Exclusive: Exasperated lawyers say status quo on Land Register’s ‘black holes’ and rejections ‘cannot continue’

Fiona Dalton

Fiona Dalton, president of the Scottish Law Agents Society, has announced the formation of the SLAS Consumer Property Group to look at particular property issues in which consumers and solicitors have a common interest.

She told Scottish Legal News: “There is widely perceived discontent of legal practitioners with the operation of parts of the Land Registration (Scotland) Act 2012 and the way it can adversely affect consumers and users and no one seems to be listening or making things change.”

There are two principal areas of concern the group has: gaps in the Land Register and rejections.

“Firstly gaps are appearing in the Land Register where ownership is likely never to be satisfactorily known. There is no effective mechanism to sort out these gaps for the future. The reason is that 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,” Ms Dalton explained.

She added: “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’ whose ownership cannot be effectively identified backed up with indemnity insurance for large numbers of titles. This is a failure of the act that was never intended as politicians intended to know who owns Scotland and large numbers of titles will fail that basic test. It is about time that politicians should know the 2012 act is flawed and needs amendment.”

The second source of discontent for lawyers are rejections, which may occur at initial sift or post sift. These result from the so-called “one shot rule” of the 2012 act, intended to prevent a ranking or preference of title being preserved too long.

Ms Dalton said: “I think there is now reluctant acceptance by the legal profession that initial sift rejections may be justified and while rejection is unfortunate normally it will not be time-critical.”

The solicitor explained, however, that “it is a different matter where an application has been admitted by the Keeper and has passed the initial sift” but “thereafter some flaw that is not obvious or is technical leads to a later rejection of the case”, which can happen a year or more after the application was lodged.

These are normally cases where the flaw was not apparent to the practitioner or the Keeper at stage one of admission or rejection.

It is the late rejection cases about which the SLAS Consumer Property Group has the greatest concerns.

Ms Dalton said: “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.

“Some may 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. This requires amendment of the 2012 act.”

She proposed as a solution a statutory deemed acceptance by the Keeper if a case has not been rejected within say one or three months.

Ms Dalton added: “The status quo cannot continue.

“The SLAS Consumer Property Group intends to engage with the Scottish government to persuade them that action is required in the interest of consumers to improve the present system of land registration.

“It is presently not working in favour of consumers. We will tell the government what others fear to – that the completion of a cadastral map of every part of Scotland will never happen with the act in its present form.

“We will seek to engage with the new Keeper of the Registers of Scotland in meaningful dialogue with regard to these areas of discontent and explore what policies and procedures under existing legislation could be developed to meet or alleviate these concerns.”