Warrandice

General

Warrandice is a form of personal guarantee given by a granter of a deed to the grantee. The guarantee is only engaged if the grantee is evicted from the property. Warrandice given by the granter is quite distinct from the Keeper's warranty, which is the state guarantee provided for those acquiring land or rights in land and registering these in the Land Register.

A registration officer will usually encounter a warrandice clause in a disposition, but may also see warrandice in other registrable deeds, such as an assignation of lease or a standard security.

The three levels of warrandice

There are different types (or levels) of warrandice explained below. Usually the type of warrandice is made express in the deed, but where the deed is silent it is implied by law. The type of warrandice then depends upon the nature of the transaction and, in some cases, the capacity of the granter.

Absolute warrandice

This is the highest level of warrandice. It is a guarantee that the purchaser/grantee in the deed will not be deprived of the subjects or the right in question being granted.

Absolute warrandice is implied in a disposition for value unless another form of warrandice is expressed in the deed. xx

Fact and deed warrandice

This is a guarantee that the granter of the deed has not done and will not, in the future, do anything prejudicial to the grant of the deed in question.

This type of warrandice is implied in dispositions by trustees or executors and others acting in a fiduciary or trust capacity. It is then normal for a deed granted by an executor, trustee, trustee in sequestration, liquidator, receiver or administrator to only grant fact and deed warrandice expressly, but to indicate that the estate under their charge is bound in absolute warrandice. It is also normal for a fact and deed warrandice clause in a disposition to indicate that no personal liability is being adopted by such granter.

Simple warrandice

This is the least onerous type of warrandice. It is a guarantee that the granter will not, in the future, undertake a voluntary grant of a deed prejudicial to the interest of the purchaser/grantee.

This type of warrandice is implied in a disposition for no valuable consideration. xx

Which level of warrandice should be granted?

The level of warrandice given by the granter is a matter for negotiation between the parties to a transaction.

In the normal case, whichever one of the three levels is made express in the disposition under examination, the registration officer should consider the terms of the application form and whether the registrable deed and application otherwise meet the general application conditions and the conditions of registration applicable to the type of application undergoing examination.

However, there may be other forms of exception from or qualification to the warrandice clause as set out in the examples below.

Qualification re right of a tenant

Warrandice does not indemnify the grantee against all eventualities. For instance, warrandice does not guarantee against the existence of real burdens or servitudes which are not particularly onerous or unusual. However, leases do not fall into this category and the registration officer may encounter qualifications to warrandice which indicate the existence of leases or rights of occupancy, e.g.:

"And we grant warrandice, but excepting therefrom the existing lease of the subjects"

The registration officer should consider the answers given in the application form in relation to the identification of encumbrances and any additional information provided in the application form or as part of the application. If a long lease is not identified as encumbering the plot of land to which the application relates then the registration officer may assume that such a qualification relates to a short lease (which does not require to be disclosed on the title sheet for the plot of land).

Qualification re heritable securities remaining outstanding

Where an acquiring party is accepting liability for an existing heritable security, such as where property is being acquired for no separate consideration, the warrandice clause will usually be qualified with the details of the security in question.

Provided that the heritable security is disclosed in the title sheet (always assuming that it has not been discharged at the time of registration of the disposition) then there is no requirement for an exclusion or limitation of warranty in such a case. xx

Qualification indicating concern with underlying procedures in power of sale

"And we grant warrandice from our own facts and deeds only but excepting therefrom any degree of warrandice in respect of the sale of the subjects hereby disponed being by way other than a Calling Up Notice confirm to the terms of section 19 of the Conveyancing and Feudal Reform (Scotland) Act 1970....."

The restriction to fact and deed warrandice is expected in this type of disposition but the reference to the calling up processes is not expected and may indicate that there is a concern over the validity of the disposition.

This type of qualification or anything similar, should be referred to a senior caseworker for consideration and referral to a senior adviser as appropriate.

No warrandice is granted

"And we grant no warrandice"

This is often the default position when property is sold at auction and the vendor is insufficiently aware of the facts of the title to grant warrandice.

The registration officer should consider the answers given in the application form in relation to examination of title and identification of encumbrances. If the applicant certifies they have examined title, and there is no indication within the application that anything adverse has been identified, then reliance can be placed on the certification by the applicant that they are submitting a valid application.

Warrandice is limited

"And we grant warrandice, but excepting therefrom the area of ground tinted blue on the plan annexed hereto"

This type of qualification or similar should be referred to a senior caseworker for consideration and referral to a senior adviser as appropriate. Further guidance for senior caseworkers on how to process the application is provided in the section on Warrandice Excepted in Disposition inducing Registration below.

Warrandice Excepted in Disposition Inducing Registration

In general terms, the Keeper proceeds on the basis of certification from the submitting party that the granter is the proprietor of the subjects being disponed. Any issues with legal title should therefore have been resolved before submission of the application, or the application should be submitted in terms of the Prescriptive Claimant procedures where there is an a non domino aspect to the deed inducing registration. However, there will be occasions where warrandice is excepted in the deed from either all or part of the subjects being disponed. There may be valid reasons for such an exception from warrandice. It could be that the granter of the deed has legal title but has not been in possession of the subjects in their entirety, or possibly there could be a competing title in the Register of Sasines in relation to an application for registration of an unregistered plot.

In cases like this where warrandice is excepted, the application form or any correspondence accompanying the application should be consulted for an explanation as to the reason behind the qualification in the deed. Where no satisfactory explanation is given, or where the explanation leaves room for ambiguity, the exception from warrandice gives the Keeper possible reason to look beyond the apparent certification on the application form to see if there may be an issue with the validity of the disposition. The level of investigation undertaken should not be onerous upon the Keeper, but where there is an exception of warrandice this may hint at an issue with the application. The duty of care placed on granters, applicants and those who act as their legal advisers under section 111 is not absolute and in particular their liability is limited where the Keeper's loss could have been avoided by the taking of reasonable measures (see section 111(6)).

Where there is any possibility of a competing title in the Land Register, this should obviously come to light during the course of the registration and the application should be rejected. It may be however that there is an issue with regard to title or possession with a neighbouring title in the Sasine Register.

Requisition for further information or clarification

Where there is no explanation regarding the exception from warrandice, or the explanation is ambiguous, section 34 allows the Keeper to relax the one shot rule to allow for submission of additional information etc. going to the legal position/registration conditions at the date of application. It does not allow evidence to be submitted which goes to the legal position/registration conditions after that date. For clarification, an amendment to a deed would fall into the latter category. It is not possible to amend a deed after the date of registration and simultaneously for it to meet the conditions at the date of registration.

Applications received so far with exceptions from warrandice fall broadly into two categories: those where there is a potential issue with legal title and the DIR appears to be partly a non domino in nature, and those where there is no issue with legal title but there is an issue with possession.

Procedure where disposition is (or appears to be) partially 'a non domino'

A disposition by someone not the owner is, by definition, invalid but the Act works by deeming it to be valid where the Keeper is satisfied that certain steps have been taken. These steps are laid out in the Prescriptive Claimant sections of the 2012 Act in sections 43-45. Even if the applicant certifies on the application form that the granter is the last recorded proprietor, the exception from warrandice in the deed is deemed sufficient reason to carry out the investigation as it suggests a level of doubt in regard to title or possibly possession. Where this investigation reveals the deed to be clearly disponing an area outwith the granters' legal title, the application should be rejected as the deed is invalid if the prescriptive claimant provisions have not been met.

The reasons for the rejection where the deed is revealed to be partially a non domino are laid out in the General Guidance on Prescriptive Claimants:

The applicant has not met the requirements of section 43, therefore the Keeper cannot treat the deed as valid for the purposes of acceptance.
Were the Keeper to accept the deed, but only give effect to the valid part, this could circumvent the prescriptive claimant provisions. This is because positive prescription under section 1 of the Prescription and Limitation (Scotland) Act 1873 can run on a disposition registered on or after 8 December 2014 even though the title sheet and cadastral map do not fully reflect the apparent terms of the deed.
There is no scope for allowing the applicant to supplement the application at this stage in order to comply with section 43. Although it may be possible for the applicant to provide the evidence of possession required under section 43(3), they could not, at that time, meet the notification requirements. Regulation 18(1)(a) of the Rules requires notification by the prescriptive claimant to be made to the appropriate person at least 60 days prior to the application.

If it is unclear from information contained in the application form, any accompanying letter or the deed if the area lies outwith legal title but it seems a possibility, the agent should be contacted to confirm the position and remove any ambiguity. Although the agent has certified the form to state that the granter was the last recorded / registered proprietor, the exception from warrandice would appear to suggest that there may be an element of doubt about the granter's ability to grant a good title. This suggests an inconsistency between the deed and the apparent certification made in the application form. It is on this basis that we would go back to the agent for further information and request route of title to confirm the area excepted from warrandice is not a non domino in nature.

We should not reject the deed at the initial stage if the agent has certified that the granter is the last recorded proprietor, unless it is absolutely clear that part of the application is a non domino. The letter should make it clear that unless the route of title confirms the validity of the deed, the application will be rejected on the basis that it is partly a non domino and the prescriptive claimant procedures have not been followed. Under regulation 13 of the Rules, the applicant has 42 days to comply with this request. It should also be made clear that if no response is received within the 42 days then the application will be considered to be partially a non domino and rejected.

Below are summaries of two examples received where there was seemingly an a non domino aspect to the application and the different approaches taken.

Example 1 - Deed includes area excepted from warrandice - no explanation given on the application form and the area excepted lies outwith the granter's title

If there is an exception from warrandice, the application form and deed should be examined to establish if there is a reason behind the exception from warrandice. Such information would be expected to be included in the 'Further Information' section of the application form, which could also refer to accompanying correspondence which may require to be considered. This may be due to a problem with regard to possession or possibly an issue with title.

In one application received, a sizeable area hatched black on the deed plan was excepted from warrandice. The deed stated that the whole area disponed (including the area hatched black) formed "... part of the subjects referred to in the Disposition to xxxxxx, recorded 21 Jan. 1954".

The application form provided no further explanation with regard to the area hatched black and simply referred to the DIR as the deed for extent. Although the agent had certified on the form that the granter was the last recorded proprietor, the exception from warrandice in the DIR was deemed reason to carry out the investigation as it suggests a level of doubt in regard to title or possibly to possession. A brief examination by a plans officer revealed the area hatched black clearly lay outwith the extent of the deed referred to in the DIR of which the subjects being disponed were stated as forming part. This was the only route of title provided in the application.

No explanation had been offered by the submitting agent in respect of the exception from warrandice, either within the deed or as further information on the application form. It was therefore decided there was no need to contact the agent for further clarification and the application was treated as being partially a non domino, in respect of the area hatched on the deed plan excepted from warrandice clearly not being part of the route of the granter's title referred to in the DIR. A disposition by someone not the owner is, by definition, invalid but the Act works by deeming it to be valid where the Keeper is satisfied that certain steps have been taken. These steps are laid out in our guidance on prescriptive claimants guidance online and had clearly not been taken.

The application was therefore rejected in line with our published external guidance because the deed was not valid in terms of Section 23(1)(b) of the 2012 Act.

In all cases where there is an exclusion from warrandice and a check of the application reveals it to be clearly a non domino in respect of all or part of the subjects, the application should be rejected without any consultation with the agent.

Example 2 - Area excepted from warrandice in the deed - questions answered normally on application form and no further information

Two areas of ground were disponed, the first place subjects coloured pink and the second place subjects coloured yellow. In relation to the subjects coloured pink the route of title was referred to in the deed. The subjects coloured yellow were excepted from warrandice in the deed and no route of title was provided. The agent had certified the form to state that the granter was the last recorded / registered proprietor, but the exception from warrandice appeared to suggest that there may be an element of doubt in the granter's mind about their ability to grant a good title, suggesting an inconsistency between the deed and the application form.

As there is an inconsistency, the Keeper will look further into the application to investigate the possibility of the application being a non domino.

Unlike the first example where it was clear that the area of ground excluded from warrandice lay outwith the only deed referred to for extent, in this application the route of title has simply not been disclosed for the second place subjects. The applicant has certified the form stating that the granter has good title and therefore in this case, where there is simply a lack of clarity as to the route of title, (coupled with the exception from warrandice), the agent should be contacted to confirm that the application is not a non domino in nature in respect of the area excepted from warrandice. It should be explained that if it transpires that the area falls outwith legal title, the application will be rejected in line with the guidance referred to above.

The agent should provide unambiguous confirmation that the area in question lies within the granter's title, and ideally evidence of the route of title for the area. The justification for this requisition from the Keeper is the inconsistency between the deed which suggests doubt over the grant of the area coloured yellow and the registration form which appears to certify good title. The deed is however at face value perfectly valid (unless it is shown to be a non domino) and should not be rejected without recourse to the agent to give them the chance to confirm its validity as they have certified the deed's validity on the application form. The letter to the agent should make it clear that if no response is received demonstrating the granter's title within the 42 days, the application will be rejected on the basis that it will be assumed to be partly a non domino and that the requirements of sections 43-45 have not been adhered to.

Where there is an exception from warrandice and it is clear from the route of title referred to in the deed and application form submitted with the application that part of the subjects lies outwith the legal title of the granter, the deed should be treated as invalid on the basis there it is partially a non domino and the application should be rejected without recourse to the agent. The rejection letter should explain the reason and the agent should be directed towards the available prescriptive claimant guidance on the RoS website.

Where there is an exception from warrandice and the agent has provided no explanation or an ambiguous explanation, and it is unclear if there is an a non domino aspect to the application, then the agent should be contacted to clarify matters and the application should be sent to standover for 42 days.

As the application otherwise appears to certify the validity of the disposition, we should not treat the deed as invalid without offering the applicant's agent the opportunity to confirm the position. The provisions of section 34 should be used to allow for submission of additional information etc. going to the legal position/registration conditions at the date of application.

Adverse possession

A number of applications have been submitted where the granter has apparent legal title to the area being disponed, some of which lies outwith the occupational extent of the granter. Whereas under the 1979 Act the Keeper would most likely exclude indemnity on the basis of adverse possession, the terms of section 75(1)(b) of the 2012 Act provide that a precondition of an exclusion or limitation of warranty is that the Keeper is not satisfied that the applicant is owner of the property.

Warranty does not turn on possession but title. Therefore, it is not appropriate to limit or exclude warranty purely on the basis of adverse possession or lack of possession. Nonetheless, we should be wary of granting a fully warranted title when there is a danger of the neighbouring proprietor who is in possession producing a claim of valid title based on a deed habile to include the area in question. We need to be sure whether or not the proprietor enjoying the adverse possession might have a title on which prescription has operated to supplant that of the granter of the deed inducing registration.

In circumstances where the agent does not inform us of a problem with possession and there is no exception from warrandice, and it turns out the party in possession does have the preferable title, then the party adversely affected by the existence of the registered title could seek rectification of the first registered title. (If the request for rectification is successful then the former registered proprietor may try to claim under warranty but this may be resisted by the Keeper depending upon the facts and circumstances, such as the knowledge of the applicant or any person acting as their adviser at the time of registration.)

This situation changes however if the submitting agent informs us on the application form that there is an issue with possession, or if there is an exception from warrandice in the DIR which may act as a flag that this is the case. If the applicant has told us about adverse possession and has undertaken an examination of the title as presented to them it could be said they have they acted in good faith and complied with the duty of care. If we are sure (or as sure as we can be) that the party in possession is not possessing on a habile title then there is no need for a limitation or exclusion of warranty.

However, any flags such as this should lead to an investigation of the neighbouring title. Depending upon the neighbouring titles and the extent of the subjects being registered, a check of neighbouring titles will often be onerous for the Keeper to undertake. In these circumstances where an examination of the neighbouring titles proves particularly time consuming, the application should be referred to a senior adviser who will in conjunction with the Policy team make a decision on what level of investigation, if any, should be carried out. Where the agent has stated that there is adverse possession, the Keeper can request that the submitting applicant confirms they have undertaken a search to confirm that the party in possession does not have a title habile to include the area on which prescription has operated.

Where neither we nor the parties to the transaction have identified a competing title which supported by the adverse possession might render the disposition submitted for registration as invalid, then we should proceed to issue title with no limitation or exclusion of warranty.

If an apparently habile title is found in the Sasine Register on which the adverse possession may have operated to perfect the title, such that the title of the granter of the deed undergoing registration may be partly invalid (and consequently the grantee would not receive the real right as proprietor in the land apparently conveyed to them) then an exclusion of warranty note should be used, similar to the following using the recorded title in favour of the apparent occupier of the area in question:

“Note: A disposition by A to B including the area xxx xxx on the cadastral map was recorded G.R.S. (xxx) dd/mmm/yyyy. Warranty is excluded in terms of section 75(1)(b) of the Land Registration etc. (Scotland) Act 2012 in respect that the Keeper is not satisfied that the above named registered proprietor has acquired a real right of ownership to said area as the said B may be the proprietor of the said area in question."

Below are two examples of applications received where the granter had apparent legal title but there was an exception from warrandice in the disposition on the basis that the granter was not in possession.

Example 1- Adverse possession

An application for house and garden ground was submitted. It was submitted as an FR and FA. Both subjects were sold by the same granters and stemmed from the same title deed, but as there had been a potential issue with possession in regard to a small portion of the garden ground, this was submitted as a separate application by the submitting solicitor and warrandice was excepted in the DIR by the granters. The question regarding legal title on the application form confirmed the granters were the last recorded proprietor and it was clear that the area formed part of the granters' apparent legal title.

Further information in the application form in this instance clarified that and included the following statement:

"In the certification in relation to links in title section above, we have answered that the granter of the deed in favour of the applicant is the last recorded/registered proprietor. This is correct in so far as her title referred to the area in this application being included in that title plan, however the granter has not occupied the area due to an encroachment from an adjoining property, hence this application has been considered necessary".

As stated, warranty turns on the validity of title. Therefore, it is not appropriate to limit or exclude warranty solely on the basis of adverse possession, unless there is also evidence that the person enjoying the adverse possession might have a title on which prescription has operated to supplant that of the granter of the DIR. As the applicant in this case has told us about the adverse possession and has undertaken an examination of the title as presented to them it could be said they have they acted in good faith and complied with the duty of care.

In this instance further investigation revealed that the title deeds were particularly clear with regard to the area that had adverse possession. The 'retained property' has since been sold on and clearly excepts the full extent of our subjects from the disposition, leaving the position in regard to legal title in little doubt. Where it is clear the occupier has no title that could prescribe to the area in question the title should be issued with full warranty, irrespective of the situation regarding possession.

The title was issued with no exclusion or limitation from warranty.

Example 2 - Adverse possession

In this instance an application was submitted with two areas excluded from warrandice which clearly appeared to be outwith the granter's occupational extent. The application form was completely unambiguous however in regard to the fact that the granter had title and the supporting extent deed submitted fully supported this.

Due to the exception from warrandice, a search of the neighbouring titles was carried out. One of the areas excepted from warrandice extended over a sizeable portion of a car park of a neighbouring property. Upon investigation, the neighbouring subjects were found to be a registered title and had been mapped to limit title to legal extent. The boundary of the title adjoined that of our subjects being submitted for registration. A check of the sasine breakaway revealed the previous title had indeed been mapped correctly to legal title, and therefore the boundary of our subjects undergoing registration was able to be mapped as per the deed, including the area excepted from warrandice. There was clearly no issue with legal title. On the ground there is an issue with possession not mirroring legal title, but this is not a concern for the Keeper as the register is concerned purely with legal title. The area was included with no exclusion or limitation of warranty as the position regarding legal title was clear cut.

The other smaller area of ground excepted from warrandice was an extremely small corner area of raised pavement that seemed to lie outwith the fenced extent. Searches were unable to locate a plan for the neighbouring title in regard to this area. One part of the subjects stemmed from a major council search sheet, the other from a major estate search sheet.

As no competing title was found, and the granter had legal title, given the apparent certification of validity of title, registration was completed with no exclusion or limitation of warranty. Unless a competing title habile to include the area in question is identified, the certification of the application should be the deciding factor in matters where there is no clear evidence of a competing title and it is clear that the granters have a legal title to the area(s) in question.

Where there is adverse possession, this alone is no reason to limit or exclude warranty over the area in question. An investigation of the neighbouring title should be conducted to ascertain if the party in possession has a title upon which prescription has operated.

If the investigation reveals a competing title in the Sasine Register then warranty should be excluded in respect of this area and the appropriate note should be added to the title sheet.

If the search of the neighbouring titles is particularly onerous (such as a large Lands and Estate application), then the application can be referred to a senior adviser who can advise upon the level of investigation to be carried out by the Keeper.