Property market down despite advance notice extension

The property market faces an extended period of inactivity during the COVID-19 crisis, despite emergency measures to enable some transactions nearing their settlement date to go ahead.

To comply with Government restrictions and to safeguard the health and wellbeing of their colleagues and the wider community, on 24 March Registers of Scotland announced a temporary suspension of the application record, meaning that it was no longer able to accept paper applications.

Emergency talks with the Society and UK lenders led to agreement to a proposal by Registers that the protected period of advance notices be extended beyond the period of the application record closure. The Coronavirus (Scotland) Act 2020, sched 7 gives effect to this by allowing an advance notice effective on 24 March, or which is entered in the application record while the record remains closed in part, to be treated as continuing in effect until 10 days after the Keeper declares the application record fully open.

In revised guidance (see its Coronavirus Update page), the Society emphasises that for settlement to take place, an advance notice has to be registered – a letter of obligation would not suffice. Advance notices for a dealing with whole can be submitted in the normal way; Registers will also now accept advance notices for first registrations and transfers of part by email (see ros.gov.uk). Signed deeds, including any standard security, must also be delivered, even if constructively in the first instance.

Speaking as the agreement was being finalised, John Mulholland, the Society's President, said he understood the frustration and distress amongst members and their clients. “I want to assure you that this is a situation we take very seriously. Since the closure was announced our staff and volunteers on the Law Society’s Property Law Committee have been working day and night with stakeholders, including Registers and UK Finance, to come up with a solution.”

As from the evening of 26 March, the Health Protection (Coronavirus) (Restrictions) (Scotland) Regulations, reg 6 prohibit gatherings in a public place of more than two people, but provide exemptions for: “(d) where reasonably necessary– (i) to facilitate a house move;... (iv) to participate in legal proceedings or to fulfil a legal obligation”.

However some UK lenders have stopped accepting new mortgage applications or are withdrawing mortgage products from the market, and on 31 March the Scottish Government published six pages of advice, including a section for solicitors, discouraging people from moving house as long as the stay-at-home measures are in place, and advising among other points that any agreement about a date of entry should make explicit provision for deferral: www.gov.scot: COVID-19 Guidance on moving home.

For the latest business support information for practices affected by COVID-19, see the Society's Coronavirus Update page.