Designations
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General
The Keeper is under certain statutory duties in relation to the completion of title sheets. In terms of section 22(1)(a) of the 2012 Act, the content of an application must be such that the Keeper can comply with those duties. If the Keeper is unable to comply with the statutory duties then an application must be rejected in terms of section 21(3) of the Act.
It is a condition of registration of a deed that the registrable deed is valid. The parties to a registrable deed - granter, grantee and consenter (if any) - must be sufficiently described. If they are not, then the deed is invalid and the application for registration of the deed must be rejected.
In addition, in terms of section 7(1)(a), the proprietorship section of a title sheet must contain the name and designation of the proprietor (or in a lease title sheet, the tenant). In terms of section 8(1), the entry for the particulars of any heritable security affecting the right in land to which the title sheet relates must contain the name and designation of the creditor in the security. Where the proprietor, tenant, or creditor is a non-natural person (e.g. a company or local authority), the designation entered in either the proprietorship section or securities section must include a designation which meets certain minimum requirements. More rarely, this might be the case for a non-natural person who was entitled to enforce a personal real burden or other encumbrance entered in the burdens section of the title sheet.
The registrable deed and/or the application form must therefore supply the required information to be entered in the appropriate section of the title sheet.
Individuals
For an individual person, even one acting in a special capacity as a trustee for example, the minimum requirement for their designation to be sufficient is that they are designed by a forename, surname, and a postal address (residential or commercial/business).
Erskine’s Institutes state:
‘In every deed the parties to it, the granter and the grantee, must not only be mentioned by their names, but designed by proper additions; not basely as a solemnity but because no deed can have effect unless the parties be so described in it as to be distinguished from all others’.
If there are joint granters or grantees and the deed does not design the parties as "spouses", "civil partners", "both residing at" or "residing together at", consideration must be given to the designation of the first party.
E.g. deed states: "... A and B, residing at ..."
In this scenario, A's designation is not 100% clear, but it is a reasonable assumption that the intention in drafting the deed was that the designation relates to both A and B.
Accordingly, provided there is no contrary indication as to A's designation on the application form, the entry in the proprietorship section should state "both".
However, if the form indicates that A’s designation is not as stated in the deed, then the deed is invalid due to A not being designed and the application should be rejected.
Where the proprietors have the same designation the term "both" should only be used, even if the word "spouses" or "civil partner" is used within the the deed.
Consentors
Regarding a consenter not being designed in a deed:
Where the consent does not affect the validity of the deed (for example consent for the purposes of the Matrimonial Homes (Family Protection) (Scotland) Act 1981 as amended, the Civil Partnership Act 2004, and the Civil Partnership (Scotland) Act 2020) then the deed can be accepted for registration.
Where the consent may affect the validity of the deed (for example where a party consents as owner of a property being burdened by real burdens/servitudes created within the deed to which they are otherwise not a party) then the deed should be referred to Policy Section via your referral officer.
If the registrable deed has a granter or grantee who is an individual but the deed does not specify a forename, surname and address, you should refer the case for consideration by your referral officer for rejection as the registrable deed may not be valid.
Non-natural Persons
For a non-natural person such as a company or a local authority, the minimum requirement for the content of the deed to be valid is that there is a name specified in the deed for each non-natural person who is a granter or grantee. It is the responsibility of the submitting agent to accurately reflect the name of the party. Only in exceptional circumstances will the Keeper reject an application because a company is not correctly named (e.g. if processing multiple applications involving the same party and one is at variance - in such instance the application should be referred for consideration as to whether it is possibly correctly drawn for a different party). For a deed to be acceptable for registration the non-natural person must be designed to provide they are identifiable against all other persons (with the exception of Scottish Local Authorities or other statutory bodies).
In most cases, more information will be included in the registrable deed, for instance, the registered number of a company incorporated under the Companies Acts will be specified or the Act under which the body was constituted will be specified. Such additional information is not an essential for the registrable deed to be valid, but it is necessary for registration to proceed because the 2012 Act has a minimum requirement for the content of the title sheet in respect of the designation of a non-natural person entered as proprietor or tenant or heritable creditor or as a person entitled to enforce a personal real burden or encumbrance shown in the burdens section.
Section 113(1) of the Act sets out a definition of designation for a non-natural person which includes the following requirements:
(a) where the person designated is not a natural person -
(i) the legal system under which the person is incorporated or otherwise established,
(ii) if a number has been allocated to the person under section 1066 of the Companies Act 2006 (c.46), that number, and
(iii) any other identifier (whether or not a number) peculiar to the person.
See Examples of some commonly encountered corporate body types below
The name and address of the non-natural person is sufficient for the registrable deed to be valid, but registration officers should also consider whether, if they are entering a non-natural person as the proprietor or tenant or heritable creditor or person entitled to enforce a personal real burden or encumbrance in a title sheet, they have sufficient information to complete their designation in the title sheet i.e. company number must also be provided as part of the application.
Foreign companies
Foreign businesses may enter the Scottish property market either to acquire heritable property or to provide loans to be secured over heritable property. Foreign companies (i.e. companies incorporated outside England, Scotland, Wales or Northern Ireland) may cause some difficulties in their execution of deeds relating to heritable property in Scotland; many countries have rules about company execution which differ from the UK rules. Further information on the execution requirements of these bodies and guidance on the difference between Foreign Companies and Foreign Partnerships is provided within the section on Foreign companies on the page Authentication of Registrable Deeds.
What is a 'legal system'?
The "legal system" under which a non-natural person is established might be, for example, reference to the country or other state (e.g. a US state or other constituent part of a country) or to a piece of legislation.
If the non-natural person is a UK limited company under the Companies Acts or a limited liability partnership under the Limited Liability Partnerships Act 2000, the entry in the proprietorship section or securities section must include the number allocated to them e.g. the company number in the case of a limited company. This applies to all UK companies regardless of whether they are known to us or not and will enable us to identify the correct lender on the LRS picklist.
However, it is sufficient for larger lenders that are known to us (such as Bank of Scotland Plc or Clydesdale Bank Plc) to simply state the company number in the body of the deed or on the application form without the need for the legal system to be stated as this should already be in our knowledge from the picklist entry on the LRS.
For all other companies the position is as follows:
For Scottish companies - it will be acceptable if the application form or deed itself provides us with the company number with the prefix SC. This is because this prefix is unique to Scottish companies and is therefore sufficient to indicate the legal system under which the company is incorporated.
For non-Scottish companies - the deed or application form must provide the legal system in addition to the company number. This may take the form of 'a company incorporated under the companies act' or 'registered in England/Northern Ireland' etc., however it may also include the registered office address from which the legal system it is established under may be extrapolated.
Where there is no SC number and no registered address or legal system information, the application must be rejected.
Although the registrable deed and/or the application form must supply the required information to be entered in the appropriate section of the title sheet, in the case of a non-natural person (other than a limited company under the Companies Acts or a limited liability partnership under the 2000 Act), where no allocated number is supplied in the deed or form then, it will be assumed in reliance on the certification of the application that no such number exists for that non-natural person.
The terms "constituted", "registered" "incorporated", or "established" can be used interchangeably to mean the same thing. A registration officer should not reject an application on the basis that a deed or application uses a different wording to the examples given below.
The examples given below are not intended to be definitive or prescriptive. They are intended to give information about the known acceptable variations for some commonly encountered UK corporate body types and some examples for limited numbers of foreign companies or corporate bodies, particularly in relation to the requirement for a "legal system".