Registration rejections – more than formalities

Of the many topics which I cover in CPD events relating to land registration, one I am frequently asked to speak about is how to avoid applications being rejected by Registers of Scotland (“RoS”). The risk to clients, solicitors and RoS in losing a date of registration because of a rejection, particularly months down the line, rightly remains an area of concern for all involved. RoS has been working hard to ensure that rejections at least happen as quickly as possible. Most rejections are now caught quickly and returned by RoS within a couple of days, but of course there are still many rejections and each is a risk to law firms and clients. Some recent statistics are in the first table below.

Many rejections are for administrative or form reasons, such as not signing the form or not including the writs mentioned in the application. There are, however, two reasons for rejection which, while not being the most frequent, are important to note since they potentially affect many transactions. Both relate to formalities of writing under the Requirements of Writing (Scotland) Act 1995, as amended by the Land Registration etc (Scotland) Act 2012. 

Ordinary signature or probative?

It has long been the case that to record a deed in the General Register of Sasines or to register it in the Books of Council and Session, the deed has to be not just subscribed but probative (self-proving), which in most cases meant witnessed.

This has not changed.

Yet for the Land Register, the Land Registration (Scotland) Act 1979 did not actually specify that a deed being registered had to be probative. Therefore under the old regime it was up to the Keeper when to accept and reject deeds for being 1995 Act compliant. 

That has changed with the overhaul of land registration. Now, under s 22(1)(c) of the 2012 Act, it is a general registration condition that to be registered, deeds need to be probative. 

Ultimately the Keeper must reject an application to the extent that she is not satisfied that the registration conditions are met. One of the statutory general application conditions is that the deed is valid. So, if the 1995 Act requirements are not met, it will often be obvious on the face of the deed, meaning the Keeper would have to reject that deed.

This has onward effects on alterations and illegible signatures.

Alterations and substitute pages in deeds

Whether or not an alteration to a deed is validly incorporated into that deed depends on whether the 1995 Act requirements have been met.

To recap briefly on the Act (wills and testamentary writings aside), see the second table below. 

These requirements do not always work well in practice. So in the flurry of a settlement, sometimes solicitors have agreed with each other and the respective clients that rather than having a deed signed again and holding up the settlement, the text of the relevant page would be amended on a computer and freshly printed off, then substituted for the original page as though it was part of the original deed. Although not technically correct, some solicitors have thought that the risk of later issues arising is low because everyone has agreed upfront, and that perhaps there would be a form of personal bar. Other solicitors have been more cautious, and rather than their firm take the risks surrounding a wholly or partly invalid deed, they have instead demanded that the strict letter of the 1995 Act be followed even if it means delaying settlement. 

However, the fact that deeds have to be probative under the 2012 Act means that there is even more reason for caution than before. This is the case not just because of the statutory duty of care and usual solicitors’ ethical requirements, but for practical reasons too. 

For although RoS would not necessarily know of all such substitutions made behind the scenes, some deeds will flag up to it as clearly having substituted pages. This may be where RoS rejects a deed, sends it back, and it is resubmitted with an alternative page. In other cases it is evident from different paper used for the substitute page, and so on. However it comes to its attention, RoS nowadays will reject unless the 1995 Act requirements of signing the alteration and dealing with the testing clause have been met.

In fact, RoS takes its duty to maintain the integrity of the Register so seriously that in addition to rejection, it will write to the senior partners of the firm(s) involved. Typically this letter includes a background of what happened, a reminder what the law is as regards registration and validity of deeds, and various warnings to the senior partners as to the potential pitfalls of an invalid deed being registered. The following is an excerpt from RoS’s standard letter in such cases:

“Submitting invalid deeds for registration places submitting agents at risk, as well as eroding the integrity of the Land Register. Should such a deed be registered but found void, a purchaser could lose their title to the property and could be ineligible for compensation. If the purchaser or the Keeper sustain loss, then they may seek recourse against the submitting agent. Inaccurate registration may lead to legal action being taken by the seller of a property against the purchaser or the purchaser’s agent. There may also be implications for standard securities granted pursuant to an invalid deed, and agents should consider any obligations to lender clients.”

Needless to say, no firm will want to receive a rejection, or this letter, albeit in some ways a rejection is less of a risk to the solicitor’s firm than an invalid deed being registered and discovered later. 

Illegible or foreign signatures 

Signatures as a general rule do not have to be legible (Stirling Stuart v Stirling Crawfurd’s Trustees and Executrix (1885) 12 R 610). Indeed under s 7(2)(c) of the 1995 Act, an individual granting a deed can sign by a name, description, initial or mark that is their usual method of signing or is intended by them as their signature of that document or alteration. This would include non-Roman script, such as Chinese letters.

Where the deed is to be probative under s 3, though, s 7(2)(c) says that this “usual method” exception to the general rule does not apply. Therefore, the general rules of subscription apply to probative signatures. These rules are contained in s 7(2)(a) and (b), which allow the granter’s signature to be: 

• the full name by which they are identified in the document or the testing clause; or
• their surname preceded by at least one forename; or
• their surname preceded by an initial or abbreviation of a familiar form of a forename.

As such, for a deed to be probative it needs not just witnessing in the usual way but also the granter’s signature to be legible and to be in the form of J Smith or John Smith. 

It is only s 3 that is carved out of the “usual method of signature” provision. There is another way to obtain probative status, under s 4 which allows certification by the court. Clearly though this will not be the normal course of action for conveyancing transactions. 

The net effect of this is that, unless court proceedings confirm probative status, RoS cannot accept for registration documents which are signed in a way that does not bear to be a surname preceded by a first name or initial, or otherwise as designated in the deed or testing clause. So, illegible scribbles or squiggles will not suffice.

It also means that signatures using a foreign alphabet such as Chinese will not be accepted by RoS unless the granter’s name is narrated that way in the document or testing clause. If dealing with a person who does not normally sign in English, translations and affidavits may be useful to allow the parties to go through settlement and possibly the s 4 procedure. 

It is a regrettable legislative quirk that parties will sometimes have to sign in a way that is not their usual signature, so that they meet the above requirements. There could also be debates around when a signature is and is not legible, since of course that is a matter of opinion in some cases.

Unfortunately it would take legislative change to be able to register a deed in the Land Register (or Sasine, or BC&S) without the signature being, for example, J Smith. Until then, firms should consider updating their signing schedule issued when asking clients to sign, check signed documents ahead of settlement if possible, and reflect on the provisions of missives and deeds insofar as they relate to the 1995 Act. For example, if an offer says that documents in the transaction must be signed and probative under s 3 of the 1995 Act, it may be prudent to say s 3 or 4, to allow for the fallback of being able to apply to the court to assist.

The future: e-conveyancing 

E-conveyancing is coming. Legislation already allows for alternative procedures for electronic signatures, and indeed for electronic documents. Digital discharges are already being used in transactions, and RoS has just launched ScotLIS, which is an integral part of its digital transformation project. When e-conveyancing becomes the standard, the traditional signing provisions of the 1995 Act will decrease in practical importance because deeds will be signed electronically instead. Until then, the Keeper will have to continue routinely checking and sometimes rejecting traditional deeds for 1995 Act compliance issues.