Under starter's orders

While our Commonwealth Games athletes prepared for years to be at their peak in time for the Games, Scottish property lawyers may not feel nearly so well prepared for the leap they have to take on 8 December 2014, when the “designated day” under the Land Registration etc (Scotland) Act 2012 arrives.

All property lawyers need to have working knowledge of the 2012 Act changes, but many of these relate to aspects of land registration that will not impact on day-to-day practice. Many things will still look very similar, even if they aren’t exactly the same. And fundamental changes to aspects such as rectification and compensation are not the stuff of our daily routine.

So what differences will we see daily?

The three principal differences in routine conveyancing practice are: the introduction of the advance notice procedure, and with it the decline of the letter of obligation; new style searches and reports; and a radically different application form. Although it is outwith the scope of this article, mention should probably also be made here of the “one shot rule”, which will mean the end of the Keeper’s requisition policy, other than on very rare occasions.

New wording for missives

Missives will need to cater for these new aspects of conveyancing practice, and the Property Standardisation Group (PSG) has produced new versions of its offers to sell, dealing with advance notices and other 2012 Act amendments. These are now available on the PSG website at www.psglegal.co.uk/offer_to_sell.php The accompanying guidance notes explain the thinking behind the changes. It is expected that similar changes will be made to the Combined Standard Clauses for residential missives, and firms are welcome to incorporate this new wording into their own proforma offers.

Gold medal: the advance notice

Undoubtedly the most significant aspect of the 2012 Act regime is the advance notice procedure. This will transform conveyancing practice in Scotland. The box shows the key elements of the new advance notice clause for the missives. Applications for advance notices can (and usually will) be created in an online system currently being developed by Registers. To see what information will need to go into an application, have a look at the Land Register Rules etc (Scotland) Regulations 2014 (SSSI 2014/150).

Once the advance notice system is up and running, I predict we will quickly adapt to the new procedures. But, since you cannot apply for an advance notice until 8 December, there are likely to be a few days around that time when the transition from 1979 Act to 2012 Act procedures could be a bit bumpy. Avoiding settlements during that week would be advisable, but may not be possible. So how should practitioners deal with the crossover from the old to the new?

Letter of obligation or advance notice?

While you can apply for an advance notice on 8 December, the application will not appear in the relevant register until the day after application, at the earliest. Advance notice protection will not start until the day after registration. So even if you apply at 9.01am on Monday, the earliest that the 35-day protected period will start is Wednesday. For settlements on the first few days of transition week, some form of letter of obligation will still be required, as there is still a “gap period”.

New style application forms

A new multi-purpose application form has to be used for applications received on and after 8 December, and the old Forms 1, 2, 3 and 4 will cease to apply. The familiar questions about companies, heritable creditors, matrimonial homes etc are gone, and new questions, also set out in the Land Register Rules, replace them. Bear this in mind if you settle on Friday 5 December, but submit your application by post, as the new form would need to be used. (There is some speculation that Registers may decide to close early that week, to give them time to ensure a smooth transition.) Therefore it will no longer be appropriate to give confirmation about the answers to questions in the application form, in any letter of obligation that you have to give in the first few days of transition. If you have to give the first undertaking in the standard letter of obligation, you must carry out the usual checks. As an aside, we are now providing in the PSG offers to sell that there is no need for the seller’s solicitors to give an undertaking on behalf of clients to deliver the updated search in the charges register. The offers impose this obligation on the seller already.

Searches

Forms 10, 11, 12, and 13 will disappear from our conveyancing vocabulary, but the searches that replace them will do more or less the same thing. And we expect that, since you will want to know when the 35-day protected period has started, you will want to see a search, just before settlement, that discloses the advance notice. That tells you how long a period of protection your client has in which to submit the application, and you also know, if other deeds are disclosed, on which side of the safety zone they lie.

Provisions in missives for advance notice procedure

• Seller is to be bound to apply for an advance notice.
• Advance notice to be in a form to be adjusted with the purchaser, since it is the purchaser who gains the protection.
• Application to be made not earlier than say five working days before the date of settlement. (This allows as much of the protected period as possible to cover the period after settlement, in case of delays, or rejection of the application.)
• The £10 fee for the advance notice to be met by the seller.
• Only a seller (or granter) can apply for an advance notice for a disposition, as only the granter can intend to grant it and may validly grant it.
• If the purchaser wants to apply before settlement for an advance notice for the standard security that the purchaser intends to grant, or for any other deeds (e.g. a disposition in a back-to-back subsale), the missives incorporate automatic consent of the seller.
• The missives also include automatic consent by the purchaser to the discharge of the advance notice should this ever be required. (Note, in most cases, the advance notice will simply be allowed to expire at the end of the 35 day period. There is no requirement to discharge it formally.)
• If a second advance notice is required, it should be paid for by whichever of the seller or the purchaser is responsible for the delay.