Examination of title
A purchaser’s solicitor should examine the title deeds to make sure that his or her client will obtain a good marketable title, free from the risk of challenge. Similarly, the registration officer, on behalf of the Keeper, must examine the title deeds to ensure that the indemnity fund will not be put at undue risk by registering, with full indemnity, a title that contains serious defects.
The registration officer must check:
In order to ensure that the applicant has a good title the registration officer must examine a prescriptive progress of title. For first registrations the period of the positive prescription is ten years and the foundation title must be a deed recorded in the Register of Sasines at least ten years prior to the date of first registration. The rules regarding the prescriptive period of leasehold subjects and servitudes are different; and these are discussed in Leasehold subjects and Servitudes and Public Rights of Way respectively. Different considerations also apply to certain titles in Orkney and Shetland, which may have been held on udal tenure without written deeds (see unwritten udal titles)
When subjects have been registered in the land register, title stems from the register and prescription is irrelevant unless indemnity has been excluded; for a DW or TP, examination of title therefore only requires a check from the details in the title sheet up to and including the deed inducing registration.
A prescriptive progress is an unbroken chain of titles stretching back at least ten years from the date of the application. This means that the officer must identify the first ex facie valid title recorded outwith the ten year period. That deed forms the foundation writ of the prescriptive progress. The foundation deed and the subsequent links in title, recorded or unrecorded, down to and including the deed inducing registration comprise the prescriptive progress.
An example of a chain of title is shown below:
1. Disposition by A to B recorded March 1980
2. Disposition by B to C recorded October 1988
3. Disposition by C to D recorded August 1993
4. Disposition by D to E recorded May 1998
5. Disposition by E to F registered January 2002 (the DIR)
In this example, the starting point for the ten year search back is January 2002, the date of the deed inducing registration. Ten years back from this is January 1992. The last title recorded prior to that is the disposition by B to C in 1988. The prescriptive progress would, therefore, comprise deeds 2, 3, 4 and 5.
The above example does not contain any midcouples/unrecorded links in title but they are not uncommon in the normal prescriptive progress. If the granter of one recorded deed in the prescriptive progress is not the same person as the grantee in the previously recorded deed there should be an unrecorded link in title. For example, suppose D had died and the disposition to E had been granted by the executor of D, then the confirmation of that executor would be the unrecorded link in title. Examples of other documents which can comprise midcouples/links in title include wills, docketed certificates of confirmation, unrecorded conveyances, etc. (see Links in title).
3.3 Checking the prescriptive progress of titles
The registration officer should check the search sheet (SSI and CSR):
The first step is to identify the deeds in the prescriptive progress. It is sufficient for the registration officer to check the prescriptive progress of titles from the search sheet, and not to examine each deed in the prescriptive progress. The Keeper will have already examined deeds in the prescriptive progress, which have been recorded in any of the registers under his control, for ex facie validity at the time of recording. This includes not only deeds recorded in the Sasine Register but also deeds registered in the Books of Council and Session such as wills, deeds of assumption and conveyance, minutes of resignation etc. That examination will have covered the following particulars: stamp duty, designation of parties, adequate description, words of conveyance (in the present tense), the testing clause and execution, and warrant of registration. It is, therefore, not necessary for the deeds to be checked again for these matters.
Special consideration should be given where the prescriptive progress of titles includes a disposition a non domino by the disponer in favour of himself (A to A). It is now recognised that dispositions a non domino by A to A are invalid ex facie (see Ex facie valid deed), it is important that settlers check whether there is such a deed in the prescriptive progress of titles. See Prior recorded a non domino titles: has the title been validated by prescription? for instructions on how to deal with applications where there is a prior recorded disposition a non domino by A to A in the prescriptive progress of titles.
The search sheet should be checked to ensure that the grantee in the foundation writ is the granter in the next recorded title and so on down to the deed inducing registration. The registration officer should check that the deeds are consistent within themselves, (for example, that any deduction of title proceeds on the correct links) and in relation to the other deeds in the progress. There is no requirement to requisition any prior recorded deeds that have not been submitted. However, in terms of section 5.31 of the Registration of Title Practice Book all relevant links in title should be submitted with an application; in all cases where a confirmation is used as a link in title it should be examined for its validity (see section 3.10 for further information. In addition, where there is some indication on the search sheet of a possible deficiency (e.g. a note under an entry ‘granter does not deduce title’), the registration officer will need to examine that particular recorded deed.
Under Scots conveyancing law the fact that the granter of a deed has executed the deed does not automatically bind that party in terms of that deed. To make the deed binding against the grantor the deed must be delivered to the grantee or his representatives. Once delivery has taken place, the grantee acquires a personal right in the interest contained in the deed. This right is made real by registration in the Land Register (or recording in the Sasine Register if appropriate). The date on which delivery occurs is not stipulated in a deed. Rather it is a question of fact and intention. For instance a deed of conveyance will normally be delivered in exchange for the consideration. On receipt of an application for registration it is reasonable for the Keeper to assume that delivery has occurred. This is because the deed will be submitted by the solicitor acting for the grantee, i.e. the party to whom the deed has been delivered.
Until a deed has been delivered the grantor remains in right of the interest in land to which he has an entitlement and can grant further deeds relating to that interest in land. Such further deeds may of course be in breach of the missives between the parties to the first deed. Such a breach of missives is not a matter for the Keeper. Rather the priority between applications is to be determined by reference to section 7 of the 1979 Act. If in doubt, refer to a senior caseworker who will, if necessary, seek the advice of Legal Services.
3.3.2 Problems detected in examination of title and/or advised to Keeper by other parties
While examining the search sheet the registration officer should check for any competing titles, or notes indicating a non domino titles or exceptions from warrandice. Account must also be taken of any other defect noted on the search sheet and a check made as to whether corrective action has been taken. Similarly, if a solicitor or member of the public advises that the title is defective in some respect, or that the application is in bad faith, the information must be carefully investigated and considered. These sorts of factors may point to the need to exclude indemnity.
A case involving the last of these scenarios (information received from an outside source that a title is defective or the application is in bad faith) should always be referred up to a senior caseworker and thence, if necessary, to Legal Services for a decision, after an initial investigation of the facts. An example taken from real life will illustrate the sorts of problems that can arise when such information is overlooked or poorly considered.
In December 2002 a solicitor complained that the Keeper had failed to react fairly, quickly and decisively to an earlier letter from him about an a non domino Disposition that was prejudicial to his client's interest. Close investigation showed that the complaint was justified. The circumstances were as follows. The solicitor's client had a recorded Sasine title to a certain area of ground. In June 2002 another party lodged an application for first registration of part of that area of ground, and other ground, based on an a non domino Disposition. In October 2002 the solicitor wrote to advise the Keeper that the application was in bad faith and included a piece of ground which the applicants knew to be in the ownership of the solicitor's client. Despite this advice, registration staff proceeded to complete the application and register the applicants' title with full indemnity. As a result, there was difficult and protracted correspondence between the solicitor and Legal Services, lasting well into 2003, and a subsequent application for rectification of the Register. This could have been easily avoided, had the registration staff checked the information given in the solicitor's letter of October 2002 in detail, which they failed to do.
Care must be taken to prevent the occurrence of similar problems in future.
As stated above, registration staff receiving information from outside sources about alleged defects in title should first investigate the circumstances and then refer the matter to a senior caseworker who can, if need be, refer on to Legal Services.
The registration officer must examine those deeds presented for registration which have not been previously examined by the Keeper to ensure that they are ex facie valid. For example, stamp duty, parties named and designed, de praesenti words of conveyance, adequate description, authentication, etc.. Any exceptions from warrandice, or only granting simple warrandice, should be investigated because such qualifications could well indicate the need to consider an exclusion of indemnity.
For the avoidance of doubt, dispositions a non domino by the disponer in favour of himself (A to A) are invalid ex facie. (See Ex facie valid deed). An application for registration in the Land Register where the deed inducing registration is a disposition a non domino by A to A should be rejected.
An application for registration should, in terms of section 4(1) of the 1979 Act, be accompanied by all relevant unrecorded supporting documents such as links in title. In general terms, therefore, an application for first registration should be accompanied by all relevant links in title within the progress of titles. Links in title should be submitted whether or not there is a clause of deduction of title in the deed or a subsequent notice of title. A registration officer should not insist on a clause of deduction of title or notice of title provided satisfactory links between the uninfeft proprietor and the person last infeft are submitted. (However, settlers should bear in mind that for the grant of a long lease it is insufficient to deduce title and/or to produce links in title; in that situation, the granter must first be infeft – see leases granted by uninfeft proprietors and Infeftment)
Where the registration officer notices that a prior deed in the prescriptive progress contains a deduction of title proceeding on the wrong unrecorded links, registration with full indemnity may proceed if the correct links are produced. If the agent fails to produce the correct links, but by other means offers satisfactory proof that the granter of the deed was the person entitled, again registration with full indemnity may proceed. Only if the agent fails to prove that the granter of the deed was the person entitled should exclusion of indemnity be considered.
If satisfactory links within the progress of title are not submitted, the common links index should be checked to see if they have previously been examined; If not, the registration officer should requisition them, giving the agent the opportunity to submit them for examination. It should be noted, however, that if the officer requisitions such links and they are not forthcoming, the application should either be rejected in terms of section 4(1) or registered but with indemnity being excluded in respect of the absence of the relevant link(s) in title. Please also see Exclusion of indemnity: a practical solution.
Where the interest in land is already registered in the Land Register it is only necessary to submit mid-couples or links between the uninfeft proprietor of that interest and the registered proprietor. Sections 3(6) and 15(3) of the 1979 Act make notices of title and clauses of deduction of title unnecessary in relation to a registered interest, provided sufficient links in title are produced to the Keeper.
Where a midcouple is likely to be relevant to other applications (for instance, a certificate of incorporation on change of name relating to a development company or the deeds and documents transferring the undertaking of a former building society on conversion to plc status, or powers of attorney), the registration officer should ensure that the details of the link in title are entered into the record of common links. The common links index is simply a catalogue of those links in title common to more than one title. Its purpose is to aid the registration process by removing the need to submit common links in title on every occasion. If appropriate, the common links index on LRS should be searched prior to a requisition being issued.
3.7 Deeds by or to special parties
The following paragraphs look at the evidence required by the Keeper in connection with deeds granted by or to special parties. If in doubt as to the evidence required in a particular case the registration officer should refer the case to a senior team leader.
3.8 Trusts and trustees - deeds granted by trustees
Section 12(3)(j) of the 1979 Act provides that there shall be no entitlement to indemnity in respect of loss suffered by (a) a beneficiary under a trust in respect of any transaction entered into by its trustees or in respect of any title granted by them the validity of which is unchallengeable by virtue of section 2 of the Trusts (Scotland) Act 1961 (or section 17 of the Succession (Scotland) Act 1964); or (b) a person in respect of any interest transferred to him by trustees in purported implement of trust purposes.
The effect of this provision is that it is not necessary to check that the trustees have acted in accordance with the trust purposes. It remains necessary, however, to ensure that there is a valid trust deed and to check the validity of any subsequent deeds of assumption and conveyance or minutes of resignation. In other words, the registration officer must check that the original trust deed was properly executed and conveyed the property to the trustees. If the current trustees are different from those named in the trust deed the officer must check that there are sufficient links by any deeds of assumption, minutes of resignation etc., validly executed, between the old and the new trustees.
If the last trustee has died it is possible for the executor of that trustee to confirm to the property, however their power to deal with the property is limited. Any instance where the trust deed provided for transfer to the heir of the last surviving trustee requires a Court declarator endorsing the succeeding trustee's interest. Due to the complexities surrounding this topic any application that includes a transfer by a successor of the last surviving trustee should be referred to legal services.
For further information on execution of deeds by trustees see 7.26.
3.8.1 Deed of Trust as midcouple
A trust deed is typically only a title to the trustees; beneficiaries cannot normally use a trust deed alone as a midcouple to complete title and a conveyance from the trustees to the beneficiaries would usually be required.
3.8.2 Self Invested Personal Pensions (SIPPs)
This is a personal pension scheme that was introduced on 6 April 2001 and is for the sole purpose of providing benefits for the member’s retirement. The scheme enables the member to have a greater, but not ultimate, say in how their contributions are invested and the ongoing management of the investments but they have no legal ownership as an individual; the member may be a trustee but cannot be a sole trustee of the scheme.
There are restrictions on what the members of the scheme may hold as investments. In particular, residential property, even property intended for re-development is not an approved form of investment for the purpose of a SIPP. The SIPP scheme allows tax rebates on contributions in exchange for a limitation on the type of investment. Should an unapproved investment be entered into, this has effect only on the availability of tax rebates on the money so invested and not in relation to the validity of the title. Therefore, the Keeper need have no concern with the type of property being purchased and, as the transfer will have been the subject of a Stamp Duty Land Tax return to HMRC, does not require to make further enquiry.3.9 Deeds granted by ex officio trustees
Clubs and similar organisations often take title in the name of designated office-bearers as trustees for the club (for example, disposition by A to B as chairman, C as secretary and D as treasurer and their successors in office as trustees for X Club, etc). Unless the club or organisation has changed its constitution since it acquired title, the Keeper would expect any conveyance by the club or organisation to be granted by the present holders of those offices as trustees.
Where the present office-bearers differ from those named in the original title, the registration officer will require to examine evidence (for example, minutes of meetings, etc.) of the appointment or election of the present office-bearers. If the club has changed its constitution to allow holders of other offices to act as trustees, the officer will require evidence of the change of constitution in addition to evidence of election of the present office-bearers.
Section 26 of the Titles to Land Consolidation (Scotland) Act 1868 provides that where land has been acquired for religious purposes and title has been taken by named parties in trust for a congregation or religious society then the recording of the conveyance in their favour shall also vest their successors in office without further transmission.
In consequence of this clause title taken in the name of AB, CD and EF as trustees for the congregation of Meadowbank House Church could subsequently be transferred by GH, JK and LM as trustees for the congregation of Meadowbank House Church without there having been any formal minutes of resignation or appointment or transfer. It does not however remove the requirement that the Keeper has to be satisfied that the named trustees are those entitled to act on behalf of the congregation. The Keeper's policy is set out at section 5.34 of the Practice Book which states that the Keeper will wish to examine links between old and new trustees. An independent view of the position is contained in section 39.18 of J. M. Halliday, Conveyancing Law and Practice (2nd edition) which states that "a purchaser would be entitled to evidence such as an extract from the minutes of the meeting at which the appointment was made ".
Such evidence can take the form of minutes identifying that the property is to be sold and confirming those parties who will act in the sale; evidence of the parties being holders of posts that might otherwise have been identified as office bearers such as treasurer, session clerk and similar; or their appointment to posts in which they are representatives of the society, such as elders of the congregation.
If any doubt exists as to whether the evidence produced is satisfactory the application should be referred to a senior caseworker for further advice.
3.10 Deeds granted by executors
All confirmations used as a link in title in the prescriptive period should be examined. When considering a confirmation as a link in title there are two important factors; firstly, does the confirmation cover the property being conveyed, and secondly, did the deceased die prior to 10 Sep. 1964? The following guidance reflects the provisions of the Succession (Scotland) Act 1964, but these do not apply in the case of death prior to 10 Sep. 1964. It is not appropriate for a confirmation to include heritable property if the deceased died prior to 10 September 1964.
Where a confirmation fails to include an item of estate it is possible to obtain an eik to the confirmation including the previously omitted item.
In the event of an application relying on any confirmation as a midcouple for a deed in the prescriptive progress that fails on either of the two foregoing points it should be referred for further guidance. On the first point, if the property is not covered by either the confirmation, or an eik to that confirmation, the referral should be dealt with by a senior caseworker, on the second point the case should be referred to legal services.
Where a person vest in heritable property has died and the property is subsequently being conveyed, for the purpose of administration the heritage vests in the executor by virtue of confirmation.
Where the executor of the party last infeft is conveying the subjects, the registration officer will require to examine either the confirmation appointing the executor or a certificate of confirmation which includes a description of the property.
In testate succession, as an alternative to the confirmation or certificate of confirmation, the registration officer may accept the will itself if it contains a general conveyance to the executor(s), and if it is accompanied by the death certificate of the testator. In addition, the officer should seek written assurance from the agent that the will constitutes the last will and testament of the deceased and has not been subsequently revoked. For a discussion regarding the competency of using a will as a link in title see paragraph Will as a link in title
In terms of section 17 of the Succession (Scotland) Act 1964 the title of a person who has acquired in good faith and for value from an executor or from a person deriving title from an executor is not open to challenge. Section 12(3)(j)(i) of the 1979 Act extends similar protection to the Keeper; no indemnity will be payable to a beneficiary who suffers loss in respect of any title granted by an executor, the validity of which is unchallengeable by virtue of section 17 of the 1964 Act. Accordingly, where subjects have been conveyed for value, the registration officer should check that the application form does not, in answer to any of the questions in Part B, give any indication of bad faith. If the answers to the questions on the application form are acceptable, the Keeper will not require assurance, such as sight of the will, that the executor has conveyed to the person so entitled.
The converse applies where a gratuitous transfer has been made by an executor and has not been followed by a transfer for value. In those circumstances the registration officer should seek assurance that the executor has conveyed to the person entitled. In testate succession, this entails examining the final will of the deceased. Where the deceased died intestate the Keeper will require proof of the identity of the heir, for example a family tree sworn to by the executor. The officer should refer such a case to a senior team leader, who will decide, according to the circumstances of the case, whether to seek further evidence, such as affidavits, exclude indemnity, or register with full indemnity.
For further information on execution of deeds by executors see 7.26.
Updated August 2008