Solicitor criticises Land Register completion costs to owners
Property owners across Scotland face substantial costs with no apparent benefit, due to the Scottish Government's drive to complete the Land Register, according to a Perth solicitor.
Alistair Duncan, partner at Miller Hendry and head of its commercial and residential property team, belives that close to 1.2m home owners in Scotland will collectively have to pay more than £900m – an average of about £750 each – as ministers attempt to have all Scottish properties registered in the Land Register by 2024.
Their titles are recorded on the older Register of Sasines. Until now, titles have been transferred to the Land Register mainly on a sale of the property, but a programme is now in place to force the pace of adding more properties to the newer register. This will affect, among others, properties transferred by gift or inheritance, elderly owners seeking equity release, and from 1 April 2016, people remortgaging their properties, in each case adding extra costs if their title is not already on the Land Register.
Mr Duncan commented: "While there are clear benefits to having a new digitised Land Register providing clear and up-to-date information about land values and ownership, we are coming across a number of situations whereby clients are having to meet substantial costs with no benefit apparent to them."
He observed that existing property owners on sasine titles had perfectly valid rights of ownership, and "there is no significant or legal reason for it to change their position". Moving to the Land Register requires a one-off examination of all relevant titles and, if required under the new legislation, preparation of a new deed plan and pre-registration plans report, which is where additional costs arise.
Mr Duncan said the additional costs incurred would vary from case to case. "As an indication, the registration of title process will increase legal fees by approximately £600 including VAT. Clients may also be looking at additional costs for deed plans, which are not prepared by lawyers and generally outsourced to surveyors at a cost of around £100, and pre-registration reports of up to £150. These costs mount up so most property owners are facing costs of over £700 for each property, not including the registration dues charged by the Land Register which are based on the value of your property."
As an incentive, the Scottish Government is offering a 25% discount on the registration dues charged by the Land Register to owners who voluntarily register their property in the Land Register. However they will still incur the legal costs and other outlays.
Mr Duncan added: "As unintended as the consequences of land registration may be, the implications are not just affecting home owners but public authorities too, with the Government insistent that their properties are also placed on the Land Register. This is a mammoth task which is tying up legal departments of public authorities across Scotland. It also begs the question of whether it is an effective use of what are already stretched and limited public resources."
A Scottish Government spokesperson said in response: "Scottish ministers are committed to Scotland having a completed Land Register by 2024, with all public land registered by 2019.
“A completed Land Register will be a national asset for Scotland as it will provide the public and owners with a single, comprehensive, publicly searchable map-based register that gives clarity on who owns what. It will speed up, and reduce the cost of, transacting in land and give owners greater certainty and security. It is a vital part of Scotland’s land reform journey and a significant step towards improving the transparency of landownership in Scotland.
Sheenagh Adams, Keeper of the Registers, added: “Mr Duncan is correct in saying that the Sasine Register gives valid property rights. However, it is widely accepted that the Land Register is better, a view supported by the Law Society of Scotland and the Scottish Law Commission. With a registered title, the owner has certainty about the extent of the title they own and a state guarantee.
“The 1.2m property owners not on the Land Register will face no sudden or extra costs – they will only pay registration fees if and when they are transacting on their property. This has been the case since the Land Register was introduced in 1981, and there is no legislation in place to impose compulsory registration on the Land Register."
Ms Adams pointed out that it had always been the case that a one-off examination of the sasine title, which included obtaining the relevant reports on a property, was required on a first registration in the Land Register, and as 59% of titles were already on the Land Register, first registrations formed only a minority of solicitors’ work.
She continued: “The closure of the Sasine Register to standard securities has been approved by the Scottish Parliament. It was fully consulted on and was supported by both the Law Society of Scotland and the Council of Mortgage Lenders. First registrations associated with a remortgage will be registered free of charge.
“The requirement to register transfers where no price is paid was approved by the Scottish Parliament when the 2012 Act was passed into law. This affects around 2% of Land Register transactions each year.
“We are unsure, therefore, how Mr Duncan’s £900m figure has been calculated and on what basis. The 2012 Act makes registration simpler and, therefore, more cost effective. While we cannot comment on the fees solicitors charge their clients, there are no plans to increase our statutory fees. Indeed, fees for voluntary registration were reduced by 25% from 1 June 2015.”