The art of rectification

As a conveyancing practitioner there will be occasions when you find yourself acting on behalf of a client in a sale and are presented with title deeds that contain an inaccuracy. Indeed my fellow conveyancing practitioners would agree that this situation usually arises when it is the first time you are acting for the client. The client will usually be completely oblivious to the fact that there is an inaccuracy in their titles which could prevent the sale from completing on time, or even completing at all until such time as the inaccuracy has been rectified. It leads to an awkward and frustrated conversation.

Prior to the introduction of the Land Registration (Scotland) Act 2012, rectification of inaccuracies would prove to be somewhat drawn out, exhaustive affairs requiring consents of varying parties and sometimes corrective conveyancing. The 2012 Act enshrines in legislation the duty on the Keeper to rectify any manifest inaccuracy which is brought to her attention. Section 80 governs the Keeper’s duties and the procedure which must be followed by the Keeper in dealing with any inaccuracy. Of course, as with most legislation, there is a degree of vagueness surrounding the interpretation of what would amount to a “manifest inaccuracy”; however, it is clear enough that there must be sufficient evidence to support the claim that there is a manifest inaccuracy in the title sheet, and not merely a typographical error that has been registered.

In terms of procedure, the process laid down in s 80 of the 2004 Act is straightforward. Although there is no requirement for a formal application, the Keeper has provided a notification of inaccuracies form (which in turn references other relevant provisions of the Act) to be completed and submitted along with any supporting documentation. The Keeper must make their decision as to whether or not there is a “manifest” inaccuracy based on the form and supporting documentation. Importantly, it is not to be based upon the documentation presented for registration at the time of the initial registration. The procedure requires that where it is accepted that there is a manifest inaccuracy the Keeper must rectify the title there and then, and thereafter write to any parties who may be affected by the rectification to give them notice that the rectification has taken place.

In addition to there being a manifest inaccuracy, in order to satisfy the requirements for the Keeper to rectify it must also be the case that the Keeper would have been able to rectify the inaccuracy prior to the commencement of the 2012 Act, which came into force on 8 December 2014. This is to preserve the position where there is a “bijural” inaccuracy, rectification of which would be to the prejudice of a proprietor in possession, as opposed to an “actual” inaccuracy.

Troublesome reality

So far so good… in summary, we have a simple procedure wherein you notify the Keeper that there is an actual manifest inaccuracy in the title that is capable of being rectified, there will be no requirement for consents of third parties, it’s a free process and still preserves the rights of proprietors in possession, therefore no more awkward conversations with your clients that their sale could be compromised due to an inaccuracy on the title deeds. Simply, you can notify the Keeper of the inaccuracy either prior to settlement or at the time of the purchaser’s application being submitted, and the Keeper will rectify. The reality has, in my experience, so far proved not to be so simple.

I recently acted in two transactions where there were inaccuracies in registered titles affecting my clients’ title and therefore their sales. Both were capable of rectification and met the requirements of rectification under the 2012 Act; however, on both occasions, on application for rectification I was initially advised “Keeper says No”. A distinct lack of understanding and knowledge of the 2012 legislation and the Keeper’s own published guidance led to protracted correspondence with the Keeper and two fraught transactions.

Having spoken to colleagues in the profession, I am not the only practitioner who has experienced such a response; however I may be more stubborn. In both transactions, eventually the Keeper did accept that they met the requirements for rectification. I take the liberty of recalling the transactions to highlight my earlier comments.

Transaction 1 – proprietor in possession

The first notification for rectification I made to the Keeper under the 2012 Act involved the sale of a property in Dundee. The sale induced first registration, and on receipt of the plans level 3 report from our searchers it was apparent that the area of ground located to the side of our clients' property had been registered in the title of a neighbouring property. My client was clearly in possession of the area, which was within my client’s legal title. The inaccuracy in this instance was an “actual” inaccuracy in the neighbouring title that had been land registered in advance of my client’s title.

It did not fall foul of the rule that the Keeper could not have rectified on 7 December 2014. There was no prejudice to the neighbouring proprietor, as the area of ground had never been in his possession. This was not a “bijural” inaccuracy, and I duly submitted the notification for rectification providing a copy of my client’s title, plans level 3 report, the neighbouring proprietor’s title, supporting photographs and even a print shot of the property on Google maps.

The initial response I received was that the inaccuracy was not capable of rectification, as “the Keeper is satisfied that the above title sheet is an accurate reflection of the information submitted in the application(s) for registration affecting the subjects”.

The decision was not based on the supporting evidence and the information contained within the notification form, but on the original application for registration and presumably the P16 (for those who do not remember P16s they were the precursor to the plans report). By my persevering, and also with the assistance of an extremely helpful member of staff at Registers of Scotland with a little more understanding of the legislation and guidance than the initial responder, it was accepted that this was a manifest inaccuracy and the neighbouring title was rectified, allowing my clients' sale to proceed. It was however delayed by over two months.

Transaction 2 – a case of mistaken identity

The second and most recent incident, which prompted this article, related to the sale of a client’s ground floor flat in Glasgow, the geographical reference being the eastmost flat on the ground floor and by convention for postal purposes being Flat 0/2. The title sheet however referred to the address of the flat as Flat 0/1. Likewise the neighbouring ground floor flat, whilst known for postal purposes as Flat 0/1, was registered in the Land Register as Flat 0/2.

Bolstered by my experience in the first transaction, and confident that this was a manifest inaccuracy and that there was no prejudice to the neighbouring proprietor in rectification of what would be a manifest inaccuracy in their title, the Keeper was duly notified and rectification requested.

You would understand my frustration therefore when the response came back: “I confirm that there is no manifest inaccuracy in the registration of GLAXXX and the other ground floor title you refer to GLAYYY. Both of these were accurately registered, based on the documentation submitted for registration”.

My initial response was “Really?”

Again I had to revert to Registers of Scotland and point out that the Keeper’s decision to rectify must be based on the information provided with supporting documentation as presented to the Keeper when the inaccuracy is reported. It is not based on whether or not the title was accurately registered based on the documentation submitted for the initial registration. Once more the response in dealing with the notification for rectification in this instance was in conflict with the 2012 legislation and also the Keeper’s published guidance.

The Keeper in terms of the 2012 Act is clearly under the duty to rectify and in this instance we had brought to the Keeper’s attention that both the ground floor flats in the tenement were inaccurate. There was no prejudice to the neighbouring flat. The correct process for the Keeper to follow in terms of the 2012 Act would be to rectify both titles and thereafter notify the neighbouring proprietor as to the rectification.

Initially the Keeper had suggested that we obtain the consent of the neighbouring proprietors whereupon the Keeper would consider the rectification. It should be noted in terms of the legislation that consent is not required.

The solution?

Where a solicitor has found themselves in a similar position I would urge that they do not just accept the Keeper’s rejection of a notification as de jure if their notification meets the requirements under s 80 of the 2012 Act. Whilst we are all still getting used to the new procedures under the Act, Register of Scotland staff included, it would be encouraging to know that there is ongoing and further training of the Keeper's staff in respect of the Act.

The Keeper herself has recently indicated that there should be more communication between Registers of Scotland and its stakeholders including members of the legal profession. It would certainly be progress if there could be more open communication available to members of the profession rather than being restricted to sending emails and awaiting a response with a 10 day minimum time frame.