Cutting the RoS bouncebacks
Why deeds are commonly rejected by Registers of Scotland, and the new pre-registration checking service that should help reduce the risk
With the substantial changes to law and practice introduced by the Land Registration etc (Scotland) Act 2012 (the “2012 Act”), it is not surprising that there are still quite a few rejections of applications. Across the profession, around 6 to 7% of applications were rejected at the first stage (intake stage) over the last six months or so. While not overly high, the extra work involved for solicitors and applicants cuts into profits and, at worst, can prejudice parties’ rights since the original date of registration will have been lost. Similarly, Registers of Scotland (“RoS”) spends on average more time (and therefore money) per rejection than the £30 it recovers in rejection fees. RoS is therefore keen to reduce the number of rejections where possible. Human error on both sides will always occur, but we hope that some of the hints and tips in this article will help.
Rejections v requisitions
Under the 1979 Act, requisitions from RoS were not unusual whereas rejections were rarer. RoS’s policy to ask questions first, and keep the registration open in the meantime, allowed the title number and original (anticipated) registration date to be retained while dialogue with solicitors and applicants usually remedied any perceived problem.
There is less room for RoS to do this now. The 2012 Act and its subordinate legislation allows for limited requisitions only. The general rule is, RoS can only requisition where the application already contains all the information and documents it needs to register. The requisition, then, is simply for clarification and so on. It cannot, for example, be used to ask for a missing burden writ to be submitted when it was completely omitted in the first place.
Are requisitions being used?
Requisitions are occasionally being used under the 2012 Act. In practice, requisitions are mainly used where a potentially adverse entry in the Register of Inhibitions is identified by RoS as part of the examination of an application. More rarely, requisitions are used in relation to unexplained warrandice exceptions. Where the deed being submitted for registration completely excepts warrandice for an area of land and it is not for an obvious reason, RoS may write to the applicant’s solicitor and ask for more information as to why it was excepted. This will inform RoS’s decision as to whether to reject the application or grant full warranty (indemnity) for that area.
For instance, where property is being sold by insolvency practitioners, trustees etc, RoS knows that the level of warrandice given in the disposition is routinely limited to fact and deed warrandice with no personal liability being assumed by the granter, and so will not be concerned. Similarly, excepting existing leases, existing third party rights and so on from warrandice is self-explanatory.
However there are also other scenarios in which warrandice is excepted for an area of land itself, such as in rural areas where not all of the property in title is possessed and warrandice is excepted for the unpossessed areas in case there is a competing sasine title. While this is by no means uncommon, on the face of it, RoS will not necessarily know why warrandice was excepted or whether it was excepted because the parties had identified a competing sasine title.
In such a case, RoS’s approach is to write to the applicant’s solicitor and ask for further information. Where the answer is a simple one, like the rural example given, full warranty might still be given, subject of course to the rest of the application. Where, on the other hand, it transpires that the granter excepted warrandice because they had no title to the area in question, the application will usually require rejection as it must meet the requirements of the prescriptive claimant arrangements (a non domino) procedure. Of course this should be rare, since applicants should not be declaring on the application form that the case does not involve s 43 (unowned areas) when in fact they know otherwise. If it is apparent that there is a competing sasine title and the seller excluded warrandice for that reason, the Keeper will exclude warranty in respect of the applicant's title to the affected area.
Broadly speaking, applications are either rejected quickly at intake stage when there are problems that are immediately evident, such as unsigned forms or missing deeds, or later down the line (possibly months) for issues that take longer to spot, such as conflicting definitions in the deed.
Rejections are, as would be expected, more common for first registrations and transfers of part of registered plots than they are for dealings with whole of registered land.
Often applications are being rejected for basic omissions (signatures, burden writs etc), so law firms’ internal checklists and so on could bring this figure down. We are working on ways at RoS’s end to hopefully reduce errors and speed up applications there, too. One way in which RoS hopes to assist is in its new pre-registration checking service.
What is the pre-registration checking service?
RoS has launched a first registration checking service. For £50 + VAT, solicitors can ask RoS to check what they intend to submit for registration. The fee covers related applications too, so if for example a standard security would be entered at the same time as a disposition, both can be sent in to the checking service together for one fee.
Although the service does not guarantee that an application will not be rejected, it can reduce the risk by checking specific points which RoS has identified as leading to many rejections.
What does the service check?
The service does not function in the same way as pre-registration enquiries did under the 1979 Act regime. Only specific matters will be checked.
Under the new service, RoS will check the following:
(1) Signing requirements are met:
(A) The deed is signed.
(B) The execution of the deed is self-evidencing (e.g. witness signature).
(C) The application form is signed.
(2) Basic application details:
(A) The deed does induce first registration.
(B) The deed is ex facie valid.
(C) The deed does not conflict with the application form answers, and in particular, that the encumbrances/burden question and the servitudes question on the application form have been answered in accordance with the information in the deed being registered. It is still quite common for deeds to list burden writs in the “always with and under” narrative, or indeed to create new title conditions, but for the form to say there are none. This check aims to reduce the number of such conflicts, which would otherwise result in a rejection.
(D) The fee is correct.
(3) Property and title conditions:
(A) The writ describing the extent of any property transferred, and being registered for the first time, has been submitted (i.e. any necessary descriptive writs).
(B) Whether the property falls within a research area (this can also be confirmed by a legal report).
(C) Whether all burden writs are included in the application. Note that if in a research area, RoS will already have some of these, but not all. If that’s the case, it is only those which were recorded in the Sasine Register after the date to which the research area is completed (also highlighted in a legal report) that need to be submitted. If in doubt it is always better to submit too much than too little, of course. RoS will not be examining title to check whether all burden writs that should legally be referred to in the relevant deed, have been. However it can check that any referred to in the deed, are in fact submitted.
What protection does the service give?
The service essentially frontloads some of the first registration process. At the moment, a first registration goes to the intake section, and the most obvious errors are usually flushed out at that point. Thus it is usually the intake section that discovers unsigned forms and so on, which tend to bounce quickly.
More complex submission problems tend to arise later in the registration process, when the post-intake section starts looking at the application in greater detail. Some of these matters are dealt with in the checking service, so some problems are discovered sooner.
This is not a guarantee that the registration application will not be rejected. The Keeper retains any statutory discretion. However in practical terms, the chance of a rejection is reduced.
The RoS terms and conditions for the service (including terms on liability for errors in the service) can be found at the link at the end of this article.
What does the service not check?
The service cannot be used for APR or voluntary registration scenarios, only first registration triggered by disposition.
The check only relates to land which will be registered as all or part of a new plot by first registration. Therefore land being transferred by disposition would be suitable, but access routes over which new title conditions are being granted (even within the same disposition) will not be checked.
It should also be remembered that the check does not look behind the documentation provided – for example, while the application form is checked against the enclosed pack, there is no check that LBTT has been paid. For the same reason, the service does not check that the property shown on the deed plan can be mapped on the cadastral map, nor that there are no competing registered titles. So a plans report will still be required in the usual way. See Journal, July 2015, 10 for which plans report is suitable in which circumstances.
What happens once RoS has finished the check?
The solicitor can ask in the initial instruction that RoS retains the documentation and proceeds with registration once the check is completed. If there is no such request or if there are problems found by the check, the default position is that the documentation will be returned to the solicitor.
When RoS does retain what was sent in, the team dealing with the check then simply passes the pack over to the intake section who will take forward the registration process. This means that there is no need for documentation to be sent back and forth between the solicitor’s office and RoS – it can simply stay with RoS for processing of the registration.
If the solicitor asks for RoS to retain the pack, RoS will submit the documentation for registration as soon as reasonably practicable after the clear check is completed, and in any event within one working day of that. For contractual reasons, the parties may not want that: they may prefer to ask for the check before the documentation is formally delivered or the transaction completed. Therefore this effect of the check should be taken into account before requesting it.
At what point in a transaction can the service be used?
This is of course up to the parties in question, but we can envisage different scenarios and ways to deal with these. For example:
(1) Before conclusion of missives
- The parties may wish to agree beforehand who will cover the cost of the service. RoS will simply bill the submitting agent, but of course the other party may agree to reimburse that.
- Send the full application to RoS. The registrable deed and form may be unsigned. They should still be final and full size, though, i.e. identical to the final version that will be submitted for registration.
- As the application may necessarily fail some of the checks, e.g. if the parties know there is no signature on the deed, there is no need in that case to ask RoS to retain the documentation. Failure automatically results in return of the pack to the solicitor.
- Once the check is returned, the parties conclude and complete as usual.
- The registration application is then submitted in full in the usual way. The application form should ideally refer to the pre-registration check so that RoS know this has been carried out already.
(2) Between conclusion of missives and completion, after deed is signed but not delivered/released
- The parties may wish the missives to cover the fact that the documentation being held as undelivered can be sent for the service; what will happen if RoS’s check says e.g. the deed needs to be amended; and who should cover the cost of the service.
- Once missives are concluded, send to RoS’s checking service the full application including the signed deed and form, burden writs and so on.
- RoS then does the pre-registration check and returns the documentation to the applicant. This will normally be what the parties would prefer at this point, since if retention is requested then a clear check will automatically result in an application progressing for registration. That, of course, would not be appropriate if the transaction has not yet settled.
- The parties complete the transaction and submit the application in the normal manner. To continue to rely on the check, the solicitor would of course need to be sure that nothing has changed since the statements on the form (which will have been signed before the check).
(3) After completion of the transaction
- As everything is already delivered between the parties, there is probably little need for a clause in the missives, save perhaps in relation to the cost of the service.
- State on the request that RoS should keep the documentation and process as a registration immediately once the check is satisfactorily completed. Otherwise, RoS will return the documentation and a day or two may be lost during which an advance notice is probably running.
- RoS completes the check, and transfers the documentation internally over to the intake section within one working day of the check being completed.
- The date on which the intake section processes the documentation will be the date of application for the registration; electronic notifications of receipt of the application onto the application record will be issued in the normal manner.
How long will the service take?
RoS intends that responses to the service can be turned around very quickly, and the terms and conditions state that RoS will use its best endeavours to complete the check within 24 hours of receipt of the request.
What will the service cost?
£50 + VAT.
This covers related transactions as part of the same fee, e.g. a standard security with a disposition: in that case, they can be submitted together.
How do I submit documentation for the service?
There is a form to complete, along with terms and conditions, on RoS’s website. See www.ros.gov.uk/services/application-checking-service
Frances Rooney is head of land registration at Harper Macleod and a member of the Law Society of Scotland's Property Law Committee. Sarah Duncan is head of operational policy with Registers of Scotland.