Leases
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General
A contract of lease (or tack, as it was often called in the past) is one whereby the use of heritable subjects is given to a lessee (or tenant) in return for the annual payment of a rent (or tack-duty). The lessee has the use of the property subject to the conditions laid down by the granter of the lease (known as the lessor or the landlord). The lease is subject to an annual payment and is only for a definite number of years, after which the subjects revert to the landlord.
The Land Registration etc. (Scotland) Act 2012 (the 2012 Act) introduces significant changes to the process of registration in relation to leasehold titles. Any grant of lease or assignation of a leasehold interest requires the underlying plot of ground (the owner's right) to also be registered, unless, in the case of an assignation of a lease, the tenant's title was registered prior to 8 December 2014. Accordingly, an application to register an assignation submitted as a DW application against an existing leasehold title can be processed as normal, as can the grant of a head lease as a TP from a title of ownership. Conversely, the grant of a sub-lease from an existing leasehold title will require investigation to ascertain whether the owner's title is already registered, and an application relating to a leasehold interest submitted as a first registration application (whether the grant of a new lease or assignation of an existing lease) will require consideration to be given to the requirements for registration of the plot of ground.
As stated above, the grant of a lease from an existing ownership title is processed as a TP. Also, if a plot of land is registered then all subsidiary real rights are also deemed registered; this means that where the owner's title is registered then any transaction on an existing unregistered leasehold interest (including sub-lease interests) affects the registered plot of land and the deed must quote the title number of that plot. In practical terms registration of this deed will require the creation of a leasehold title sheet.
Automatic Plot Registration
Sections 24 and 25 of the 2012 Act make provision for first registration of a plot of land where the registrable deed relates to another right in that land. 'Automatic plot registration' ("APR") is the phrase used within RoS to describe the process.
Automatic plot registration is a process whereby a deed creating, transferring or otherwise affecting a subordinate real right (that is a real right other than ownership) induces first registration of the plot of land to which the deed relates. The key examples, effective from the designated day of 8 December 2014, are
a grant of a long lease (including a lease of shooting or fishing rights) including a sub-lease or
the assignation of an unregistered long lease or unregistered long sublease.
In those cases, and more rarely in the case of a notice of title affecting a lease, provided that the plot of land (the owner's title) affected by the lease/sub-lease is not already registered in the Land Register, an application for registration of the grant or assignation will induce registration of the plot of land to which the lease/sub-lease relates. The owner's consent is not required for registration to occur; rather the provisions of the 2012 Act place the Keeper under a duty to register the plot of land (to the same extent as the subjects of the lease) when processing an application relating to a transaction with the right of the tenant.
A deed of variation that extends the extent of the subjects let will induce APR of the plot of land, so far as not already registered. The plot of land to be registered when APR is triggered in these circumstances will comprise the original leased subjects plus the additional subjects. This is because the combined geographical area is now the “subjects of the lease” in terms of section 25(5)(a) of the 2012 Act.
Assignations and transactions affecting registered leases do not generally result in APR. However, a grant of a sub-lease or a notice of title for a registered head lease induces APR if the plot of land (the owner's title) is not registered.
The provisions for APR do not apply where the registrable deed is an assignation of a registered lease or any other dealing relating to a registered lease which (1) does not alter the extent to include a plot where the landlord's title is unregistered and (2) is not a sub-lease or notice of title affecting that lease.
Transactions affecting registered leases
Registration officers should bear in mind that once the plot of land is registered, i.e. the owner's title is registered, even where the title sheet for the plot of land does not disclose the existence of an existing long lease, the lease is deemed to be registered and transactions affecting such leases are considered to be transactions with "registered" leases.
Normally however, a registered lease will have its own title sheet and in many cases for leases registered prior to the designated day, a transaction affecting the lease occurring after the designated day will not induce APR.
A registration officer considering whether any particular type of transaction might induce APR should note that Sch. 4 of the 2012 Act was amended in this regard by the addition of paragraph 11B. The Land Registration etc. (Scotland) Act 2012 (Incidental, Consequential and Transitional) Order 2014 and The Land Registration etc (Scotland) Act 2012 (Amendment and Transitional) Order 2014 both contain relevant amendments to Sch. 4.
Where Automatic Plot Registration is Required
From the designated day, section 24 of the 2012 Act requires the Keeper to use APR to register the plot of land. In four cases the applicant must submit the deed inducing registration to the Land Register, but in one case, the registrable deed may continue to be submitted to the Register of Sasines until the Register is closed by an order of Scottish Ministers to the particular deed type or to all deeds.
grant of a long lease (section 24(2));
assignation or partial assignation of an unregistered lease by section 24(3);
sublease granted by a tenant by section 24(4) (whether the head lease is registered or not);
standard security over a subordinate real right (e.g. a standard security over a recorded standard security or a standard security over an unregistered lease (by s24(7)).
In all cases, APR is required where the owner's title to the plot is not registered. This includes leases such as shooting and fishing leases.
In terms of section 48(1) and (5), an application to record a disposition, a lease (including sub-lease), an assignation of lease (including sub-lease), or a standard security in the Register of Sasines must be rejected. The recording of such deeds in the Register of Sasines is of no effect.
In the case of a standard security over an unregistered plot, the applicant must submit the deed to the Land Register. However, this type of application does not induce APR, for the reasons set out below at Use of APR as closure of Register of Sasines progresses.
notice of title to a subordinate real right, e.g. a notice of title by the creditor in a standard security (by s24(6)).
Section 48(1) and (5) provides that the recording of this type of deed continues to be effective and does not currently require that applications to record such deeds in the Register of Sasines be rejected. It is the grantee's choice whether to submit their application to register the deed in the Land Register under section 24.
Pro indiviso shares
If the lease affects a plot of land that is already registered in the Land Register but only to the extent of some pro indiviso shares or rights in common, with the remaining shares in ownership still in the Sasine Register, the applications should be referred to a senior caseworker for further guidance.
Use of APR as closure of Register of Sasines progresses
Section 48(3) allows for the Register of Sasines to be closed to deeds other than standard securities, by order or orders of the Scottish Ministers. Once an order is made under section 48(3), APR will be used to create a title sheet for the plot of land affected by the registrable deed under section 24(5).
An order has been made under section 48(2) to close the Register of Sasines to standard securities - see Voluntary Registration as a Result of the Closure of the Sasine Register to Standard Securities for more information. However, section 24(5) applies only to orders made under section 48(3), and consequently APR does not apply to standard security applications, other than standard securities over subordinate real rights, which induce APR by virtue of section 24(7). Instead, where the standard security is over an unregistered plot of land, the owner must apply for voluntary registration of the plot in order to register the standard security.
APR Scenarios
APR - Lease Scenarios and Outcomes
APR - Variation and/or Extension of Lease Scenarios and Outcomes
Examples of scenarios where a variation of lease incorporating additional subjects may be submitted, and the registration outcomes in terms of the 2012 Act.
Examples of scenarios where the extent of the leasehold subjects is not increased - showing Fees and whether APR is triggered.
Automatic Plot Registration - Intake Guidance
General
This guidance is concerned with the creation of applications on the LRS system on receipt of an Automatic Plot Registration (APR) application.
Most APR applications will be for a grant of lease or an assignation of lease. In such cases, an APR application will require the creation of one cadastral unit on the cadastral map, but two title sheets: one title sheet for the plot and one title sheet which is known as a lease title sheet.
Once completed, the two title sheets, and associated mapping information, will be available via email notifications to the relevant parties. (There is no second registration fee for the creation of the plot title sheet.)
The intake officer should create the applications in accordance with the guidance below.
For more general information, see Automatic Plot Registration above.
If a grant of lease is submitted for registration with an FR form it is likely the application should have induced registration of the plot; accordingly the application should be referred for further guidance.
Application submitted with FR form instead of APR form
Where a deed that triggers APR is submitted with an FR application form, it will not result in an automatic rejection. Application for Registration - Part B breaks down the form as to which Part B questions are mandatory for an APR application. The decision to accept an FR application form comes down to whether the questions required in an APR application are attempted or not, and then, how they are answered is key to whether we have enough information to create the AP application.
It is common for the questions on the FR form to be answered in relation to the deed which triggers APR i.e. the lease, assignation of lease or sub-lease, instead of being answered in relation to the plot. In such instances, the application should be rejected.
Where the questions on the FR form have been answered in relation to the plot, the application can be accepted.
Categorisation
The applications should be categorised as Category 3. Once the applications are confirmed in LRS they should be released as normal to the next LRS location.
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Automatic Plot Registration - Closing Notes
General
Receipt of an application to register a lease interest where the plot of land is not already registered will result in the creation of two title sheets, one for the plot of land and one for the lease interest. In all cases the registration date for the leasehold title will be the same as that for the plot of land, even if created subsequent to the plot title sheet (N.B. this is not a backdating action as the interest is in the Land Register as at the date of registration of the plot. However, authorisation to change the date of registration must still be obtained to ensure that this is only undertaken in the appropriate circumstances).
Closing notes
Two title sheets
Title Sheets should have been created for both the plot of land and the leasehold interest and closing notes should be added to the relevant search sheet for each interest. If the DIR is a grant of a new lease, a closing note should be added to the search sheet for the landlord's interest: this should refer to the title numbers for the two title sheets that have been created.
Pre search sheet title
If the owner's interest is untraceable from the information provided (e.g. lease was granted for 999 years in early 19th century) the closing note should be added to the search sheet relating to the lease, e.g.:
The plot of land subject to the [lease/assignation of 23 High Street, Newtown] is registered in terms of s.24 of Land Registration (Scotland) Act 2012 - To [TITLE NO.]
Style of Closing Notes