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Plans reports: an evolving scene

20 June 16

The evolving content and practical application of plans reports for property transactions – and why level 3 reports are not needed nearly as often as they are being requested

by John King, Frances Rooney

In the year to end March 2016 RoS issued some 36,000 plans reports, with the vast majority being the most comprehensive level 3 report. The content of the plans reports was developed between the Property Law Committee and RoS and is designed to support applications that will result in new cadastral units or changes to existing cadastral units, thus providing advice on suitability, extent and overlaps for transactions that will induce a first registration or a transfer of part application.

In essence, the level of report needed for any particular transaction is still the same as in our previous article on the subject (July 2015). In our view, too many level 3 reports are still being ordered. However, plans reports have continued to evolve over the past year. In this article we expand on our previous article and provide an update on plans report matters.

Dealings with whole

As we said in our previous article, there are few, if any, circumstances where a plans report is necessary in connection with a dealing with whole. Where the dealing gives effect to such a disposition there is no need for a plans report. This is because the Keeper will not be creating a new cadastral unit, or otherwise dealing with the plan or boundaries. All she will be doing is substituting one owner’s name for another on an existing title sheet.

If the dealing relates to a deed that may have an impact on the cadastral map, such as an agreement constituting a new burden over part of the property, a plans report may be helpful to ensure the relevant feature on any deed plan is capable of plotting on to the cadastral map. Here a level 1 report would be apt if the title is registered, because the key questions (whether there are registered overlaps and whether the draft plan meets the Keeper’s requirements for registration) are answered at that level. See our previous article for a fuller explanation of the differences between the different levels.

RoS does occasionally still receive requests for reports over a registered title for dealings with whole. The concern appears to be that there may be another competing title and either:

(1) the application is thus rejected; or
(2) the purchaser is in some way prejudiced at some point in the future by the other title.

On point (1) we can provide assurance. To date, RoS has not rejected any applications for dealing with whole because of an overlap somehow coming to light. That is because the cadastral map is not routinely checked for a dealing unless that dealing itself will lead to a change in the cadastral map. Where there is an already identified overlap – which was permissible under the 1979 Act – this will be apparent from the title sheet; a note will be present and/or indemnity will have been excluded.

As under the old system, the applicant in this scenario has a number of options. They can seek to resolve the competition, perhaps presenting information to support the running of prescription, or they can seek to have the area removed, or they can continue with the status quo, as prescription may still be running. In the latter scenario the Keeper will simply update any notes on the title sheet, as well as any exclusion of indemnity note, to make them 2012 Act compliant. There is no question of the application being rejected. The only practical difference is that the issue would flag up after the registered title is issued rather than as part of a requisition process.

This takes us on to the second point. What if there is a competing title lurking in the background? This is an age old question; it applied before the Land Register arrived and it applied under the 1979 Act. There is always (and was always) a risk that part of the registered title is also contained in either a competing sasine title deed or in a competing Land Register title. Regarding the latter it will in most cases be apparent from the title sheet entry, but there is also the possibility of latent competitions. The 1979 Act placed less emphasis on the need for mapping, so there are for instance very many tens of thousands of registered titles that simply reflect the underlying titles which themselves reference, say, areas of common ground or individual pertinents and rights over ground without mapping them. The PMP case highlighted the perils of this approach to conveyancing, and the 2012 Act has firmly embedded the principle of no registration without mapping. But should we be worried – should solicitors be examining every neighbouring sasine or land registered title?

The simple answer is no. To do so would change the way in which conveyancing transactions work, with of course a knock-on effect for solicitors’ duties vis-à-vis negligence and so on. Unless there is a risk of rejection by the Keeper, which there is not for a dealing with whole, logically it would only be necessary to check for possible competing registered titles if the profession also thought it was necessary for competing sasine titles. No one is suggesting we go down that route – not least because clients simply wouldn’t pay.

In any case, the mere existence of a competing title does not mean that the purchaser will not obtain the best claim to the property. Assuming good title is shown, and the requirements are met to allow reliance on the Register (the Midas touch for 1979 Act registered titles and realignment for 2012 Act registered titles), the purchaser should be safe enough to quash a competing title claim, particularly where possession is continued after the date of entry. To put it another way, if the solicitor is satisfied that were there to be a competing title, the purchaser would have the stronger claim because of the type of title and possession, the theoretical risk of a competing title should usually not matter. See Journal, November 2015, 35 for further discussion of different types of title and what protects each one.

Properties within tenement buildings

An example of the above is the sale of a flat in a tenement building, where the building has already been mapped by RoS in the parent title or a neighbouring flat’s title. In this context the tenement building is not simply the footprint of the building itself but includes any land attached to the building. This is sometimes referred to as the “tenement steading”.

In most cases, the title sheet for the purchaser’s title will simply replicate the outline of the building shown on the other title sheets. So long as there are no other areas needing mapped, such as parking spaces sold with the individual flat, RoS will not be creating a new plan as such. In some cases the cadastral unit representing the tenement will be extended where a later registration requires it.

Again, even if it turns out there is an existing registered title overlapping into this one, RoS will not be aware of that as there will be no new map created. Therefore RoS will not bounce the application simply for that overlap, it being unknown to them. As such, we would suggest that in such cases solicitors simply continue the pre-2012 Act practice of not needing to check for registered overlaps.

Even if the property is such that a new title sheet plan is likely to be created for the part being transferred, a plans report still may not be needed. For if the DPA (development plans approval) service or PAS (plans assistance service) have been used, these already incorporate checks for registered overlaps. Or, the area being sold may not have any boundaries on the parent registered title boundary, in which case the risk of an overlap decreases to the point where parties can perhaps take a view.

Therefore in land registered tenement building transactions, there will be many cases where no plans report at all is needed. Where one is needed, and the land is registered, a level 1 report should normally suffice, unless there is a particular concern around an area of shared or exclusive ground attached to the tenement.

Changes to OS map features

Some changes to the cadastral map are to be expected. The cadastral map is based on the most up-to-date version of the Ordnance Survey (OS) map, which is updated every time there is a new or a change to an existing physical feature (such as a house, boundary, road etc) on the ground. As such it is very possible the backdrop for an existing registered title may change.

Again, this is nothing new. It does not in itself mean a plans report should be obtained; such OS updates have been happening since the advent of the Land Register in 1981. If you are interested in seeing whether or not features on the ground have changed, the simplest way to do so is to inspect Registers Direct.

Searching over servitude/ancillary areas

It is often the case that a transaction will involve a sale with a new servitude being granted for, say, access. In that scenario, the obvious temptation is to order a plans report over both the sale area and the access route, to ensure that there are no registered overlaps that would affect the grant and result in a rejection.

Over the past couple of months, RoS has been finessing the approach to plans reports for such cases. The result is the decision that level 3 reports will only be provided for areas which RoS believes are going to be sold, let or voluntarily registered. New servitude areas, burdened areas, and other ancillary rights areas will not be able to get a level 3 report.

We recognise of course that if A is granting a servitude to B, but C has managed to get a registered title to part of the access road, this could be as much of a problem for the parties as if the sale area itself were overlapped. It would of course similarly result in a rejection by the Keeper, since this is not simply a dealing with whole and the overlap would be evident to RoS when mapping the new rights.

Therefore when a RoS plans report is ordered and the whole or part of the plan being searched against is for some kind of subordinate or ancillary right, RoS will essentially downgrade the report over that part to a level 1. A level 3 will still be provided against what RoS takes to be the main sale/lease/transfer area. One report could therefore have a mix of level 1 and level 3 elements.

To ensure that this is clear for anyone reading a restricted report, part 5 of such a report will list any registered titles overlapping the servitude area and also include this explanation:

“the area coloured XXX on the submitted deed/plan appears to be a servitude, the report for this area has been reduced to level 1 and the registered titles this area affects are XXX”

Of course, requests for reports usually just give the plan and/or title deed to search over. RoS will not necessarily know what area on a plan is to be sold or let, and what is to be a new servitude or burden. The simplest way to ensure that level 3 is completed over the areas being actually transferred is to say so in the request for the report. For example, the solicitor can state that the green area is a sale area and the pink area is for a new servitude. This will assist RoS in deciding which level to complete for each area. If no such instruction is given, RoS will use its own judgment.

Competing applications for registration

Plans reports, of all levels, identify if there are any registered titles overlapping the subjects being searched against. In order to assist solicitors further, RoS are now also disclosing whether there are any obvious competing applications for registration.

Not all competing applications will be disclosed. This is simply because an existing application may not yet have reached the mapping stage within RoS, so when RoS is searching an area of ground on its systems to complete a plans report it may not realise that there is an application which has not yet made it that far. Still, the inclusion of some applications in reports will hopefully help solicitors to spot potential issues ahead of settlement.

Plans report portal

RoS’s online portal for ordering plans reports now asks: “Will the subjects of this request be part of an application for voluntary registration?”

The reason for this question is to allow RoS to anticipate volumes of voluntary registrations.

The question must be answered to be able to order through the portal. However it is a simple yes/no selection so should not cause any difficulties.

John King, Business Development Director, Registers of Scotland, and Frances Rooney, Head of Land Registration, Harper Macleod

 

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Your comment

Mr Hunter

Monday October 31, 2016, 19:03

Got a question. Mid June 2015 we bought a self contained flat above a commercial property in Angus.

We checked out the boundary as it was in 2015 and it was over 100 years since it last changed.

When our offer was accepted the vendor built a fence and cut off a 20m x10m of land they now claim is theirs. Before that the flat owned all land within its boundary except for commercial access.

The title deed has come back a year later and states the old boundary we saw before it went up for sale.

The vendor claims he had a level 3 plan done but we never saw it but even if it was done why after 13 months has the deed plan came back as we thought it would.

Our solicitor has requested the vendor to remove fence and resite it correct to old boundary. Who is right and what should the vendor have done prior to said sale, for example should the title have been completed prior to been offered for sale.

I am a ex-property developer of 100's of properties and even I am confused.

Kind regards.