Foreign and different
Registers of Scotland's first briefing this month covers standard securities by overseas companies, title conditions, and a reminder not to submit photocopy certificates
Solicitors will be familiar with the requirement for a standard security granted by a limited company (or a limited liability partnership) to be registered in the Register of Charges within 21 days of the date of registration in the Land Register or the General Register of Sasines. Sections 874 and 889 of the Companies Act 2006 provide that failure to do so means that the standard security is void against the liquidator or administrator, or a creditor of the company.
The Department for Business, Innovation and Skills announced that overseas companies will cease to be subject to the scheme for registration of charges at Companies House from 1 October 2011. From that date, an overseas company with a UK establishment which has registered at Companies House, will no longer require to register with the Registrar of Companies charges created by the company over its UK property.
Where an overseas company grants a standard security which is presented for registration in the Land Register on or after 1 October 2011, the Keeper will not require to see a certificate of registration of charge issued by the Registrar of Companies. The applicant should not ask the Keeper to confirm the date of registration of such a security. The applicant should make it clear in the application that the granter of the security is an overseas company. Similarly, where a security granted by an overseas company is presented for recording in the Register of Sasines on or after 1 October 2011, the applicant should not request confirmation of the recording date but should clarify that the granter is an overseas company.
Further information on the changes, and the Keeper’s practice in connection with UK limited company standard securities, can be found in Registers Update 34 and on our website ros.gov.uk
Update on registration practice
Our experience indicates that there continue to be many cases of non-compliance with ss 4 and 120 of the Title Conditions (Scotland) Act 2003 where dispositions are used to create praedial real burdens. Those sections require any such disposition to be contemporaneously registered against both the benefited and burdened properties. Failure to comply results in the deed being legally unacceptable for registration.
To aid solicitors, we endeavour to identify those applications containing a deed that purports to create new real burdens, at the point of receipt. Having done so, we will conduct a preliminary examination of the application in an effort to identify whether the application is being registered against all the required titles. Applications for which the necessary forms and/or fees are not provided will be rejected outright (and, where appropriate, withdrawn from the General Register of Sasines), and returned to the presenting agent. In the period from January to July 2011, the failure to provide all of the required forms and/or fees for deeds purporting to create new real burdens or servitudes constituted the third most common reason for rejection of an application at the point of receipt. The return of the application will incur the £30 rejection charge.
Problems can be avoided through the use of a single deed registered in advance of the sale of individual units, such as a deed of conditions. It will avoid the many cost and legal problems that can arise if the requirement for double or multiple registration of constitutive deeds is not adhered to.
Identification of benefited and burdened properties in title sheets and land certificates
The Title Conditions (Scotland) Act 2003 introduced a general requirement that a deed constituting new real burdens should identify both the benefited and burdened properties. On registration, the identities of these properties as narrated in the constitutive deed are shown on the relevant title sheet and/or reflected in the General Register of Sasines as appropriate.
However, in time, changes may take place which mean that the description of one or both of these properties is no longer accurate. One such change would be where a benefited or burdened property is subdivided.
Although constitutive deeds pertaining to praedial real burdens or positive servitudes now require dual registration against both burdened and benefited properties, the same is not true for a conveyance which effects subdivision of the property burdened by or which benefits from a constitutive deed, or a waiver of the conditions. This means that in order to establish the properties with a potential interest in a burden, it is necessary to establish the title position as at the date of registration of the constitutive deed and then trace the progress of title of the properties in question.
To aid in this matter, the majority of new title sheets created on or after 1 October 2011 (notwithstanding the date of receipt) will explain that the identification of burdened and benefited properties reflects the position as at the date of recording or registration of any constitutive deeds disclosed in the title sheet.
This will offer a clear point from which those who seek to rely upon the register must commence their investigation, and continue to support the spirit of transparency in respect of rights and obligations inherent in the 2003 Act.
Full details of both the intake application check, and the information we will provide on title sheets to aid identification of benefited and burdened properties, can be found in Registers Update 35.
No photocopies please
The Keeper reminds solicitors that photocopy birth, death, marriage and civil partnership certificates are not acceptable evidence for Land Register applications. As intimated in the May 2010 issue of the Journal, extract birth, death, marriage and civil partnership certificates are subject to Crown copyright. The copyright guidance, published at www.opsi.gov.uk/advice/crown-copyright/ specifies that the use of a photocopy of an extract as evidence of the occurrence of the event in question is not authorised.
This is further supported by the Registrar General for Scotland, who advises that the photocopying of certificates for purposes other than record keeping is not authorised. In cases where such evidence is required, the Keeper will therefore require sight of an extract.
ARTL update – as at 26 September 2011
- 47,855 transactions have taken place
- 677 solicitors’ firms are currently on the ARTL system
- 29 lenders are currently on the ARTL system
- 13 local authorities are using the system.
From 4 July 2011, ARTL can process applications containing a transfer with a value of more than £1 million.
For up-to-date information and a full list of participating practices and companies, go to: ros.gov.uk/artl