Warranty

Table of Contents

Table of Contents

1 General
2 Warranty - Key Points
3 Transitional Arrangements
4 What is Not Warranted
5 Caveats and Warranty
6 Extension or Variation of Warranty
7 Limitation or Exclusion of Warranty
8 Existing Exclusion of Indemnity on Title Sheet - Dealing with Whole and Transfer of Part
9 Guidance on Dealing With Specific Type of Existing Exclusion of Indemnity

Useful Links

Insolvency - Personal and Corporate

Mineral Titles

Rejection Policy and Procedures

Substitution or Amendment - Requisition Policy and Procedures

Updating Existing 1979 Act Title Sheets - Instructions for Plans and Legal Settlers

Warrandice

General

Section 73 of the 2012 Act provides that, when completing registration of an application for registration of a deed or of an application for voluntary registration, without a limitation or exclusion of warranty on the title sheet, the Keeper warrants (or guarantees) certain matters to the applicant for registration. Separate provision is made in section 74 for warranty to the owner of a plot on completion of registration under automatic plot registration under section 25 or where there is a Keeper-induced registration under section 29.

This warranty is subject to certain limitations, these are set out in the section on What is Not Warranted below.

Warranty is breached if it transpires that the title sheet is inaccurate and the Keeper may be liable to pay compensation to the applicant where the inaccuracy is rectified. An inaccuracy is defined in section 65 - this does not include minor typographical errors. Compensation may be due for a breach of warranty to an applicant for registration or an owner as a result of a voluntary registration or Keeper-induced registration.

There are separate compensation provisions in the 2012 Act for losses which occur as a result of:

realignment, and
the inaccuracy of an extract of a title sheet, part of the cadastral map, certified copy of a deed or other information obtained from the register, and
if a document is lost in the hands of the Keeper.

Compensation for breach of warranty is dealt with by sections 77 to 79.

Warranty - Key Points

The key points for consideration where warranty is granted under sections 73 and 74 of the Act are set out below:

Applicants for registration - section 73

Unless there is an exclusion or limitation of warranty note entered on the title sheet, full warranty is deemed to be given. Under section 73(1) the Keeper warrants to the applicant for registration on completion of the registration process that as at the date of registration:

the title sheet is accurate in that it shows an acquisition, variation or discharge in favour of the applicant (e.g. that in respect of registration of a disposition the title sheet is accurate in showing the applicant as registered proprietor), and
the title sheet is not inaccurate in so far as any registrable encumbrance has been omitted.

Where an application is for the registration of a deed relating to a title condition, the applicant is deemed to include the person benefiting from the deed given effect to, in terms of section 73(4).

The following example may assist: The application is for a deed transferring part of a registered plot which does not create a real burden in favour of the proprietor of the parent title. Only the applicant for registration of the transfer of part receives warranty in respect of their title. Although the parent title will be updated to disclose the removal of the transfer of part subjects, the warranty to the proprietor of the parent title remains as at the date of their registration as proprietor.

In contrast, if the parent title is being updated to both remove the subjects being transferred and to disclose new enforcement rights in respect of burdens created in the transfer of part disposition, then the proprietor of the parent title will receive warranty. This will be in respect of the right to enforce the real burdens, which is the right acquired on registration of the transfer of part disposition. Their warranty as regards their right of ownership remains as at the date of registration of that right.

Where an application is accepted in terms of the prescriptive claimant provisions, the Keeper does not give the foregoing warranty, by virtue of section 73(5). The provisions for prescriptive claimants allow the Keeper to treat dispositions a non domino as valid for the purposes of acceptance. When such an application is registered the entry will be marked as provisional until positive prescription has operated to put the title beyond challenge. However when the relevant entry in the title sheet ceases to be provisional under the prescriptive claimant arrangements the Keeper may, by virtue of section 75(4), give such warranty as she considers appropriate.

The status of owners under section 74 in relation to Automatic Plot Registration (s25) or Keeper-induced registration (s29)

Since there is no applicant in these types of registration, warranty is given to the owner of the plot of land. The warranty given to the owner under section 74(1) is essentially the same as that available to an applicant under section 73(1). In terms of section 74(1), the Keeper warrants that the plot title sheet is accurate in what it shows and is not inaccurate in omitting any encumbrances.

Applicants for registration - section 73

In general terms, warranty is only given to the applicant for registration. Warranty does not extend to third parties relying on the register or persons, other than the applicant, who may suffer loss where the title sheet is rectified subsequently.

In terms of section 73(4) where a deed is registered relating to a title condition a person benefiting from the deed would also receive the benefit of warranty. Further, the benefit of warranty also extends by virtue of section 73(3) to persons who would benefit from the warrandice clause in a deed. For example, if the applicant has subsequently died and rectification of an inaccuracy which breached the warranty has resulted in loss to their estate, then the benefit of warranty extends to their executors who would be able to claim for a breach of warranty.

The status of owners under section 74 in relation to Automatic Plot Registration (s25) or Keeper-induced registration (s29)

As there is no applicant, warranty is given to the owners of the plot shown in the title sheet for the plot of land, e.g. where automatic plot registration occur, the tenant who applies for registration of their lease receives warranty as an applicant whereas the owner of the plot affected by the lease does not apply for registration but their warranty is given in terms of section 74.

Further, the benefit of warranty under section 74 also extends by virtue of section 74(2) to persons who would benefit from the warrandice clause in a deed. For example, if the applicant has subsequently died and rectification of an inaccuracy which breached the warranty has resulted in loss to their estate, then the benefit of warranty extends to their executors who would be able to claim for a breach of warranty.

On registration of a plot of land under Automatic Plot Registration or Keeper-induced registration, it is important to note that where there is, for example, an existing heritable security affecting the plot of land the Keeper will bring this forward from the Register of Sasines. However, the heritable creditor in the security receives no warranty in terms of section 74. In order to make this clear to anyone viewing the plot title sheet a note will be added which states that registration of the plot was completed under section 25 or 29.

Warranty is given at the date of registration of the deed or the voluntary registration in question.

This means that the Keeper does not warrant against a title sheet later becoming inaccurate as a result of an off-register event that takes place after the date warranty is given, i.e. the date of registration of the application for registration.

For example, a claim under the Keeper’s warranty could not be made where a title sheet becomes inaccurate because a servitude right included in the title sheet has subsequently been extinguished by long negative prescription.

Further where an extract of a title sheet is provided to a person requesting the same, the title sheet is updated for this purpose, but the warranty position of the proprietor does not alter, no additional warranty is given as to the title of the proprietor or the listed burdens and encumbrances in the title sheet at the date to which the title sheet is brought down. The proprietor's warranty is still a guarantee as at the date of their registration as proprietor. There are separate compensation provisions if the extract is not a correct extract of the title sheet at the date it is brought down to (for example if an outstanding application had yet to be processed but the application was not processed and the extract issued omits the impact of the outstanding application).

Transitional Arrangements

Indemnity will continue for title sheets created under the 1979 Act. Where a transfer of the whole registered plot (created under the 1979 Act) occurs on or after the designated day, then the disponee as applicant for registration will have the benefit of warranty. However, title sheets created by virtue of an application for registration received before 8 December 2014, but affected by applications for registration submitted on or after 8 December which are not transfers of the whole registered plot, will have the benefit of both warranty and indemnity in the interim until there is a transfer of the whole registered plot.

For example: after the designated day an application to register a standard security is accepted over an existing 1979 Act title sheet. The heritable creditor in the standard security will receive warranty as they are the applicant in terms of section 73(1). But the registered proprietor's position does not alter. They do not receive the benefit of warranty since they are not the applicant, they will instead continue to have the benefit of the Keeper's indemnity as it existed immediately prior to 8 December 2014. Schedule 4 of the Act contains specific provisions relating to the transition between the 1979 Act and 2012 Act schemes of registration.

What is Not Warranted

Section 73(2) sets out a list of matters that the Keeper’s warranty will not ordinarily cover. An applicant could ask the Keeper to extend warranty to cover one or more of these matters. See Extension of warranty below.

Unless extension of warranty is given (by express statement in a title sheet), the Keeper does not warrant to the applicant any of the following matters:

It is noted that it is a condition of registration of a deed at first registration or an application for voluntary registration that the applicant include a description of every public right of way over or through the plot, so far as known to them. The Keeper can rectify a title sheet to include such a description at any time when sufficient evidence of the existence of the right of way is demonstrated.

A path order can be made under section 22 of the Land Reform (Scotland) Act 2003 to delineate a path or paths by which access rights benefiting the public are exercisable.

The Keeper does not warrant to an applicant that there are no servitudes affecting (burdening) the plot either:

created by prescription, or
which do not appear in the progress of titles of a burdened property (having been constituted otherwise than by dual registration, for example in a disposition of the benefited property and not referred to in the progress of titles of the burdened property thereafter).

For example, the Keeper does not warrant that a purported servitude disclosed in a title sheet is a valid servitude known to the law. A right of access is of course known to the law but some unusually worded purported servitudes may not be capable of being true servitudes.

The most common form of pertinent which might be extinguished by an off register event is a servitude, where negative prescription (failure to exercise for a set period of time) may have terminated the servitude right.

Unless the terms of a particular title state otherwise, the owner of the land owns the minerals beneath the surface. Minerals are legally capable of being owned as a separate tenement if they are severed from the surface land.

Minerals can be constituted as a separate tenement by express grant or by reservation in a conveyance of the land. The latter method became standard in feudal conveyances where such clauses were often included even when the granter had no title to the minerals. Consequently, there can be a proliferation of mineral reservations within a progress of title. This makes it extremely difficult to determine where the title to the minerals actually lies.

A lease may be terminated by for example, irritancy of the lease by the landlord.

Should there be an 'over-registration' which results in the title sheet showing a greater extent than the registered deed (or the title for which voluntary registration was sought) gave effect to, the Keeper does not warrant to the applicant that this over-registration is accurate.

This means that where the error is rectified, there is no breach of warranty, as no warranty was given in respect of land outwith the extent described in the registered deed or title to the plot of land for which voluntary registration was sought.

Alluvio is the gradual movement of a natural water boundary, resulting in an increase of land above or under water.

Caveats and Warranty

In terms of section 75(2) when considering whether or not to extend, limit or exclude warranty the Keeper must have regard to any relevant caveat placed on the title sheet by virtue of section 67. The User Guides for processing applications involving deeds affecting registered plots all require registration officers to check the property section of a title sheet to ascertain if there is a caveat. This guidance on this page is concerned primarily with applications for registration of a deed where the registration officer notes a caveat in the property section of the title sheet.

Application for a caveat

An order granting warrant to place a caveat must be submitted with the application form "Application relating to a Caveat". This is not an application for registration. If such an application is encountered, it should be referred to a senior caseworker.

Effect of a caveat

A caveat acts as the publication on the title sheet of an ongoing court action and is intended to act as a warning to a person who may intend to transact with a property. The caveat does not prevent transactions occurring but the effect of it is to prevent a person from claiming to be in good faith at the time of the transaction if the Keeper later rectifies the title sheet adversely to their interest as a result of the court action. It has the effect of preventing rights from realigning under Part 9 of the 2012 Act. It also may result in less compensation being paid by the Keeper than would have been payable had there been no caveat on the title sheet as it may lead to an exclusion or limitation of warranty from the title.

Placing the caveat on the title sheet will not affect the warranty already given to a previous applicant for registration since warranty is tied to an earlier date, i.e. the last date of registration. However, when registering any subsequent application against that title sheet the Keeper must have regard to the caveat when considering the warranty to be given for that application. Whether or not the Keeper excludes or limits warranty will depend on the nature of the caveat.

A caveat may relate to three types of court actions identified by section 67, namely an action that could result in:

(a) the reduction of a registered deed on the grounds it is voidable,

(b) a judicial determination that the land register is inaccurate, or

(c) the grant of an order that would be registrable under section 8A of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 (c.73) (registration of order for rectification of a deed).

For example a deed might be reduced as a result of an action by an inhibiting creditor against a deed granted by the debtor in breach of the inhibition, or raised by a trustee in sequestration against a bankrupt who has transacted without consent.

An entry for a caveat is made in the property section of a title sheet. The form of the note will be in one of two forms depending upon whether the whole subjects are affected or just a part of the subjects in the title sheet, e.g.:

The subjects in this Title are affected by a caveat in terms of section 67(2) of the Land Registration etc. (Scotland) Act 2012 granted by the Court of Session in relation to an action raised under section 67(1)(a) of the said Act in favour of Mary O'Brien as Trustee of Frances de la Rue, 255 Carntyne Avenue, Broadford, for a period of 12 months as of 9th April 2015.

If a registration officer encounters a caveat in the property section of a title sheet for which they are processing an application, the application with which they are dealing must be referred to a senior caseworker. The senior caseworker will notify the Litigation Team via the Litigation inbox. An exclusion or limitation of warranty may be necessary. A caveat has effect for a period of 12 months from the date it is entered on the title sheet, but all applications apparently affected by a caveat should be referred.

Extension or Variation of Warranty

Whilst the default position is that full warranty is given when the Keeper completes registration, in terms of section 75(1)(a) warranty can be extended where the Keeper is satisfied that it is appropriate to do so to cover a situation where no warranty is usually given. The applicant can ask the Keeper to extend warranty to cover any of the matters ordinarily excluded under section 73(2) (see above at What is Not Warranted). Where an extension of warranty is granted the Keeper must, under section 75(3), enter a statement describing this in the title sheet.

The applicant can request an extension of warranty as part of an application for registration, and there is a specific question on the application form for this purpose. The applicant must also submit sufficient evidence in support of their request. For example, the applicant may seek to have their warranty extended to cover the right to mines and minerals, in which case they would have to provide the Keeper with sufficient evidence of possession. See Mineral Titles for additional guidance on extension of warranty with regard to minerals.

The evidence required in respect of a request to extend warranty will vary depending on the nature of the extension sought, and further guidance on this will be issued separately. However, it is important to note that since the application must be acceptable for registration before an extension of warranty can be considered, the Keeper may requisition additional evidence under section 34(1)(b). Also, the nature of the evidence required to extend warranty in any given case will vary depending on the circumstances and may be complex; therefore, a strict application of the one-shot rule is not appropriate.

The level of warranty originally granted to an applicant can be varied by the Keeper outwith an application for registration in terms of section 76(2). The Keeper in dealing with this request may not give less extensive warranty than originally given, therefore the request is for an upgrade. It is thought likely that a variation will be requested because the original application for registration is subject to a limitation or exclusion of warranty.

Where, for example, a piece of additional evidence is requisitioned as part of the registration process but is not produced, the Keeper may be able to proceed to register with an exclusion of warranty. The applicant can later request a variation of warranty and provide the Keeper with the necessary evidence.

To request a variation of the warranty originally given to an applicant, the Application to Vary Warranty Form prescribed under regulation 16 of the Rules must be completed and submitted with requisite evidence. This type of application attracts a fee ( see Fees). If the evidence submitted with such an application is not sufficient for the Keeper to vary the warranty originally granted, the Keeper will advise the applicant by letter why the request has been refused. The applicant would then be required to apply again with the appropriate evidence. The application will not be placed in standover.

Where any applications to extend or vary warranty are received as described above, these should be referred to a senior caseworker who can seek further guidance as required.

Limitation or Exclusion of Warranty

In terms of section 75(1)(b), the Keeper can also give less extensive warranty than that available under section 73(1) or section 74 if registration is made by virtue of section 25 (automatic plot registration) or section 29 (Keeper-induced registration).

Warranty can be limited or it can be excluded entirely where the Keeper is not satisfied as to some aspect of the application. However it is important to note the effect of the rules concerning substitution and amendment of an application in this regard. In terms of the 2012 Act, in order for an application for registration (either registration of a deed or voluntary registration) to be accepted, the general application conditions and the conditions of registration must be met as at the date of application. This means, for example, that a registration officer cannot return a defective deed for amendment while the application is pending. In terms of section 21(3) (registration of a deed) or section 27(3) (voluntary registration) where there is such an omission or defect the Keeper must reject the application. This is sometimes referred to as the “one-shot rule”.

If an application fails to meet the application or registration conditions it must be rejected, therefore limiting or excluding warranty can only be considered where the application is acceptable for registration purposes but where some element of doubt exists. The power to exclude or limit warranty cannot be used to enable registration of defective applications. It is likely that limitations or exclusions of warranty will occur where the application meets the relevant conditions but where the applicant has failed to comply with a requisition.

The warranty decision depends on the particular circumstances of that application. However, the registration officer may need to consider referring a case for limitation or exclusion or warranty in the following circumstances. These examples are not intended to be exhaustive, but to offer general guidance only.

The following examples are not intended to be an exhaustive list:

Where the applicant has failed to comply with a requisition (however see guidance on failure to comply with requisition re apparent adverse entry in the ROI);
Where there is an existing caveat on the title sheet;
Where the application form indicates that the parties are not content to certify that the registrable deed is valid, including where they think the land affected might be common good land;
Where a statement under section 30(5) needs to be added to any name or designation entered in the plot title sheet following an automatic plot registration or a Keeper-induced registration, e.g. where the name of the proprietor cannot be determined with any certainty;
Where information available to the registration officer indicates that there is a competing title in the Register of Sasines in relation to an application for registration of an unregistered plot;
Where the applicant has indicated on the application form that their examination of title has been limited or restricted in some way (e.g. where automatic plot registration has taken place but the applicant has been unable to obtain the titles or unrecorded links in relation to the landlord's plot - warranty may be excluded on the plot title sheet but granted on the lease title sheet);
Where there is an existing exclusion of indemnity on the title sheet of continuing relevance (for example an exclusion of indemnity concerned with validity of the proprietor's title but where positive prescription cannot yet have remedied the issue may need to be converted into an exclusion or limitation of warranty);
Where on the basis of additional information provided on the application form it is appropriate to do so (e.g. an applicant indicates uncertainty as to the validity of a midcouple or the actual authority of an attorney who has executed the registrable deed under the power of attorney).
Where there is an existing exclusion/limitation of warranty on the title sheet and a new deed is being registered e.g. a standard security.

The wording of the statements required under section 75(3) will vary depending on circumstances, but will generally be similar to one of the following:

“Warranty is excluded in terms of section 75(1)(b) of the Land Registration etc. (Scotland) Act 2012 in relation to XXX or in terms that XXX.”

“Warranty is limited in terms of section 75(1)(b) of the Land Registration etc. (Scotland) Act 2012 in relation to XXX or in terms that XXX.”

“As regards XXX on the cadastral map warranty is excluded in terms of section 75(1)(b) of the Land Registration etc. (Scotland) Act 2012 in relation to XXX.”

If a decision is reached that a limitation or exclusion of warranty is required in a title sheet, then the registration officer is not required to notify the applicant of such a decision. However, when completing registration they should confirm this in writing when the documentation submitted with the application is returned to the applicant.

A limitation or exclusion of warranty must be authorised by a senior caseworker. All applications falling within the general guidance given above (other than in respect of an entry in the ROI) should be referred to a senior caseworker to assess whether an exclusion or limitation of warranty is appropriate.

Existing Exclusion of Indemnity on Title Sheet - Dealing with Whole and Transfer of Part

Section 12(1) of the 1979 Act gave a person who suffered loss in consequence of certain acts of the Keeper the entitlement to be indemnified for that loss. Section 12(2) provided that the Keeper may on registration of an interest in land exclude, in whole or in part, any right to indemnity. An exclusion of indemnity was therefore simply an exclusion of a right to compensation.

Section 12 of the 1979 Act has now been repealed. The effect of that repeal is that no person will obtain an entitlement to indemnity after the designated day, and the Keeper will not be able to exclude indemnity after the designated day.

Existing exclusions of indemnity will continue to operate to deprive a person of any entitlement to compensation under the transitional provisions of the 2012 Act referred to above. In addition, schedule 4, paragraph 15 of the 2012 Act provides that where, immediately before the designated day where a person had an entitlement to claim indemnity but has not yet done so, or where any such claim has been made but is undetermined, that entitlement or claim will be unaffected. If indemnity was excluded prior to the designated day, no such claim or entitlement will arise.

What happens to exclusion of indemnity statements which appear on a title sheet after the designated day?

The text of the statement will remain in whichever section of the title sheet it was entered into. Exclusions should not be removed automatically/as a matter of course because:

(i) they continue to have legal effect insofar as the transitional provisions apply, and

(ii) the reasons for having excluded indemnity in the past will require to be taken into account in taking a decision on warranty when the title is subject to an application.

When we receive an application to register a deed which transfers ownership of the whole or part of a title in respect of which indemnity has previously been excluded, we must consider whether the reason for excluding indemnity (the defect) is still extant and is also a reason for excluding or limiting warranty, or has been cured, in which case the statement should be removed.

In considering whether the defect has been cured, we require the same standard of evidence that we used to require when asked to remove an exclusion of indemnity. The applicant must provide evidence to support the removal of the exclusion. For example, if the exclusion related to a lack of prior title and more than 10 years had passed since a foundation deed was recorded/registered then the applicant would be expected to demonstrate that prescription had operated. The Keeper will not assume that there has been open and peaceful possession in fortification of a title.

If the defect is still present, we must consider whether it necessitates excluding or limiting warranty. If so, the exclusion of indemnity statement should be removed from the section of the title in which it appears and be replaced by an exclusion or limitation of warranty statement.

If the defect is still present, we must consider whether it necessitates excluding or limiting warranty for the TP subjects. If so, an exclusion or limitation of warranty statement should be added to the appropriate section of the TP title sheet.

Examples:

if there is an exclusion of indemnity in the parent title relating to lack of prior title which affects the TP subjects, an exclusion of warranty statement should be included in the proprietorship section of the TP title sheet.
if a standard security over the parent title has an exclusion of indemnity because of a failure to register it with Companies House, and no evidence has been submitted to remove the exclusion, and the standard security is being brought forward to the TP title, the exclusion of indemnity should be brought forward with it.

With regard to the parent title, in any case where there is no transfer of ownership of the subjects remaining in the parent title, no change to the existing exclusion of indemnity contained therein will be required.

Matters no longer warranted

Sometimes the exclusion may relate to a matter which is not warranted by the Keeper under section 73(2)(a) – (i), such as an exclusion relating to the movement of natural water boundaries. In such cases the exclusion can be removed without any further action by the applicant. However, where part of the note provides clarity as to the boundary of a plot then that part should be retained and amended as necessary, see example below.

Existing note:

Note: The boundary between the points arrowed and lettered V - W in blue on the Title Plan follows the stream. Indemnity is excluded in terms of Section 12(2) of the Land Registration (Scotland) Act 1979 in respect of any loss arising as a result of the said boundary being declared or found to follow a different line from that shown on the Title Plan at any time.

After amendment, the note should read as follows:

Note: The boundary between the points arrowed and lettered V - W in blue on the cadastral map follows the stream.

Subordinate rights

When we receive an application for registration of a subordinate right, such as a standard security, over a title which contains text showing that indemnity had previously been excluded, we must consider whether the reason for excluding indemnity necessitates excluding or limiting warranty in relation to the deed that is being registered. The presence of the statement excluding indemnity will inform the decision regarding the warranty to be offered on the deed that is being registered. The exclusion of indemnity should remain on the title sheet upon which the standard security is to be registered.

Applications to register a guardianship order, discharge of a standard security, notice of grant, HASSASSAA charging order or notice of potential liability for costs

Any existing exclusion of indemnity should remain on the title sheet. Warranty is given to the applicant, guided by the terms of the existing title sheet (where one exists), the application form and deeds. An existing exclusion of indemnity does not impact upon the registration of the above noted deeds.

An exception to this rule is the registration of a discharge of a standard security that is affected by an inhibition.

Application to register a discharge of a standard security where there is both an exclusion of indemnity and an exclusion/limitation of warranty on the title sheet

Where the title sheet includes both an exclusion of indemnity and an exclusion/limitation of warranty, guidance in the appropriate sections should be followed. If required, refer to a senior caseworker.

For applications to register notices of grant or notices of payment for liability for costs, where the title sheet discloses both an exclusion of indemnity and an exclusion / limitation of warranty, both exclusions / limitations should remain on the title sheet.

Any existing exclusion of indemnity, other than those relating to a failure to register limited company securities with Companies House where said security is now being discharged, must be referred to your referral officer for consideration who will, if necessary, refer to a senior caseworker.

Any plans reference referred to within an exclusion of indemnity note that is being deleted from a title sheet should be removed from the cadastral map unless it is also referred to elsewhere in the title sheet.

Guidance on Dealing With Specific Type of Existing Exclusion of Indemnity

Adverse entry (Inhibition) in Register of Inhibitions and Adjudications

Section 32 of the 2012 Act requires the Keeper to add to a title sheet a reference to any entry in the Register of Inhibitions and Adjudications (ROI) that might affect the validity of a deed to which the application for registration relates; there is no requirement to also limit warranty.

Where there are existing details of an entry in the ROI and consequent exclusion of indemnity, the action to be taken will depend on the current application.

For the avoidance of doubt, the certification on the application form relating to the ROI question does not over-ride any existing inhibitions disclosed on the title sheet.

Inhibition against A recorded 21 Dec. 2001

Disposition by A to B registered 27 Feb. 2006

The 2006 Disposition (and everything following on therefrom) is reducible.

Assuming the inhibition is neither discharged, nor had evidence submitted to show it has prescribed in some way, then retain the current inhibition note in the proprietorship section.
Delete related exclusions of indemnity from the proprietorship and/or securities sections.
If a new security is being registered, there is no requirement to exclude or limit warranty in respect of the new deed.

Assuming the inhibition is neither discharged, nor had evidence submitted to show it has prescribed in some way, then retain the current inhibition note in the proprietorship section.
If there is an outstanding security which is affected by the inhibition, retain the current exclusion of indemnity note.
If a new security is being registered, there is no requirement to exclude or limit warranty in respect of the new deed.

Assuming the inhibition is neither discharged, nor had evidence submitted to show it has prescribed in some way, then retain the current inhibition note in the proprietorship section.
Retain related exclusion of indemnity notes in the proprietorship and/or securities sections.
There is no requirement to exclude or limit warranty in respect of the new deed

Assuming the inhibition is neither discharged, nor had evidence submitted to show it has prescribed in some way, then retain the current inhibition note in the proprietorship section.
Retain related exclusion of indemnity notes in the proprietorship section. If there is an exclusion of indemnity in respect of a standard security that is not being discharged, that note should also be retained.

Assuming the inhibition is neither discharged, nor had evidence submitted to show it has prescribed in some way, then retain the current inhibition note in the proprietorship section.
Retain related exclusion of indemnity notes in the proprietorship and/or securities sections.

Assuming the inhibition is neither discharged, nor had evidence submitted to show it has prescribed in some way, then retain the current inhibition note in the proprietorship section.
Retain related exclusion of indemnity notes in the proprietorship section.
If there is an exclusion of indemnity note against the relevant securities section entry, said note should be removed. The reason for this is that the new creditor's interest is warranted under the 2012 Act.

X acquires property on 1 Jun. 2012

Inhibition against X recorded 1 Oct. 2012

X grants security 1 Dec. 2012 - Inhibition disclosed in proprietorship section, indemnity excluded in securities section for said security.

Assuming the inhibition is neither discharged, nor had evidence submitted to show it has prescribed in some way, then retain the current inhibition note in the proprietorship section (updating debtor's details if necessary).
Delete related exclusions of indemnity from the proprietorship and/or securities sections.
If a new security is being registered, there is no requirement to exclude or limit warranty in respect of the new deed.

Assuming the inhibition is neither discharged nor had evidence submitted to show it has prescribed in some way, then retain the current inhibition note in the proprietorship section (updating debtor's details if necessary).
If there is an outstanding security which is affected by the inhibition, retain the exclusion of indemnity note.
If a new security is being registered, there is no requirement to exclude or limit warranty in respect of the new deed.

Assuming the inhibition is neither discharged nor had evidence submitted to show it has prescribed in some way, then retain the current inhibition note in the proprietorship section.
Retain related exclusion of indemnity notes in the proprietorship and/or securities sections.
There is no requirement to exclude or limit warranty in respect of the new deed.

Either

a) If no securities now remain in the securities section that can be affected by the inhibition, the inhibition note should be removed from the proprietorship section along with any relevant exclusion of indemnity note.

The reason for this is that the statutory duty under the 2012 Act is to only disclose an entry in the ROI on a title sheet when the inhibited person has granted a deed which appears to be in breach of an inhibition.

Or

b) If there is an exclusion of indemnity in respect of a standard security that is not being discharged, then the inhibition and relevant exclusion of indemnity notes should be retained.

Assuming the inhibition is neither discharged nor had evidence submitted to show it has prescribed in some way, then retain the current inhibition note in the proprietorship section.
Retain the related exclusion of indemnity notes in proprietorship and/or securities sections.

Assuming the inhibition is neither discharged nor had evidence submitted to show it has prescribed in some way, then retain the current inhibition note in the proprietorship section.
Remove the relevant exclusion of indemnity note. The reason for this is that the new creditor's interest is warranted under the 2012 Act.

Any scenarios involving outstanding inhibitions which do not fall into any of the above categories should be referred to a senior caseworker as should any situations where a caveat or notice of litigiosity is disclosed on the title sheet.

Adverse entry (Sequestration) in Register of Inhibitions and Adjudications

In similar terms to the above section dealing with inhibitions, Section 32 of the 2012 Act also requires the Keeper to add to a title sheet a reference to any entry for a sequestration in the ROI that might affect the validity of a deed to which the application for registration relates. However, as above there is no requirement to also limit warranty.

Where there are existing details of an entry in the ROI and consequent exclusion of indemnity the action to be taken will depend on the current application. The certification on the application form relating to the ROI question does not over-ride any existing CCI's/inhibitions disclosed on the title sheet.

The following guidance is for situations where there is an exclusion of indemnity in respect of a breach of a sequestration by the debtor.

An inhibition against the debtor registered prior to the date of his sequestration ceases to be effective as an inhibition upon that date. The trustee in sequestration can therefore sell free of any prior inhibitions against the debtor, and the purchaser’s title will not disclose those prior inhibitions.

However, if the debtor had taken a title which was subject to an inhibition against a previous proprietor, that inhibition will remain effective. This is because the trustee in sequestration can acquire no better title than that of the debtor. In these circumstances, the guidance at Adverse Entry (Inhibitions) in Register of Inhibitions - Existing Exclusion of Indemnity (see Table of Contents) should also be followed.

X acquires property on 1 Jun. 2013

X is sequestrated on 1 Oct. 2013

X grants security 1 Dec. 2013 - CCI disclosed in proprietorship section, indemnity excluded in securities section for said security.

Delete CCI(s) and inhibitions against the debtor and related exclusions of indemnity from the proprietorship and/or charges sections.
Follow the guidance in relation to the Powers of Trustee in relation to heritable property - Sale by trustee in the section on Insolvency - Personal and Corporate.

If there are any outstanding securities which are affected by CCI(s) and inhibitions against the debtor, then:-

Retain the relevant exclusion of indemnity note(s).
Retain the CCI/inhibition notes in the proprietorship section that are referred to in said exclusion of indemnity note(s).
Follow the guidance in relation to the Powers of Trustee in relation to heritable property - Sale by trustee in the section on Insolvency - Personal and Corporate.

X acquires property on 1 Jun. 2013

X is sequestrated on 1 Oct. 2013

X grants security 1 Dec. 2013 - CCI disclosed in proprietorship section, indemnity excluded in securities section for said security.

If the title sheet also discloses inhibitions and attendant exclusions of indemnity, the guidance at Adverse Entry (Inhibitions) in Register of Inhibitions - Existing Exclusion of Indemnity (see Table of Contents) should also be considered.

Retain the existing CCI notes in the proprietorship section (updating debtor's details if necessary), ensuring that the guidance in relation to Transactions by debtor in the section on Insolvency - Personal and Corporate is followed.
Delete related exclusions of indemnity from the securities section.
If a security by the new proprietor is also being registered, there is no requirement to exclude warranty in respect of the new deed. The proprietorship section note makes it clear that the title of the new registered proprietor (and any further deeds granted by him) is subject to possible reduction by the trustee in sequestration.

Retain the existing CCI notes in the proprietorship section (updating debtor's details if necessary), ensuring that the guidance in relation to Transactions by debtor in the section on Insolvency - Personal and Corporate is followed.
Retain the existing exclusions of indemnity for any undischarged securities that are affected by the CCI.
If a security by the new proprietor is also being registered, there is no requirement to exclude warranty in respect of the new deed. The proprietorship section note makes it clear that the title of the new registered proprietor (and any further deeds granted by him) is subject to possible reduction by the trustee in sequestration.

Retain the existing CCI notes in the proprietorship section, ensuring that the guidance in relation to Transactions by debtor in the section on Insolvency - Personal and Corporate is followed.
Retain related existing exclusion of indemnity notes in the securities section.
There is no requirement to exclude warranty in respect of the new deed. The proprietorship section note makes it clear that the title of the new registered proprietor (and any further deeds granted by him) is subject to possible reduction by the trustee in sequestration.

Either:

a) If no securities now remain in the securities section, the CCI note should be removed from the proprietorship section along with any relevant exclusion of indemnity note.

The reason for this is that the statutory duty under the 2012 Act is to only disclose an entry in the ROI on a title sheet when the debtor has granted a deed which appears to be in breach of that entry.

Or:

b) If there is an exclusion of indemnity in respect of a standard security that is not being discharged, then the CCI and relevant exclusion of indemnity notes for the undischarged security should be retained.

Retain the existing CCI note in the proprietorship section.
Retain the related exclusion of indemnity note in securities section.

Retain the existing CCI note in the proprietorship section.
Remove the relevant exclusion of indemnity note. The reason for this is that the new creditor's interest is warranted under the 2012 Act.

X is sequestrated on 1 Oct. 2013

Disposition by X to Y registered 1 Dec. 2013

CCI disclosed in proprietorship section as Note 1

Indemnity excluded in proprietorship section as Note 2.

Security by Y to Bank registered 1 Dec. 2013, indemnity excluded in securities section.

If the title sheet also discloses inhibitions and attendant exclusions of indemnity, the guidance at Adverse Entry (Inhibitions) in Register of Inhibitions - Existing Exclusion of Indemnity (see Table of Contents) should also be considered.

Retain the existing CCI note in proprietorship section (updating debtor's details if necessary).
Delete related exclusion of indemnity from the proprietorship section.
If a new security is being registered, there is no requirement to exclude or limit warranty in respect of the new deed. The proprietorship section note makes it clear that the title of the new registered proprietor (and any further deeds granted by him) is subject to possible reduction by the trustee in sequestration.

Retain the existing CCI note in proprietorship section (updating debtor's details if necessary).
Delete related exclusion of indemnity note from the proprietorship section.
If there is an outstanding security which is affected by the CCI, retain the current exclusion of indemnity note for that security.
If a new security is being registered, there is no requirement to exclude or limit warranty in respect of the new deed. The proprietorship section note makes it clear that the title of the new registered proprietor (and any further deeds granted by him) is subject to possible reduction by the trustee in sequestration.

Retain the existing CCI note in proprietorship section.
Retain related exclusion of indemnity notes in proprietorship and securities sections.
There is no requirement to exclude or limit warranty in respect of the new security. The proprietorship section note makes it clear that the title of the new registered proprietor (and any further deeds granted by him) is subject to possible reduction by the trustee in sequestration.

Retain the existing CCI note in proprietorship section.
Retain related exclusion of indemnity note in proprietorship section.
If there is an exclusion of indemnity note in respect of a standard security that is not being discharged, that note should also be retained.

Retain the existing CCI note in proprietorship section.
Retain related exclusion of indemnity notes in proprietorship and securities section

Retain the existing CCI note in the proprietorship section.
Retain related exclusion of indemnity note in proprietorship section.
Delete the exclusion of indemnity note against the relevant securities section entry. The reason for this is that the new creditor's interest is warranted under the 2012 Act.

Any scenarios involving outstanding sequestrations which do not fall into any of the above categories should be referred to a senior caseworker, as should any situations where an exclusion of indemnity relates to the failure of the trustee to comply with rules in the realisation of the bankrupt's estate, (section 78(3) and (4) of the Bankruptcy (Scotland) Act 2016) or a Caveat or Notice of Litigiosity is disclosed on the title sheet.

Failure to comply with sections 31(1A) and (1B) of the Bankruptcy (Scotland) Act 1985

Sections 31(1A) and (1B) of the 1985 Act are now replicated in s.78(3) and (4) of the Bankruptcy (Scotland) Act 2016. These sections (both past and present versions) provide that it is not competent for the trustee in sequestration or person deriving title from the trustee to complete title until 28 days have passed since the Certified Copy Interlocutor (CCI) granting warrant to cite or Certified Notice of Determination (CND) is recorded in the ROI.

The following are examples of existing exclusions of indemnity disclosed on title sheet:

Note: Indemnity is excluded in terms of section 12(2) of the Land Registration (Scotland) Act 1979 in respect of any loss arising from any title stemming from the said Trustee being declared or found not to be competent by virtue of the provisions of section 31(1A) and (1B) of the Bankruptcy (Scotland) Act 1985.

Note: Indemnity is excluded in terms of section 12(2) of the Land Registration (Scotland) Act 1979 in respect of any loss arising from the title of the above proprietor stemming from Disposition by Trustee on sequestrated estate of AB to CD, registered dd mmm yyyy being declared or found not to be competent by virtue of the provisions of section 31(1A) and (1B) of the Bankruptcy (Scotland) Act 1985.

The implications of the above provisions mean that the Keeper's approach to an application for registration in relation to a title that contains a note in the same or similar terms to the above will vary depending on the particular circumstances of the transaction. Amongst other things, the passage of time, the nature of the transactions and the terms of the application form are all factors that could influence the application's treatment. The variety (and complexity) of these scenarios means that each application must be considered on a case by case basis.

Any application involving a title sheet that contains a note referring to s.31(1A) and (1B) of the 1985 Act should be referred to a senior caseworker.

Adverse occupation

If the existing exclusion of indemnity relates purely to apparent adverse occupation but no competing title was identified for the area in question then, on the submission of a disposition or other deed effecting a transfer, provided the applicant certifies that deed is valid, the application can proceed and the exclusion of indemnity can be removed.

There is no need to exclude/limit warranty in respect of any new deed being registered.

Any plans references purely relating to the exclusion of indemnity should be removed from the cadastral map/title plan.
If a competing title has been identified then the application should be referred to a senior caseworker.

Competing title

Where there is more than one historic title to the area, it is unlikely to be manifestly clear to the Keeper which title should prevail unless representation has been made by one party seeking rectification.

There is clearly an inaccuracy, as the subjects cannot form part of both titles. However, it is not manifestly clear to the Keeper how to rectify that inaccuracy.

Complex scenarios involving multiple competing titles should be referred to a senior caseworker who can seek further guidance if required.

The following scenarios are those most likely to be encountered by registration officers.

1. The competing title is disclosed in the title sheet as being in the Sasine Register

In straightforward cases (e.g. adjacent houses in an urban setting), the registration officer should be able to ascertain whether the competing title is now in the Land Register.

If there is a note excluding indemnity, it should be removed and replaced with a note (i) identifying the competition in title, (ii) stating that the inaccuracy is a manifest inaccuracy, and (iii) excluding warranty.

The note below is an example of the style to be used:

Note: The proprietor of xxxx registered under title number XXX also has title to the area xxx xxx on the title plan by virtue of the disposition to Y recorded G.R.S. (XXX) dd/mmm/yyyy. The Keeper considers that the above-mentioned competition in title represents a manifest inaccuracy in terms of section 80 of the Land Registration etc. (Scotland) Act 2012 but what is needed to rectify the inaccuracy is not manifest. 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 proprietor of the subjects in this title has acquired a real right of ownership to said area.

If there is a note stating that there is a competition in title but indemnity has not been excluded (as the Land Register title ranked prior to the sasines title) then this note should be removed and replaced with a note (i) identifying the competition in title, (ii) stating that the inaccuracy is a manifest inaccuracy, and (iii) excluding warranty.

The note below is an example of the style to be used:

Note: The proprietor of xxxx registered under title number XXX also has title to the area xxx xxx on the title plan by virtue of the disposition to Y recorded G.R.S. (XXX) dd/mmm/yyyy. The Keeper considers that the above-mentioned competition in title represents a manifest inaccuracy in terms of section 80 of the Land Registration etc. (Scotland) Act 2012 but what is needed to rectify the inaccuracy is not manifest. 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 proprietor of the subjects in this title has acquired a real right of ownership to said area.

If there is a note excluding indemnity it should be removed and replaced with a note (i) identifying the competition in title, (ii) stating that the inaccuracy is a manifest inaccuracy, and (iii) excluding warranty.

The note below is an example of the style to be used:

Note: A disposition to XX, of the area xxx xxx on the title plan was recorded G.R.S. (xxx) dd/mmm/yyyy and ranks prior to the disposition to ZZ, registered dd/mmm/yyyy, on which the entitlement of the proprietor of the subjects in this title was founded. The Keeper considers that the above-mentioned competition in title represents a manifest inaccuracy in terms of section 80 of the Land Registration etc. (Scotland) Act 2012 but what is needed to rectify the inaccuracy is not manifest. 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 proprietor has acquired a real right of ownership to said area.

If there is a note stating that there is a competition in title but indemnity has not been excluded (as the Land Register title ranked prior to the sasines title) then this note should be removed and replaced with a note (i) identifying the competition in title, (ii) stating that the inaccuracy is a manifest inaccuracy, and (iii) excluding warranty.

The note below is an example of the style to be used:

Note: A disposition to XX, of the area xxx xxx on the title plan was recorded G.R.S. (xxx) dd/mmm/yyyy. The Keeper considers that the above-mentioned competition in title represents a manifest inaccuracy in terms of section 80 of the Land Registration etc. (Scotland) Act 2012, but what is needed to rectify the inaccuracy is not manifest. 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 proprietor has acquired a real right of ownership to said area.

2. The competing title is disclosed in the title sheet as being in the Land Register

In these circumstances, the title number for the competing title should be established.

If there is a proprietorship section entry for the other registered title and an exclusion of indemnity note (against either entry), both proprietorship section entries together with the exclusion of indemnity note should be removed.

A note (i) identifying the competition in title, (ii) stating that the inaccuracy is a manifest inaccuracy and (iii) excluding warranty should be added after the new proprietorship section entry.

The note below is an example of the style to be used:

Note: The proprietor of xxxx registered under title number XXX also has title to the area xxxx xxxx on the title plan by virtue of the disposition to YY registered dd/mmm/yyyy. The Keeper considers that the above-mentioned competition in title represents a manifest inaccuracy in terms of section 80 of the Land Registration etc. (Scotland) Act 2012 but what is needed to rectify the inaccuracy is not manifest. 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 proprietor of the subjects in this title has acquired a real right of ownership to said area.

If there is a note stating that there is a competition in title but indemnity has not been excluded (as this Land Register title ranked prior to the other land register title), then this note should be removed and replaced with a note (i) identifying the competition in title, (ii) stating that the inaccuracy is a manifest inaccuracy, and (iii) excluding warranty.

The note below is an example of the style to be used:

Note: The proprietor of xxx registered under title number XXXX also has title to the area xxx xxx on the title plan by virtue of the disposition to YY registered dd/mmm/yyyy. The Keeper considers that the above-mentioned competition in title represents a manifest inaccuracy in terms of section 80 of the Land Registration etc. (Scotland) Act 2012 but what is needed to rectify the inaccuracy is not manifest. 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 proprietor of the subjects in this title has acquired a real right of ownership to said area.

1. The competing title is disclosed in the title sheet as being as in the Sasine Register

In straightforward cases (e.g. adjacent houses in an urban setting), the registration officer should be able to ascertain whether the competing title is now in the Land Register.

If there is a note excluding indemnity it should be retained (details should be amended/updated as appropriate e.g. changing a named individual to "the proprietor of the subjects in this title").

A note (i) identifying the competition in title, (ii) stating that the inaccuracy is a manifest inaccuracy, and (iii) excluding warranty should also be added.

The note below is an example of the style to be used:

Note: The proprietor of XXX registered under title number XXXX also has title to the area xxx xxx on the title plan by virtue of the disposition to YY recorded G.R.S. (xxx) dd/mmm/yyyy. The Keeper considers that the above-mentioned competition in title represents a manifest inaccuracy in terms of section 80 of the Land Registration etc. (Scotland) Act 2012 but what is needed to rectify the inaccuracy is not manifest. 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 proprietor of the subjects in this title has acquired a real right of ownership to said area.

If there is a note stating that there is a competition in title but indemnity has not been excluded (as the Land Register title ranked prior to the sasines title), for example:

Note: C also has title to the subjects in this title/part xxx xxx on the title plan by virtue of a Disposition recorded G.R.S. (xxx) xxx. The title of the said B [registered proprietor] is founded on a Disposition in favour of Z, recorded G.R.S. (xxx) xxx, which ranks prior to the Disposition in favour of X, recorded G.R.S. (xxx) xxx, on which the title of the said C is founded.

then this note should be removed.

A note (i) identifying the competition in title, (ii) stating that the inaccuracy is a manifest inaccuracy and (iii) excluding warranty should be added.

The note below is an example of the style to be used:

Note: The proprietor of xxxx registered under title number XXXX also has title to the area xxx xxx on the title plan by virtue of the disposition to YY recorded G.R.S. (xxx) dd/mmm/yyyy. The Keeper considers that the above-mentioned competition in title represents a manifest inaccuracy in terms of section 80 of the Land Registration etc. (Scotland) Act 2012 but what is needed to rectify the inaccuracy is not manifest. 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 proprietor of the subjects in this title has acquired a real right of ownership to said area.

If there is a note excluding indemnity it should be retained (details should be amended/updated as appropriate e.g. changing a named individual to "the proprietor of the subjects in this title").

A note (i) identifying the competition in title, (ii) stating that the inaccuracy is a manifest inaccuracy and (iii) excluding warranty should also be added.