Registers of Scotland digital submission service Updated guidance

Update as at 23 April 2020

Law Society guidance for settlement of conveyancing transactions during Covid-19 restrictions

Introduction

Public health must be at the forefront of all decisions during this difficult time and members should not put themselves, their staff, clients or members of the wider public at risk, and we comment further on this below.

Registers of Scotland have issued details of their proposals to allow electronic submission of applications. These arrangements are in addition to the current interim measures for Advance Notices, following the closure of Registers of Scotland’s offices. 

Registers of Scotland are expecting that the arrangements for electronic submission of applications will be live from Monday 27 April. Any change in this date will be announced by Registers of Scotland, and we would refer you to Registers of Scotland’s website for more details in relation to the interim measures for Advance Notices and electronic submission of applications.

NEW: Guidance

We set out our guidance as follows:

(i) Summary of the Interim Measures for Advance Notices;

(ii) Summary of Electronic Submission of Applications; (New)

(iii) Treatment of Transactions that have settled; (New)

(iv) Treatment of Transactions that are to be settled; (New)

(v) Opening of the Application Record; (New)

(vi) Arrangements for settling.

Members registering deeds are reminded not to send paper applications to Registers of Scotland at this time. Registers of Scotland are unable to receive any paper applications whether by Royal Mail, DX or other method of transfer such as personal presentment, and so these will be returned to sender.

(i) Summary of the Interim Measures for Advance Notices

Following closure of the Registers of Scotland’s offices in response to the serious health risk posed by Covid-19, interim measures were developed between Registers of Scotland, the Law Society of Scotland and UK Finance and these have since been embedded in legislation by the Coronavirus (Scotland) Act 2020.

These interim measures for Advance Notices are that the period of the Advance Notice will be extended from the date after submission (in the normal way) until the later of (i) the expiry of the usual 35 day protected period and (ii) 10 days after the application record or Sasine Register, as the case may be, is declared by Registers of Scotland to be fully reopened.

This means the protection afforded by the Advance Notice remains in place until the application record and Sasine Register fully re-open.

There are however some essential steps which must be in place before a particular transaction can safely settle using the interim measures for Advance Notices:

• First and foremost is the requirement that Advance Notices be registered. The protection from an Advance Notice is essential so cannot be dispensed with in favour of a Letter of Obligation.

Advance Notices over whole registered in the Land Register can be submitted electronically in the normal way.

Registers of Scotland have recently created a digital portal for submitting Advance Notices for Transfers of Part and First Registrations electronically.

• There must be delivery of signed deeds. At settlement the Disposition must have been delivered to the purchaser’s solicitor and the Standard Security must have also been delivered to the lender’s solicitor (which in most cases will be the borrower’s solicitor). This could however be constructive delivery by email agreement between solicitors so that the selling solicitor can demonstrate or confirm that the disposition has been validly executed and is being treated as delivered on the basis it will be physically delivered to the Purchaser's solicitor immediately after the Application Record/Sasine Register re-opens to paper applications.

Through UK Finance we had confirmation of the UK Lenders who had approved settlements using these interim measures, and we note these lenders at the end of this guidance.  

(ii) Summary of Electronic Submission of Applications (New)

Registers of Scotland have created a system to allow the electronic submission of applications to register traditional deeds in the Land Register of Scotland.

This application is by way of a new digital portal on the Registers of Scotland’s website, and we refer you to the Registers of Scotland’s website for more detailed guidance.

The points that we would highlight are:

(a)  once submitted electronically, there is no need to submit the physical deeds once the application record is fully open. However, it is possible that Registers of Scotland may requisition any of the hard copy deeds, and so these deeds must be stored until completion of registration.  

(b) if the plan is too big to be scanned in a single image, the plan can be scanned in sections;

(c) multiple transaction can be linked;

(d) where the order in which related applications are taken on is significant, there is provision for uploading a covering letter to set out the order of registration.

(iii) Treatment of transactions that have settled (New)

Transactions that have settled, will in relation to any existing Advance Notices, continue to have the protected period afforded by the Advance Notice as extended by the Coronavirus (Scotland) Act 2020.

In addition, transactions that have already been settled will be able to benefit from the new arrangements for submitting applications electronically. Registers of Scotland will initially limit the applications that can be made electronically to applications where the date of lodging the Advance Notice was on or prior to a date to be specified. Registers of Scotland will move that date forward, to allow more applications on a rolling basis. The relevant date will be publicised on the Registers of Scotland website. The date moving forward does not preclude a deed being submitted where the Advance Notice for that deed pre-dates the most current date publicised on Registers of Scotland's website.

Where there are compelling reasons for a transaction to be submitted for registration in advance of Registers of Scotland's rolling programme, members should contact Registers of Scotland’s Customer Services team [call 0800 169 9391 and select customer services from the options] to arrange to speak to a Senior Adviser to seek to agree an earlier electronic submission.

In summary, members may either submit the deeds for registration via the digital portal (in line with the rolling programme) or alternatively retain the paper applications until we have further advice from RoS as to when they will be in a position to accept paper applications.

It is important to note that applications that are not submitted via the digital portal during this time will continue to have the protected period afforded by the Advance Notice as extended by the Coronavirus (Scotland) Act 2020.

(iv) Treatment of transactions that are to be settled (New)

Transactions that are being settled will continue to benefit from the interim measures for Advance Notices.

These transactions will be treated in the same way as transactions that have already settled, and so generally electronic submission of an application for registration would need to wait until the date of the Advance Notice fell within Registers of Scotland’s rolling programme for allowing electronic submissions.

Where there are compelling reasons for a transaction to be submitted for registration in advance of Registers of Scotland's rolling programme, then members should contact Registers of Scotland’s Customer Services team [call 0800 169 9391 and select customer services from the options] to arrange to speak to  a Senior Adviser to seek to agree an earlier electronic submission.

It is expected that the existing backlog of commercial and other transactions that have been postponed pending Registers of Scotland’s electronic submission solution, and which were not able to settle in terms of the interim measures for Advance Notices, will proceed to registration through the digital portal for electronic submission by arrangement with Registers of Scotland’s Customer Services team.

For transactions that require to settle in advance, we would recommend early contact with Registers of Scotland’s Customer Services team, ahead of any proposed settlement date, to ensure that the process for submitting an application to RoS (either via the portal or as advised by the senior adviser) is agreed with RoS, allowing settlement to proceed.  

It is important to note that applications that are not submitted via the digital portal during this time will continue to have the protected period afforded by the Advance Notice as extended by the Coronavirus (Scotland) Act 2020

(v) Opening of the Application Record (New)

Registers of Scotland confirm that the new procedures to allow Advance Notices and applications for registration to be accepted do not represent the full re-opening of the application record and Sasine Register for the purposes of Schedule 7 of the Coronavirus (Scotland) Act 2020.

Registers of Scotland have committed to consulting and providing notice prior to the application record being declared to be open, and the ending of the interim measures extending the duration of Advance Notices.

(vi) Arrangements for Settling

The interim measures have been put in place to provide a legal framework to allow certain transactions to settle, but any settlement would need to comply with the Government restrictions.

This guidance must be read in conjunction with The Health Protection (Coronavirus) (Restrictions) (Scotland) Regulations 2020 (“the Regulations”) and the Scottish Government Coronavirus (Covid-19): guidance on moving home.

The Scottish Government guidance sets out that parties should seek to reschedule settlements and to only move home when it is reasonably necessary to do so at this time, where the move is able to be completed safely and the property is empty or can be safely vacated. As such, our guidance below should only be followed when it is reasonably necessary to move home in terms of the Regulations and accompanying guidance from Scottish Government.

Regulation 6 sets out exceptions to restrictions on gatherings.  Where it is reasonably necessary to facilitate a house move is one such exception (Regulation 6(d)(i)). A breach of the Regulations constitutes a criminal offence. Under Regulation 8, a defence to such a charge of a criminal offence under this Regulation is to show that the person, in the circumstances, had a reasonable excuse.  Regulation 8(5)(l) refers to moving home where reasonably necessary, as an example of a reasonable excuse. You will note that the Scottish Government’s guidance expands on this and highlights that such settlements remain subject to safety precautions being taken. 

We consider that the digital portal for electronic submission of applications will be of particular benefit to non-residential transactions given the terms of the Regulations and Scottish Government guidance on moving home.

Scottish Government Coronavirus (COVID-19) guidance on moving home recommends that all parties should work either: to delay concluding missives until after the period where stay-at-home measures to fight coronavirus (COVID-19) are in place; or to include explicit contractual provisions to take account of the risks presented by the virus.

Any such provisions would be a matter of negotiation between the respective parties. Given the continuing uncertainties with the impact of Covid-19, and their impact on the particular circumstances of each transaction, we would stress the importance of tailoring each clause to the particular transaction and clients. 

The key is of course explicit and therefore anyone considering negotiating such a clause should think very carefully about doing so and about covering the desired outcome during this time of uncertainty, and the practical issues of applying and enforcing such a clause. Such a clause could create unintended consequences depending on how circumstances change.

As ever, the above interim measures are designed solely to deal with one particularly important legal problem arising from the closure of the application record and Sasine Register to paper applications. A conveyancing settlement requires a number of different parties to be able to implement various legal and practical processes, which in the current circumstances are difficult to achieve.

The current restrictions imposed by Government are for the protection of public health during a national and international emergency. Our guidance should be read in conjunction with the current and any future  advice from Government and the safety of members, their staff, clients and the wider public should be the most important factor in deciding whether or not it is appropriate to proceed with settlement of a transaction in present circumstances. In particular, our members should refer to the “Solicitors” section of the Scottish Government Coronavirus (COVID-19) guidance on moving home.

Members should be careful to obtain clear instructions from clients, including lenders, to settle transactions in the above circumstances.

Members should also be wary of the vulnerability of clients looking to purchase a home in the present circumstances and be careful to ensure that a client’s informed consent to proceed is adequately obtained.

None of the measures proposed should be in any way used to compel settlement of a transaction where someone is shielding from the virus. This is reflected in the Scottish Government guidance.

Undernote: Lenders

We have confirmation from UK Finance that the following lenders are agreeable to the interim measures for Advance Notices:

• Aldermore
• Bank of Ireland
• Barclays
• Clydesdale Bank plc (Virgin Money, Clydesdale Bank, Yorkshire Bank Home Loans)
• Co-operative Bank
• Coventry Building Society (Godiva Mortgages Ltd and ITL Mortgages Ltd)
• Cumberland Building Society
• Glasgow Credit Union
• Handelbanken
• Hanley Building Society
• HSBC
• Kensington Mortgage Company Ltd
• Leeds Building Society
• Lloyds Banking Group (all brands, i.e. Bank of Scotland, Halifax, Halifax Intermediaries, Lloyds, BM Solutions and Scottish Widow Bank)
• M&S Bank
• Nationwide
• Newcastle Building Society
• Precise Mortgages
• RBS (RBS, Natwest, Ulster Bank brands)
• Santander
• Scottish Building Society
• Skipton Building Society
• TSB
• UKAR entities (Bradford & Bingley, Mortgage Express, NRAM Ltd)
• Yorkshire Building Society / Accord Mortgages

We understand that there had been uncertainty as to whether those lenders who approved the use of the Registers of Scotland Interim Measures, still required to give individual approval for each transaction. Our view is that those lenders have provided a generic approval for the settlement under the Registers of Scotland Covid 19 Interim Measures, and approval on a transaction by transaction basis is not required. All the other requirements to report etc to the lenders and the need to comply with lenders standing instructions remain in place.