Conversion of Long Lease - rectifying title sheet

Useful Links

Notices under Long Leases (Scotland) Act 2012 - Example Deeds

General

On 28 November 2015 (the "appointed day"), the provisions of the Long Leases (Scotland) Act 2012 ("the Act") converted certain ultra-long leases into ownership. On that day, the landlord's right of ownership of the land over which an ultra-long lease was held was also extinguished where the lease was converted.

If rectification of the Land Register is sought prior to the former tenant seeking to transfer ownership or otherwise transact with the land, the party submitting the rectification request should inform the Keeper that conversion to ownership has occurred under the terms of the Long Leases (Scotland) Act 2012.

The party submitting the rectification request should be the former tenant or landlord (or their agent) as it is unlikely that anyone else would know for certain that conversion had actually happened (for example, there may be outstanding proceedings relating to the lease being exempted from conversion, or the lease may have been extinguished off register). If the request for rectification is by a party other than the former tenant or landlord (or their agent) it is unlikely that the Keeper will be able to establish that there is a manifest inaccuracy in the title sheet and the request should be rejected. If in doubt, refer to senior caseworker.

The lease should be checked to confirm that it is a "qualifying lease" under s.1 of the Act and consequently qualifies for conversion. In order for the lease to be a qualifying lease it must:

be registered in either the Land Register or the General Register of Sasines (or the Particular Registers/Burgh Registers);
have an initial term of more than 175 years;
have more than 100 years to run at 28 November 2015 where the property is wholly or mainly used as a residential dwelling house or 175 years in other cases*; and
have an annual rent of not more than £100 (note: if there is Value Added Tax included in the rental and this takes the rental over the £100 threshold, then the request/application should be referred to a senior caseworker).

*where a lease includes provision (however expressed) requiring the landlord to renew the lease, the period for which any such renewed lease would be granted, were that provision complied with, must be added to the period for which the original lease is granted, as per s71(1)(b) of the Act.

Note:- A lease does not qualify if:

the subjects of the lease include a harbour (either wholly or partly) in relation to which there is a harbour authority,
it is granted for the sole purpose of allowing the tenant to install and maintain pipes or cables, or
it is one either (i) of minerals, or (ii) which includes minerals and in respect of which a royalty, lordship or other payment of rent determined by reference to the exploitation of those minerals is or may be payable.

Only one lease qualifies for conversion to ownership

Where subjects are held under 2 or more potential qualifying leases only the lowest level of qualifying lease will convert to ownership. For example, if a tenant under a long lease sub-lets individual parts of the land to 10 sub tenants, under 10 new (sub) long leases, then only the 10 sub tenants interests would convert to ownership (assuming that each of the sub leases qualify for conversion as noted above).

If the sub-lease affects only part of the land originally leased, conversion of the sub-lease would apply to this part and the head lease would be the qualifying lease for the remaining part. For example, if A, the owner of land, leases 10 hectares to B for 999 years and B in turn sub-lets 4 of these hectares to C for 920 years, C is the qualifying tenant in relation to the 4 hectares and B is the qualifying tenant in relation to the remaining 6 hectares.

In the above scenarios, where the sub-tenant's interest converted to ownership, the head tenant's interest in those subjects is extinguished.

This only happens where both leases are qualifying leases - there may be subjects which are held under a long lease where parts have been subsequently sub-let under new leases which are not affected by the Act. In such a scenario where the long lease converts to ownership, the sub-leases will still require to be shown in a schedule of leases on the converted title sheet as the sub-tenants interest subsists.

In some circumstances the conversion/conversion date of these ultra-long leases can be affected by the recording/registration of a notice of recall of exemption. Further information on these notices is available under Notices/Agreements under the Long Leases (Scotland) Act 2012 at Conversion of Long leases.

In all cases where the tenant's interest has converted to ownership the former landlord's ownership title must be checked to ascertain whether it is registered. In some cases the landlord's title may be registered under more than one title number.

If the former landlord's title is registered it must be updated to reflect the conversion. In order to avoid any competing titles, the application(s) used to update the former landlord's title must be completed on the same day as the rectification application. Guidance for updating the former landlord's title sheet(s) is set out below.

Lease 'deemed registered'

Where the right of the tenant in a qualifying lease is unregistered but the landlord's title is registered the lease is 'deemed registered'. The applicant/agent will need to consider how the conversion affects the tenant's interest and then provide the Keeper, as part of their request for rectification, with details of any servitude rights and/or encumbrances affecting the converted tenant’s interest that require to be entered into the title sheet. Where a servitude right and/or encumbrance requires to be delineated on the cadastral map, the request for rectification must include a plan or sufficient description of the extent in order for the Keeper to show it/them on the cadastral map.

Lease registered

In general, and subject to the information supplied as part of the rectification request, where the right of the tenant in a qualifying lease is registered, the rights and burdens (except the payment of rent) already contained in the registered tenant's title should be retained. The applicant or their agent may inform the Keeper that certain leasehold conditions contained in the converted lease no longer subsist. Where so advised, these leasehold conditions should be removed from the burdens section entry for the lease. Unless so advised, with one exception, all of the lease conditions should be brought forward to the converted lease title sheet. The only consideration the Keeper will give to leasehold conditions is whether to remove any obligation to pay rent. Such an obligation should be removed wherever possible but there may be instances where the rent is intermingled with other burdens and it would not be practical to remove the reference. In such cases, the rent should be left in the burdens section entry for the lease and a note added - see guidance below for different scenarios.

In addition to the rights and burdens in the registered tenant's title, section 6(3) of the Act states that "The converted land is, subject to subsection (4), subject to (a) any subordinate real rights (other than any superior lease extinguished by virtue of section 4(1)(c)), and (b) any other encumbrances, to which the converted land itself was, immediately before the appointed day, subject" [subsection (4) states "Any heritable security or proper liferent to which the converted land itself was subject immediately before the appointed day is, on that day and to the extent that the security or liferent affected the land, extinguished"]. This means that the burdens shown in the former landlord's title should be brought forward (so far as they affect the converted land) unless the rectification request states that certain burdens and conditions no longer affect the converted land.

The servitudes and rights affecting the former landlord's title should be brought forward only insofar as detailed in the rectification request.

Subordinate real rights affecting the former landlord's interest

Under section 6(4) of the Long Leases (Scotland) Act 2012, any heritable security or proper liferent that burdened the former landlord's interest immediately before the appointed day was extinguished on the appointed day (to the extent of the converted lease subjects).

If there is a Notice or Agreement under the Long Leases (Scotland) Act 2012 shown in the title sheet for either the former tenant or former landlord, the application should be referred to a senior caseworker.

Minerals and converted leases

The position relating to any residual ownership right to minerals contained in a registered former landlord's title must be considered when dealing with an application for either registration or rectification of an affected title where conversion to ownership has taken place.

Section 1(4)(d) of the Act provides that a lease will not qualify for conversion to ownership where it is either a) a lease of minerals or b) a lease which includes minerals and in respect of which a royalty/payment of rent determined by reference to the exploitation of those minerals is or may be payable.

Where a lease includes minerals but does not include details of a royalty or payment of rent determined by reference to the exploitation of those minerals being payable, then such a lease can convert, provided it conforms to section 1 of the Act, as noted above.

Unless specifically provided for, a lease of land does not include those minerals beneath it - the lack of an express inclusion of minerals therefore has the effect of separating entitlement to the surface of the land from entitlement to the minerals beneath it. In practice, rather than an express inclusion, an express reservation of minerals is almost always contained in ultra-long leases of land.

This has an important impact on the conversion process as conversion cannot bestow on the former tenant a greater interest than that which was contained in the lease itself. Accordingly, where minerals were excluded from a lease, then they are also excluded from the property acquired by the former tenant on conversion.

Where conversion of a lease takes place and the minerals beneath the subjects of the lease have not already been created as a separate tenement (either by being expressly reserved by a previous proprietor or by being expressly conveyed to a third party in an earlier deed), such minerals became a separate tenement.

An express reservation of minerals in a lease is not, however, a firm indicator that minerals were ever included in a former landlord's title itself. Sometimes the minerals will, in fact, already be a separate tenement, in which case the purpose of the minerals reservation itself is to make it clear that the minerals do not pass to the tenant - rather than operating as a statement that the former landlord has expressly retained the minerals.

Further complicating the situation is that such minerals reservation clauses usually contain conditions relating to rights to work and payment of compensation. Where minerals are already separated, such conditions merely serve to repeat the terms of the earlier separation. Where the minerals remain in the ownership of the former landlord, however, such conditions serve to regulate the landlord/tenant relationship for the purposes of the lease and continue to do so after conversion of the lease into ownership when the minerals became a separate tenement.

The potential for a former landlord to retain a residual ownership right to minerals therefore requires to be carefully considered when correcting a former landlord's title post-conversion.

Before rectifying the existing ownership title sheet the officer should give careful consideration as to whether the lease includes an express inclusion of minerals, or whether the interest in the minerals was reserved to the former landlord or his predecessors, or conveyed to a third party. All instances where an ultra-long lease contains an express inclusion of minerals and purports to qualify for conversion should be referred to a senior caseworker.

The process steps at Rectification Processand General Updates to the Title Sheet - Rectifications should be followed in conjunction with the appropriate scenario guidance outlined below (which assume no live application(s) exists):

Both Tenant’s and Landlord's Interests Registered

Former Tenant's title (no inclusion of minerals)

Where the subjects registered in the converted lease title sheet are co-extensive with the former landlord’s registered title, all subsisting burdens appearing in the former landlord’s title sheet should be brought forward to the converted lease title sheet (where they do not already appear), unless the applicant or their agent informs the Keeper that certain burdens do not subsist.

Where the subjects registered in the converted lease title sheet comprise only part of those subjects in the former landlord’s registered title, only those subsisting burdens appearing in the former landlord’s title sheet which affect the area of ground subject to the converted lease should be brought forward to the converted lease title sheet (where they do not already appear) - unless the applicant or their agent informs the Keeper that certain burdens do not subsist.

In both of the above scenarios:

The servitudes and rights in favour of the former landlord's title should only be brought forward insofar as detailed in the rectification request.

The rights and burdens already contained in the registered tenant's title should be retained. If the applicant or their agent advises that leasehold conditions contained in the converted lease no longer subsist, they should be removed from the burdens section entry for the lease. Unless so advised, with one exception, all of the lease conditions should be retained in the converted lease title sheet.

The only consideration the Keeper will give to leasehold conditions is whether to remove the obligation to pay rent. Such an obligation should be removed from all burden section entries (including minutes of agreement or variation) wherever possible but there may be instances where the rent is intermingled with other burdens and it would not be practical to remove the reference. In such cases, the rent should be left in the burdens section entry and a note following the style below, amended as appropriate, should be added to the end of that entry:

Note: The rent payable under the above Lease is extinguished by virtue of Section 5(1) of the Long Leases (Scotland) Act 2012 and is shown only insofar as it affects/assists with the interpretation of other real burdens contained in this Title Sheet (in respect of maintenance obligations, liability for common repairs etc).

If the existing entry for the lease in the converted lease title sheet is "copy in certificate", it should be updated to be incorporated by reference following the procedures at Deed or Document Incorporated in Title Sheet by Reference and a footnote added:

Note: The Keeper has been informed that the said lease is a qualifying lease in terms of the Long Leases (Scotland) Act 2012. Any obligation to pay rent under the said lease has been extinguished.

Preambles of burden section entries in the converted lease title sheet may also require editing. For example, the preamble may refer to the "Lease referred to in the Property Section"; as the schedule in the property section will be removed, the words "referred to in the Property Section" should be deleted and the preamble amended as appropriate.

If a burdens section entry is cloned and amended, add an LRS Element Note - "Amended for Conversion under the Long Leases (Scotland) Act 2012".

If removal of other leasehold conditions is complex, the application should be referred to a senior caseworker for further advice.

A long lease conversion note should be added as the last entry in the burdens section:

The subjects in this title formerly comprised the right of a tenant in a long lease. The right converted into ownership in terms of the Long Leases (Scotland) Act 2012.

This is available on the LRS Deeds Pick-list: Deed Code "424" Type "T".

If the property was previously held on a mixed ownership/leasehold title then the note should be amended accordingly, e.g.:

The subjects in this title formerly partially comprised the right of a tenant in a long lease. That right converted into ownership in terms of the Long Leases (Scotland) Act 2012.

The property section of the converted lease title sheet should be further updated:

Change the real right field from "Tenant" to "Ownership"
Update the title sheet update field
Remove the Schedule of Short Particulars of Lease.
Remove the notes (if any) relating to the ownership of the plot of land and the currency of the cadastral unit

Where the minerals beneath the lease subjects are excluded from the property acquired by the former tenant on conversion and there is no minerals reservation in any of the burdens section deeds (nor a reservation/exception note in the property section), the following note should be added:

"Note: The minerals are excepted’.

This note can be amended to suit the circumstance of the particular case, for example, if the existing minerals reservation note affects only part of the converted subjects.

Where the former landlord’s title is benefited with the right to enforce real burdens created in terms of the Title Conditions (Scotland) Act 2003, the application should be referred to a senior caseworker for further consideration.

If there are any sub-leases and/or head/interposed leases shown in either title sheet, the application should be referred to a senior caseworker for further consideration.

For the avoidance of doubt, any security or liferent that burdened the former landlord's interest in the converted lease will be extinguished and should not be brought forward to the converted tenant's title sheet.

The RR application should be referred to Plans as amendments will be required on the DMS due to the conversion to ownership.

Plans Settler:

Change the tenure on the DMS to OL
Add a DMS title note in the following terms:

The tenant's interest registered under this title has converted to ownership under the terms of the Long Leases (Scotland) Act 2012. See application [application number of current case]

Former Landlord's title

The qualifying lease contains no express inclusion of minerals

In this case, the minerals beneath the subjects of lease are excluded from the property acquired by the former tenant on conversion. Where the minerals have not already been created as a separate tenement (either by being expressly reserved by a previous proprietor or by being expressly conveyed to a third party in an earlier deed), such minerals become a separate tenement.

The former landlord's title should be examined to establish whether that title contains a minerals reservation in a burdens section deed that relates to the subjects of lease or an indication that the minerals below the lease subjects have been expressly conveyed to a third party.

Minerals reserved from former landlord's title or expressly conveyed to a third party - Converted lease subjects are co-extensive with former landlord's title

Where there is a minerals reservation in a burdens section deed that relates to the subjects of lease or an indication that the minerals below the lease subjects have been expressly conveyed to a third party, the surface extent of the former landlord's title is exhausted and it would appear that no residual ownership rights to minerals can remain.

The former landlord's title sheet should therefore be closed.

Legal:

1.1 Create rectification application against former landlord's title on the LRS

1.2 Add LRS application note:

"RR created to close this title due to the conversion to ownership under the Long Leases (Scotland) Act 2012 of the tenant's interest held under [title number of tenant's title sheet]".

1.3 Refer application to Plans on the LRS with instructions to close the title on the DMS

Plans:

2.1. Close the title on the DMS and add the following DMS title note:

"The tenant's interest registered under [title number of tenant's title sheet] has converted to ownership under the terms of the Long Leases (Scotland) Act 2012. That tenant's interest was over the whole of the subjects in this title. This title sheet has been closed and the plot registration continues under [title number of tenant's title sheet]."

2.2 Release application to Legal Settle on the LRS

Legal:

3.1. Complete the following steps in order to update and close the former landlord's title sheet.

3.1.1 Amend the "TS Update" in the property section to the date of the rectification application.

3.1.2 Add title workdesk note:

"The tenant's interest registered under [title number of tenant's title sheet] has converted to ownership under the terms of the Long Leases (Scotland) Act 2012. That tenant's interest was over the whole of the subjects in this title. This title sheet has been closed and the plot registration continues under [title number of tenant's title sheet]. See application [application number of tenant's application] for the confirmation that the relevant lease was a qualifying lease"

3.2 Close title by doing the following:

3.2.1 Click on the "Edit" tab in the Title Work desk and select "close/cancel"

3.2.2 In the dialogue box which appears add the following details:

(i) "Date of Closure" = the date of the rectification application

(ii) "Title for Continuation of Registration" = the title number of the tenant's title which has converted to ownership

3.3 Confirm and complete the rectification application.

3.4 Consider who should be notified of the rectification and draft letters as appropriate - this could be the submitting agent for the last title transfer which involved the former landlord.

3.5 Archive all forms/correspondence/referral material with the application.

3.6 Update the Post Registration Enquiries Log.

Minerals reserved from former landlord's title or expressly conveyed to a third party - Converted lease subjects form part of former landlord's title

Where there is a minerals reservation in a burdens section deed specifically relating to the subjects of lease or to subjects of which the subjects of lease form part, or an indication that the minerals below the lease subjects have been expressly conveyed to a third party, it would appear that no residual ownership rights to minerals below the subjects of lease can remain. The subjects contained in the converted lease should therefore be removed from the former landlord's title sheet.

The removal of the converted lease subjects from the former landlord's title sheet by way of a rectification application is comparable to updating a parent title as a result of a Transfer of Part application; as such, similar consideration should be given as to how to remove the subjects from the former landlord's title. Further reading on Transfer of Part applications can be found at the following page in the Registration Manual: Transfers of Part.

Legal:

1.1 Create rectification application against the former landlord's title on the LRS

1.2 Add LRS application note:

"RR created to amend this title due to the conversion to ownership under the Long Leases (Scotland) Act 2012 of the tenant's interest held under [title number of tenant's title sheet]".

1.3. Refer application to Plans on the LRS with instructions that the converted tenant's subjects are to be removed from the former landlord's title.

Plans:

2.1. Complete Plans work required to remove the converted tenant's subjects from the former landlords title and inform legal of same. Add the following title note on the DMS:

"The tenant's interest registered under [title number of tenant's title sheet] has converted to ownership under the terms of the Long Leases (Scotland) Act 2012. The subjects over which this tenant's interest was registered has been removed from the subjects in this Title [add details of how the removal was made]"

2.2 Release application to Legal Settle on the LRS.

Legal:

3.1 Complete the following steps in order to update the former landlord's title sheet.

3.1.1 Amend the "TS Update" in the property section to the date of the rectification application.

3.1.2 The converted lease subjects should be removed from the title sheet by one of the following methods, depending on the extent of the converted subjects and how many leases are shown:

(One) If there is only one lease shown on the landlord's title sheet and the whole of the subjects leased have now converted to ownership:

(1) Remove schedule of leases and associated note from the property section

(2) Remove the tenant's rights note from the burdens section

(3) Check burdens section for entry/entries relating to converted lease and amend if/as appropriate

OR

(Two) If there are other leases shown on the landlord's title sheet in addition to the one where the whole of the subjects leased have now converted to ownership:

(1) Remove reference to the converted lease from the schedule of leases

(2) Retain the tenant's rights note in the burdens section

(3) Check burdens section for entry/entries relating to converted lease and amend if/as appropriate

OR

(Three) If only part of the subjects leased have converted to ownership:

(1) Retain schedule of leases

(2) Retain the tenant's rights note in the burdens section

(3) Check burdens section for entry/entries relating to converted lease and amend if/as appropriate

3.1.3 Add the appropriate information to the property section of the landlord's title sheet to show the removal of the converted leasehold subjects (this will depend on the method used by Plans - for example a note that the subjects edged green have been removed or a schedule of removals).

3.2 Add title workdesk note:

"The tenant's interest registered under [title number of tenant's title sheet] has converted to ownership under the terms of the Long Leases (Scotland) Act 2012. The subjects over which this tenant's interest was registered has been removed from this Title. See application [RR application number] for the confirmation that the lease was a qualifying lease"

3.3 Confirm and complete the rectification application.

3.4 Consider who should be notified of the rectification and draft letters as appropriate - this could include the submitting agent for the last title transfer which involved the former landlord.

3.5 Archive all forms/correspondence/referral material with the application.

3.6 Update the Post Registration Enquiries Log.

No minerals reservation in any burdens deed nor any indication that the minerals have been conveyed to a third party

Where there is no minerals reservation in any burdens section deed that relates to or includes the lease subjects, nor any indication that the minerals under the lease subjects have been expressly conveyed to a third party, the former landlord's title may be habile to include title to the minerals. In this situation, the former landlord's title sheet should not be closed, nor should the lease subjects be "greened out" or the schedule of leases removed/amended. Instead, the existing note referring to the schedule of leases should be amended as appropriate.

Legal:

1.1 Create rectification application against the former landlord's title on the LRS

1.2 Add LRS application note:

"RR created to amend this title due to the conversion to ownership under the Long Leases (Scotland) Act 2012 of the tenant's interest held under [title number of tenant's title sheet]".

1.3. Refer application to Plans on the LRS with instructions that the converted tenant's subjects are to be removed from the former landlord's title.

Plans:

2.1. Add the following title note on the DMS:

"The tenant's interest registered under [title number of tenant's title sheet] has converted to ownership under the terms of the Long Leases (Scotland) Act 2012. The subjects over which this tenant's interest was registered has been removed from the subjects in this Title [add details of how the removal was made (eg. property section note relating to the leased subjects amended, schedule of leases and yellow edges/numbers amended)]"

2.2 Release application to Legal Settle on the LRS.

Legal:

3.1 Complete the following steps in order to update the landlord's title sheet.

3.1.1 Amend the "TS Update" in the property section to the date of the rectification application.

3.1.2 Add LRS title note:

"The tenant's interest registered under [title number of tenant's title sheet] has converted to ownership under the terms of the Long Leases (Scotland) Act 2012. The subjects over which this tenant's interest was registered has been removed from the subjects in this Title. See application [RR application number] for the confirmation that the relevant lease was a qualifying lease"

3.1.3 Amend the existing note referring to the schedule of leases, as appropriate:

For example,

Where the whole subjects in the former landlord's title were leased:

Note: The subjects in this Title were leased - for particulars see Schedule below. In so far as leased, these subjects ceased to be within this title upon the conversion of certain ultra-long leases into ownership on 28 Nov. 2015** in terms of the Long Leases (Scotland) Act 2012.

Where only part of the subjects in the landlord's title was leased and that lease has converted to ownership:

Note: The part edged and numbered X in yellow [the current reference for the long lease subjects on the title plan/cadastral map] on the title plan/cadastral map was leased - for particulars see Schedule below. In so far as leased, that part ceased to be within this title upon the conversion of certain ultra-long leases into ownership on 28 Nov. 2015** in terms of the Long Leases (Scotland) Act 2012.

Where parts of the subjects in the landlord's title were leased but only one part has converted to ownership:

Note: The parts edged and numbered X, Y, Z in yellow [the current references for the long lease subjects on the title plan/cadastral map] on the title plan/cadastral map were leased - for particulars see Schedule below. In so far as leased, that part edged and numbered Y ceased to be within this title upon the conversion of that lease into ownership on 28 Nov. 2015** in terms of the Long Leases (Scotland) Act 2012.

**The appointed day can be deferred in some cases (see Notice of Recall of exemption notice (without limit of time) at Conversion of Long Leases); if so, one of the following notes, as appropriate, should be added instead of the appropriate default note referred to above:

Where the whole subjects in the landlord's title was leased:

Note: The subjects in this Title were leased - for particulars see Schedule below. In so far as leased, these subjects ceased to be within this title upon the conversion of that lease into ownership on 28/MM/YYYY*** in terms of the Long Leases (Scotland) Act 2012.

Where only part of the subjects in the landlord's title was leased and that lease has converted to ownership:

Note: The part edged and numbered X in yellow [the current reference for the long lease subjects on the title plan/cadastral map] on the title plan/cadastral map was leased - for particulars see Schedule below. In so far as leased, that part ceased to be within this title upon the conversion of that lease into ownership on 28/MM/YYYY*** in terms of the Long Leases (Scotland) Act 2012.

Where parts of the subjects in the landlord's title were leased but only one part has converted to ownership:

Note: The parts edged and numbered X, Y, Z in yellow [the current references for the long lease subjects on the title plan/cadastral map] on the title plan/cadastral map were leased - for particulars see Schedule below. In so far as leased, that part edged and numbered Y ceased to be within this title upon the conversion of that lease into ownership on 28/MM/YYYY*** in terms of the Long Leases (Scotland) Act 2012.

Where parts of the subjects in the landlord's title were leased and a) at least one lease converted to ownership on 28 Nov. 2015, and b) at least one lease converted to ownership on a deferred appointed day:

Note: The parts edged and numbered X, Y, Z in yellow [the current references for the long lease subjects on the title plan/cadastral map] on the title plan/cadastral map were leased - for particulars see Schedule below. In so far as leased, a) the part edged and numbered Y in yellow ceased to be within this title upon the conversion of certain ultra-long leases into ownership on 28 Nov. 2015 in terms of the Long Leases (Scotland) Act 2012 and b) the part edged and numbered Z in yellow ceased to be within this title upon the conversion of that lease into ownership on 28/MM/YYYY.”***

***The appropriate date will either be 28 May or 28 November, depending on which date occurs first on or after the day which falls 6 months after the date of recording/registration of the Notice of Recall.

3.1.4 Where there is only the one lease shown in the schedule and that has converted to ownership, then the tenant's rights note can be removed from the burdens section.

3.2 Confirm and complete the rectification application.

3.3 Consider who should be notified of the rectification and draft letters as appropriate - this could include the submitting agent for the last title transfer which involved the former landlord.

3.4 Archive all forms/correspondence/referral material with the application.

3.5 Update the Post Registration Enquiries Log.

The lease includes an express inclusion of minerals

In this case, the minerals beneath the subjects of lease are included in the property acquired by the former tenant if the lease converts. Whether conversion can operate will depend on whether the lease includes details of a royalty or payment of rent determined by reference to the exploitation of those minerals being payable or not.

All instances where an ultra-long lease contains an express inclusion of minerals and purports to qualify for conversion should be referred to a senior caseworker.

Tenant’s Interest Registered, Landlord's Interest in Sasines

The Keeper will expect the applicant or their agent to inform her which of those burdens and servitude rights affecting the former landlord's interest affect the converted lease subjects. Relevant details of those burdens and servitude rights will require to be supplied as part of the rectification request before they can be entered into the converted lease title sheet. Rectification officers will not investigate any burdens or servitude rights beyond those which are narrated in the rectification request.

The rights and burdens (except the payment of rent) already contained in the registered tenant's title should be retained (subject to information supplied with the rectification request).

The guidance relating to the removal of rent/leasehold conditions and the amending/updating of the property and burdens sections as detailed above at Former Tenant's title (no inclusion of minerals) under Both Tenant’s and Landlord's Interests Registered also applies to this scenario. Likewise, the information provided above relating to the exclusion/express inclusion of minerals also applies to this scenario.

Where it is practical to do so, an appropriate note should be added to the search sheet for the former landlord's interest, e.g.

The tenant's interest registered under [title number of tenant's title sheet] has converted to ownership under the terms of the Long Leases (Scotland) Act 2012.

The RR application should be referred to Plans as amendments will be required on the DMS due to the conversion to ownership.

Plans Settler:

Change the tenure on the DMS to OL
Add a DMS title note in the following terms:

The tenant's interest registered under this title has converted to ownership under the terms of the Long Leases (Scotland) Act 2012. See application [application number of current case]

Landlords Interest Registered - Tenant's Interest in Sasines, Deemed Registered

There may be rare cases where the right of the landlord in a qualifying lease is registered, but the right of the tenant which will convert is still recorded in the General Register of Sasines.

Lease Subjects Co-extensive with Landlord's Title:

1. The sasine recorded qualifying lease contains no express inclusion of minerals

In this case, the minerals beneath the subjects of lease are excluded from the property acquired by the former tenant on conversion.

The former landlord's title should be examined to establish whether that title contains a minerals reservation in a burdens section deed that relates to the subjects of lease or an indication that the minerals below the lease subjects have been expressly conveyed to a third party.

Minerals reserved from former landlord's title or expressly conveyed to third party

Where there is a minerals reservation in a burdens section deed that relates to the subjects of lease or an indication that the minerals below the lease subjects have been expressly conveyed to a third party, the surface extent of the former landlord's title is exhausted and it would appear that no residual ownership rights to minerals can remain.

The former landlord's title sheet should be updated and the former landlord's details replaced with the former tenant's details.

Legal:

1.1 Create rectification application against former landlord's title on the LRS.

1.2 Add LRS Application Note:

"RR created to update this title due to the conversion to ownership under the Long Leases (Scotland) Act 2012 of the tenant's interest in the Lease recorded [Sasine recording details for lease] on Search Sheet [search sheet of Tenant's title]".

1.3 Refer application to Plans on the LRS with instructions to note this on the DMS.

Plans:

2.1. Add the following DMS title note:

"The Tenant's interest in the Lease recorded [Sasine recording details for lease] on Search Sheet [search sheet of Tenant's title] has converted to ownership under the terms of the Long Leases (Scotland) Act 2012. That Tenant's interest was over the whole of the subjects in this title."

2.2 Release application to Legal Settle on the LRS.

Legal :

3.1. Complete the following steps in order to update the landlord's title sheet.

3.1.1 Add LRS title workdesk note:

"The Tenants interest in the Lease recorded [sasine recording details for lease] on Search Sheet [search sheet of Tenant's title] has converted to ownership under the terms of the Long Leases (Scotland) Act 2012. That Tenant's interest was over the whole of the subjects in this title."

Property section:

3.1.2 Amend the "TS Update" to the date of the rectification application.

3.1.3 Check that the real right field is 'Ownership'; amend if necessary.

3.1.4 Remove the schedule of leases and the associated property section note.

3.1.5 Amend any existing servitude rights, if appropriate, as detailed in the rectification request.

3.1.6 Check minerals reservation note; amend/add if necessary.

Proprietorship section:

3.1.7 Remove the former landlord's details and enter the name and designation of the tenants as advised in the rectification request.

3.1.8 Date of Entry - leave blank.

3.1.9 Consideration - enter "Not Applicable" from the pick-list.

3.1.10 Add note: "The Date of Entry field is intentionally blank."

3.1.11 Date of registration - date of the rectification application.

Securities section:

3.1.12 Heritable securities that affected the land prior to conversion will be extinguished on the appointed day. If there is a security shown in the landlord's title sheet, this should be removed.

Note: Removal of a security should only be done when the converted lease forms the whole of the landlord's interest.

3.1.13 Heritable securities that affected the lease subjects prior to conversion will affect the ownership title after conversion. Check the search sheet for any outstanding heritable securities etc. and enter details of any identified by the preceding check.

Burdens section:

3.1.14 Retain the existing burdens deeds (unless the applicant or their agent informs the Keeper that certain burdens do not subsist).

3.1.15Add entry for lease (it will only be shown as a "Tenant's rights" note in the present title sheet), removing any obligation to pay rent, and any other conditions which the applicant or their agent has said no longer subsist.

If it is not practical to remove the reference to rent, it should be left in the burdens section entry and a note following the style below, amended as appropriate, added to the end of that entry:

Note: The rent payable under the above Lease is extinguished by virtue of Section 5(1) of the Long Leases (Scotland) Act 2012 and is shown only insofar as it affects/assists with the interpretation of other real burdens contained in this Title Sheet (in respect of maintenance obligations, liability for common repairs etc).

3.1.16 If the lease is incorporated by reference, follow the instructions at Deed or Document Incorporated in Title Sheet by Reference and add the following note to the entry for the lease:

Note: The Keeper has been informed that the said lease is a qualifying lease in terms of the Long Leases (Scotland) Act 2012. Any obligation to pay rent under the said lease has been extinguished.

3.1.17 Check search sheet for any other deeds that affect the former tenant's interest, e.g. Minutes of Variation or Agreement and add entries if appropriate.

3.1.18 Delete "Tenant's rights" note.

3.1.19 Add "Long lease conversion note" as the last entry in the title sheet:

The subjects in this title formerly comprised the right of a tenant in a long lease. The right converted into ownership in terms of the Long Leases (Scotland) Act 2012

4.1 Confirm and complete rectification application on LRS.

4.2 Consider who should be notified of the rectification and draft letters as appropriate - this could include the submitting agent for the last title transfer which involved the landlord.

4.3 Archive all forms/correspondence/referral material with the application.

4.4 Update the Post Registration Enquiries Log.

Arrange for note to be added to Sasine Search Sheet for tenants interest

5.1 Complete the "Amendment to black note" form (available via RoSnet) : with details of the conversion to ownership and the former landlords title

"To [add title number of former landlords title] - Lease converted to ownership under the Long Leases (Scotland) Act 2012"

No minerals reservation in burdens deed nor any indication that the minerals have been conveyed to a third party

Where there is no minerals reservation in a burdens section deed nor any indication that the minerals have been expressly conveyed to a third party, the former landlord's title may be habile to include title to the minerals. If the rectification request does not make it clear that the former landlord's title does not include title to minerals, the request should be referred to a senior caseworker for further consideration.

2. The lease includes an express inclusion of minerals

In this case, the minerals beneath the subjects of lease are included in the property acquired by the former tenant if the lease converts. Whether conversion can operate will depend on whether the lease includes details of a royalty or payment of rent determined by reference to the exploitation of those minerals being payable or not.

All instances where an ultra-long lease contains an express inclusion of minerals and purports to qualify for conversion should be referred to a senior caseworker.

Lease Subjects form part of Landlord's Title:

1. The sasine recorded qualifying lease contains no express inclusion of minerals

In this case, the minerals beneath the subjects of lease are excluded from the property acquired by the former tenant on conversion.

The former landlord's title should be examined to establish whether that title contains a minerals reservation in a burdens section deed that specifically relates to the subjects of lease or to subjects of which the subjects of lease form part, or an indication that the minerals below the lease subjects have been expressly conveyed to a third party.

Minerals reservation in burdens section deed that affects the subjects of lease or indication that minerals beneath the subjects of lease have been expressly conveyed to a third party

Where there is a minerals reservation in a burdens section deed relating to the subjects of lease or to subjects of which the subjects of lease form part, or an indication that the minerals below the lease subjects have been expressly conveyed to a third party, it would appear that no residual ownership rights to minerals below the subjects of lease can remain.

Rectification will mean that part of the subjects in the registered landlord's title will need to be removed by way of a Transfer of Part application.

Instructions for both Legal and Plans staff in respect of Transfer of Part applications can be found in Transfers of Part. In general, the same principles should be followed as for any other TP application. However, some of the additional areas which may need clarification and/or consideration are noted below:

New title (being the subjects in the sasine recorded lease)

Legal:

1.1 Create TP application for the new title - LRS deed type "430" (Converted Lease)

1.2 Add LRS Application Note:

"TP created due to the conversion to ownership under the Long Leases (Scotland) Act 2012 of the Tenant's interest in the Lease recorded [Sasine recording details of long lease] on Search Sheet [search sheet of Tenants title]", which formed part of [title number of Landlord's title]."

1.3 Refer application to Plans on the LRS with mapping instructions. If this is a first removal, the instructions set out for Transfer of Part applications should be followed.

Plans:

2.1. Add the following additional DMS title note:

"The Tenant's interest in the Lease recorded [Sasine recording details of long lease] on Search Sheet [search sheet of Tenant's title] has converted to ownership under the terms of the Long Leases (Scotland) Act 2012, which formed part of [title number of Landlord's title]."

2.2 Release application to legal settle on the LRS.

Legal:

3.1. Complete the following steps.

3.1.1 Add LRS title workdesk note:

"The Tenants interest in the Lease recorded [Sasine recording details of long lease] on Search Sheet [search sheet of Tenant's title sheet] has converted to ownership under the terms of the Long Leases (Scotland) Act 2012."

Property section:

3.1.2 Date of First Registration: same date as the date of first registration shown on the landlord's title (the Parent Title).

3.1.3 Real Right: Ownership.

3.1.4 Title Sheet updated to: [registration date of new title].

3.1.5 Bring forward servitude rights and any associated notes from the landlord's title, as detailed in the rectification request.

3.1.6 Include any servitude rights and associated notes from the lease, as detailed in the rectification request.

3.1.7 Bring forward minerals reservation note(s) from the landlord's title, as appropriate.

Do not add Schedule for Short Particulars of Lease

Proprietorship section:

3.1.8 Enter the name and designation of the tenants as advised in the rectification request.

3.1.9 Date of Entry - leave blank.

3.1.10 Consideration - enter "Not Applicable" from the pick-list.

3.1.11 Add note: "The Date of Entry field is intentionally blank."

3.1.12 Date of registration - date of the RR application.

Securities section:

3.1.13 Heritable securities that affected the land prior to conversion will be extinguished on the appointed day. If there is a security shown in the landlord's title sheet, this should not be brought forward to the converted tenant's title sheet.

3.1.14 Heritable securities that affected the lease subjects prior to conversion will affect the ownership title after conversion. Check the search sheet for any outstanding heritable securities etc. and enter details of any identified by the preceding check.

Burdens section:

3.1.15 Bring forward those subsisting burdens appearing in the landlord’s title sheet which affect the area of ground subject to the converted lease. Plans may be asked to provide a reference on the cadastral map if required.

3.1.16 Add entry for lease (it will probably only be shown as a "Tenant's rights" note in the CDI), removing any obligation to pay rent, and any other conditions which the applicant or their agent has said no longer subsist.

If it is not practical to remove the reference to rent, it should be left in the burdens section entry and a note following the style below, amended as appropriate, added to the end of that entry:

Note: The rent payable under the above Lease is extinguished by virtue of Section 5(1) of the Long Leases (Scotland) Act 2012 and is shown only insofar as it affects/assists with the interpretation of other real burdens contained in this Title Sheet (in respect of maintenance obligations, liability for common repairs etc).

3.1.17 If the lease is incorporated by reference, follow the instructions at Deed or Document Incorporated in Title Sheet by Reference and add the following note to the entry for the lease:

Note: The Keeper has been informed that the said lease is a qualifying lease in terms of the Long Leases (Scotland) Act 2012. Any obligation to pay rent under the said lease has been extinguished.

3.1.18 Check search sheet for any other deeds that affect the former tenant's interest, e.g. Minutes of Variation or Agreement and add entries if appropriate.

1.1.19 Add "long lease conversion" note as the last entry in the title sheet.

The subjects in this title formerly comprised the right of a tenant in a long lease. The right converted into ownership in terms of the Long Leases (Scotland) Act 2012.

4.1 Confirm and complete application on LRS.

4.2 Consider who should be notified of the rectification and draft letters as appropriate - this could include the submitting agent for the last title transfer which involved the landlord.

4.3 Archive all forms/correspondence/referral material with the application.

4.4 Update the Post Registration Enquiries Log.

Arrange for note to be placed on Sasine Search Sheet for tenants interest

5.1 Complete the "Amendment to black note" form (available via RoSnet) with details of the conversion to ownership and the title number

"To [title number] - Lease converted to ownership under the Long Leases (Scotland) Act 2012"

Parent Title (the Landlord's Title Registered in the Land Register)

Legal:

1.1 Create rectification application against the landlord's title.

1.2 Add LRS Application Note:

"RR created to update this title to show removal of the subjects formerly held under the Tenant's interest in Lease recorded [add G.R.S. recording details]. The Tenants interest under said Lease has converted to ownership under the terms of the Long Leases (Scotland) Act 2012. Ownership of those subjects continued under [details of new title number]."

1.3. Refer application to Plans on the LRS with instructions that the converted tenant's subjects are to be removed from the landlord's title.

Plans:

2.1. Complete Plans work required to remove the converted tenant's subjects from the landlord's title and inform Legal of same. Add the following title note on the DMS:

"The Tenant's interest in the Lease recorded [add G.R.S. recording details] has converted to ownership under the terms of the Long Leases (Scotland) Act 2012 and has been removed from this title. Ownership of those subjects continued under [details of new title number]."

2.2 Release application to legal settle on the LRS.

Legal:

3.1 Complete the following steps in order to update the landlord's title sheet.

3.1.1 Amend the "TS Update" in the property section to the date of the rectification application:

3.1.2 The converted lease subjects should be removed from the title sheet by one of the following methods, depending on the extent of the converted subjects and how many leases are shown:

(One) If there is only one lease shown on the landlord's title sheet and the whole of the subjects leased have now converted to ownership:

(1) Remove schedule of leases and associated note from the property section

(2) Remove the tenant's rights note from the burdens section

(3) Check burdens section for entry/entries relating to converted lease and amend if/as appropriate

OR

(Two) If there are other leases shown on the landlord's title sheet in addition to the one where the whole of the subjects leased have now converted to ownership:

(1) Remove reference to the converted lease in the schedule of leases

(2) Retain the tenant's rights note in the burdens section

(3) Check burdens section for entry/entries relating to converted lease and amend if/as appropriate

OR

(Three) If only part of the subjects leased have converted to ownership:

(1) Retain schedule of leases

(2) Retain the tenant's rights note in the burdens section

(3) Check burdens section for entry/entries relating to converted lease and amend if/as appropriate

3.2 Add the appropriate information to the property section of the landlord's title sheet to show the removal of the converted leasehold subjects (this will depend on the method used by Plans - for example, a note that the subjects edged green on the cadastral map have been removed or a schedule of removals).

3.3 Add LRS title workdesk note:

"The Tenants interest in the Lease recorded [Sasine recording details of lease] on Search Sheet [search sheet of Tenant's title] has converted to ownership under the terms of the Long Leases (Scotland) Act 2012. The area of ground over which this Tenant's interest was recorded has been removed from this Title. Ownership of those subjects is continued under [details of new title number]."

3.4 Confirm and complete rectification application on LRS.

3.5 Consider who should be notified of the rectification and draft letters as appropriate - this could include the submitting agent for the last title transfer which involved the landlord.

3.6 Archive all forms/correspondence/referral material with the application.

3.7 Update the Post Registration Enquiries Log.

No minerals reservation in burdens section deed that affects the subjects of lease nor any indication that the minerals beneath the subjects of lease have been conveyed to a third party

Where there is no minerals reservation in a burdens section deed relating to the subjects of lease or to subjects of which the subjects of lease form part, nor any indication that the minerals below the subjects of lease have been expressly conveyed to a third party, the former landlord's title may be habile to include title to the minerals beneath the subjects of lease. If the rectification request does not make it clear that the former landlord's title does not include title to these minerals, the request should be referred to a senior caseworker for further consideration.

2. The lease includes an express inclusion of minerals

In this case, the minerals beneath the subjects of lease are included in the property acquired by the former tenant if the lease converts. Whether conversion can operate will depend on whether the lease includes details of a royalty or payment of rent determined by reference to the exploitation of those minerals being payable or not.

All instances where an ultra-long lease contains an express inclusion of minerals and purports to qualify for conversion should be referred to a senior caseworker.

Sub-Tenants registered interest subsists

As stated above at Only one lease qualifies for conversion to ownership, only the lowest level of qualifying lease will convert to ownership. There may be occasions however where a registered sub-tenant’s interest subsists as it is not affected by the Act, for example a 25 year sub-lease of a sub-station site. In this scenario consideration should be given as to whether the title sheet for that sub-lease should be updated to reflect the conversion to ownership of the head-lease.

Where the burdens section includes an entry for the now converted head lease an entry in the following style should be added to the burdens section:

The real right of ownership in the subjects in this title is registered under [title number of converted lease, now ownership]. This right of ownership formerly comprised the right of a tenant in a long lease. The right converted into ownership in terms of the Long Leases (Scotland) Act 2012.