The designated day for the Land Registration (Scotland) Act 2012 (8 December 2014) has now passed. We consider below the implications for lenders.

Summary

  • Advance notices will give lenders more security, with their interest protected for 35 days from the date of registration of the notice, and will avoid the “race to the register” where competing interests can be registered first.
  • The Sasine Register will be phased out. The date for closure is still to be confirmed.
  • Copy Title extract is provided on registration so it may no longer be required to retain original deeds.
  • The letter of obligation is replaced by advance notice and will avoid reliance on borrower’s solicitors professional indemnity insurance.

The Land and Sasine Register

The objective of the Act is for the Register of Sasines to be closed and for every property to be registered in the Land Register by 2024. Where a property is not already in the Land Register, its transfer will trigger first registration. The Sasine Register will remain open at present for new standard securities or discharges over the unregistered property but, at a date still to be confirmed, the grant of new deeds over unregistered property will trigger first registration.

Land and Charges certificates

Land or Charge certificates will no longer be issued by the Registers of Scotland when a deed is registered. In its place will be a PDF extract which can be checked to ensure that the registration has been completed as expected.

Official extract copies can be obtained where necessary for any enforcement proceedings.

This potentially means that original deeds no longer need to be retained where a property has been registered under this system.

Advance Notice

The system of a letter of obligation being provided on the day of completion by the borrowers’ solicitors has ended. In its place is an advance notice which gives a 35 day priority period, commencing on the date of registration of the notice, during which time the person in whose favour the notice has been granted will be granted priority over any competing deed or inhibition registered during that period.

One shot rule

The 35 day period will give lenders a period in which to have their security registered commencing on the date of registration of the notice. The registers have introduced a “one shot” rule so that if an application for registration is incomplete or incorrect it will not be accepted. Lenders should ensure that the notice is registered as close as possible to completion to allow for time in resubmitting the application in case there is an issue with an application.

Searches

The searches in Forms 10 & 12 and 11 & 13 have ended and in their place is a new form of search called a legal report. This search works in much the same way as the previous searches for all practical purposes.