Fee review 2020 - Fees consultation response

Background

Registers of Scotland (RoS) is a Scottish public body headed by the Keeper of the Registers of Scotland, who is a non-ministerial office-holder in the Scottish Administration and the Chief Executive of RoS. RoS' functions are to maintain the public registers for which the Keeper is statutorily responsible and make the information they contain publicly available.

In October 2020, RoS launched a public consultation to seek views on its proposals to increase some of its statutory fees to return it to a cost-neutral position.

View the consultation paper.

44 responses were received to the consultation.  9 responded on behalf of organisations and 35 as individuals.

We would like to thank all respondents for their responses and we will keep all comments, views and suggestions under consideration.

High-level analysis of consultation responses

Methodology

The consultation ran from 26 October 2020 to 24 December 2020. It was hosted on the Scottish Government’s Citizen Space consultation hub, where people could post their responses.  Announcements were posted on the RoS website, by email, and via RoS social media channels to confirm that the consultation was live and to encourage responses while it was live.

The consultation was open to both individuals and organisations and feedback was gathered via an online consultation questionnaire - containing 10 substantive questions focussing on the reasons behind the proposed new fee structure. Views were sought on the consequences of the change for users of RoS services, stakeholders and citizens.

Where respondents asked questions, made specific comments or raised issues on wider topics not related directly to the questions asked, responses and links to additional information has been included in the sections labelled 'Comment and Clarification'.

Nine of the questions included a yes/no response. Closed question yes/no responses were quantified and the number of respondents who agreed/disagreed with each proposal or question statement is reported below.

Comments given in the free text field at each open question were examined and, where questions elicited a positive, negative or a neutral response, they were categorised as such. The main reasons presented by respondents both for and against the content included in the consultation were reviewed, alongside specific examples or explanations, caveats and other related comments.

The remainder of this report presents the findings from the analysis.

Consultation analysis

Q1. Do you have any comments on the proposed fees as set out in Annex A of this consultation?

Our first question was an open question inviting free-text responses and which did not include yes/no response options. We offered respondents an opportunity to make general comments to the proposals which we then analysed according to sentiment expressed.

34 respondents (77%) either agreed with or were neutral towards the proposed fees, and respondents providing no commentary were characterised as a neutral response. 10 respondents provided responses which we characterised as negative.

We have therefore characterised the overall response as being in support of the proposed fees.

Those who responded to agree with the proposal tended not to elaborate on their views.  Some respondents commented that the proposed fee change is too soon following the temporary £10 increase in October 2020, some considered that the increases were too high, and some others commented that the fees should be proportionate to the work involved for RoS.

Comment and clarification

1. Temporary increase in October 2020

The Keeper used a power granted to her in Article 4 of the Registers of Scotland (Fees) Order 2014 to raise fees by £10 on a temporary basis.  Both the impact of rising costs and the anticipated impact of the health emergency on the housing and property market which would have had a detrimental effect on the financial position of Registers of Scotland which the Keeper could not otherwise mitigate.  The Keeper gave three months’ notice of her intention to bring the rise into force to enable applicants to plan accordingly.

As the effect of the October rise can only be temporary and limited to a maximum of £10 on statutory fees, and given the levels of revenue raised by the £10 increase are insufficient to place RoS back on a cost-recovery basis, a more substantial and permanent change to the fee structure using subordinate legislation is required.  This will ensure that the fees that RoS charge are set at a level whereby they recover the cost of the work involved in line with the requirements of the Scottish Public Finance Manual.

2. Differentiation between types of product and savings from digitalisation

As discussed in the consultation, we propose maintaining no differential between the fees for a First Registration (FR) of a property onto the Land Register, a Dealing with Whole (DW) of a property already on the Land Register, and a Transfer of Part (TP) of part of a property on the Land Register.

The policy aim is to protect customers from the higher costs involved in registering in the Land Register for the first time, FRs remain a significant portion of our intake onto the Land Register, and the parity of fees reflects the fact that all titles registered in the Land Register benefit from a state-backed warranty, except in exceptional circumstances.

Whilst digital registration once established does provide a cost saving as evidenced by the lower registration fee for Digital Discharge Service, currently this is the only end-to-end digital registration service in operation. The Digital Submission Service facilitates the registration of copy traditional deeds and requires a similar level of manual input by RoS as paper submission.  Cost savings may be realised once other digital registration services are developed and brought into being.

Further information on how RoS operates is set out in its framework document.

Q2: Do you agree that rejection fees should be removed?

Yes: 40, No: 4

All 44 respondents answered this question.  At over 90% in favour of the proposal, there was very strong support for the proposal to remove rejection fees.

The decision to remove rejection fees was met with particularly strong support from the Law Society of Scotland and several other solicitor respondents.  Some respondents cited the administrative costs in dealing with rejections, as well as the financial costs borne by solicitors.

The Law Society of Scotland commented on the measures which RoS has already put in place to lower the number of rejections, including redesigning the application form, producing guidance to help avoid rejections and revising the rejection policy.

Support was not universal, however, with one respondent commenting that ‘poor conveyancing should not be rewarded’, and another commenting that the cost of rejection would have to be absorbed by RoS and transferred on to other users.  RoS will keep the position under review.

Q3a: Do you agree that voluntary registration fees should continue to be lower than standard registrations?

Yes: 38, No: 6

Again all 44 respondents answered this question.  At 86% in favour of the proposal, there was very strong support for the proposal to retain lower registration fees for voluntary registration.

The proposal was met with strong support from solicitors specialising in voluntary registration and the Law Society of Scotland as lower fees are considered an incentive to voluntary registration.

One respondent said ‘We carry out a large number of voluntary registrations for our clients. They often come to us aware of the discounted registration dues and view this as an incentive for registering title by way of a voluntary registration. Voluntary registration can be an expensive exercise and this discount is appreciated by our clients.’

Whilst support was strong, several respondents commented that these fees should be set as low as possible.  This suggests support for the sentiment of lower fees but ambiguity at the level at which these will continue to be set, which is 25% lower than deed-induced registration fees.

Others suggested that the discount was not a sufficiently attractive incentive to encourage landowners to voluntary register their properties, with one respondent suggesting that government support could be provided to deliver larger discounts.

Q3b: Do you agree that Registers of Scotland should retain the ability to vary statutory fees by an amount not exceeding £10 in such circumstances as described in the paper?

Yes: 33, No: 10, Not answered: 1

43 of the 44 respondents answered this question.  At 75% in favour of the proposal, there was strong support in favour of RoS retaining the ability to vary statutory fees as described.

Comments include "Legislation is way too slow. It is essential for ROS to have a certain amount of flexibility" and “I have no objection to that provided the power is used sparingly.”

Support for the proposal was not universal and some qualified supportive and some negative comments were provided.  One respondent said “While I have no objection to the variation of the registration dues for deeds in the Land and Sasine Registers these should not apply to advanced notices or other deeds submitted such as those in Books of C+S.” Another said: “I do agree however for the reasons stated I do think there should be a sufficient notice period so that firms have an opportunity to take account of increases and plan accordingly.”

The power to raise fees was brought into force in 2014 and has been used only once, in October 2020, to help mitigate the impact on RoS’s finances caused by Coronavirus.  RoS will only seek to use the power in similar such extenuating circumstances.

Q3c: Do you agree that registration fees for the Crofting Register and the Register of Community Interests in Land should remain unchanged?

Yes: 38, No: 4, Not answered: 2

42 of the 44 respondents answered this question.  At 86% in favour of the proposal, there was very strong support in favour for these fees remaining unchanged at this point.

One respondent commented that “It is very important that there is no disincentive to registration in these important areas of land law”. Others were less supportive, with one respondent stating that “The submission fees should reflect the general increase in the other registers to mirror the cost of providing the relevant register so that the cost equals the revenue received”.

Q4: Do you agree that registration through Registers of Scotland digital registration systems should continue to cost less than standard registrations?

Yes: 39, No: 5

All 44 respondents answered this question.  With 88% of respondents in favour of the proposal, there was very strong support in favour of registration fees for digital registration systems costing less than standard registrations.

Whilst responses were strongly in favour of the sentiment, some respondents queried why reduced fees were not available for all deeds submitted electronically, notably those submitted through the Digital Submission Service.

As mentioned above, the Digital Submission Service is a portal through which electronic copies of traditional paper deeds can be submitted for registration and is not a digital registration system, that is to say, it is not a system for creation and registration of electronic documents, and whilst there are no paper handling costs associated with the Digital Submission Service, paper handling costs represent a very limited saving against the overall cost of registration and therefore this saving would not justify a reduced fee for use of the Digital Submission Service.

The Digital Discharge Service is the only end-to-end digital registration system currently in operation. It represents a significant cost saving compared to the ‘traditional deed’ equivalent which enables us to pass this saving on to users of the Digital Discharge Service and incentive its use.  We intend to extend digital registration to other document types as explained in our Digital Submissions 2020 Consultation which is open for comment until 1 February 2021.  Once more end-to-end digital registration services become available, RoS would at that point be in a position to consider offering a reduction in registration fees for their use.

Q5: Do you agree that the fees we charge for these services should at a minimum recover our costs for the provision of information, copy deeds and services?

Yes: 36, No: 8

All 44 respondents answered this question.  With 82% of respondents in favour of the proposal, there was very strong support in favour of RoS recovering the costs we incur from the fees we charge for information, copy deeds and searches.

Some respondents commented on RoS’s funding model more generally, including one respondent suggesting that funding could come from general taxation.

As explained in the Consultation, RoS is required to operate on a cost recovery basis through the provisions of the Scottish Public Finance Manual.  This is on the basis that the costs of registration should be met by those individuals or organisations who wish to procure it rather than from the public at large.

Q6a: Do you agree that Registers of Scotland should review its statutory fees on an annual basis?

Yes: 24, No: 19, Not answered: 1

43 of the 44 respondents answered this question.  With only 55% in favour, there was limited support for this proposal.

Response comments were fairly evenly divided between showing support for RoS reviewing its costs on an annual basis and others concerned about the impact this would have on property transactions.

One respondent, in support of the proposal noted “Just as any business should annually check their fees and costs”.  Another noted that “It seems fair – all other companies do this”.

A respondent who was against the proposal, noted that “This would create chaos in the legal profession… 3 yearly reviews would be acceptable.” Another noted that “We think that statutory fees being reviewed on an annual basis is too frequent and could cause issues in managing client costs and when requesting outlays from clients, particularly when registration dues could be varied by up to £10 at any time before the annual review taking place… Having said that, we would prefer for reviews to be permitted to take place in a way that avoids seeing significant uplifts such as those proposed now.”

Comment and clarification

A fee review does not automatically imply a fee increase

RoS formally reviews its fees at least every two years and this is the first time we have had to raise our fees since 2011.  We will continue to review fees on an on-going basis to ensure that we are cost-neutral.

Regulations governing permanent changes to fees

As with the current proposed fee changes, a Scottish Statutory Instrument would be required to effect the change, and so publicity in the form of a consultation and other communications would be given so to alert users in good time to any proposed changes.  Should a further limited, temporary increase (of the type introduced by the Keeper in October 2020) be required in the future, RoS would again give at least the minimum 3 months’ notice as required by statute.

Conclusion

You can now view all consultation responses, where the respondent has given permission for these to be published.

We will aim to provide respondents with a copy of this consultation response.  Where the respondent provided comments not directly related to the consultation, we will seek to answer these directly.

We would like to thank all respondents to the consultation for their comments.