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Leading Title Insurance

Like any good spring clean, we have applied the “Out with the old, in with the new” mantra to our quarterly newsletters. Our decision to move to this format was not only to refresh the look and feel of the newsletter itself but, also to provide a better user experience for an increasing number of our subscribers who read our newsletter when out of the office. Our new platform is fully optimized for both desktop and mobile devices and newsletters can also be downloaded as PDFs to enable viewing without an internet connection. We believe that the content is still as compelling as always with contributions this quarter from First Title’s Laura Lapsley, who considers the terms of the new registration as well as our regular feature from Professor Stewart Brymer who offers an insight into the Scottish Land Information Service. We hope that you like our new style. As always, if you have any comments or suggestions, please feel free to drop us a line at


How can Title Insurance help when the Keeper’s Midas Touch / Warranty cannot be relied upon? By Laura Lapsley Assistant Commercial Underwriter

More than a year after the introduction of the Land Registration (Scotland) Act 2012 (“the 2012 Act”), solicitors are adjusting to the various changes implemented. However, the 2012 Act is still relatively new and so there are bound to be teething problems and many property practitioners may still be finding their feet when it comes to changing their traditional ways of working. Some parts of the 2012 Act are still untested and it may take some time and some trial and error before precedents are set and it is known how certain sections operate in practice.

The Keeper’s Midas Touch One of the most significant changes resulting from the Land Registration (Scotland) Act 2012 (“the 2012 Act”) was the weakening of the Keeper’s ‘Midas Touch’. Under the previous Land Registration (Scotland) Act 1979 (“the 1979 Act”) the effect of registration was to grant a title which was immune to rectification. All that was required was the registration of a title deed along with possession of the land in question (section 3(1)(a) of the 1979 Act). This system provided a great deal of certainty as to ownership of

registered land, as there was no need to ‘look behind the register,’ however, the problem with this practice was that it was vulnerable to fraud and error. For example, a purchaser could register a deed, and provided they had possession of the land, would become the registered proprietor on the Land Certificate, even if they were not the true owner. The effect of this was that true owners of land could be deprived of ownership. This practice was an example of bijuralism – where there was an inconsistency between registration law and property law – and is one of the issues that the 2012 Act sought to rectify.



How can Title Insurance help?

The 2012 Act still does contain protection for registered proprietors known as ‘Realignment,’ which is similar to the previous Midas Touch, but is not as instantaneous and a number of boxes must be ticked before this protection applies. Section 86 of the 2012 Act sets out the conditions which must now be met for the disponee to achieve a valid title where a person who is not the proprietor of a registered plot of land but (A) is entered in the proprietorship section of the title sheet as proprietor, and (B) is in possession of the land, purports to dispone the land:

One point of concern to some solicitors, is the new requirement contained in Section 86 of the 2012 Act, which states that the land must be possessed openly, peaceably and without judicial interruption for a continuous period of one year. This gap represents a potential year of uncertainty, where the title is open to challenge and rectification. Wherever there is uncertainty or a potential gap in title, title insurance can be invaluable in providing comfort and protection.

1. the land has been in the possession, openly, peaceably and without judicial interruption— (i) of (A) for a continuous period of at least one year, or (ii) of (A) and then of (B) for periods which together constitute such a period, 2. at no time during that period did the Keeper become aware that the register was inaccurate as a result of (A) or (B) not being the proprietor, 3. B is in good faith, 4. the disposition would have conferred ownership on (B) had (A) been proprietor when the land was disponed, 5. at no time during the period mentioned in paragraph (A)— (i) was the title sheet subject, by virtue of section 67, to a caveat relevant to the acquisition by (B), (ii) did the title sheet contain a statement under section 30(5), and 6. the Keeper warrants (or is to be taken to warrant) (A’s) title. This section raises the bar and requires that more criteria be met before title to a piece of land can be said to be valid. After the year period has passed and all of the other criteria have been met, the registration cannot be reversed and so if a true owner came forward at that point, they could only seek compensation from the Keeper.


First Title can consider providing a bespoke policy which will cover the purchaser of land against a challenge by a third party against the title to the land because of a lack of title in terms of s.86 of the 2012 Act. Our policy lasts in perpetuity and passes to successors in title, so the solicitor can rest assured that their client is provided with an extensive level of cover. The interest of mortgagees is also covered and so this policy can provide comfort to lenders and assist in getting your transaction over the line. Another change introduced by the 2012 Act involved the level of responsibility which rests on the shoulders of the solicitor. Under the 2012 Act, there is an express statutory duty of care owed by the solicitor, not to cause the Land Register to become inaccurate. There may be occasions where the solicitor feels unable to fully certify the title to the Keeper because of missing deed plans or poor property descriptions and may seek additional comfort elsewhere, in the form of a title indemnity policy, to ensure that their client is fully protected. Of course, there are obvious benefits to this change in legislation, such as the realignment of property law and registration law, which provides more protection for the true owner of land. However, there is less certainty for the good faith purchaser, who may not be able to rely on the register as confidently as they previously could. In their circumstances, title insurance is there to back up their title and mitigate their loss should the worst happen.


What is ScotLIS? By Professor Stewart Brymer

ScotLIS is an acronym for the Scottish Land Information Service. It will be hosted and operated by Registers of Scotland. In essence, it will provide a one-stop-shop for accessing information about land and property. Registers of Scotland will lead on the development of the new system as part of its digital transformation programme, which is focused on improving our registration and information services.

Why is it required? Many countries already have such a system. One of the main benefits is that those seeking information on land and property only require to go to one place instead of, as at present, instructing numerous searches or trawling numerous disparate web-sites and databases. It should be the “Go to” place for all such information. As a result, there should be significant efficiency improvements to searching for information about land and property and there should be less risk of information not being discovered about a property.

How will ScotLIS be accessed? The objective is for information to be delivered on a digital basis through ScotLIS. It will be able to be accessed by anyone be they a member of the public,

a solicitor, surveyor or a searcher. Information on land and property is currently held in a number of disparate sources and it is felt that there will be economies of scale and increased accuracy from information being able to be accessed through a single channel – the information will remain to be held by the “producing” organisations responsible for it but made available through a portal or channel. ScotLIS will ultimately be accessed by a Unique Property Reference Number (“UPRN”) which will be allocated to each property. ScotLIS will provide a single point of access to land and property information via a portal, which is likely to be map based, although other searches e.g. by address could be possible. Where datasets have been matched to the gazetteer and contain the URPN, this will enable linking of different information. Where this matched has not been completed the linkages will be through location.


How will the information be collated? The information that is being talked about here is largely public data which is currently held in various silos across central and local government. Much of this data is held by local authorities. One of the first goals will be to ensure that all local authority data is held in the same way across Scotland so that it may be more easily accessed and analysed. It is not envisaged that ScotLIS will be a single point of access to local authority information which, although forming part of a Property Enquiry Certificate, could be accessed through a number of other portals.

Will there be an indemnity in case of error? ScotLIS is not intended to alter the warranty that currently applies to certain types of land and property information. So where information is currently warranted by a provider, that warranty would exist in ScotLIS. Much will depend on the type of information being accessed. So, for instance, information from the property registers will be provided on the same footing as is currently


applicable to Registers Direct. It is anticipated that all the information accessed through ScotLIS will be covered by a suitable indemnity insurance “wrapper� the exact terms of which have yet to be discussed however due, in part, to the quality and lack of consistency of existing data.

What will be contained within ScotLIS? ScotLIS will be a cadastral map-based system. When accessed via a UPRN or other means as mentioned above, a user will hopefully be able to view the property and see both the boundaries thereof and also the route of utilities, servitudes and other important pertinents of the property. This should greatly enhance what a prospective purchaser will know about a property being marketed for sale and, as such, will be a positive development of the Home Report. Indeed, a development if the system would be for Energy Performance Certificates and Home Reports themselves to be registered in ScotLIS on a property-specific basis. This would allow repairs and improvements flagged up in Home Reports to be logged which, at long last, would meet what was the principal objective of the Scottish Government’s Housing Improvement Task Force.


What is to be done now? A Project Board has been created to take the development of ScotLIS forward. This is under the direction of Registers of Scotland as envisaged in the report of the Task Force, which considered the subject. The Project Board will consult broadly with stakeholders and external IT consultants and will consider international examples of what is being proposed. Discussions are already taking place with local authorities, Ordnance Survey, The Law Society of Scotland and RICS. A prototype will be developed and tested. This will be an incremental process with version 1 likely to be focused on the information required in a property transaction.

When will it be available? It is hoped that ScotLIS will be launched by October 2017 which, interestingly, will mark the 400th anniversary of the creation of the Register of Sasines which was the world’s first register of property deeds. Scots Property Law has a long tradition and is highly regarded across the globe. The creation of ScotLIS will place Scotland at the forefront of land and property initiatives and will generate a

significant return on investment for both the public and private sectors while reducing time, cost, risk and stress to the citizens of Scotland. It will provide improved transparency which, in turn, will result in more certainty and lower costs when buying and selling property.

What is next? Current systems are less paper-based than they were and solicitors have to key data through web portals into the systems of other agencies they deal with eg Registers of Scotland, Revenue Scotland et al. Unfortunately, database formats and fields are anything but uniform, so the way data is stored in case management systems does not match the way the same information is stored in the systems of other agencies making the uploading of data very difficult. The objective must be to have data entered once in a consistent format so that it may be used many times thereafter. ScotLIS could well be that single agency collecting such data. This would allow property lawyers to generate all relevant documents and forms in a consistent manner. That may well be what is required in an e-conveyancing system. Only time will tell.


Have you read our roundtable article featured in this month’s Journal? If not, please click here to read the full report.

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Spring '16 Scotland  
Spring '16 Scotland