Rural Law

On Tuesday night I was pleased to have the opportunity to speak at a Registers of Scotland working dinner where the topic at hand was how Registers of Scotland can support, and increase the rate of, voluntary registration of land by private landowners.

Why is this important? The Scottish Government has given the Keeper of the Registers of Scotland the mighty task of getting the whole of Scotland on the Land Register by 2024. With only 26% of Scotland’s land mass on the Register at present, it’s a big challenge. The vast majority of Scotland is classed as rural and most of the title deeds to rural areas are still on the old style “sasine” register primarily because, until the Land Registration (Scotland) Act 2012 came into force on 8 December 2014, transfers for no consideration (e.g. family transfers and gifts) did not require registration in the Land Register. From 8 December 2014, any transfers of unregistered areas will “trigger” a first registration onto the Land Register.

There are various other new “triggers” for registration but, even so, it’s likely that sizeable chunks of rural Scotland won’t be affected by a “trigger” before 2024. This means that large parts of Scotland will not be on the Land Register by the 2024 deadline unless (1) landowners choose to register on a voluntary basis; or (2) the Keeper of the Land Register decides to put land on the Register herself, using the “keeper-induced” registration system.

It’s clear from the discussions on Tuesday night that the Keeper and her staff are keen to engage with rural estate owners and farmers to see how voluntary registrations can be encouraged (“keeper-induced” registration is less attractive for a number of reasons which I won’t go into here). As the owners of the bulk of the unregistered land mass throughout Scotland, the Keeper is hoping to engage rural landowners in the process sooner rather than later.

Whilst it is undoubtedly a good thing that the Land Register is completed, it is important to remember that landowners are being asked to engage on a voluntary basis. They are not obliged to register their properties in the Land Register unless they do something which “triggers” registration under the Land Registration (Scotland) Act 2012. Unfortunately registration of land in the Land Register, particularly of large properties, is not without cost. In addition to the registration fees payable to Registers of Scotland, there are a range of other costs which arise including legal fees, agent’s fees, mapping costs and time spent by landowners checking boundaries etc. Along with others representing rural landowners, at Tuesday night’s event I stressed that efforts must be made to mitigate these costs and to demonstrate the benefits which flow from registration – otherwise Registers of Scotland are unlikely to see a sizeable influx of voluntary registrations from rural landowners.

I am pleased to say that Registers of Scotland are listening to what we are saying and, in addition to the 25% reduction in registration fees which is likely to take effect in June, the Keeper and her team were keen to hear what we had to say about the need for a designated voluntary registration team at Registers of Scotland and, generally, the need for a practical and collaborative approach between lawyers and Registers of Scotland.

So what does all of this mean for landowners? The first step is to start thinking about land registration. Do you know if your land is registered? If it is not, is your sasine title unclear? Would it be beneficial to have it tidied and properly mapped on the Land Register, to give clarity on boundaries? These are some of the things which need to be considered, alongside the costs involved, so that an informed decision can be made on whether or not making a voluntary application for registration of your land is worthwhile.

POST-SCRIPT ADDED 20 MAY 2015

A wee update following on from last week’s blog, above.

The Scottish Ministers have now published a draft Order which impacts upon voluntary registration. It takes forward the commitment to give a 25% discount on registration fees for voluntary registration, taking effect from 30 June 2015. By way of example, this means that a farmer looking to register farmland worth between £1m-£2m will be due to pay Registers of Scotland a fee of £750, instead of £1,000.

The Order also proposes to remove the Keeper’s existing discretion to refuse voluntary applications so that landowners have comfort that, if they want to register, Registers of Scotland must allow it. Although the refusal of voluntary registrations may have been a (minor) problem in the past, since the Keeper now has a target of 100% completion of the register, it is unlikely that Registers of Scotland will refuse any voluntary application! That being the case, the removal of the Keeper’s discretion – which is proposed to take effect from 1 April 2016 – is unlikely to have a major impact.

The Order also sets the proposed date (1 April 2016) on which the grant of a standard security (mortgage) will become a “trigger” for land registration (currently securities can still be registered in the old Sasine register). Until then, landowners (and lenders) can take comfort in the fact that the grant of a security can continue to be recorded in the Sasine register.

Lorna McKay

Associate at Brodies LLP
Lorna is an Associate in Brodies’ land and rural business team. Lorna is experienced in a range of rural property matters including the purchase and sale of farms, estates and woodland, agricultural
holdings, fishings and trust and executry conveyancing. 
Lorna McKay