Registers seeks advance notice solution to COVID-19 closure

Registers of Scotland is seeking an emergency provision to extend the effect of advance notices, as a way of overcoming the difficulties created by the closure of its paper applications service.

The closure, announced on Tuesday this week at least until tomorrow (Friday), was followed by the Law Society of Scotland stating that property transactions should not settle while it endures, leaving people about to complete their transactions unable to do so. Some would become homeless as a result.

Registers then announced a concession to people in an emergency situation whose transactions had to settle, allowing them to seek advice and help through its customer service number 0800 169 9391. But it is being used by people who want to settle even if they could wait to, preventing emergency cases being dealt with. "This is not a state of affairs the Keeper can allow to continue", Registers said in its latest update today.

It notes that the risk to which applicants are exposed through the closure is that they are unable to register deeds in their favour, which would normally mean exposure to the additional risk of some other party creating a competing right, or insolvency of the granter of their own deed. "Given the whole paper application record is closed, registration of a competing real right is not possible", Registers states. "The remaining risk is therefore insolvency of the granter.

"Advance notices, provided for by part 4 of the Land Registration etc (Scotland) Act 2012, are designed to deal with this risk generally. They offer protection for a 35 day period, but the current circumstances mean that 35 days may not be sufficient for the application record to reopen.

"We are investigating if it is possible to seek emergency legislation to make a relevant amendment to the 2012 Act. We would seek provision along the lines that the protected period of advance notices extends until 10 days after the next full reopening of the application record, unless discharged by the parties in the usual way. This offers the highest level of legal certainty for applicants.

"If we are unable to achieve legislation we will take a dual pronged approach. Firstly, we will proactively work with parties who have advance notices in the system for pending transactions which are due to settle to renew them as soon as is possible. That will allow another 35 day period to commence. Within that 35 day period we will endeavour to have a digital system up and running for applications themselves.

"However, it will remain possible for advance notices to be renewed by the parties for as long as is required and we would expect in the usual case that will be achievable. If there is any reason or indication either (a) that the granter in the advance notice may become insolvent or (b) that the protected deed would not be entered on to the application record by the date five working days prior to the expiry of the protected period (under the original or any renewed advance notice) then we would open the application record (digitally) for the application to be taken on (digitally). Given the likelihood of the wider market slowing down we think it is likely we could make this approach work for all applications pending in this way."

It adds that the Law Society of Scotland is now considering how to update its own guidance in the light of these proposed measures, working with UK Finance to engage the lending community in seeking their consent to operating in this way.