Leases and automatic plot registration
This section covers a wide range of frequently asked questions that focus on how we are changing our systems and processes to meet the requirements of the 2012 Act regarding leases and automatic plot registration.
Q1. Do the requirements for a registrable lease change under the 2012 Act?
No. The Act does make certain amendments to the Registration of Leases (Scotland) Act 1857 however, in general terms, the requirements for a registrable lease remain unchanged. In order to be acceptable for registration a lease must be self-proving and must either be for a duration exceeding 20 years or, if it is for a shorter period, it must contain an obligation on the granter to renew the lease so that it could endure for a period in excess of 20 years. It is also a condition of registration under the 2012 Act that the deed being registered is valid. The essential elements of a valid lease will also remain the same, namely that the parties, subjects, rent and duration are stipulated.
Q2. Does the Keeper continue to use lease title sheets?
Yes. The 2012 Act would allow the Keeper to disclose leases, as subordinate real rights on the title sheet relating to the plot of land (the "plot title sheet") to which the lease relates. However section 3(2) permits the Keeper discretion to create a separate title sheet for a registered lease. The Keeper has decided after public consultation to use this statutory discretion to create separate lease title sheets in all cases. This will avoid the creation of complex plot of land title sheets and will provide certainty for applicants.
Q3. Do lease title sheets look any different under the 2012 Act?
Broadly, the structure of both lease title sheets and plot title sheets will be the same as title sheets for the interest of a tenant and the interest of an owner respectively, constituted under the existing arrangements. The main change is that the "charges" section will be renamed the "securities" section. The 2012 Act will also alter the information contained in title sheets from the designated day as follows:
- The property section must cross refer to the title numbers of other title sheets over the area of land. Therefore, a lease title sheet must disclose the title number of the title sheet for the plot of land and of any registered subleases for the same area.
- The securities section of a lease title sheet will not disclose securities affecting the plot of land. Only securities affecting the tenant's right will be disclosed in the lease title sheet.
- The burdens section of the lease title sheet will only disclose leasehold conditions in the relevant lease. It will not disclose encumbrances affecting the plot of land.
Q4. Does a plot title sheet continue to disclose a schedule of leases in the property section?
Yes. In terms of section 6(1)(f) the Keeper must enter in the property section of a title sheet the title number(s) of any other title sheet for that area of land. Therefore the property section of a plot title sheet will disclose the title numbers of any relevant lease title sheets. The Keeper intends to use a schedule of leases for this purpose.
Q5. Does a lease title sheet have a separate cadastral unit on the cadastral map?
No. Section 12(1) provides that "a cadastral unit is a unit which represents a single registered plot of land". The plot of land is the unit of registration and a lease title sheet relating to that plot is subordinate to the plot title sheet. The description in the title sheet of the leasehold subjects will include reference to the cadastral unit number of the plot of land.
Q6. Since a lease title sheet is not represented by a separate cadastral unit how will the Keeper reflect them on the cadastral map?
Section 11(1)(b)(iii) provides that the cadastral unit for the plot must show the title number of any registered lease relating to it, and where the lease is only over part of the plot the extent of the lease will be delineated on the cadastral map. Where the lease contains rights of access or conditions specific to an area of ground within the lease extent, the deed will be incorporated into the lease title sheet by reference to the copy of the lease in the archive record.
Q7. If lease title sheets are subordinate to plot title sheets will they be warranted?
Yes. Where the Keeper creates a lease title sheet upon acceptance of an application for registration, or where an application is accepted in respect of an existing lease title sheet, warranty is available under section 73(1) as it would be for any other application for registration.
Q8. Can I use an advance notice in relation to a lease?
Yes. In terms of section 57(1) an advance notice can be used to protect an intended deed that relates to a registered or unregistered lease.
Q9: How do the provisions for realignment of rights affect leases?
In terms of section 88, where a person acting in good faith is assigned a lease from a person shown in the lease title sheet as tenant but who is without a valid title, realignment of rights can occur provided the subjects of the lease have been possessed by the assigner or assignee, or both together, openly, peaceably and without judicial interruption for a one year period. The rights of the parties are then realigned so that the register is not inaccurate in showing the good faith acquirer as registered tenant.
In relation to the extinction of encumbrances through the realignment provisions it is worth noting that "encumbrance" as defined in section 91(4) does not include a lease. Therefore, if a lease with real effect is erroneously omitted from a plot title sheet realignment could not operate to render that lease extinct, as it would with certain other encumbrances.
Q10. Can the Keeper create a shared plot title sheet in relation to an area that is tenanted in common?
Yes. Schedule 1 of the Act contains provisions similar to those set out in sections 17 and 18 in relation to registered leases tenanted in common. Where an area of land is tenanted in common by the tenants of two or more registered leases by virtue of their tenancy under those leases, and those registered leases have lease title sheets, the Keeper may make up a "shared lease title sheet".
Q11. Are all lease applications or transactions affecting leases registrable in the Land Register from the designated day?
Section 48(1) of the Act provides that the recording of a lease, assignation of lease or sublease in the Sasine Register has no effect. Therefore such deeds must be registered in the land register to have real effect.
Section 52 amends the Registration of Leases (Scotland) Act 1857 to make certain other deeds relating to registered leases also registrable in the land register, namely: any deed terminating the lease, extending the duration of the lease, or otherwise altering the terms of the lease. These deeds are registrable not only where there is a lease title sheet but where the plot of land has been registered but the tenant does not have a lease title sheet.
The basis of registration under the Act is that all rights in land stem from the plot of land title sheet. This means that it will be necessary, when transacting with a lease where the right of the current tenant was constituted in the Sasine Register, to ascertain whether the plot of land is registered. The right of the tenant may have been constituted in the Sasine Register and there is no lease title sheet, but if the plot of land is registered any deed affecting that lease including a renunciation/termination, or a deed which extends the duration of the lease or otherwise alters the terms of the lease would require to be registered against the plot title sheet. The Keeper will constitute a lease title sheet (if appropriate) upon such a registration.
If the plot of land is unregistered, a grant of a lease (including a variation of a lease to increase the extent of the land let), or an assignation of a lease or a sublease from it would trigger registration of the plot of land affected by the deed (referred to as "automatic plot registration") in terms of sections 24 and 25. In order to ascertain the type of application that the transaction will trigger it will be necessary in many cases to first establish whether the plot of land is registered. It is intended that the Keeper's pre-registration reports service will disclose for leasehold subjects whether the underlying plot of land is registered in the land register.
Q12. Does the Keeper continue to accept variations of lease that incorporate additional subjects for registration?
Yes. On the basis that such deeds are essentially new leases over the additional ground they will continue to be registrable. Section 52 of the Act amends the Registration of Leases (Scotland) Act 1857 to make registrable any deed that alters the terms of a registered lease. If the original lease and the plot of land are not already registered, a variation that incorporates additional subjects, being a grant of new lease, will trigger automatic plot registration under section 24(2). Where the plot of land is already registered, the variation will be registrable against the plot of land as a subordinate right stemming from that title sheet.
Q13. What is the effect of sections 24 and 25 of the Act?
The Act introduces additional triggers for first registration in order to accelerate land register coverage. One such measure is set out in sections 24 and 25, which is that where certain deeds are submitted for registration, for example, a lease, sublease or assignation of unregistered lease, this will trigger registration of the landlord's plot of land relative to that deed. This is referred to as "automatic plot registration".
Q14. What effect does automatic plot registration have on my application to register a lease, sublease or assignation of unregistered lease?
In terms of section 22(1)(a) the onus is on the applicant to ensure the application contains all documents required to enable the Keeper to make up the title sheet or title sheets necessary to give effect to the deed in question. Therefore when submitting a lease for registration the application must contain sufficient information to enable the Keeper to make up the title sheet for the landlord's previously unregistered plot. It is important to note that the unregistered plot will only be registered to the extent of the deed submitted, i.e. the lease, sublease or assignation.
Plot of land registered
Where the plot of land is already registered automatic plot registration does not apply. However any subsequent lease, sublease or assignation of lease (even where the granter of the sublease or the assignor's rights were constituted by recording in the Register of Sasines) must narrate the title number of the plot title sheet in order to be accepted in terms of section 26(1)(c). The Keeper is currently considering means of providing this information as part of the RoS reports service.
Plot of land not registered but there is a lease title sheet
Where there is a lease title sheet but the plot of land has not been registered:
- The grant of a sub-lease will trigger automatic first registration of the plot of land (the right of the owner) to the extent of the sub-lease (section 24(4));
- An assignation of the lease will not trigger an automatic first registration of the plot of land (section 24(3)). The assignation of the lease would however require to narrate the title number of the lease title sheet.
Q15. Do the Keeper's pre-registration reports help me establish whether of not a plot title sheet exists?
Yes. New pre-registration reports are available that provide this information in order to assist applicants when submitting their applications for registration.
Q16. Where the owner's title is more extensive than the subjects of the lease will this trigger automatic registration of the entire plot?
No. Section 25(5) defines the "plot" to be registered as a result of automatic plot registration. Where triggered by a lease, sublease or assignation of unregistered lease the landlord's plot need only be registered to the extent of the lease. This means that where the landlord's property is more extensive than that of the leased subjects the applicant will not be bound to provide all the documents that relate to the larger title.
Q17. If my plot is registered through automatic plot registration how will I know?
The Keeper has a duty to notify the owner of the plot where the plot is registered as a consequence of automatic plot registration. Where registration is triggered by a grant of lease the owner will be party to the transaction and should therefore know that their plot will be registered. If an email address is supplied on the application form the Keeper will notify the owner electronically. However, in other scenarios, for instance, a sub-sublease or an assignation of unregistered lease, the owner of the plot of land may be completely removed from the transaction. In such cases the Keeper will send notification by post to the last known address of the owner as disclosed from the deeds presented with the application for registration.
Q18. If my plot is registered through automatic plot registration will my title sheet be warranted?
Yes. The Keeper will give warranty under section 74(1) upon registering a plot of land by virtue of automatic plot registration. Where an application is received to register a lease, sublease or assignation of unregistered lease the tenant's title sheet will be warranted under section 73(1) and the owner's plot title sheet will be warranted under section 74(1). The level of warranty available under sections 73 and 74 is the same however since the owner of the plot of land is not an "applicant", separate provision has been made in the Act to reflect this.
Q19. Does automatic plot registration relate only to leases, subleases and assignations of lease?
No. Whilst it is likely that from the designated day most automatic plot registrations will be triggered by a lease, sublease or assignation of unregistered lease, section 24 does specify other scenarios in which it may occur.
Section 24(5) makes reference to section 48, which provides for the eventual phased closure of the Sasine Register. From the designated day the Sasine Register will be closed to dispositions, leases, subleases and assignations of lease/sublease. The next step set out at section 48(3) is for the closure of the Sasine Register to standard securities, and following that subsection (4) provides for closure in respect of other deeds. Once the Sasine Register is closed to "other" deeds under subsection (4), registration of deeds within this final category will induce automatic plot registration by virtue of section 24(5).
However, even after the Sasine Register is closed to standard securities a standard security over a plot of land will not induce automatic plot registration. This particular scenario is not included as a trigger under section 24, instead the owner of the plot will have to apply for voluntary registration of their title prior to the standard security being registered.
Q20. An assignation of a registered lease is currently a straightforward dealing application, will automatic plot registration affect this?
No. Assignations of registered leases were excluded from section 24. Applications to register such assignations will not trigger automatic plot registration. They will continue to be registered as straightforward applications over a registered title, akin to the current dealing with whole application.
Q21. Does an application to register a sublease trigger registration of the unregistered plot even where there is an existing lease title sheet?
Yes. In terms of section 24(4) any sublease granted by a tenant over an unregistered plot of land will trigger automatic plot registration, regardless of whether the lease is registered or unregistered.
Q22. What happens if the assignation of lease I wish to register will trigger automatic plot registration but I do not know who the current owner is?
In terms of section 22(1)(a) the onus is on the applicant to ensure that their application for registration contains sufficient information to enable the Keeper to make up a title sheet for the plot of land. However, when completing registration section 30(5) permits the Keeper to add a statement in the new plot title sheet that the name or designation to be entered in the proprietorship section is not known or is not known with reasonable certainty. Where such a statement is necessary this may in turn result in an exclusion from warranty under section 75(1)(b) in the plot title sheet.
Q23. Are leases of shooting and fishing rights caught by automatic plot registration?
Yes. Since a lease of shooting or fishing rights is a "grant of a lease" in terms of section 24(2) it will be subject to the automatic plot registration provisions in the same way as any other grant of lease. This means that such leases will be registrable even where the plot is not registered. This is provided the rights have not been converted into a separate tenement by notice under the Abolition of Feudal Tenure etc. (Scotland) Act 2000. In terms of section 3(5) of the 2012 Act a separate tenement constitutes a plot of land, and in terms of section 3(1) each registered plot of land it must have its own title sheet.
Q24. Is there be an additional fee where automatic plot registration is triggered?
No. The fee payable for registration of a lease, sublease or assignation of unregistered lease will be calculated under the usual arrangements irrespective of the fact that automatic plot registration is triggered. Since registration of the plot of land is induced by the same application no additional fee will be generated.
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