fixed charge.
In itself, the additional registration requirements add a little
to the time, effort and cost that goes in to an individual
registration, but no more so than the time and effort that would
have gone into an old fashioned first registration as a result of a
sale. Registers have even tried to make the process less
off-putting by either reducing or waiving the registration dues
when registration is being induced because of a new fixed
However, ultimately, it is another layer of diligence that needs
to be dealt with in transactions, particularly portfolio
refinancing transactions. No longer will it be possible to simply
insert title details into a suite of broken out documents and send
them to registers. Instead, if any of the secured properties
are still registered in the Sasine Register, steps need to be taken
to obtain the underlying titles and an application for automatic
registration will need to be made. This is likely to involve
obtaining a land registrable plan of the property, a plans report
and the usual suite of searches.
The problem is doubled if the borrower is unfortunate enough to
be securing a Sasine registered long lease, in which case not only
will they need to register the leasehold interest, but also the
landlord's freehold interest as well.
Automatic registration may not always be a straightforward
matter of filling in the form. One of the questions which must be
answered is whether or not there has been any restriction on the
title investigation carried out by the submitting solicitor.
For a commercial building, it will be in both the owner and the
lender's interests to ensure that an investigation is carried
out and that no restriction of the investigation is noted on the
title. This is not an insurmountable problem, but it will
take time and needs to be built into the transaction timetable.
In any event, in order for the bank to be properly secured at
completion, the bank's solicitors will need to be careful to
ensure that the correct registration forms, (and underlying deeds)
are all correctly submitted at completion.
The material contained in this article is of the nature of
general comment only and does not give advice on any particular
matter. Recipients should not act on the basis of the information
in this e-update without taking appropriate professional advice
upon their own particular circumstances.
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