Over the finishing line – 2

The obtaining of searches, another key element of the conveyancing process, is also going to be profoundly different in a number of ways under the 2012 Act. A suite of searches (or reports, as they are now being called) has been produced by the Registers to provide the essential information from the Registers that every conveyancing transaction requires.

Legal reports

Legal reports, which replace the old Forms 10, 11, 12 and 13, are reassuringly familiar, and will perform virtually the same function. The Legal Report – Unregistered Land will be equivalent to the Form 10, and will be the report to obtain in first registration transactions. As well as providing the same information as a Form 10, this report will also disclose any advance notices that have been recorded in the Sasine Register. If, as is usual practice (at least in commercial property transactions), the report is obtained early in the transaction, it is likely to predate the advance notice application for the transaction. However, a Legal Continuation Report (the equivalent of a Form 11 or Form 13) can be obtained at no additional cost (if requested within six months from the date of the original report). A continuation report obtained immediately before settlement will show the advance notice, meaning that the purchaser will know they can proceed to complete the transaction, safe within the shelter of the advance notice protection.

The Legal Report – Registered Land will perform the same function as a Form 12, with a continuation report also included in the cost.

Plans reports

Plans reports have not played a major part in land registration under the 1979 Act. The P16 report, which compares a plan or bounding description with the Ordnance Survey map, while useful, is too often inadequate, or inconclusive. An essential part of the 2012 Act regime will be the requirement to plot the property being conveyed onto the cadastral map. There can be no overlapping titles on the cadastral map, and any application for registration which competes with land that is already plotted on the cadastral map will be rejected. So, obtaining detailed plan and mapping information becomes an even more crucial part of the due diligence process, and plans reports have been developed to provide the information that conveyancers will need, to ensure that their application will not compete with any other registered titles, and that the property in question can be accurately plotted onto the cadastral map.

There are to be three levels of plans report. Information about what these will contain, and the costs, are to be found in General Guidance on Reports on the Registers’ website, and both legal and plans reports can be ordered from the Registers via their eforms service. There will be five components to plans reports, and the level of report you request (level 1, level 2 or level 3) will determine the detail of plans information you receive. The five components of plans reports are to be:

• Part 1 – Suitability of submitted plan and/or bounding description for registration
• Part 2 – A comparison with the Ordnance Survey map (P16 equivalent)
• Part 3 – Details of any existing exclusive registered areas which conflict with the property
• Part 4 – Details of any existing shared registered areas which affect the property
• Part 5 – Any additional registered interests, such as leases affecting the property

All three levels will include part 1 and clarify whether the plan (or description) that is to be submitted with your application will meet basic registration requirements. The Registers’ “Deed Plan Criteria” is a valuable guide to ensuring that these requirements are met. A positive response at part 1 will reassure the applicant that their proposed plan (or an existing sasine plan or description) will be accepted for land registration purposes.

The level 1 report will also disclose any potential conflicting cadastral units. This information may appear in part 3, 4 or 5 of the report. Having information about any conflicts at the earliest opportunity will allow corrective or remedial action to be taken, and will reduce the risk of rejection of the application.

A level 2 report will provide all the information that a level 1 report provides, and will provide a comparison with the Ordnance Survey map (P16 equivalent) at part 2.

In addition to providing all the information found in a level 2 report, a level 3 report will provide extracts showing the extent of any competing cadastral units, as well as providing other information about the extent of servitudes and burdens and any mineral interests affecting the land.

A plans continuation report will also be available.

When will you need a plans report?

All three levels of plans report are suitable for applications for first registration. Which level you opt for will depend to some extent on the complexity of the title, and the type of property. The difference in cost between level 1 and level 2 is only £10, but, other than the OS map comparison, neither one, it seems, will provide you with an illustration showing where any conflicts lie. Only a level 3 report will provide that information, so for higher value or complicated titles, the modest additional cost of a level 3 report would appear to be justified.

Will you need a plans report for registered property? The immediate answer would appear to be no, but on reflection, possibly. If you are dealing with a property registered under the 1979 Act, although reasonably rare, there is anecdotal evidence of competing title extents, and mapping errors cannot be ruled out. There may be a gap between “adjoining” cadastral units, or neighbouring land may have registered a prescriptive servitude since the date of the title sheet for the property you are dealing with. While you would expect this latter event to be disclosed by a legal report, a plans report would be a quick and easy way to establish the extent.

When acquiring part of a registered title, a plans report will be able to confirm that there is no conflict with any other part of the larger title that has been conveyed (although note that if the larger area is a development that has the benefit of Development Plan Approval, there should be no boundary conflicts between plots in that development). And there will be other examples that haven’t occurred to me yet!

Private searching organisations will also provide the new reports.

Having accurate plans confirmation, and comfort that there are no conflicts with other registered interests, is going to become increasingly important in the process of applying for registration.

General application conditions

The onus is on the applicant (and the applicant’s solicitor), not only to satisfy the Keeper that, at the date of application, the conditions for acceptance of an application for registration have been met, but also to conduct an investigation of title that is sufficiently rigorous to ensure that no inaccuracy appears on the Register.

All applications must comply with the general application conditions set out in s 22 of the 2012 Act, and also with any particular conditions of registration (ss 23, 25, 26 and 28 respectively) that relate to the type of application, i.e. a first registration, automatic plot registration, registration of a registered plot, and voluntary registration. If the relevant conditions are not met, as at the date of application, the application will be rejected.

The general application conditions relate to the application itself, whereas the particular conditions of registration relate to the deed or plot being registered.

• The general application conditions are:
• the application must be in the prescribed form;
• the registration fee must be paid at the time of the application, or satisfactory arrangements for payment (such as payment by direct debit) must be in place;
• the application must not relate to a souvenir plot (a plot of negligible size and no practical use);
• the application must not fall to be rejected by s 6 of the Requirements of Writing (Scotland) Act 1995, which makes probativity (self proving status) a requirement for registration in the Land Register;
• the application must not be one that would be rejected because of a prohibition in some other enactment (e.g. the prohibition on registration under the Finance Act 2003, without SDLT having been paid, or LBTT from 1 April 2015 under the Land and Buildings Transaction Tax (Scotland) Act 2013); and
• the application must be such that the Keeper is able to comply with her duties under part 1 of the Act. Part 1 sets out the information that the Keeper must enter in the relevant sections of the title sheet: e.g. the property section must contain a description of the plot together with any pertinents; the proprietorship section has to show the name and designation of the proprietor; charges must be disclosed in the securities section, and the burdens section should set out the details of any encumbrances.

It is therefore up to the applicant to provide the Keeper with all the documents and information necessary to comply with these duties, and the omission from the application of any material information will result in rejection.

In addition, it is a condition of all applications for registration that the deed must be valid. The deed must therefore be properly drawn and executed, the granter of the deed must have both title and capacity to grant it, and the deed must be in such a form that it is competent to achieve its purported effect. A disposition must therefore have dispositive effect, and real burdens must be set out in a deed that is properly constitutive for the purposes of the Title Conditions (Scotland) Act 2003.

In an application for first registration, the description of, and/or plan representing, the plot must be sufficient to enable the Keeper to delineate it on the cadastral map. If there are any encumbrances affecting only part of a plot, these must be sufficiently described to allow them to be mapped. Deeds that relate to a registered plot must narrate the title number of each title sheet to which it relates.

Last month’s article and the accompanying checklists, along with the detailed guidance produced by the Registers, provide more help on completing the new application form. Now that we have made it beyond the designated day, we will start to become increasingly familiar with the content and effect of the reports and forms, and using them in live transactions will make it easier for us to see how our processes and procedures need to adapt to the new regime. It will however take some time to make all the adjustments that are needed, and to get to grips with how to complete some parts of the application form, especially when circumstances are not straightforward. Practices and approaches will no doubt evolve over the next weeks and months. Let us take comfort from the fact that we are all setting out together.