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Property in the spotlight

16 February 15

A roundup from Professional Practice team of recent developments affecting property lawyers

by Kaira Massie

May you live in interesting times” is a well known curse, and one that many practitioners may feel is very pertinent right now, given the extensive changes to property law and practice. The Professional Practice department has been engaged with members throughout this time to assist with numerous queries that have arisen as a result of the changes brought about by the Land Registration etc (Scotland) Act 2012 and other matters, and what follows is a brief summary of some of the main issues which we have been asked to consider recently. The Professional Practice department can be reached on 0131 226 8896.

New and updated property guidance

The Property Law Committee has updated its guidance which can be found at Section F, Division C of the Practice Rules, available on the Society’s website. We would encourage all solicitors engaged in property law to review it, as the updates are extensive. 

In addition to reviewing the existing guidance, new guidance where the lender wishes to remit funds directly to the seller’s solicitor has been introduced. An advice note to assist practitioners when a lender wishes a repairs grant to be discharged is also available, and links to the new CML compliance checklist and Scottish Standard Clauses have been provided.

Aronson v The Keeper [2014] CSOH 176

Following the decision in RBS v Wilson 2011 SC (UKSC) 66, the Aronson case, which called in the Outer House, reviewed the issue of whether the charges section ought to be cleared by the Keeper following sale of the property by a heritable creditor, notwithstanding that the solicitor has not told the Keeper that the relevant statutory procedures have been complied with. RBS v Wilson had turned on its head the generally accepted position that the Keeper would clear these upon sale to a heritable creditor. In Aronson, Lord Doherty directed the Keeper to clear the charges section of outstanding charges. 

The Keeper is preparing a practice note following the decision and, once received, Professional Practice will issue an update with practical advice to assist practitioners with affected clients.

Letters of obligation and advance notices

While advance notices are the preferred option for settlement when settling transactions in which one can be obtained, solicitors may grant letters of obligation. A full note on this, and more besides, can be found in the Professional Practice updates for December. 

Marsh, the Master Policy providers, confirmed that cover will remain in place for classic letters of obligation for this policy year. Given the issues with advance notices not showing up on some sasine transactions, practitioners should consider granting letters of obligation as an alternative until matters are resolved.

Professors Rennie, Paisley, Brymer, Gretton and Reid released a joint statement on the use of advance notices when a solicitor is acting for both the purchaser and lender. A copy of this statement can be found in the Professional Practice updates for December.

The Professional Practice updates for December also contain draft advance notice forms which are, hopefully, of assistance to parties wishing to adjust drafts. 

Kaira Massie is a solicitor in the Professional Practice team 
Professional Practice updates can be found at www.lawscot.org.uk/members/member-services/professional-practice/professional-practice-updates/

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