Substitute land and charge certificates

Moreover, in terms of Rule 9(3) of the Land Registration (Scotland) Rules 1980 any application for registration of any dealing with whole or transfer of part of a registered title shall be accompanied by the appropriate land certificate. If the application is not accompanied by the land certificate then, unless the provisions of Rule 18 apply, the Keeper will reject it.

Naturally it would be too much to expect that there would never be occasions when land and/or charge certificates might go missing or be inadvertently destroyed. The aforementioned Rule 18 takes cognisance of this, by allowing the Keeper the discretion not to reject an application which is not accompanied by the appropriate land certificate if he is satisfied that it has been lost or destroyed. Rule 19 carries this a stage further and provides that the Keeper shall issue a substitute land and/or charge certificate, marked as such, if he is satisfied that the original has been lost or destroyed. The rule also provides that the title sheet will be noted to show that a substitute has been issued. This is a fairly obvious precaution to minimise the risk of fraud.

It is interesting to note that in terms of both Rule 18 and Rule 19 the Keeper has to be satisfied that a land or charge certificate has been lost or destroyed. The Keeper must decide on the standard of evidence sufficient to satisfy him. Because of the importance of the certificates, the Keeper initially imposed stringent evidential requirements to prove loss or destruction. These are as follows:

• He required the last known location to be identified.
• He required written assurances from the solicitor that diligent and exhaustive searches had been made.
• If the land certificate had been lost in the possession of a mortgage lender he required identical written assurances from them.
• If the certificate had been lost in the post he required the Post Office to certify that they had carried out a search to no avail and so on and so forth.

As time went by the Keeper relaxed the stringency of his requirements a little. He decided to trust to the solicitor’s word and introduced a form, the L22, for applying for a substitute which considerably simplified the procedure. Essentially the form asked for full details of how the certificate had come to be lost or destroyed and asked the solicitor to certify that a thorough search had been made and that the certificate could not be found.

Unfortunately this relaxed approach has led to a considerable increase in requests for substitute certificates. Currently the Agency is issuing around 1000 substitute certificates per annum. This suggests that the land and charge certificates are not being accorded the care which they deserve. Another sign of a more casual approach to the whole issue is that on a number of occasions after the issue of a substitute certificate and a subsequent application for registration is made the original land certificate is included in the supporting documentation. This suggests that the search for the “missing” certificate has not been as thorough as the Keeper has been led to believe. More evidence of this is apparent from the fact that in 150-200 cases per year applications for substitute certificates are cancelled after the necessary Form L22 has been completed and returned to the Keeper and work on producing the substitute has commenced. Furthermore, in around 250 cases, applications are not followed through when the necessary Form L22 declaration has been requested by the Keeper.

It may be that a number of solicitors who cannot immediately lay their hands upon the land certificate and who need to exhibit something quickly are ordering a substitute when an office copy of the title sheet would suffice. Section 6(5) of the 1979 Act provides that the Keeper shall issue office copies of inter alia any title sheet and that the copy shall be accepted for all purposes as sufficient evidence of the contents of the original. Thus, if the original cannot immediately be found and the need is to exhibit something, an office copy will suffice. This can buy the necessary time for a proper search to be made and the original to turn up, as it manifestly does on a number of occasions. Staff in the Agency responsible for handling applications for substitute certificates have been instructed to discuss the possibility of using an office copy with any applicant for a substitute certificate. The situation will be monitored to see if this leads to any reduction in the number of substitute certificates requested and/or issued.

If, however, the number of requests for substitute certificates continues at the present level or increases the Keeper will have to give serious consideration to introducing more stringent evidential requirements again. The more substitute certificates there are in existence, the more potential for fraud exists. The Keeper has a duty to ensure that Land and Charge Certificates are treated with the care and respect that they deserve. If it appears manifest to him that they are not being accorded that treatment he will not hesitate to take steps to make it much more difficult to acquire substitutes and thus make patent the need to take special care of the original. It is certainly the Keeper’s intention to introduce, with immediate effect, a charge for the work done by his staff in cases where the application for a substitute certificate is cancelled after production of it has started.

The Conveyancing Committee of the Law Society of Scotland share the Keeper’s concerns and support the publication of this Note.