Summer '17 Scotland

Summer 2017 ISSUE

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FIRST COMMENT IN THIS ISSUE: • 400TH ANNIVERSARY OF THE REGISTER OF SASINES • SEVEN STRATEGIC FACTORS TO IMPROVE TELEPHONE QUOTES CONVERSION RATES • ENDORSEMENTS - ENHANCING YOUR COVER • PRODUCT CASE STUDY - JUDICIAL REVIEW

Leading Title Insurance

Welcome to the summer edition of our newsletter.

In this issue we have contributions from our regular writers; Professor Stewart Brymer celebrates the 400th anniversary of the Register of Sasines and discusses the future of Scots property and registration law. Our staff contribution this quarter comes from Elizabeth Vyner who discusses how endorsements to a policy can ensure a client obtains the exact cover they require, and, finally, we have the second of four submissions from business development expert Professor Ian Cooper. In the second article of his series, Ian sets out seven strategic factors that will assist with increasing the conversion rate success from telephone quotes.

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FIRST COMMENT

400th Anniversary of the Register of Sasines

By Professor Stewart Brymer Brymer Legal Ltd

On 28 June 2017, Registers of Scotland celebrate the 400th anniversary of the creation of the Register of Sasines – the world’s oldest national continuous public property register. The Register of Sasines comprises a record of individual title deeds. Prior to 1617, there was a system of public registration of instruments of sasine and before then the instruments were recorded in the protocol books of notaries. Transfers of property were originally by symbolic delivery, by handing over earth or a stone or similar object on the property itself, and then registering the deed of conveyance in the local Register of Sasines. Some might say: “those were the days!” Actual sasines on the land itself were made unnecessary in 1845. The instrument of sasines was superseded by the recording of the conveyance with a warrant of registration in 1858. Over time, sasine came to be used in common speech (at least to property lawyers) as a reference to the deed or document recording the transfer, rather than to the

transfer itself. Hence phrases such as ‘to give sasine’ or ‘to take sasines’. The point of having a public register was to provide certainty and to regulate preferences.

Since 1617, the system of registration in Scotland has seen many changes. The search sheet system was introduced in 1871 for the counties of Glasgow and Renfrew. By 1876 all counties had a search sheet system. The search sheet is divided into two parts – the First and Second Series. The Second Series runs from 1905 to the present day. If there have been no transactions affecting a property since 1905, then no Second Series sheet will exist, and the First Series will have to be examined.

For a long time, other registers ran concurrently with the main Sasine Register held in Edinburgh. Of these various register, the Burgh Register was the most significant. The Burgh Registers were kept from 1681. Although most were discontinued much earlier, the

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final one remained until 1963. Like the First Series, if no transactions affecting a property have been recorded for a long time, it is possible that they remain in the Burgh Register.

In essence, the Sasine Register is a historical register of deeds affecting land and comprises 33 divisions called Counties. These Counties correspond to the geographical counties that divided Scotland before regionalisation, e.g. Angus, Midlothian etc. Deeds affecting land in a particular county are registered in that Sasine County. The Register of Sasines (which is now closed to transfer deeds, leases and standard securities) is simply a public record of deeds.

While a real right in land or buildings could not be obtained without recording in the Sasine Register, the act of recording itself did nothing to validate or enhance the title. The actual interpretation of the title as to boundaries, burdens and the like remained essentially a private matter in which the Keeper of the Registers took no part. The rights and indeed obligations of the owner of the land had to be determined from the deeds themselves and thus developed the practice of conveyancing with solicitors experienced in interpreting deeds in light of property law and practice.

In contrast, the Land Register is an Ordnance Survey map-based public register of plots of land which was established in 1979 and developed over the years. Registration of land in the Land Register results in the production of a single title sheet which includes a definitive boundary plan of the

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land which may be accessed online for a small fee so as to quickly access property ownership details.

Whilst the title sheet for a particular property is technically the only deed which requires to be looked at in order to analyse the title, occasionally it may contain less information than the historic Sasine Register title deeds, making it more difficult to interpret. In such cases, the historic Sasine tiles and other information are very useful when examining title.

Legal ownership of land is the same regardless of whether the title to the land is in the Sasine Register or the Land Register, both of which are maintained by the Keeper of the Registers of Scotland (‘the Keeper’). However, depending on the nature of the Sasine Register title deeds or Land Register title sheet for a particular property, the process of analysing the title can be quite different.

The nature of the Sasine Register means that it is possible for two (or more) neighbouring Sasine titles to include or at least potentially include the same piece of ground. This is not uncommon and may arise particularly where the titles to neighbouring properties do not contain plans and, instead, simply contain general descriptions (e.g. ‘the lands of…’) and the neighbouring landowners, both in good faith, consider that they own the same piece of ground. Even when they contain clear plans, title deeds can sometimes simply be wrong. Once again, that is where Scots property law and the skill of the property lawyer comes in.

FIRST COMMENT

The Future There have been major changes in Scots property and registration law and practice in recent years.

That process of change started with the abolition of feudal tenure and the codification of the law of real burdens and the law of the tenement which came into force on 28 November 2004 and the latest legislative change was the enactment of the Land Registration etc. (Scotland) Act 2012. The 2012 Act marked a sea change in policy with regard to registration of title and the Keeper and her staff are currently working on completing the Land Register by 2024. This will see the titles of all properties in Scotland being on the Land Register rather than being held between the Land Register and the Sasine Register. Once completed, there will be a cadastral map of Scotland which will be capable of being fully interrogated. That and the introduction of a Scottish Land Information System (‘ScotLIS’) and other digital changes will bring Scotland once again to the fore in terms of modern registration practice.

KIR is a new legal concept introduced to Scotland under section 29 of the 2012 Act. The Keeper now has the power to register property that is not yet on the Land Register. The goal is the ultimate closure of the Sasine Register. Current government policy is to accelerate the process of registering land in the Land Register, in order to increase transparency of land ownership in Scotland. That, in turn, should help ‘demystify’ the conveyancing process somewhat in the eyes of the consumer and that has to be a good thing.

What will the future hold for the Land Register, ScotLIS and the practice of conveyancing generally? Who knows. All that can be said is that the future is in our own hands and, once again, Scotland is at the leading edge of transformational change. In the meantime, “Happy Birthday Register of Sasines!”

In May 2014, when the Keeper was invited by Scottish Ministers to complete the Land Register of Scotland in 10 years, she knew that she would have a challenge on her hands. Good progress is being made however with a discounted fee initiative in operation to encourage voluntary registration of title and a programme of Keeper Induced Registration (‘KIR’) in what are called Research Areas – being areas in which the Keeper’s staff have undertaken various checks on titles over the years.

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Seven strategic factors to improve telephone quotes conversion success

By Professor Ian Cooper Law firm skills trainer / consultant, Author of the Financial Times Guide to Business Development

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FIRST COMMENT

In my previous article on this critical topic, I wrote about the major research survey into how firms nationwide deal with their telephone quotes calls. It highlighted a catalogue of missed business opportunities. In this article, I summarise the seven key strategic issues that all firms should discuss and debate in their next departmental meeting if they would like to increase their conversion rates success.

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Understand that call handlers are in ‘sales’

When it comes to dealing with quotes calls it is vital for your call handlers to understand that they have a ‘sales’ role. This might seem like a statement of the obvious, but all too often, callers are simply ‘processed’ as a matter of

administration. “Give me the details of what you are doing and I’ll email you a quote”. Job done.

Yes, it might mean that calls get dealt with quickly, but what matters most is whether the caller ever becomes a paying client. This common method is simply ineffective.

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Challenge and question current methods and track results

One of the most common problems I find in firms of all sizes is that they rarely take time out to stop, actually review their existing methods of dealing with quotes calls, challenge what they are doing and consider conversion results strategically.

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Given the need for this, it is vital for you to have reasonably precise statistical tracking information on the telephone quotes given and your current conversion rates.

There are four basic pieces of information that you should track and gather, to be able to monitor this area effectively.

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How many quotes enquiries do you get per day / week?

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What are your cumulative quotes worth in average revenue terms?

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Volume of quotes calls handled by particular people?

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What are their personal conversion rates?

Once you have this information, you will be in a much stronger position to make decisions about new strategies, structures and techniques and of course to measure future improvements.

the quotes calls handled by 3. Have the right people

It is a fact, all too often overlooked, that some quotes call handlers consistently get better results than others. So making sure you have your best quotes handlers deal with the most calls is a simple but vitally important piece of the strategic jigsaw.

This is so important that I will be devoting an entire article to this subject in a future issue.

– Why should 4. Differentiate someone choose you?

Why should a potential client who telephones for a conveyancing quote choose your firm … particularly if you are more expensive?

The fact is that our research (which is based upon a significant number of mystery calls) indicates that 91% of 8

FIRST COMMENT firms make no attempt to differentiate themselves from their competitors, either during the telephone enquiry or in any follow-up email.

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More repeat business and recommendations Is it not the case that you get a significant amount of business from clients returning and them recommending you to others? Bearing that it mind, it follows that the more clients you have, the more repeat work you will also get in the future.

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Less abortive time on the phone How much time is wasted on the phone giving and emailing quotes to people who never become clients? Consider this. If as a firm you merely handle four quotes calls across your practice per day, you are spending at least 166 hours per year dealing with quotes. This is a significant and pointlessly expensive use of resources if you have a poor conversion rate. If you are going to spend that time, you may as well get the business!

Write down right now why someone should choose you? Now, ask yourself how you communicate those attributes when you are on the phone to them?

If you aren’t communicating or demonstrating these unique selling points to your callers, you are almost certainly leaving cash on the table!

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Don’t fall into the price trap The price trap is the automatic assumption that everybody who calls and asks for a quote will only ever choose the cheapest. This is simply not the case. If that is your perception and experience, then I invite you to consider that this is largely because you are either not doing anything else other than giving a price, or you are not handling the enquiry as well as you could.

If you only give the price to those who ask, then it is you who reduces the issue to one of price and you who actually forces them to go to the cheapest.

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Understand the benefits of getting good at dealing with quotes calls

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Skills training is the key 85% of firms provide no ‘proper’ training for their call handlers on ‘soft conversational’ sales skills and how to engage and influence those who call for a quote, to actively want them.

What training does take place is usually around administrative tasks, such as how to calculate the fee, Stamp Duty and get an email quotes letter out. This is very different from ensuring that call handlers have the right techniques, personal skills and confidence to engage a caller and get the business.

Of course, there is the obvious benefit that more conversions equal more revenue. However, there are three other tangible benefits to be aware of: •

Increased fees We have found that once a firm has mastered the techniques of getting people to really ‘want you’, it is relatively easy to increase the fees as well. Thus not only do you convert more, but you convert more at higher rates.

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Underwriting Article:

FIRST COMMENT

Endorsements enhancing your cover

By Elizabeth Vyner Assistant Commercial Underwriter

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FIRST COMMENT

Imagine the following scenario: •

Your client is buying a residential property which they intend to convert into a Bed and Breakfast (B&B).

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They intend to either run the business themselves or lease the premises to a third party.

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When carrying out your title review it transpires that the titles contain a condition which states that the property can only be used as a residential dwelling-house. Arguably, the planned use is a breach of this condition which could lead to a neighbour taking action to prevent this use.

To solve the issue you obtain title insurance for your client. However, have you considered all of their potential losses? The following is a helpful guide to what you might consider in these circumstances.

Actual Loss Our standard policy covers actual loss as defined by the policy. This covers a diverse range of potential losses including any or all of the following: 1. The difference between the value of the property before and after an order (being a final order made by the relevant court in respect of the known risk) which prevents the property from being used for the planned purpose, in this case as a B&B. 2. Sums pursuant to an order. These could, for example, include the cost of returning the property to use as a house in the event that the property can no longer be used as a B&B. 3. Sums pursuant to a settlement. These could, for example, include sums expended by virtue of having the title condition varied or removed so the property can continue to be used as a B&B. 4. Sums expended by the insured or that the insured has contracted to expend. These could,

for example, include sums due under a contract for works to convert the house to a B&B. 5. Interest payable by the insured under the terms of a Standard Security.

Legal costs are covered by the policy in addition to the policy amount; these are paid by First Title and are not deducted from the sums covered by the policy.

Whilst our standard policy covers a wide range of heads of loss sometimes enhanced cover is required as your client may feel that our actual loss coverage does not provide sufficient cover for them and their business in the event of a claim, e.g. what if reaching a settlement takes time and the tenant operating the B&B business is unable to pay their rent during this time, with the landlord receiving no income during this period? Cover can be enhanced by adding various endorsements to the policy to extend the heads of loss.

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Some examples of these are as follows:

Loss of Profit Endorsement The party operating the business may be concerned if operation of the business has to cease or trading cannot be commenced as planned whilst a claim is resolved. During this period no income or profit will be generated and your client may be relying on these sums to meet other obligations.

Loss of Profit cover provides cover during a specific period of interruption (which is a period running from the date from which a temporary court order is obtained which prevents the business or trade from being carried out, until a specified date or the date of a final court order (whichever comes first)).

Once a final order is issued, the actual loss section of the policy will kick in.

Loss of Rent Endorsement If your client decides to lease the B&B then the rental income will presumably be their main concern. It could be the case, for example, that the lease of the property allows for suspension of rent in the event the tenant is unable to use the property for the intended purpose. An endorsement can therefore be included which protects the rental income for the property in the event of a claim.

The endorsement would provide cover for the situation where the business is up and running and rent is being paid or, alternatively, where rent is expected from a certain date but the business cannot commence and the tenant is therefore unable to start paying rent.

Rental Liability Endorsement The tenant may be concerned that rent will remain due even after a final order has been made which determines that the property cannot be used as a B&B. This would result in the tenant being liable for rent in relation to a property that they are unable to run their business from. An endorsement can be included which covers the tenant’s rental liability from the date of a final order which 12

prevents them from using the property for their intended purpose until they can legally break their lease by, for example, using the break clause.

Relocation Costs Endorsement The tenant may also require some assistance where they are prevented from using the current property for the purposes of their business in the event of a claim and they are required to move to an alternative property. This endorsement will be available in certain circumstances and will include: (i) the reasonable costs of negotiating the new lease; (ii) reasonable agent’s fees incurred in finding the new property, and (iii) the reasonable costs incurred in moving the tenant’s property to the new location.

Consequential Loss Endorsement There may be other sums that your client will be liable to pay during a period of interruption which are not covered by the policy, e.g. your client may (i) have hired staff to work at the B&B, but opening is delayed due to a claim and staff wages are due or (ii) have more than one B&B and staff or equipment could be sent to another property but this will incur costs or (iii) have hired equipment to carry out the relevant works, but this cannot be used until the claim is resolved. Costs such as these can be considered under this endorsement.

Conclusion Whilst our policies cover a wide range of losses and legal fees are paid in addition to the policy amount, it is always worth considering if there are more specific losses that your client (or any tenant of the property) may be concerned about. We offer a number of endorsements which ensure that your client can obtain the exact cover they require and that any claim has minimal impact. We are always happy to discuss and consider any additional requirements your clients may have bearing in mind their proposed use of the property.

It is always worth considering if there are more specific losses that your client may be concerned about 13

You wouldn’t settle for second best.

Neither would we.

Call: +44 (0)141 413 8800 Email: scotinfo@firsttitle.eu Visit: www.firsttitle.eu First Title Insurance plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. First Title Insurance plc is registered in England under company number 01112603. Registered office: First Title Insurance plc, ECA Court, 24-26 South Park, Sevenoaks, Kent TN13 1DU

Leading Title Insurance

FIRST COMMENT

Product Case Study:

Judicial review Background Our insured wished to develop upon land that it owned (an area of unused and open space comprised of overgrown grass and scrub with a wooded copse) and an application for outline planning consent had been submitted for the redevelopment of the land as a large residential housing scheme.

The application was complicated and had been submitted several times to the planning committee during which a number of technical and procedural issues had been raised. To further complicate matters, the application had generated a significant response from the local community.

Challenge Our insured was concerned that if consent was granted, a third-party challenge by way of a judicial review could present a number

of scenarios that would potentially delay or threaten the development. These included preventing access to the land in order to commence works, an injunction which ordered the cessation of works, or the reversal of the planning decision. Solicitors acting on behalf of our insured approached us to consider offering Judicial Review cover.

Solution Following a full analysis First Title was able to become comfortable with the risk and provided a policy to our insured ensuring that they would be indemnified in the event that the planning consent was quashed by an Order citing: An application for judicial review under Chapter 58 of the Rules of the Court of Session 1994 (as amended) instigated within a period of three months of the date of grant of the Planning Permission or Policy Date (whichever is the later).

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To find out more about our products and services email scotinfo@firsttitle.eu or call +44 (0)141 413 8800

www.firsttitle.eu

First Title Insurance plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. First Title Insurance plc is registered in England under company number 01112603.

Registered office: First Title Insurance plc, ECA Court, 24-26 South Park, Sevenoaks, Kent TN13 1DU.