Экзамен зачет учебный год 2023 / SLC, Report on land registration. Vol 1

Land certificate. (A type of certificate of title.) An official copy of a title sheet.

Land Register of Scotland. Or "Land Register" for short. This is the register established by the 1979 Act to replace, on a phased basis, the Register of Sasines. The Land Register de facto consists of four parts: (i) the Cadastral Map, (ii) the Title Sheet Record; (iii) the Application Record; (iv) the Archive Record. The draft Bill gives formal recognition to these four parts.

Liferent. The right to use property for one's lifetime.

Long lease. A lease of over twenty years.

Midas touch. Under section 3 of the 1979 Act, entries in the Land Register cannot be void. If they are wrong they are bijural inaccuracies, and they may or may not be rectifiable, but they are not void. We call this effect the Keeper's Midas touch. There are a few exceptions to the Midas touch, where an inaccurate entry is void: this would be an actual inaccuracy.

Midcouple. A deed that can be used as basis for completing title by a notice of title. For example, Adam is sequestrated (declared bankrupt). The court appoints a trustee, Eve, and orders that Adam's property is vested in her for the benefit of his creditors. This itself does not give her the real right of ownership of any land he owns: for that registration is necessary. She can become owner by registering a notice of title, the midcouple being the court's order. The notice specifies the property in question, something the court order will not have done.

Mud or money. See guarantee of title. Case (i) is "mud" and case (ii) is "money".

Notice of title. A deed whereby title is completed on the basis of a midcouple.

Office copy. An official copy of a title sheet. Similar to, but not the same as, a land certificate.

Offside goals rule. If X contracts to transfer a right (eg ownership of land) to Y, but in fact transfers it to Z, and Z knew that X was acting in breach of the X/Y contract, then Z has scored an "offside goal", with the result that Y can have the X/Z transfer set aside. Thus Y's personal right prevails over Z's real right. The doctrine can apply not only to transfers but also to certain other types of transaction.

Overriding interest. An encumbrance constituted other than by registration. For example short leases are overriding interests, as are servitudes created by prescriptive use. The term is not used in the new scheme.

New scheme. We use this phrase to refer to the law as it will be if and when our recommendations are implemented.

Notice of title. A deed by which an unregistered holder can complete title.

Person. "Person" includes juristic persons such as companies.

Personal right. A right against a person as opposed to a real right in property. A typical example would be a contractual right.

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Pertinent. A right attached to property. An example is the benefit of a servitude. If Blackmains has a servitude of way over neighbouring Whitemains, that is an encumbrance over Whitemains and at the same time a pertinent which benefits Blackmains. Pertinents appear in the A Section of a title sheet.

Plot of land. An area of land owned by one person, or one set of persons. Separate tenements such as salmon fishing rights and mineral rights are deemed to be plots of land. So are flats in tenements. In the new scheme there is a one-to-one correspondence between plots of land and cadastral units.

Proprietor. In the Report and the draft Bill this term means someone with a valid completed title to land. Thus it does not include unregistered holders.

Protected period. The 35-day period of priority following an advance notice.

Provisional shared plot. A shared plot that has yet to come into existence but which is entered provisionally in the Land Register. It comes into existence as a shared plot as and when the developer registers an ascertainment deed. Provisional shared plots do not exist under current law.

Real right. A direct right in land. (Or moveable property.) Real rights divide into (i) the right of ownership and (ii) the subordinate real rights, which are encumbrances. In contrast to a real right, a personal right is a right against a person. If Fergus owns land and enters into a contract of sale with Fiona, her right at this stage is a personal right. She acquires the real right of ownership later, on registration.

Realignment. In certain cases where there is a discrepancy between what the Register says and the actual rights of the parties, the latter may, under the draft Bill, be changed (realigned) so as to conform to what the Register says. Those who suffer as a result are compensated. A similar concept exists in current law. Realignment is what we called in the discussion papers the "integrity principle".

Register error. An inaccuracy which already affected the title sheet at the time of a transaction. Compare transactional error.

Register of Sasines. Established by the Registration Act 1617. It is a register of deeds rather than a register of title. It is being gradually replaced by the Land Register.

Registration of deeds. A property registration system in which deeds are registered. There is no official statement as to the effect the deeds have. The Register of Sasines is a register of deeds. Compare registration of title.

Registration of title. A property registration system in which there is an official statement, in relation to each property, what its boundaries are, who the owner is, and who has other rights (eg security rights) in that property. The Land Register is a title registration system. Compare registration of deeds.

The Rules. The Land Registration (Scotland) Rules 2006, and, earlier, the Land Registration (Scotland) Rules 1980. Both derive their authority from section 27 of the 1979 Act.

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Separate tenements. Salmon fishing rights, mineral rights and certain other rights are classified as "separate tenements". That is, they are treated as plots of land in themselves, capable of being owned separately from the land itself.

Servitude. A subordinate real right in favour of one property over a neighbouring property. An example is a servitude of way. (A servitude of way is a private right of way. There are also public rights of way.)

Shared plot. A plot of land that is co-owned by the owners of neighbouring property, such as an amenity area in a housing development.

Short lease. A lease for twenty years or under. Short leases cannot be registered in the Land Register.

Standover. An application for registration is said to be in standover if processing is suspended for any reason.

Subordinate real right. See real right.

Tenement. A building in which not all the units are in the same ownership. The typical tenement is a building purpose-built for residential units. But a single large house that has been split into upper and lower units, separately owned, is also a tenement. Tenements can also involve non-residential property.

Title sheet. A document setting out the title to a plot of land, divided into four sections. The A Section identifies the property and any pertinents. The B Section identifies the owner/s. The C Section sets out any heritable securities. The D Section sets out any other encumbrances.

Title Sheet Record. The set of all title sheets.

Torrens system. A system of registration of title developed in the 1850s in South Australia by Robert Torrens. Systems based on the Torrens system (of which there are many round the world) are themselves often called Torrens or Torrens-type systems. It is a system of registration of title and thus in broad terms is similar to the Scottish system.

Traditional document. The name we give to a paper document, as opposed to an electronic document.

Transactional error. An inaccuracy on the Register resulting from the acquirer's own transaction (for example, a forged deed). Compare Register error.

Transfer of part. The transfer of part only of a registered property, as contrasted with a dealing with whole.

True owner. We use this term as shorthand. If the Register is inaccurate, the person who would appear in the Register as owner, had the Register not been inaccurate, is the "true owner". (In the 1979 Act a true owner is not the owner, because of the operation of the

Midas touch.)

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Uncompleted title. A title to land that has not yet been made real by registration but which is capable of being made real by application for registration by the unregistered holder. Thus an uncompleted title is different from, say, a right under missives.

Unregistered holder. The holder of an uncompleted title. Also sometimes called an uninfeft proprietor. An unregistered holder can complete title by registration, and can also, without being registered, grant certain deeds.

Voluntary registration. Voluntary registration happens if the owner of property that is still in the Register of Sasines applies for the property to be registered in the Land Register. It is a form of first registration. Under current law the Keeper has a choice whether or not to accept such an application. The draft Bill would remove the discretion to refuse.

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Foreword

Land rights are important to individuals, to businesses and to the economy as a whole. The total value of land in Scotland runs to several hundred £billion. The annual value of sales is about £35 billion; if the value of secured transactions (mortgage transactions) is included the latter figure is much higher. All land rights, and all land transactions, are registered with the Department of the Registers of Scotland. Getting the law of land registration right is important: it affects every square inch of the country - every house, flat, farm, factory and office. It affects everyone who lives in Scotland and it affects the whole of Scotland's economic life. The Land Register is part of the national infrastructure.

Until recently, registration took place in the Register of Sasines. The Land Registration (Scotland) Act 1979 introduced a more advanced system, which was rolled out, area by area, beginning in 1981 and extending to the whole country in 2003. When a property is sold for the first time after an area has become "operational", the sale triggers a switch into the new register. There are roughly 2.2 million title units in Scotland and roughly 60% of them are now in the new register. The new register is much better than the old one. For the first time Scotland is being mapped according to title boundaries (see the pull-out maps in Appendix F) and for each title unit there is a "title sheet" setting out who the owner is and what other rights there may be in the property. "Who owns Scotland?" is a familiar question. The Land Register is now providing the answer.

The other great innovation of the 1979 Act was the introduction of a state guarantee of title, which removes much of the risk and uncertainty otherwise inherent in transacting with property.

The new register is a quantum leap forward. But it is not surprising that the ambitious legislation of 1979 was not free from defects. Conscious of the problems, the Department of the Registers of Scotland asked us to review the law. This Report is the final result of that process.

Our recommendations are evolutionary: the great achievements of the 1979 Act should be consolidated and developed. We think that the result should be one of the best land registration systems in the world. The details of our recommendations are lengthy and technical, and so cannot readily be summarised in this foreword. But a few salient points are as follows:

•Acceleration of the process of bringing properties into the Land Register: the aim should be 100% coverage of Scotland as soon as is reasonably possible.

•Electronic conveyancing, which at present is competent only to a very limited extent, would become competent in all cases.

•In an imperfect world, inaccuracies cannot be wholly avoided. But the 1979 Act's rules for handling inaccuracies, when they do occur, are unsatisfactory and generate many complaints. We recommend a radically revised system of handling inaccuracies, making it easier to put mistakes right.

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•We recommend that the law should recognise a single title map of the whole of Scotland. (In a sense this has developed de facto but the 1979 Act fails to provide a legal basis for it.) To bring Scotland into line with international terminology this would be called the Cadastral Map. Appendix F shows a section of the current "index map". This gives a rough idea of how the Cadastral Map would look.

•Under the current law, there tends to be a "blind period" of a few days in which a buyer is at risk: a buyer may have paid the price but then finds that in the blind period there was a seller-related entry in the Land Register (or in the interlocking Register of Inhibitions), the effect of which is to blight the buyer's title. At present this risk is covered by a Heath Robinson system of "letters of obligation" which is widely accepted as unsatisfactory. We recommend the introduction of a system of advance notices which will protect buyers from potential entries in the blind period.

•Our recommendations and draft Bill pave the way for a complete, single, accessible national register of accurately mapped, guaranteed land titles.

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Part 1 Introduction

Land registration law

1.1 Land registration law is law that is as important as it is inconspicuous. Indeed, to nonlawyers it is so inconspicuous as to be invisible: few even realise that it exists. There is no harm in that. Much law is like plumbing: useful but unexciting and seldom thought about except when it goes wrong. Visible or invisible, it is important. It is important for ordinary people, for commercial enterprises, for the agricultural sector and for the financial services industry. If Jack and Jill buy a house their title should be secure. If they wish to sell it they should be able to prove title to a buyer. If banks could not rely on an efficient title system before they give secured credit then the system of secured credit could not function. Development economists constantly stress the importance for developing countries of what they tend to call "land titling".1 The absence of a functioning2 land titling system is regarded as a brake on economic development. We are lucky that in this country we can take such things more or less for granted, like plumbing.

Land registration in Scotland

1.2Scotland has long had a particularly good record, becoming one of the leaders when

the Registration Act was passed in 1617, requiring the public registration of conveyancing deeds. Few other European countries introduced any form of registration until the 19th

century and indeed in England and Wales some areas had no system of registration until 1990.3 In such countries the lack of title transparency proved a problem that eventually had to be addressed.

1.3The Register of Sasines, which was introduced in 1617, was advanced for its time. It was given a new lease of life in the late 19th century when, as well as being indexed by

persons, it was also indexed by property units. But the fact is that it gradually fell behind the best standards. Title registration systems involve accurate mapping and allow a higher degree of reliance on what is registered than does a system of the Sasine type. Such title registration systems were developed first in German-speaking Europe and later in Australia

and have gradually spread round much of the world, though many countries still have deedsrecording systems broadly comparable with our Sasine system. When in the 19th century the

decision was made in England and Wales to introduce property registration, the choice was a title registration system.

1 The literature is too extensive to be mentioned here. The ideas are particularly associated with the Peruvian economist Hernando de Soto.

2 Some developing countries have titling systems that exist on paper but do not function properly in practice. For an interesting if depressing study see John Mugambwa, "Transportation of the Torrens System to Developing Countries: Uganda and Papua New Guinea", in David Grinlinton (ed), Torrens in the Twenty-first Century (2003), p 115.

3 In England and Wales there was no system of registering deeds, except in Middlesex and Yorkshire (other than York), for which counties it was introduced in the 18th century. Title registration was eventually introduced as an option but it was for individual local authorities to decide whether that option should be taken up for land in their area.

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1.4 In Scotland a debate began about 1900 as to whether to shift from a deeds recording system (the Register of Sasines) to a title registration system. Finally the Land Registration (Scotland) Act 1979 was passed. It was rolled out county by county, the rule being that when a property was sold it would switch from the old register to the new one. The first county to come on stream was Renfrewshire in 1981 and the last were Banffshire, Caithness, Moray, Orkney and Shetland, Ross and Cromarty and Sutherland, all in 2003.4 There are rather more than two million title units in Scotland, and thus far approaching 60% have been switched into the new register. But in terms of area the figure is much lower: only about 20% of Scotland is in the new register. This is because larger landward properties tend to be bought and sold less often than smaller urban ones.5

The need for reform

1.5Even today the Sasine system is a better system than can be found in many countries in the developed world, not to mention the less-developed world. But there is no room for complacency and the decision taken in 1979 to move to title registration was a sound one, despite the transitional difficulties and costs that such a change inevitably brought with it. We now have a system that is in most respects excellent and is certainly a vast improvement over the Sasine system. But progress is always possible, and experience since 1979 has shown that the legislation had several design defects that can be and should be put right. These defects being not merely surface features but inherent in the design, the Report recommends that the system be stripped down and rebuilt so as to enable it to deliver according to high performance specifications. In addition, we recommend one technical upgrade, namely the system of advance notices. A version of such a system has been available in England and Wales and a number of other countries, in Europe and elsewhere, for many years – well before 1979 – and the fact has to be faced that, in not offering this facility, our law has not kept pace with the best land registration systems round the world.

1.6It was at the suggestion of the Keeper of the Registers of Scotland that a review of the Land Registration (Scotland) Act 1979 was undertaken. Given the scale of the subject we issued three discussion papers:

•Discussion Paper on Land Registration: Void and Voidable Titles (Scot Law Com DP No 125, 2004).

•Discussion Paper on Land Registration: Registration, Rectification and Indemnity

(Scot Law Com DP No 128, 2005).

•Discussion Paper on Land Registration: Miscellaneous Issues (Scot Law Com DP No 130, 2005).

1.7The proposals in these discussion papers were generally supported by respondents, and the Report and draft Bill follow those proposals closely. Inevitably, however, there are

some departures, and moreover there are some new recommendations that were not

4 The Land Register inherited from the Register of Sasines the traditional counties as they were before the Local Government (Scotland) Act 1973.

5 Unsurprisingly, coverage varies from county to county. Renfrewshire, having been "operational" for the Land Register for the longest period, has the highest degree of coverage. Appendix D contains diagrams which illustrate coverage.

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mentioned in the discussion papers. Although our recommendations are extensive, and although we recommend that the 1979 Act be repealed and replaced, the changes, if enacted, would be evolutionary, not revolutionary. The value of continuity has been present in our minds throughout the process. There would continue to be a Land Register and existing registered titles would be largely unaffected. The great achievements of the 1979 Act would be retained.

1.8 We believe that if our recommendations are implemented, Scotland would once again have one of the best land registration systems to be found anywhere in the world. Indeed, arguably it would be the best.6

Scot/LAND online

1.9The 1979 Act was conceived of simply as a conveyancing statute. It aimed at making conveyancing simpler and therefore cheaper. And in that it has been successful. What was not realised was that it was more than just another conveyancing statute. Year by year more and more of Scotland is covered by the new registration system. And unlike the old system, the new one is accessible and transparent. In the past, to discover "who owns this property?" and "what non-ownership rights is it subject to, such as secured debt?" was possible, via the Register of Sasines, but it was slow and expensive and needed a conveyancing expert to turn the data into usable information. Moreover, boundaries were often uncertain. And all this remains true of properties that are still in the old register.7 But the new register is different. Any intelligent person can understand a title sheet, at least in broad terms. It shows the property by means of a coloured plan.8 It says who the owner is.9 And it says what rights (if any) held by other parties burden the property.10 Moreover, all this is available online.11

1.10Though no one seems to have seen it this way in 1979, the effect is revolutionary. In the 19th century the detailed physical mapping of Scotland was carried out for the first time by the Ordnance Survey: an achievement of immense significance. But the Ordnance Survey mapped, and maps, only (a) physical features and (b) boundaries of public law, such as constituency boundaries. It does not map boundaries of private law, ie title boundaries. This task began when the new register went live in April 1981 and the process continues. The sooner it can be completed the better. Under current law completion can hardly be

6 For example, the recommendations solve the problem of "bijuralism". (For bijuralism see in particular Parts 13 and 17.) This problem has a tendency to arise in any title registration system and does in fact plague many such systems. Our solution is derived from German law. (A system that has been influential across much of Europe but which unfortunately was not studied before the passing of the 1979 Act.) But at the same time our recommended scheme is, we believe, superior to the German system in a number of respects, including the nature of the title guarantee that is given to those dealing in land.

7 As mentioned above, about 40% of title units and about 80% of the surface area of Scotland are still in the old register.

8 The A Section of the title sheet.

9 The B Section of the title sheet.

10The C Section (heritable securities) and the D Section (other encumbrances).

11It is necessary to sign up. And there is a pay-per-hit charge. In practice it tends to be organisations that sign up, not least public-sector organisations such as local authorities. The benefits to local authorities of knowing what properties there are in their area, what their boundaries are, and who owns them, are immense. The BiGGAR Report (see para 1.11 below) at para 2.3 mentions better recovery of Council Tax as a benefit of land registration. The benefits run across the public sector, even if they cannot always be quantified in monetary terms. (For example the Land Register is often used by the police.) There are also obvious benefits to the private sector and to the third sector.

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envisaged.12 We recommend measures to bring about completion. When that happens the access revolution would be complete. Scot/LAND would be online.

Economic impact

1.11At the beginning of this part we touched on the importance of effective land registration to a country's economic development. Early in 2009, the Department of the Registers of Scotland engaged professional economics consultancy firm, BiGGAR Economics,13 to consider and to attempt to quantify the value of the Keeper's operations to the Scottish Economy. The initial report reinforces the value of Scotland's national property registers.14

1.12Against this background, the Department of the Registers thought it important, both for its own purposes and for informing stakeholders and policy makers, to consider the economic impacts of our proposed reforms. Economic considerations are, of course, not the sole driver for law reform. But in a project such as this the likely macroand microeconomic effects of the proposed reforms are important. Accordingly the Department of the Registers decided to commission a further economic impact assessment to consider the likely impact of our proposed reforms. This second report is reproduced at Appendix C.15 In brief, this study indicates that the proposed reforms would not create negative economic impacts and notes a variety of positive economic impacts, particularly in relation to our proposals for bringing forward completion of the Land Register and in relation to electronic conveyancing.

What land registration can and cannot achieve

1.13There are sometimes calls for the law to require owners of land to disclose their identity, or for this requirement to apply to those who own more than a certain amount of land. This idea does not need new legislation: the law has required this ever since the Registration Act 1617. It is not possible to acquire ownership of land in Scotland – whether a thousand-hectare estate or a flat in a city – without registration, and registration requires the disclosure of the identity of the acquirer. Secret ownership has been impossible in our law for almost 400 years.

1.14What the Register does not reveal is the back story, if there is one. If Alan is the registered owner he might be merely the nominee for Beata. That does not mean that she is the proprietor. Alan is the proprietor: that is the whole point of the arrangement. If Alan is to own the property in her interest, then, self-evidently, it is necessary for him to own the property: he cannot own it in her interest if he does not own it in the first place. But it is Beata who calls the shots. It is not only in nominee cases that the background power may not appear from what is in the Register. Beata might set up a company of which she is the sole shareholder, and buy the land in the name of the company. Here the owner is the company

12Transfer of properties into the new register happens on sale. There may be no sale for long periods, such as properties owned by companies or public authorities, or properties handed down the generations through the law of succession, which is not uncommon for landward properties. The 1617 Act required the recording of any transfer (not just transfers on sale) and yet four centuries later there are still properties that are not in that register because there has been no transfer since 1617. (These cases all involve state property, local authority property, and the property of our older universities.)

13http://www.biggareconomics.co.uk/

14This report is available on the Keeper's website. See http://www.ros.gov.uk/public/publications/RoS%20Economic%20Impact%20Report%2018aug09.doc

15With the permission of the Keeper and of BiGGAR Economics.

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