News / General

Consumer Property Group of SLAS

By Michael Sheridan

A Consumer Property Group has been formed by the Scottish Law Agents Society to look at particular issues where the interest of consumers and solicitors are aligned and action required to improve the situation of both in relation to Property in Scotland.

Reason

There is wide perceived discontent of the legal practitioners with the operation of parts of the Land Registration (Scotland) Act 2012 and the way it can adversely affect consumers and users.

Particular Areas of Concern

1) Gaps are appearing in the Land Register where ownership is likely to never be known. There is no effective mechanism to sort out these gaps for the future. Why? There has been an effective abolition of the benefits obtained by use of a non domino Dispositions. The procedures under Section 43 of the 2012 Act are far too long and are capable of frustration at the last minute because of burdensome intimation procedures and possible late challenge of these. This is not an effective way of filling in gaps in the Land Register. Most legal practitioners are simply not using them now and rely on Title (or more accurately Dispossession) Indemnity Insurance Policies which once taken out will mean the Title will never be cured for the future as any attempt will invalidate cover under the Policy. Thus the Land Register Cadastral Map will have "black holes or slivers of land" whose ownership cannot be effectively identified backed up with indemnity insurance for large numbers of Titles. Part of this problem was created by practices adopted by the Keeper under the Land Registration (Scotland) Act 1979 and the way the Keeper dealt with "gap areas". It was part of the practice of the Keeper to ask in the then style of application form whether an applicant wished to register to the full extent of their Sasine Title or only to the possessory extent if less. Legal practitioners assumed, perhaps naively, that this would mean that when the neighbouring property came to be registered it would receive the benefit of the “disclaimed” area and the Keeper would automatically include it in the Title to the neighbouring property. That has not happened and is not happening. It would have been far more sensible to show the full extent in every case which would lead to the applicant having Title to that gap area occupied by a neighbour and the applicant could convey it to the neighbour if agreement was reached. Resolution One method of resolving this position would be to reintroduce a non domino Dispositions. However this time the period of prescription would be 20 years and not 10 years. There is some legal basis for this in that such a system has been recommended by the Scottish Law Commission to be included in the proposed reform of moveable property law such that if moveable property has been possessed for over 20 years it can become ownership. This would be consistent with a change to the heritable property position proposed above. Also 20 years is the recognised long negative period of prescription cutting off rights (whether there has been intimation or not) and so a balance in terms of the Human Rights Act may be struck. This particular solution would require amendment of the 2012 Act.

2) Rejection The so called ‘one shot rule’ is built into the 2012 Act and is supposed to prevent a ranking or preference of title being preserved too long. There are 2 stages. Initial Sift - Early Rejection Of all the areas that have been a source of discontent with the Act, rejection is the largest. However I think there is now reluctant acceptance by the legal profession that "initial sift" applications may be justified and while rejection is unfortunate it will normally not be time critical. Post Sift - Late Rejection However it is a different matter where an application has been admitted by the Keeper and has passed the initial sift and thereafter some flaw that is not obvious or technical leads to a later rejection of the case, some times a year or more after the application was lodged. These are normally cases where the flaw was not apparent to the solicitor or the Keeper in the Stage 1 part of admission or rejection. It is the “late rejection” cases about which the SLAS Consumer Property Group has concerns. There is a world of difference between some obvious error at the initial sift and the more complex reasons for “late rejection”. It is unacceptable that such cases should be rejected without the opportunity of the matters being rectified (if that is possible). There is no flexibility in the present scheme for a period to allow the application to be altered. More thinking needs to be done to remedy the situation but the present position is completely unsatisfactory. There will be those who say that if there is a late rejection it is all the Solicitors fault and owners affected can claim on their indemnity insurance but we do not believe that is a consumer answer. At present a Solicitor will have to carry the can for this and that will be the case if some intervening event like bankruptcy, receivership, sale on or grant of a security etc has taken place and the property lost. Some may argue therefore that the solicitors with the failed application will provide redress. However it is not proper redress as far as consumers are concerned. Consumers want the “mud” i.e. the house and not “compensation” for not getting it. The problem with the present position is that if there is a late rejection and some act intervenes then the consumer will not receive the Title to the "mud" or the house that he should obtain. This system is wrong. It requires to be corrected so that the effect of late rejection is proportionate and the consumer does not lose the house or mud. This requires amendment of the 2012 Act. Another solution might be to have a statutory deemed acceptance by the Keeper if a case has not been rejected within say 1 or 3 months.

Action

1. Engage with the Scottish Government to persuade the Scottish Ministers that action is required in the interest of consumers to improve the present system of land registration in Scotland as it is presently not working in favour of consumers and to warn them that the completion of a cadastral map of every part of Scotland is doomed leaving multiple gap areas with unidentified owners.

2. Engage with the Keeper of the Registers of Scotland in meaningful dialogue with regard to these areas of discontent. To explore what policies and procedures under existing legislation could be developed to meet or alleviate these concerns and if not to pursue satisfactory amendments of the Land Registration (Scotland) Act 2012.

3. Engage with other Legal Professional organisations and Solicitors to achieve these objectives.

END

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