Legal Capacity

General

This section of the manual provides information on two scenarios relating to legal incapacity. The main scenario that will be encountered is where a party is aged 18 years, or older, but is deemed incapable of transacting on his or her own behalf (adults with incapacity). The other scenario relates to parties under 18 years of age and this itself has two sub-categories. 

Legal Capacity in Parties Under 18 Years of Age

There are two scenarios where a party to a transaction is under 18 years of age. Where the party is aged 16 or 17 they have the capacity to enter into a transaction, however it could potentially be overturned. Where the party is under 16 years of age, any transaction with property should be undertaken on their behalf by a legal representative (or guardian if appointed by testamentary deed or court order).

The Keeper will not normally be aware of the age of a party to a transaction but would expect the solicitors acting in the drafting of a deed involving a party under 16 years of age to have drawn it either by, or to, the legal representative. By submitting the application, the Keeper will accept the applicant is satisfied that the named legal representative has the authority to act in the current transaction.

Parties aged under 16 

If it is apparent that a party to the deed is under 16 years of age and a legal representative is not involved, then the following procedures should be followed.

Parties aged 16 or 17

As any person over the age of 16 has legal capacity to enter into any transaction, there is no need for the involvement of a legal representative or guardian. Deeds should be granted by, or in favour of, the person alone. However a person who entered into a transaction while aged 16 or 17 can, until they reach the age of 21, apply to the court to have the transaction set aside if it can be considered as one that an adult, exercising reasonable prudence, would not have entered into. Information may be provided in support of the application that the transaction has been ratified by the Sheriff Court. 

A deed involving a 16 or 17 year old will either be valid or voidable, but not void from the outset. Taking this in conjunction with the usual considerations regarding warranty (i.e. that warranty only applies at the date of registration), warranty need not be limited. (A comparison can be drawn with deeds which breach inhibitions – these only become void when overturned by a court). This approach can also be extended to transfers of titles in which a relevant outstanding exclusion of indemnity note appears on the title sheet. As warranty is only given to the applicant at the date of registration, we can remove the existing exclusion of indemnity and issue a clear title.

Adults with Incapacity - Statutory Background

Despite being over the age of legal capacity, a person may have no (or impaired) legal capacity by reason of disease, injury or birth defect. The issue arises most commonly in respect of degenerative mental illnesses such as senile dementia and Alzheimer's disease. Physical incapacity without mental impairment does not usually present a bar to performing legal acts as the procedure in Section 9 of the Requirements of Writing (Scotland) Act 1995 can be followed to allow a ‘relevant person’ to sign deeds on behalf of a person who is blind or physically unable to write. For further information, see the section relating to Notarial or vicarious execution on the Authentication of Registrable Deeds page. However, very severe physical impairment which prevents the adult from communicating his or her wishes can amount to legal incapacity.

The law provides two main mechanisms whereby the affairs and property of an incapable adult may be managed by another person:

1. Before loss of capacity, the adult may have appointed an attorney to manage his or her affairs. Provided that certain criteria are met, a power of attorney can continue to be effective after its granter has lost capacity.
2. A person may be appointed by the court to look after the incapable adult’s affairs, or some aspect of them.

The current legislation governing this area of law is the Adults with Incapacity (Scotland) Act 2000. Part 2 of that Act, which deals with powers of attorney, came into force on 2 April 2001 and has been amended by the Adult Support and Protection (Scotland) Act 2007. Part 6 of the 2000 Act, which covers appointment by the court, came into force on 1 April 2002.

More detailed guidance is provided below in relation to:

• Power of Attorney and
• Guardianship and Intervention Orders. 

Power of Attorney

A power of attorney is a document by which one legal persona (be it a natural person, a company or any other entity with separate legal personality) empowers a second legal persona to carry out some action on his, her or its behalf. The person or other entity so appointed (i.e. the grantee of the power of attorney) is called the attorney; the granter of the power of attorney is referred to as ‘the principal.’

In all cases, an attorney has power to do only such things as the deed granting the power clearly states – i.e. an attorney’s powers are restrictively construed; none can be implied. However for clarification, where the power conferred on the attorney requires execution of a deed as a consequence of fulfilling the contract, there is no requirement for the deed granting the power to expressly provide for this action as well. Further, the attorney must not act auctor in rem suam (i.e. for his or her own interest rather than for the benefit of the principal).

Powers of attorney are used in a wide variety of circumstances which do not involve legal incapacity. For example a person who is overseas on business may appoint an attorney to complete the sale of a house in this country; a company may use a power of attorney to authorise a manager to sign deeds on the company’s behalf; members of a syndicate may appoint a single party to complete transactions making execution of deeds easier; or a person who is physically frail may appoint an attorney to carry out banking transactions.

Registration guidance

While a deed will normally run in the name of the principal, there is no prohibition on it running in the name of the attorney. See below for instructions in relation to both forms of deed.

Guardianship and Intervention Orders

 An intervention order or guardianship order under the Adults with Incapacity (Scotland) Act 2000 which vests in an authorised person or guardian the right to deal with, convey or manage an interest in heritable property is a registrable deed in terms of section 21(1) of the 2012 Act. 

The 2000 Act introduced two forms of court appointment in relation to the property and well-being of incapacitated adults:

• when it is only necessary for a single transaction with the incapable adult's property to be carried out, the court can grant an intervention order authorising a named person to carry through the particular transaction on behalf of the adult.
• when there is a need for long-term, ongoing management of the adult's property and affairs, then a court can appoint a guardian to act for the adult. 

In both cases, no transfer of the property assets of the incapax occurs; instead management power is being given to the authorised person or the guardian. 

Neither order induces first registration of the property of the adult. Any order which does not give the authorised person or guardian a right to deal with, convey or manage an interest in heritable property would not be registrable. 

A court order is also sometimes called a decree or an interlocutor. The 2000 Act requires a guardian or person authorised under an intervention order to forthwith apply for registration of the interlocutor in the relevant property register. This means that where a guardian or authorised person is transacting with property for the incapax adult, the order is not a midcouple (an unregistrable form of conveyance), so that guardian or authorised person cannot on that basis expede a notice of title. 

In respect of a DW or TP, if a disposition is granted by a guardian or authorised person under the 2000 Act, but the order appointing the guardian or authorised person is not referred to in the proprietorship section, and no application has been submitted contemporaneously for registration of the relevant order, the registration officer should refer the application to their referral point for consideration whether the application requires to be rejected on the basis that the guardian/authorised person does not have appropriate power to grant the disposition. In a FR, this question will not arise unless the application form indicates that the order has not been recorded. 

When might a registration officer need to consider an order?

There are several scenarios where the registration officer may encounter a guardianship or intervention order or need to check the title sheet of the property affected by a transaction for the details of such an order:

• the order is registered alone;

• the application relates to a registrable deed being granted by the authorised person or guardian appointed by such an order (in which case the registration officer will need to check the order was registered in a prior application and that the order authorises the deed being registered);

• the application is for registration of a disposition or other deed granted in favour of an incapax person, e.g. a notice of title in their favour, a disposition in their favour or a standard security in their favour (registration officer will need to check that the order is being registered with separate application form).

Further information on each scenario is set out below. 

Which orders are registrable?

There will inevitably be some situations in which there is doubt whether or not an order is registrable. Such applications should be referred to a senior caseworker for advice. Where it is appears that the order is not registrable, the application may have to be rejected as this is a breach of the requirement in section 21(1) that the deed is of a registrable type. See the undernoted examples of registrable and unregistrable orders and the guidance set out in Rejection Policy and Procedures for additional information on the authorisation and notification procedures relating to rejections. 

What are the registration requirements for such orders?

In general terms, the general application conditions in terms of section 22 and the specific conditions of registration for each type of application must be fulfilled, subject to certain exceptions outlined below. See Rejection Policy and Procedures for additional information on registration requirements and rejection criteria.

In particular the order being registered should contain the title number of the plot of land to which the application relates (unless the order was executed/granted prior to the title number being allocated to the plot of land in question) which is a condition of registration of deeds relating to registered plots of land under section 26(1)(c). If further information on the requirement for deeds relating to registered plots to bear a title number is required see Requirements of Registrable Deeds. 

Section 56(4)(c) (intervention) and section 61(4)(c) (for guardianship) require the applicant to submit a copy of the order with the application for registration. 

This means that the registration officer might see:

1. A extract of the order (will bear on its face to be an extract and will be signed by an officer of the court at least on the final page, in addition there may also be a seal on each page of the order); or
2. A photocopy certified to be a true copy either by the sheriff clerk or other officer of the court, by a solicitor or by a member of the Public Guardian's office staff; or
3. a photocopy of an unsigned order with no certification as to its being a true copy. 
4. A paper copy of an Order issues electronically by the court which may or may not be certified.

See Decree Appointing Guardian or Authorised Person for example orders. 

All are acceptable for the purpose of registration, provided that the application form does not indicate any particular concern with the validity of the order. If there is any suggestion in the application form that the copy order submitted may not be a true reflection of the order of the court then a referral should be made to a senior caseworker to consider whether rejection is required on the basis that the application breaches the condition of registration that the registrable deed is valid in section 26(1)(a). 

As stated, an applicant does not have to submit a signed order. This means that there is also no requirement for a signed order to be self-evidencing, therefore the general application condition in relation to deeds which require to be rejected for failing to meet the self-evidencing requirement does not apply. See Court Orders that are Registrable Deeds for information on other court orders if required. 

There are separate additional requirements for intervention orders and guardianship orders in terms of the 2000 Act set out below.

How are such orders given effect to? 

Registration of either type of order is given effect to by a note in the proprietorship section of the relevant title sheet usually setting out the relevant terms of the order. The entry for the right of the adult as proprietor or tenant in the proprietorship section is otherwise retained.

It is possible to refer to the contents of the order as entered in the archive record if the entry will be particularly lengthy, complex and cannot be edited clearly to extract the relevant information to be registered. The authorisation of such a cross reference should be referred for a decision by a referral officer. If a registration officer is repeating the whole terms of an order, consideration must be given to information that may be sensitive in nature (e.g. details of bank accounts or detailed care requirements) - such details should be omitted if possible as it is unlikely they will impact on any action affecting the registered title. The purpose of registration is to intimate the powers held by the guardian or authorised person in relation to the adult's heritable property and an entry for the order should be restricted, wherever possible, to those matters. For example entries see below. 

Examples - style entries 

Orders where the adult has not completed title

In rare cases, Intervention or Guardianship Orders may be submitted for registration where the adult has entitlement to the heritable property but has not yet completed title i.e. a link in title in favour of the adult exists, but no deed has been submitted for registration to make this entitlement a real right.

The 2000 Act provides for this (at sections 56(1) and 61(1)) by permitting an Order to be registered in respect of an adult who has an interest in heritable property capable of being registered.

In such cases, the adult will not be the registered proprietor shown in the Proprietorship Section, and therefore the entry made for the Order will require to narrate the relevant links in title – example styles are shown below:

“Note: By an interlocutor of the Sheriff of X at Y dated xxxx authorised person name and designation was vested as authorised person in management powers of Adult name and designation in terms of sections 53 of the Adults with Incapacity (Scotland) Act 2000. Said Adult name has entitlement to the subjects in this title by virtue of narrate link in title. The terms of the interlocutor are:”

“Note: By an interlocutor of the Sheriff of X at Y dated xxxx Guardian name and designation was vested as guardian in management powers of Adult name and designation in terms of sections 57 and 58 of the Adults with Incapacity (Scotland) Act 2000. Said Adult name has entitlement to the subjects in this title by virtue of narrate link in title. The terms of the interlocutor are:”

Foreign Orders Relating to Incapax Persons

Sometimes a person may be appointed under foreign law to deal with the property of an incapax person situated in Scotland.

For example, under the law of England and Wales, a deputy may be appointed by the Court of Protection. Such a court order appointing the deputy is not a registrable deed as there is no enactment authorising registration; rather such an appointment should be registered in the Register of International Measures which is administered by the Public Guardian's Office, in order to be enforceable in Scotland. In general terms, provided that the order contains the relevant powers, once it is registered in the ROIM, the deputy can act in relation to that property. 

If an order from another jurisdiction is presented for registration, a referral should be made to a senior caseworker.

Deed by Guardian or Authorised Person

The appointed person(s) under a guardianship or intervention order is required to register or record the order forthwith. Where such orders affect a registered plot of land or a registered lease, then the order will need to be registered in the Land Register. Such orders are not midcouples or links in title. Failure to record or register the order may consequently render a deed granted by the guardian or authorised person invalid.

The section on the role of the registration officer in ensuring that the grantor of a deed has title on the Requirements of Registrable Deeds page explains that in the case of a deed granted by a person other than the registered or recorded proprietor or creditor, in assessing the validity of the title of the granter of a deed the registration officer will usually rely on the certification given on the application form that midcouples or links in title exist by indicating that the granter is not the registered or recorded proprietor, subject to specified exceptions. Dispositions granted by a guardian or authorised person of the whole or part of a registered title are one such exception.

Where the plot affected by a deed is registered, the registration officer must carry out additional checks to assess the validity of the deed granted by a guardian or authorised person to the check of the application. This section addresses those additional requirements. As the Keeper has a policy of not routinely searching the Register of Sasines to assess whether the title of a granter of a deed is valid there are different requirements for applications which are for registration of a deed affecting the whole or part of a registered plot from those which are applications for registration of an unregistered plot of land. Instructions for each type of application are set out in the following sections. 

Example narrative clauses of deed granted by guardian or authorised person

In considering the form of any disposition or other conveyance to be granted by an authorised person or guardian it must be borne in mind that the adult remains proprietor of his or her heritable interests. However, the authorised person or guardian now has the power to convey or transact with the property and so must execute the deed. The opening clauses of a disposition where the incapax has a guardian or authorised person could run either in the name of the authorised person or guardian for the incapax or in the name of the incapax but must be executed by the guardian or authorised person. Below are two examples of how such a disposition might be drafted:

As explained above, different procedures apply depending upon whether a deed is being submitted as affecting a registered plot of land or as a deed inducing first registration. Instructions for each type of application are set out below. 

Applications for registration of deed relating to unregistered plot - FR or APR

Applications for registration of deed relating to registered plot - DW or TP

Deed in Favour of Incapax Adult

Registration officers may encounter several situations where a deed is being granted in favour of an adult

• Where the authorised person or guardian has been authorised to acquire heritable property for the adult, the interlocutor should be registered along with the disposition in favour of the adult.
• Where the adult has no recorded/registered title registered title but has entitlement by way of a link in title, the adult may choose to complete title (although this is not essential to allow registration of the Order – see Orders Where Adult Has Not Completed Title ). In this situation, the Order should be registered alongside a Notice of Title in the adult’s favour in either the Land Register or Register of Sasines.
• Where registered title is in joint names but A has died and title vests in B in terms of a survivorship destination, and the guardianship/intervention order is to affect B's interest in the whole subjects, the order cannot be accepted for registration prior to rectification of the title to show B as sole proprietor. The application for rectification should be accompanied by sufficient evidence to establish that the inaccuracy is manifest, e.g. death certificate and confirmation of non-evacuation of the destination. 

Purchase of subjects for adult

The grantee of the disposition or other conveyance should be the adult although the deed may narrate that the consideration was paid by the authorised person or guardian acting in that capacity.

If the interlocutor is not being registered at same time as the title the application should be rejected, however the Keeper does not require to see evidence of compliance with matters the guardian has to have undertaken prior to registering title (e.g. obtaining caution or consent of public guardian). If the application includes information indicating that a required process has not been complied with the should be referred to a senior caseworker.

The applicant is the adult and the appropriate fields on the application form should be completed as follows:- in surname enter the adult's surname;in forename enter the adult's forename and the type of appointee, for example 'Mary, guardian of' or 'William, authorised person for'.

Failure to comply with this style should not result in the rejection of the application. The address fields are completed with the adult's address. For the avoidance of doubt 'guardian of' and 'authorised person for' should not be included as part of the indexed material. 

Discharge of standard security where adult is proprietor/debtor

The normal style at Form F in schedule 4 to the Conveyancing and Feudal Reform (Scotland) Act 1970 should be followed inserting the name of the adult at C.D.. If the loan was repaid (wholly or partly) by the authorised person or guardian acting in that capacity, the Keeper will take no objection to this being narrated in the deed. However, in all cases, the grantee of a discharge is the adult. On the application form, the application is made by the guardian or authorised person on behalf of the adult. The applicant fields on the application form should be completed as described above. 

Discharge of standard security where adult is creditor

The authorised person or guardian must be empowered to grant the discharge and the interlocutor must be recorded or registered against the title of the security subjects. The granting of the discharge is an exercise of management power and the deed therefore runs in the name of the guardian or authorised person, as in the following example:

I, A.B. (authorised person - design) being authorised person under a intervention order in terms of section 53 of the Adults with Incapacity (Scotland) Act 2000 in respect of the affairs of X.Y.. (adult - design) in consideration of £ paid to me (or to X.Y., or as the case may be) by C.D.. (debtor - design) hereby discharge a standard security for £ by the said C.D.. in favour of the said X.Y. registered on (date) over the subjects in Title Number ….

Whilst the foregoing paragraphs do not cover every eventuality, they will hopefully serve to outline the Keeper's policy in the majority of situations which will arise in practice. Other queries arising in specific transactions leading to registration in the Land Register should be raised with a senior caseworker.

Death of Incapax, Guardian or Authorised Person