KIR: the time bomb explodes

In September 2017, my article “The Land Register: two ticking timebombs” speculated that Keeper-induced registration (KIR) may cause problems which remain undetected until affected properties subsequently came to be sold. I subsequently raised my concerns with both Registers of Scotland (RoS) and the Law Society of Scotland.

Given the rollout at that time of KIR as part of the push to complete the Land Register by 2024, I was concerned that RoS does not properly notify owners that their title has been transferred to the Land Register, the only “notification” being a note on the new Land Register title and the closing sasine record to show that KIR has taken place. My concerns were twofold.

First, for the reasons which I go on to explain, I considered this method of “notification” grossly unsatisfactory and likely to lead to considerable problems in the future, if errors were discovered in future only on the sale of affected properties.

Secondly, given the lengthening delays in ordinary registration times, I was concerned at the effect which KIR was having on the primary task of RoS: registration of ordinary loan, sale and other title transactions.

Missing rights

Following my retirement from full-time practice in October last year, I became aware that two small local residential developments had been subject to KIR. I decided to have a closer look at what had been done, and chose one of the KIR-affected titles at random on Registers Direct. I was astounded to find that the ownership details for this property were incorrect and contained an entry which can only be described as “gobbledygook”. The owners asked me to have this corrected, which I did. I then wrote to Registers of Scotland (RoS) expressing my concern that the very first KIR title I examined contained such an error and suggesting that it would be appropriate for RoS to review their notification policy. I also suggested that, in light of my experience, it would be appropriate for them to review all the KIR titles (at that time some 35,000) to ensure that none of these contained errors.

The response from Charles Keegan, Registration and Transformation Director at RoS, while apologising for the error, completely ignored my suggestion and did not attempt to address my concerns over the lack of proper notification. I then suggested to Mr Keegan that I would look at the remaining KIR titles at this particular development in detail to determine whether any similar errors existed and provide them with a full report on that, at no cost to RoS apart from Registers Direct and quick copy charges. That offer was refused on the basis that he was satisfied that RoS’s own quality control systems were sufficient.

Because of my concerns I decided to proceed at my own expense. Over the past winter, I examined the existing sasine titles and the new KIR titles produced. What I found was, frankly, horrifying. Each sasine title on the development contained an equal property right in the roads and pavements. In all but two of the KIR titles, this right was completely ignored. A servitude right of access over the roads and pavements was similarly ignored. Two of the KIR titles contained a verbal description of the property right to the roads and pavements. This is not competent under the 2012 Act, as such rights require to be mapped. None of the other titles contained any note to indicate that these rights were omitted, the addition of such a note actually being a requirement of the RoS online manual for its staff. As requested by Mr Keegan I sent a copy of my findings to him, only to find that he was no longer responsible for KIR at RoS.

My correspondence was passed to Harry Wilson, Head of Policy Development. We corresponded back and forth about this. I was informed that the decision to omit the property rights and right of access was intentional on the basis that these could not be mapped. Again, on checking the RoS online manual it was clear that verbal descriptions in a sasine title could be transferred, provided the verbal description was sufficiently clear to allow mapping.

I find it difficult to imagine any better candidate for mapping a verbal description, since the roads and pavements were not only shown on the original sasine title plan but also on the Ordnance Survey map itself. I submitted an application for correction of some of the affected KIR titles, including in the applications a plan showing the extent of the roads and pavements. The titles were then corrected by RoS to include both the property right and servitude. I suggested that RoS should, at their own hand, correct the remaining KIR titles at the development. I have now received a reply from the new Keeper, Jennifer Henderson, to say that “the conveyancing for individual properties was not consistent, in particular in the treatment of rights in common. Accordingly, it was not the case that we had to rectify every property which has been registered from that area. Those where inaccuracies were identified have been rectified”.

I have to say that I find that response troubling. I have looked at one of the titles corrected by the Keeper. While that has been corrected to include the missing right of ownership of roads and pavements, the title plan has not been amended to show this. As already mentioned, this appears to me to be incompetent under the 2012 Act. It does seem to me that, given the importance of these matters to the owners of the property, the owners and their solicitors should have been involved in these matters. As far as I can see that is not the case.

Lack of notice

We have therefore a situation where one tiny rural development discloses major problems in the way that RoS tackles KIR. None of the owners concerned had the least inkling when I contacted them that their title had been changed in any way, simply because they had not been notified by RoS. Before embarking on KIR, RoS carried out a consultation exercise, the results of which are available on their website. At that time, RoS indicated that a letter would be sent out to each owner at the last registered sasine address once KIR had been completed. Responses generally indicated that that was thought to be a good idea, although one consultee suggested that it might cause alarm among property owners. Given my experience, such alarm would clearly be entirely justified.

In light of the statutory obligation on RoS to notify owners of KIR transfers, I suggest that the present “notification” arrangements are woefully inadequate, if not actually illegal. It is not only my view but the view of all the owners and fellow professionals to whom I have spoken that this policy needs to be changed immediately, and owners notified by letter to the last registered address as proposed in the original consultation. One of the excuses given by RoS for not doing so is that to do so might “encourage identity fraud”. Since anyone can obtain a copy of their own or anyone else’s title from RoS without any formality other than paying the fee, I find such an excuse laughable. I would go further and say that every owner affected by the 70,000-odd KIR titles carried out to date, should also now be retrospectively notified so they can have the integrity of the work checked.

I have raised this with Jennifer Henderson, who responded that this is currently under review and that “we have been looking closely again at the issue of notification in relation to Keeper-induced registration. We have identified a small number of options which we are now assessing on the basis of cost to the Registers of Scotland and the benefit to citizens. I want to get the balance right; so that homeowners have the information they require, but at a cost which does not make KIR unfeasible. Plainly I also want to ensure that the option we ultimately take meets the duty placed upon me by the legislation”.

It is to be hoped that full notification will now be given and I would invite fellow solicitors to make their views known to the Keeper on this important point. It is to be hoped that the form of notification proposed in the Keeper’s original consultation will in fact be implemented, including notification of those already affected.

Targets and the day job

Of equal concern is what effect the rush to complete the Land Register by 2024 is having on day-to-day registration. RoS recently admitted that there is a large backlog of applications.

In June 2018 I received back a first registration application which had been in the system since November 2016. There was nothing unusual about the application, and when I enquired as to the reason for the delay, I was told that it was “still with our Plans team. We are experiencing a huge backlog at the moment and your patience is appreciated”. The new Keeper recently indicated that she is taking steps to reduce this backlog. While this is obviously to be welcomed, I would respectfully suggest that one of the best things that could be done would be to abandon the Scottish Government-imposed 2024 deadline, freeing up mapping resources for the “day job”. It is also clear from my own research that quality control needs to be vastly improved.

RoS’s own figures indicate the target number for KIR as some 600,000 titles. That equates to some 100,000 titles transferred per annum until 2024. I was disturbed to read the strategy plan recently released by RoS, which indicates that they hope to complete 90% of titles by 2021. To my mind that indicates a much increased rate of KIR compared to the 70,000 in the two years or so to date. For the reasons stated in this article that should give rise to grave concern.

If, like me, you are concerned with the present situation, I would urge you to make your views known to RoS. Drastic change is clearly needed to restore the respected position once held by RoS.