Scotland can proudly claim to have the oldest national public land register in the world being the Sasine register dating back to 1617. You might imagine that having kept records of land ownership for so long, by now it must be easy to find out who owns land in Scotland. That is not always the case however. It is not always easy or even possible to find the owner.
When it comes to development sites there may be a hole in the middle or, worse still, a potential "ransom strip" at the entrance which unlocks the site for which no owner can be found. A missing piece in the development site jigsaw can prevent or hamper development and may have costly implications for a developer.
Where to search for the owner
Purchasers of land are usually more aware of the modern Land Register of Scotland but a large part of land in Scotland remains recorded in the Sasine register.
The Sasine register is, unlike the Land Register of Scotland, a register of deeds and there is no requirement for plans to be attached to those deeds for them to be valid. Invariably, the lack of a plan, historical property descriptions and issues encountered in obtaining copies of older deeds have resulted in difficulties in establishing ownership of certain land still recorded in that Register.
Even if a piece of land is registered in the Land Register of Scotland certain events occur, such as the winding up of a company, which can result in situations where the land appears to be ownerless.
And so, despite extensive searches and research, sometimes the owner cannot be found. There are various options which a developer can pursue when they encounter 'ownerless land' but the 3 main options are as follows.
Insure against challenge and eviction
The most time and cost effective option is for a developer to obtain an insurance policy called title indemnity insurance. Such an insurance policy provides cover against loss should there be a future challenge to the use of the land by the owner of the land.
The insurance premium is usually a one off payment and normally protects future owners of the land and lenders but, as with all insurance policies, the terms of the policy should be checked carefully.
Title indemnity insurance does not provide a developer with ownership of land and, on its own, never will. It may therefore not be appropriate in certain circumstances and there are situations where title insurance will not be an option at all if insurers deem the risk as being too high.
Apply to the Crown
Ultimately, the Crown has the choice to deal with land which truly has no owner (bona vacantia), for example, when a company has gone into liquidation in Scotland. The Queen's and Lord's Remembrancer Treasurer (QLTR) is the Crown's representative in Scotland.
A developer may consider an approach to the QLTR to acquire ownership of bona vacantia. If the QLTR accepts the application, the land will first be transferred to the QLTR who will then transfer the land to the purchaser in exchange for payment of the land value as determined by the District Valuer.
The QLTR is not obliged to deal with bona vacantia and may disclaim ownership of such land. The QLTR would then notify parties of the disclaimer by placing the disclaimer in the Edinburgh Gazette and, if appropriate, Companies House.
Make a prescriptive claim
Where no owner can be found, it is possible to make a prescriptive claim to the land. This involves registering what is known as a disposition a non domino, a transfer of property by a party who has no title to it. This transfer must be to a separate individual or entity.
This sounds like the obvious way to solve the problem but, it is not straightforward or guaranteed. The person transferring the property must be able to show that they have possessed the property for at least one year before the transfer. They must also have tried to contact all possible owners and the QLTR to notify them of the proposed transfer. Once the disposition has been presented for registration, Registers of Scotland will then repeat the notification process and contact all possible owners including the QLTR to check that they do not object to the transfer.
If an objector and potential owner appears out of the woodwork, the Keeper will reject the application for registration of the disposition and title will not transfer.
If no objections are raised to the transfer, a provisional title will be registered. It is possible to sell, lease and grant security over a provisional title but full ownership can only be applied for after open and peaceable possession of the land with no challenges in court for at least 10 years after the disposition a non domino was registered. Evidence of this possession will have to be presented with the application for full title.
Careful consideration must be given before going down the prescriptive claim route as it takes time and expense. It will also potentially remove the ability to insure against the risk of a challenge to the title and invalidate any such insurance already in place.
As the drive to complete the Land Register continues, the issues associated with ownerless land should begin to fade away. Meantime options are available but, the type and location of any ownerless gap and the development intended must be carefully considered when choosing which way to go.