Getting to know you

The purpose of the conference was to give participants “a clear vision of how you will manage your conveyancing workload within your own firm in the new ARTL age”. But also to have a bit of fun as we all grappled with a new challenge.

Teams were formed for the exercises and were asked to tot up how many ARTL transactions their members had completed. The highest total for any team was five, and the total for all 85 participants was 15. Of those, only two were title transfers. The realisation that we were all in the same boat helped break the ice.

At the start we heard a message from Kate Marshall, senior solicitor to Lloyds Banking Group in Scotland. LBG views ARTL as a commercial imperative for their business. It will help them cut their costs and reduce their exposure to risk. It will be a surprise if the other mainstream lenders do not follow LBG’s lead and effectively make the use of ARTL compulsory where it can be deployed. Kate’s message was that LBG will look at what percentage of a firm’s total registrations are processed via ARTL in checking on compliance with their requirement.

I think it was Margo Hopton of Lynne Herbert & Co who said that getting to grips with ARTL will be a repeat of what happened when we went live as a registration county. We all dreaded having to fill in those unfamiliar forms. Now we hope that every title we deal with is registered. It will be the same with ARTL once we get used to the new processes and the teething problems have been ironed out.

Decision time

When preparing for the conference, it quickly became apparent that the actual operation of ARTL would be the easy bit. One of the tricky bits would be how conveyancing staff would decide which parts of a sale/purchase transaction affecting the land certificate (title transfer, standard security and discharge) could proceed via ARTL. The bulk of the information needed to make that decision is contained in the note entitled “ARTL Compatibility of Deed Titles” (see www.ROS. gov.uk/ARTL).

It is not an easy read, but for practitioners looking to run a profitable and client focused conveyancing service it is critical that all of your staff study this.

Looked at as a process, ARTL is an alternative online route to the paper-based route for registration. If we call the point that we make the decision on which route to take point “D”, the ARTL route to registration route “A” and the paper route to registration route “P”, the worst case scenario is that at point “D” we decide to progress the transaction via ARTL (route “A”), only to find some way down the road that it is blocked. We would then have to retrace our steps and reprocess via route “P”.

The blockage on route “A” might be a factor that was foreseeable at point “D”, or it may be a change in the nature of the transaction that makes route “A” no longer an option.

The best case for us then is that we have to redo some work. The worst case is that settlement is delayed and that neither set of clients are able to complete on the other sale/purchase we are running in tandem for them. In these days, when bridging is almost impossible to obtain, the situation would quickly turn ugly for both sets of solicitors involved.

To minimise risk and record our reasoning for deciding at point “D” whether to follow route “A” or route “P” for each element of the transaction, we needed a decision tree with some of the logic programmed into it. Exactly what questions that decision tree should include I hoped the participants at the conference would supply, and they did. The result is available as part of the ARTL (India) Pack (see www.artl.co.uk).

The real thing

Over lunch, our coach for the day, Kevin Ramsay of Registers of Scotland, and Keith Robertson of Robertson & Co, hatched a cunning plan to process a Royal Bank discharge application Keith had brought with him. When we resumed, with Kevin’s coaching Keith logged onto ARTL and completed the application in quick time. It was clear to everyone that not only was processing a discharge via ARTL straightforward, it takes much less time than the current paper-based route.

We then moved on to the walk through/talk through of a complete sale and purchase. We whizzed through the terms of engagement, the missives, the decision tree, the ARTL mandates, the export of client data from our Instant Office system directly to ARTL, and the creation of the title transfer application on ARTL.

At this point, Kevin coached Keith on how to complete the transfer of title, with his every keystroke closely followed by everyone in the auditorium – who said conveyancing is not a spectator sport!

One of the surprises was how little the seller’s agent has to do on ARTL. Apart from approving the disposition and processing the discharge, the seller does not need to log on until settlement.

The purchaser has most work to do, creating the title transfer application, the SDLT return and the standard security, but it is just a question of knowing which buttons to press. Everything went so smoothly we made up time and went into the closing question-and-answer session ahead of time.

Practical points

Arising from a discussion before the conference with members of the Aberdeen Society of Advocates, I had asked the Conveyancing Committee if it were competent for the offshore joint borrower to grant a power of attorney authorising the onshore joint borrower to sign an ARTL mandate authorising a solicitor to electronically sign the standard security on behalf of both borrowers. The question had been referred to Professor Rennie. However, Janet Taylor of Grigor & Young pointed out that in terms of the CML rules (Part One, 5.11.1), neither borrower may appoint the other as attorney.

Sole practitioners need to have another solicitor named in their ARTL mandates, in case the principal is on holiday or indisposed when a title transfer or standard security needs signed. That substitute will have to be authorised on ARTL to sign for the principal’s firm.

Not infrequently, loan instructions do not arrive until just before settlement. There was concern that, if the amount shown in the instructions did not match that in the signed ARTL mandate, the mandate might be invalid. The suggested solution is to insert the words “per my/our offer of loan” in the loan amount box.

In the ARTL timeline (with the ARTL (India) Pack), I recommend that we adopt the practice of having clients sign both an ARTL mandate and a power of attorney in favour of the same solicitors. This is to cover the scenario where, at the 11th hour, you discover route “A” is blocked and the clients are not available to sign the route “P” paperwork in time for settlement. Armed with the power of attorney, the solicitor can do so and save the day.

The Society’s John Scott advised that the Conveyancing Committee expects to review the form of the ARTL mandate and the rules relating to ARTL in light of feedback from the profession. We will have to work through some real life transactions before we can validly contribute to that debate, but John will be happy to receive your feedback.

SDLT funds?

In route “P” transactions, we send the deeds for registration and have 28 days to pay the SDLT. With route “A” transactions the SDLT will be taken from our (ROS) client account by direct debit three working days after we submit the title transfer application via ARTL.

If you do not have cleared funds in your client account to cover the SDLT (cheques can take up to five days to clear), the sum taken by ROS will put you in breach of the Accounts Rules. If you stop the SDLT payment, ROS will shut down your ARTL account. Both events will have consequences, none of them good.

Kevin appreciates the problem and is taking it up within Registers.

The parting message for participants, who are beginning to like ARTL, was (a) doing discharges via ARTL is easy and a good place to start building confidence in what buttons to press; and (b) we would be in touch when the ARTL (India) Pack was available via www.ARTL.co.uk, which it now is.

Graham Gibson is a partner with Kirklands, Perth, and a director of Kirklands Business Solutions Ltd

The ARTL of giving

The ARTL (India) Pack offers you practical materials to help you get started on ARTL in return for a donation via JustGiving.com to help build a new home and a skills centre for 100 orphaned or abandoned girls of the “untouchable” caste in Kapcot, northern India. About a further £10,000 is needed to reach the target of £45,000. The pack includes:

• two ARTL mandates (in Word format) (1) for transfer of title and discharge; and (2) security;
• decision tree, a huge time saver. See Timeline for how early to use it;
• sample wording for terms of engagement, explanatory letter to client and other letters;
• ARTL timeline and processes. See at a glance the life cycle of an ARTL sale and purchase.

See www.artl.co.uk for more.