Designations

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’.

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

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 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".

Special Parties

Where a registrable deed designs a person with a noble title (e.g. XY, the Earl/Marquis/Countess of...., etc) this may be sufficient to identify them from all other natural persons such that the deed is a valid deed. Applications where such a deed is encountered should be referred. 

Designation of Parties in a Special Capacity

Persons who are acting in a trust capacity (including trustees for a firm) will be individually named and designed in the proprietorship section or securities section as appropriate, by the address given in the disposition, notice of title or heritable security. In addition, the proprietorship section or securities section must disclose their capacity within the trust as specified in the registrable deed. Registration officers must reflect the deed and they must not omit any material words, especially within the destination, even where there appears to be repetition.

Testamentary trustees will be narrated as such in the proprietorship section. Executors ‘nominate’ and executors ‘dative’ should be reflected when this is revealed in the application: the name and designation of the deceased will be reflected in the proprietorship section. The deed nominating the executor(s) will not be referred to in the proprietorship section.

For trustees acting under inter vivos trusts, the name and date(s) of the relevant trust deed(s) and the name and designation of the truster will also be entered.

Trustees of a Church of Scotland congregation or the Church of Scotland General Trustees

Since their incorporation in 1921, the Church of Scotland General Trustees hold title to heritable property on behalf of the various committees, trusts, etc within the Church. A disposition in terms of the Church of Scotland (General Trustees) Order Confirmation Act 1921 will normally narrate that the consideration has been paid by the trustees of the specific trust. The dispositive clause will go on to state that the subjects are disponed to The Church of Scotland General Trustees incorporated by The Church of Scotland General Trustees Order Confirmation Act 1921 for behoof of the Trustees of [the individual trust]. In such circumstances, the proprietorship section should follow the style of the dispositive clause in full, including the designation of the individual trust on whose behalf the General Trustees hold title. 

The Act does not require the individual trustees to be named or designed. Consequently, they are not normally named or designed in the disposition and they should be omitted from the proprietorship section of the title sheet.

Conveyances of properties which will be used in conjunction with the operation of a local Church of Scotland often include a number of conditions which affect the disponees [grantees] and take the form of a trust arrangement between the disponees [grantees] and the internal government of the Church of Scotland. In particular such conveyances often include conditions to the effect that the property is to be held for the behoof of the Church of Scotland and in accordance with the constitution of the Church of Scotland, as well as that the management and disposal of the property will be subject to the regulation and direction of the General Assembly of the Church of Scotland.

These conditions are not real burdens as such. Nevertheless, in consultation with the Church of Scotland General Trustees, it has been agreed that it is appropriate to draw the attention of a person examining a title sheet that such an arrangement is in place. Therefore, in terms of section 10(2)(e) of the Act which provides discretion to enter in the title sheet such information as the Keeper considers appropriate, it has been agreed to make reference to the existence of these conditions in the proprietorship section of a title sheet, provided they are contained in the deed inducing registration. For example, if the grantees are the trustees ex officio of a local congregation, then the entry for the Proprietor will read as follows:

"A (design), B (design) and C design, respectively Minister, Session Clerk and Finance Convener of X Church of Scotland Congregation and as such Minister, Session Clerk and Finance Convener, Trustees ex officiis for the said Congregation, and by virtue of the Disposition by X to the said A, B and C registered in the Land Register on [ ], for the behoof of the Church of Scotland and the purposes therein specified."

The wording should reflect that used in the deed. Any similar clause contained in a deed that is not the deed inducing registration should not be included in the title sheet. As stated previously, this clause is not creating a real burden or condition that would run with the land.

The Free Church of Scotland and its congregations

Most dispositions in favour of the Free Church of Scotland include trust provisions, which run to over a page in length. These are known as model trust deed provisions, and will refer to a disposition in favour of John Cadell registered in the Books of Council and Session on 13 November 1844. Section 10(2)(e) of the Act gives the discretion to enter in the title sheet such other information as the Keeper considers appropriate; the Keeper has previously agreed that a shortened version of the terms will be inserted in the entry in the proprietorship section, as follows:

"A (design), B (design), C (design) and D (design) as trustees for the Congregation of the xxxx Free Church of Scotland and their successors and assignees whosoever in trust always for the ends, uses and purposes contained in and referred to in the Disposition by X to (said) A, B, C and D registered in the Land Register on dd/mm/yyyy."

If there is no reference made within the disposition to the model trust deed provisions then the usual details will be entered in the proprietorship section as normal.

Trustees for investment schemes

Examples of these include funds managed by investment companies on behalf of groups of individuals and funds managed for private pension schemes. While there will always be a beneficiary of a trust, it may not always be apparent who that is from the terms of the deed submitted for registration with the arrangements being governed by the background deed that constituted the trust. It is important to reflect the terms of the deed, which may require the inclusion of details of the trust deed in the title sheet entry. However, trust deeds are frequently subject to amendment as trustees are assumed or resign. It may be possible to reflect this in the title sheet entry by referring to the "as constituted by Trust Deed (as amended)".

In Self Invested Pension Plans, the party whose investment is being managed will frequently be a trustee.

Other trusts have more complex structures with nominee companies under the trust operating through a funding company.

Nominee companies

On occasion, title will be taken in a complex ownership structure: two examples are given below.

In both examples, several apparent 'tiers' exist: in Example 1 there are three tiers:

• Tier 1: companies hold the property as nominees for ...
• Tier 2: a further company, acting as a trustee or depositary for ...
• Tier 3: a further body that may be a property fund or some other body.

Example 2 above arguably has a 4th tier. Other examples have been identified where tier 1 is a person holding as trustee for a person in tier 2 who is stated to be the nominee of a third party at tier 3.

Keeper's obligation

Section 7(1)(a) of the 2012 Act requires the Keeper to make an entry in the proprietorship section of the title sheet disclosing the name and designation of the proprietor. Section 113(1) specifies that if the proprietor holds in a special capacity, then the designation to be entered in the title sheet must include a description of that capacity. To meet these requirements, all these tiers of information must be entered in the proprietorship section of the title sheet.

Updating titles - rectification

The Keeper may receive requests for rectification to update the upper-tier information shown in the proprietorship section as a result of off-register changes in the ownership structure. As a change to the upper-tier information does not represent a transfer of the proprietary right (the nominee companies shown at "Tier 1" remain the owners), but simply a change in designation, the Keeper will rectify provided sufficient evidence of this change is submitted in support of the request.  

Updating titles - live applications

Legal settlers should be aware that deeds granted in respect of a title already held by a nominee company arrangement may show the granter by way of an updated description of the arrangement as a result of an off-register change. In this situation the Certification of Links in title question in the application form may be answered either "yes" or "no", and the application should not be rejected in relation to this question. The proprietorship section should also be updated as part of the live application.
 

Change of trustees

See Names and Changes of Name in the Proprietorship and Securities Sections