7.3 Designations

An authoritative quote can be found in Erskine’s Institutes:

‘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’.

As the title sheet takes the place of a writ, it follows that entries therein must both accurately reflect, and give effect to, the contents and purpose of the relevant writ or writs(s) inducing registration. An exception to that general rule is where other documents submitted with or supporting an application contain new or more up-to-date particulars of the parties. Since a title sheet should disclose only the current position, the registration officer should make use of this latest information when preparing the relevant entry.

7.4 Designation of individuals

The words ‘residing at’ (or similar) should only be used where it explains the designation e.g. Accountant with X Limited residing at 6 High Street, Paisley. (If the words ‘residing at’ were omitted from this designation, the inference would be that the address was X Limited’s address.) Similarly, if the proprietor is designed as a ‘widow/widower of’, the spouse will not be named unless the designation would otherwise be unclear. The county should only be entered in the designation if it differs from the county in which the subjects are registered.

Where a party is designed as "care of" another party this should only be reflected in the entry if the designation is a business.

So that the content and purpose is exactly as the writ intended, the title sheet must reflect the writ accurately. The reflection of the deeds may seem cumbersome but it is essential that the registration officer does not interpret the writ. The following examples may assist:

7.5 Designation of an incorporated body

The designation of an incorporated body should include a reference to the legislation under which it is incorporated and the address of its registered office, if such information is available from the application, e.g. Inverclyde Council, incorporated under the Local Government etc. (Scotland) Act 1994, Municipal Buildings, Greenock.

7.5.1 Designation of a company

The title sheet should reflect the full details of the company's designation, including all of the following information, where it is revealed in the transfer deed or the application:

• the company's full name, taking account of current indexing guidelines

• the company number;

• the country in which it is registered, and/or the statute under which it is registered;

• the company's registered office.

Additional information, such as the address of the company's place of business (which may differ from the registered office address), should be included where this is revealed in the application.

On a subsequent transaction involving the company, the registration officer should check the details of the company's designation carefully. It should be borne in mind that there may be several unrelated companies with the same name, but registered in different jurisdictions; that a company's name can change; and that the name formerly held by one company might subsequently be used by an entirely different company. For companies registered in the United Kingdom, the company number is a unique and unchanging identifier. The names, designations and incorporation dates of UK companies can if necessary be checked on the free WebCHeck service provided on the Companies House website.

7.6 Designations for statutory bodies

Where a statutory body acquires title under a specific statutory provision that should be stated. If the statutory provision is reflected in the proprietorship section then any restriction in the power of disposal or use is clear from the title sheet.

7.7 Designations of proprietors in a trust capacity

Proprietors who are acting in a trust capacity (including trusteeship for a firm) will be individually named and designed in the proprietorship section, including their capacity within the trust. 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.

In general terms the deed will be reflected where possible in the proprietorship section. The following are examples of styles that registration officers may encounter:

· A (designed) and B (designed) and the survivor of them and the executor of the last survivor as Testamentary Trustees of C (designed)

· A (designed) and B (designed) as Executors Nominate of C (designed)

· A (designed) as Guardian of B (designed)

· A (designation) as Trustee under Trust Deed by B (Designation) dated ….

·  A (designation) and B (designation) as Trustee under the contract of marriage between C (designation) and D (designation) dated ….

·  A (designation), B (designation) and C (designation) the partners of Firm X (designed) as trustees for the firm and the partners thereof present and future and their successors in office as such trustees and the survivor of them

·  A (designation), B (designation) and C (designation) as Chairman, Secretary and Treasurer and their respective successors in office as Trustees for the DF club, (designation of the club)

Registration Officers should see Examination of Title at Deeds by or to special parties for a discussion of the issues relating to trusts and partnerships.

7.7.1 Church of Scotland 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 Land Certificate.

7.7.2 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, e.g.

Fred Binnie (desig) and Scottish Mutual Investment plc (desig) as Trustees of In Line Retirement Benefit Scheme (desig).Sippdeal Limited (desig) as scheme trustee and Tom Wetherspoon (desig) as member trustee of the Sippcentre SIPP re said Tom Wetherspoon constituted under Master Trust Deed dated (as amended)

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

British Islands Bank Nominees (desig) and ABC Nominees (desig) in their capacity as nominees for and on behalf of A Big Bank plc (desig) as Trustee of the Building R Us Property Unit Trust.

7.8 Destinations

A destination has been commonly defined as:

‘a statement of the persons or series of persons in whose favour the granter of a deed conveys the property or interest’.

At its simplest, in the context of the Land Register, where the registered proprietor is a natural person, the destination is a statement of the person(s) entitled to succeed to the interest on the death of the registered proprietor.

7.8.1 General destination

Very often a conveyance contains a ‘general destination’ which takes the following form:

‘in favour of A and his executors and assignees whomsoever’

When no other destination is included and the general destination is omitted then the general destination is implied by law. The general destination is never shown in the title sheet.

7.8.2 Special destination - entry in the Proprietorship Section

Where more than one individual purchases subjects then the destination (if any) may reflect the parties’ future intentions. For example, each share may be left to one or other of the proprietors on death. This is referred to as a special destination. Special destinations are always entered in the proprietorship section exactly as they appear in the deed.

The most common forms of special destinations are ‘equally’ or ‘equally and survivor.’ If A and B acquire subjects 'equally and survivor', then the effect of the destination is that each owns a half share. On the death of either party, however, the share will automatically pass to the survivor, provided the destination has not been evacuated or revoked by operation of law. Where there are more than two grantees a survivorship destination may be adapted accordingly to reflect that on the death of one party the property would go to the survivors then consequently the singular survivor; the form used in the deed should be reflected in the title sheet. These are known as survivorship destinations.

It should be noted that a special destination may not always make sense when inserted into the proprietorship section, for instance, the italicised words in the following example:

• • 'equally between them with full power to each of them inter vivos or mortis causa to dispose of or otherwise deal with his or her one-half pro indiviso share but declaring that no mortis causa deed shall be deemed an exercise of the power or to affect the right of the grantor to his or her interest in the said subjects unless it bears specific reference to these presents or to said subjects and failing or subject to the acts and deeds of the predeceaser as aforesaid then to the survivor'

This should be resolved by the addition of a note to the entry in the proprietorship section, for example:

• • The above destination reflects the terms of Disposition by Z to said A and B of the subjects in this title, registered dd mmm yyyy.

A conveyance may be registered which transfers the subjects to A and includes a special destination in favour of B in the event of A's death for example

• • 'to A (design), and on her death to B (design)' or
  • 'to A (design), whom failing to B (design)

Such destinations are rare now. However, these do not necessarily operate in a manner similar to the survivorship destinations discussed in this chapter, in that for example, A can usually evacuate the destination fully without B's involvement or that they do not operate automatically on the death of A. Therefore,  a subsequent application which is either dependent on the operation of the destination or is granted by A without reference to B should be referred through usual channels to Legal Services for guidance on whether it is acceptable to proceed or guidance on the appropriate evidence to seek.

7.8.3 Death of Grantee Prior to Registration of deed containing survivorship destination

If a deed in favour of more than one party is being registered after one of the grantees has died, proceeding on a survivorship destination, consideration must be given as to whether the destination could have been evacuated. 

If there was no survivorship destination consideration must be given as to whether the application can proceed.  Should the party have died prior to delivery of the deed then it is not competent for the executor to complete title and fresh conveyancing to the entitled party will be required (if death occurs prior to the date of entry in the deed further enquiry should be made into the date of delivery).  Any application that falls within these criteria should be referred to a senior caseworker who will advise on whether registration can proceed, taking into account whether there was a survivorship destination or whether confirmation has been obtained and registration should proceed on behalf of the executor.

7.9 Applications affected by the evacuation/non-evacuation of a special destination

Registration officers should bear in mind that not all destinations are capable of evacuation. In some cases (particularly where both parties have contributed to the purchase price), there may be an implied contract not to evacuate the destination and therefore a deed by only one of the parties may not be completely effective to terminate the destination. If the application reveals an attempt to evacuate the destination not covered by the following scenarios the case should be referred to a senior caseworker.

These can be broken down into four types-

• Where the Keeper is effectively being notified of the death of one or more of the parties to a special destination and to disclose the operation of the special destination;
• Where an application to register a disposition is being made and the question of whether a destination has operated or been evacuated or revoked by operation of law either immediately prior to the transaction is in question; or
• Where the Keeper is being asked to register the effect of a disposition amongst the parties which is an attempt to evacuate the destination.
• Where the Keeper is being asked to register the effect of some other deed amongst the parties which is an attempt to evacuate the destination.

7.9.1 Applications to give effect to operation of a special destination

In the case where the Keeper is notified of the death of a co-proprietor holding under a survivorship destination the Keeper will register the change in title, on production of an extract death certificate and evidence by way of affidavit or a letter from the agent confirming that the destination has not been evacuated by a deed nor has it been revoked by operation of law as a result of the divorce, annulment or dissolution of the parties' marriage or civil partnership on or after 4 May 2006, if appropriate. (For further information on revocation of a destination by operation of law under the Family Law (Scotland) Act 206 see below).

If the Agent submits a Form 2 for the extract death certificate when the subjects are held under a special destination and a letter or affidavit confirming non evacuation or revocation of the destination, the Proprietorship Section will be amended as follows.

The existing entry will be amended by deleting the deceased proprietor and adding explanatory notes to the existing date of registration and consideration.
The date of registration should be added for the additional share, however the consideration and date of entry should be left blank e.g.

If an extract Death Certificate is submitted along with another application with no separate Form 2 or evidence of non-evacuation etc, only a note should be added to the Proprietorship Section to reflect this.
"Note: The said B died on..."

7.9.2 Application proceeding on a disposition granted by less than all proprietors holding under a special destination

If two (or more) proprietors held title by way of an ’equally and survivor’ destination and the subsequent disposition of the whole subjects is granted by one of them only, the inference is that one has died. Registration officers must of course ensure that the application is supported by documentary evidence (e.g. extract death certificate) that this is the case.

The death of the individual does not mean that the conveyance by the remaining proprietor can be accepted without further evidence. Registration officers must satisfy themselves that the destination has not been evacuated by inter vivos or mortis causa deed or has not been revoked by operation of law (in terms of the Family Law (Scotland) Act 2006 for which see below) prior to registration. If the destination has been evacuated, or the marriage/civil partnership had been terminated/annulled, then it means that someone else could have succeeded to the deceased’s share.

7.9.2.1 Revocation by operation of law under Family Law (Scotland) Act 2006

Section 19 of the Family Law (Scotland) Act 2006 provides that where spouses (and civil partners) in whose favour a special destination has been created have subsequently had their marriage (or civil partnership) terminated by divorce or annulment (dissolution or annulment in the case of civil partners) the special destination is effectively cancelled or revoked by divorce/dissolution or annulment of the marriage or civil partnership (unless the destination specifies otherwise). The share of the property formerly subject to the special destination will simply form part of the deceased's estate, to be dealt with by Will or under the laws of intestacy.
Please note, however, that the new law is not retrospective - it will not have the effect of revoking a destination where the divorce/dissolution or annulment occurred before this part of the Act came into force on 4 May 2006.

This Act also provides that where a purchaser acquires a property for value from a surviving ex-spouse or civil partner and is in good faith (for example, being unaware of the divorce or annulment), the title so acquired will not be challengeable on the ground that the special destination did not in fact operate and that the deceased person's share of the property has properly vested in their executors. This protection only extends to the acquisition of title for value (not gifts, or indeed succession).

7.9.2.2 Appropriate evidence where application proceeds on disposition granted by only one party to destination

When a transfer of property is being effected subsequent to the death of one of the proprietors the evidence required is dependent on the circumstance of the registration:
1.  Transfer for value (this would not include certain good and onerous causes):

• • an affidavit from either the seller or the executor of the deceased swearing that the destination has not been evacuated or
  • a letter from the applicant’s solicitor confirming the same or
  • a declaration in gremio of the DIR that the destination has not been evacuated

2.  Transfer not for value (including consideration for certain good and onerous causes):

• • Confirmation that the transfer is not affected by section 19 of the Family Law (Scotland) Act 2006 and
  • evidence in line with one of the requirements at 1 above.

7.9.3 Evacuation by disposition(s) involving the parties to the destination

If A and B acquire subjects equally and survivor, then the effect of the destination is that each owns a half share. On the death of either party, however, the share will automatically pass to the survivor, provided the destination has not been evacuated or revoked in terms of section 19 of the 2006 Act. Joint sales by both parties evacuate the destination and cause no problems. However, difficulties can arise if the proprietors separate even if they have divorced or had their marriage/civil partnership annulled or dissolved prior to 4 May 2006 and in implement of the separation agreement only one of the proprietors conveys their half to the other. Ideally, the disposition will make it clear whether and to what extent the parties are effecting an evacuation of the special destination in respect of the subjects. However, the following examples illustrate the difficulties and potential solutions.

Example 1

Disposition by A and B to B of the whole subjects.

No evidence required as the whole destination is considered to have been evacuated (the presumed intention of the parties being to evacuate the special destination completely).
The decision in the Board of Management of Aberdeen College v Youngson (2005 S.C. 335) case is not presently considered to have any adverse affect on the evacuation of a special destination by means of a Disposition by A and B to B, and no change to registration practise is required. (The B to B part of the disposition is not effective to transfer any property or title, but is considered to be effective to evacuate the special destination in respect of B's share).

Example 2

Disposition by A to B of A’s half share.

Only the destination as regards A’s half share is evacuated. The destination as regards B’s half share remains untouched. The outstanding half of the destination must be revealed in the title sheet.
In the second example, while the destination is evacuated as regards A’s half share, it leaves the destination as regards B’s half share untouched. The implications of this are that if B predeceases A, without evacuating the destination, then B’s half share automatically passes to A. If the registration officer is dealing with an application to register such a disposition, the applicant's agent should be contacted and advised of the situation. He may wish to withdraw the application and redraw the disposition as one by A and B of the whole subjects. However, if the agent elects not to withdraw the application and redraw the disposition, registration officers should deal with it in one of two ways.

Option 1

If B’s title to the original half share is recorded in the Sasine Register, the Keeper's policy is that B be invited to submit an application for voluntary registration of that half share. In this case, the special destination must be revealed in the title sheet in respect of that half share. This is done in the following manner:

Option 2

If the agent declines to submit an application for voluntary registration of the half share B holds on a Sasine title, the Proprietorship Section will remain silent as regards the special destination, the reason being that for the half share being registered the special destination is evacuated.

When the half share that remained in the Sasine register enters the land register having been sold by B then such a sale will evacuate the destination. However, should someone other than B grant the disposition, it may be that B has died. In such a case there is a possibility that B failed to evacuate the destination, and if A survived B then the half share will have fallen to him or her under the destination. Accordingly, it may be necessary for the registration officer to make enquiries of the agent.

Option 3

In the event of a dealing with whole being submitted to give effect to a disposition transferring a one half pro indiviso share in a registered title, without resolving the position of a special destination, then the proprietorship section entries should be in the following style:

Registration officers may encounter what may appear to be a different version of Example 3 but usually this will be an attempt to resolve the difficulties arising under Example 3. For instance, they may be dealing with an application which is a disposition by B to C (as B's nominee) of B's half share then disposition by C back to B of the same subjects or they may be dealing with a disposition B to B either of the half share containing the unaffected destination or the whole subjects. The Keeper considers such deeds are capable of evacuating the destination in respect of B's share

For more information on Pro indiviso shares generally see Miscellaneous Registrations under Pro indiviso Shares.

7.9.4 Evacuation/variation of destination in deed other than disposition

The Keeper will accept for registration an inter vivos renunciation of a survivorship destination in a deed other than a Disposition, provided that certain criteria are fulfilled.

Where a deed that purports to vary the terms of a survivorship destination, other than within a Disposition, is submitted for registration the application should be referred to a senior caseworker, who should consider the application in light of the following policy:

The deed should take the form of a Deed of Revocation or a Deed of Renunciation, or the revocation/renunciation may be contained within another deed such as a Minute of Agreement/Separation. 

The deed must contain an operative clause in the present tense.  One of the following forms of words should be used:

"We (hereby) revoke/renounce/evacuate the survivorship destination contained in…"

(It is not sufficient for the deed merely to express an intention, such as:  "We wish to/it is our intention to revoke/renounce/evacuate…".  These words alone are not sufficient to revoke/renounce/evacuate the survivorship destination.)

The Keeper will not accept the unilateral evacuation of a destination, consequently the deed must be granted by all those parties who potentially benefit from the destination.  In addition, the deed must make reference to the deed in which the destination was originally created and the date upon which that deed was registered, along with reference to the Title Number.

Where a deed of evacuation is signed by an Attorney, the Power of Attorney must include a specific authorisation allowing the Attorney to evacuate the destination.  A general authorisation to grant deeds will not suffice.

The Keeper will not accept an evacuation purporting to take effect after the death of one or more of the proprietors (e.g. a variation in terms of section 142 of the Inheritance Tax Act 1984), nor will she generally accept for registration a mortis causa variation of a survivorship destination.  

These general rules are subject to the terms of the deed creating the destination and the legal presumptions as set out in the previous sections.  For example, if the Disposition explicitly stated that the destination cannot be evacuated, the Keeper will not accept a deed of evacuation for registration.

It is not, in general, acceptable for a deed purporting to evacuate a survivorship destination to be used as an unrecorded/unregistered link in Title.  Any such deed should be referred to Legal Services for consideration. 

If an application has been signed by a party other than a solicitor or licensed conveyancer licensed to practise in Scotland, it should be accompanied by the requisite RoS ID form.

7.10 Destinations in building society reconveyances

When a purchaser has a disposition granted in his or her own favour he or she can, and sometimes does, take a destination in favour of himself or herself and their spouse and survivor and the heirs of the survivor. When the disposition was taken with his or her consent in favour of a building society this could not be done, and the destination could be inserted only in the ultimate reconveyance.

7.11 Entry number

The entry number will be inserted in the first column of the proprietorship section.

The need to use more than one entry will arise when co-proprietors register their respective interests by separate deeds or applications, or where additional subjects are acquired by a registered proprietor and combined on the existing title sheet.

Also, if a title is held in a variety of pro indiviso shares and the shares are all registered these will appear as separate entries in the proprietorship section (pro indiviso shares are discussed in Miscellaneous Registrations at Pro indiviso Shares.)

7.12 Date of registration

By section 4(3) of the 1979 Act, the date of receipt of an application by the Keeper becomes the date of registration even where the Keeper requires further information or an amendment to the live deeds. However, when an application contains material defects making it unacceptable for registration (e.g. the application form is unsigned, or dual registration of a deed is required), the whole application must be rejected.

Where there is more than one entry in the proprietorship section the entries will be inserted in date order.

7.12.1 Date of registration – voluntary registration

The date of registration entered in the title sheet for a voluntary registration is the date of receipt of the application, as with any other application. Where the proprietor is already the owner on a title recorded in the Sasine Register, the date of recording of that title is not included.

7.12.2 Date of registration – roof space

If the proprietor of a registered title is acquiring a roof space, which is to be added to an existing title, the date of registration of the acquisition is not shown in the proprietorship section. (It has already appeared in the property section; see Miscellaneous Registrations under Roof Space).

7.13 Consideration

It is the registration officer’s responsibility to check that the price reflected in the proprietorship section is correct. When the consideration stated is also in respect of additional property to the subjects in the title sheet then this should be reflected, e.g. "£100,000 in respect of the subjects in this Title and other subjects". The price can be carried forward on the LRS from the application workdesk but there will be occasions where the officer will need to amend the entry.

An example is the situation where the proportion of the price paid by each disponee differs from the share of ownership which each disponee is acquiring. This has particular significance if there is a survivorship destination, as it may affect the ability of either party to revoke the destination. The registration officer must therefore ensure that the proprietorship section accurately reflects the terms of the deed, e.g.

• if the deed narrates "in consideration of £50,000 paid by A, I do hereby dispone to A and B equally and survivor", then the 'consideration' field should state: "£50,000 paid by said A"
  
  
• if the deed narrates "in consideration of £35,000 paid by A and £15,000 paid by B, I do hereby dispone to the said A and B equally and survivor", then the 'consideration' field should state: "£35,000 paid by said A and £15,000 paid by said B"

For the avoidance of doubt, where the deed narrates that the total price has been paid by the parties 'equally', and the dispositive clause narrates that the property is conveyed to them 'equally' (or 'equally and to the survivor'), only the sum of money paid should be reflected in the 'consideration' field.

When the consideration narrated in the deed indicates that VAT is payable this should be reflected in identical terms to the deed, e.g.

£100,000 plus VAT; or
£100,000 plus £17,500 VAT; or
£117,500 including VAT

There may be occasions when the consideration stated in the deed is in a foreign currency. In such an event registration officers should not convert the price paid into sterling but should reflect the exact terms of the deed in the consideration field of the title sheet.

When the DIR does not narrate a monetary consideration, the officer should check the entry from the pick list on the LRS. However, it may be necessary to amend the entry if the style in the pick list does not accurately reflect the terms of the deed.

The variations on the non monetary pick list are:

7.13.1 Consideration – voluntary registration

With a voluntary registration where the applicant already has a recorded title, the consideration is left blank on the basis that it has been previously entered in the Sasine Register; the words voluntary registration should not be entered as this is not a consideration. However, leaving the consideration blank could lead to the conclusion that it has been omitted inadvertently. Therefore ‘Not applicable’ will be inserted by selecting from the pick list. In the case where the applicant’s title has not been recorded in the Sasine Register, but is given effect to in the Land Register by an application for voluntary registration the consideration is shown in the Proprietorship Section
.
The words 'voluntary registration' should appear in the consideration box on the application workdesk to provide an explanation for searchers why the application is on the register. Any valuation provided for feeing purposes should only be shown in the 'value' field on the application workdesk.

7.13.2 Consideration – statutory conveyance

Where a schedule conveyance does not narrate that a price is paid, leaving the ‘consideration’ box blank could lead to the conclusion that it has been omitted inadvertently. Therefore, ‘Not applicable’ will be inserted by selecting from the pick list.

7.13.3 Consideration –undertaking to repay existing standard security

When the DIR narrates that the purchase price is a personal undertaking to repay a debt in an existing standard security, this is shown in the proprietorship section. This undertaking is considered to be a ‘valuable consideration’ in terms of the 1979 Act and will therefore induce first registration.

The entry in the proprietorship section will follow the deed but it is normally in the following format:

‘personal undertaking to repay the sum of £150,000 secured by the standard security in entry 1 of the Charges Section’ 

7.13.4 Consideration – leasehold

Deeds relating to leasehold property may narrate the rental paid or a combination of grassum and rental. In each case the deed should be reflected e.g.:

·  Consideration

Rent £2500 per annum
(subject to review)

In situations where the clause setting out the rental provisions is complex this should be reflected by reference to the entry in the burdens section for the lease itself, which will include the full details, e.g.

Rent as specified in the Lease in Entry x of the Burdens Section

7.14 Date of entry

The date of entry will be entered in the same format as the date of registration. The various phrases in the deed that accompany the date of entry(e.g. ‘and actual occupation’) in a deed should be omitted.
Where the DIR states that entry takes effect from the 'date hereof', the date to be entered in the proprietorship section is the last date of execution of the deed.

With a voluntary registration where the applicant's title is recorded in the Sasine Register, the date of entry is not appropriate in the Land Register but leaving the date of entry blank could lead to the conclusion that it has been omitted inadvertently, accordingly ‘Not applicable’ should be shown, however if this cannot be done due to system constraints an explanatory note should be added to the entry. In the case where the applicant's title in an application for registration is being given effect to in the Land Register, the date of entry should be completed.

7.14.1 Date of entry omitted or incomplete

If the DIR does not narrate details of the date of entry, the provisions of section 28 of the Conveyancing (Scotland) Act 1874 can be relied upon. The effect of these provisions was amended by the Term and Quarter Days (Scotland) Act 1990, which came into effect on 13 July 1991. The 1874 Act states that, where no date of entry is stated in a conveyance of lands, the entry shall be at the first term of Whitsunday or Martinmas following the date or last date of the conveyance.

For deeds executed on or before 12 July 1991, the terms of Whitsunday and Martinmas are taken to be 15 May and 11 November respectively. For deeds which are executed on or after 13 July 1991, the terms of Whitsunday and Martinmas are taken to be 28 May and 28 November respectively.

When no date of entry is specified in the DIR, or the date is incomplete, the settler should insert in the ‘date of entry’ box in the proprietorship section the relevant date of Whitsunday or Martinmas. The LRS ‘notes and instructions’ field should be annotated to explain the action which has been taken.

There are two exceptions to this. The first is when the date of entry is given on the application form, in which case that date should be entered.

The second is when the deed bearing no date of entry is a schedule A conveyance. Such a conveyance, as laid down in the Lands Clauses Consolidation (Scotland) Act 1845, does not contain a clause of entry, although it does contain other provisions relating to dates of entry.

If a schedule conveyance is received with an entry date, it is acceptable and the date will be reflected in the title sheet. When the schedule conveyance has no date of entry leaving the date of entry blank could lead to the conclusion that it has been omitted inadvertently. However, until such time that the LRS is adjusted to accommodate the insertion of ‘Not applicable’, the following note should be added to the B section:

Note: The consideration and date of entry fields are intentionally left blank.

7.15 Matrimonial Homes and Civil Partnership Act Notes

The Matrimonial Homes (Family Protection) (Scotland) Act 1981 gave spouses certain rights in their matrimonial home and the Civil Partnership Act 2004 gave civil partners occupancy rights in certain circumstances in their family home. In terms of rule 5(j) of the Land Registration (Scotland) Rules 2006, the Keeper is required to insert-

a statement that there are in respect of the interest in land no subsisting occupancy rights–

(i) in terms of the Matrimonial Homes (Family Protection) (Scotland) Act 1981, of spouses of persons who were formerly entitled to the interest in land; or

(ii)in terms of section 106 of the Civil Partnership Act 2004, of a non-entitled civil partner,

if the Keeper is satisfied that there is no such subsisting right

The Matrimonial Homes Act is discussed at Matrimonial Homes (Family Protection) (Scotland) Act 1981 and the Civil Partnership Act 2004 is discussed at Civil Partnership Act

7.16 Search in the Register of Inhibitions and Adjudications

A search in the ROI usually requires to be undertaken as part of the completion of the proprietorship section. The ROI is covered in detail in ROI.

7.17 Exclusion of Indemnity notes in the Proprietorship Section

The proprietorship section may also reflect details of any exclusion of indemnity relating to validity of prior title. Indemnity should only be excluded with the approval of a senior caseworker and the knowledge of the submitting agent (the agent does not need to be contacted if they have answered the questions on the application form in such a way to indicate that they are already aware of an issue that may result in an exclusion of indemnity). Only if the applicant is unable or unwilling to remedy the defect should the officer proceed with the exclusion. Registration officers should endeavour to maintain a standard form of entry whenever this is possible and examples can be found in the appropriate chapters of this manual.

7.18 Partnerships

Introduction

This chapter deals with the title problems associated with partnerships. The term ‘partnership’ covers the situation where two or more persons agree to conduct a business on the basis of dividing the profits and sharing the losses between them. This therefore excludes businesses operated by a sole proprietor, and it also excludes businesses operated by a corporate body such as a limited company. Normally the partnership is constituted by a written contract between the partners, setting out the trading name of the firm; the nature of the business; what each partner will put into the business; how the profits will be shared etc.. Businesses such as farms or shops are often operated by partnerships, and in many of the professions (e.g. law and medicine) a partnership is the almost invariable method of providing general practice to clients.

A partnership has the status of a legal persona in Scots law. This enables the partnership to enter into contracts in its own name, but it also means that a partnership can be sued or sequestrated. Prior to the Abolition of Feudal Tenure etc (Scotland) Act 2000, the general rule was that a partnership could not own heritable property in its own name, although in theory a firm could take title as a tenant in a long lease in its own name.

A limited liability partnership (see Limited liability partnerships below) may hold property in its own name.

With effect from 28 November 2004, in terms of section 70 of the Abolition of Feudal Tenure (Scotland) Act 2000, it became permissible for partnerships to hold title.  This means that, at least in theory, a firm could take title to land without mechanism of trustees holding land for that firm. However, see Partnership holding Title to Land below. For the more usual scenario of the property being conveyed to or by trustees for a firm please see the immediately succeeding paragraphs.

7.18.1 Trustees of partnership holding title to land

7.18.1.1 Deeds in favour of the trustees

Property being acquired by the partnership should be conveyed by the granter to the trustees for the firm. Normally the whole partners of the firm at the time will be the trustees, but in principle the firm could nominate only some of its partners (or indeed persons who are not partners at all) to be the trustees. A typical dispositive clause will run in the following style:

… do hereby dispone to and in favour of A (designed), B (designed) and C (designed), the partners of the firm of D & Co. (designed) as trustees for the said firm, and the survivors and survivor of them as trustees and trustee aforesaid

However, more complicated styles of destination are not unknown – e.g. the destination might be to the partners ‘present and future and their successors in office’ as trustees. Registration officers should therefore ensure that the entry in the proprietorship section of the title sheet accurately reflects the deed, rather than slavishly following set styles of entry. No material words should be omitted even where there appears to be repetition, as this might inadvertently change the meaning of the destination.

The same principle applies where the trustees acquire on the firm’s behalf an interest of a different type (e.g. where the firm is the creditor under a standard security).

7.18.1.2 Deeds granted by the trustees

Conveyances and other deeds should be granted by the trustees on behalf of the firm; where title has been taken in the name of trustees for the firm, the partnership itself should not grant the deed. Where the partners and the trustees are the same individuals, the operative clause of the deed must make it clear that they grant the deed in their capacity as trustees.

The normal rules of authentication apply to deeds granted by the trustees. In other words, the deed should be signed by all the trustees together in the presence of one witness, or the trustees may each sign separately in the presence of their respective witnesses. The witnesses must also sign the deed and be named and designed. Section 7 of the Trusts (Scotland) Act 1921 makes a general provision for trusts of all types, to allow a majority and quorum of the trustees to sign a deed running in the name of all the trustees, if a minority of the trustees is not available to sign. However, the interpretation of section 7 has been a matter of some academic debate, and any deed which is not signed by all the named trustees should therefore be referred to a senior caseworker.

In some cases, the partnership itself, and/or any partners who are not trustees, may also be parties to the deed. This is common where trustees for a firm grant a standard security; the firm itself and the partners may well grant the personal obligation, since the firm is able to contract in its own name to acquire the debt. In such cases, the operative clause should be worded in such a way that the conveyance or grant is by the trustees, and the basis on which the firm or partners are parties should be explained. Any additional partners should sign the deed in the presence of a witness (or their respective witnesses). The firm’s name may well also be ‘signed’ by one of the partners in the presence of a witness, but this is not a statutory essential.

7.18.1.3 Change of trustees

Where the trustees who grant a deed are the same individuals as the trustees who hold a completed title, registration officers should assume (in the absence of contradictory evidence) that there has been no change in the membership of the trust. Difficulties arise where some of the trustees who hold a completed title have left the firm and are not granting the deed, and/or additional persons not named in the title grant the deed as trustees. In such cases, the appropriate links in title will require to be examined.

7.18.1.4 Death of a trustee

In the normal case where the trustees have taken title with a destination to the ‘survivors and survivor’, on the death of one of the trustees the trust continues to be administered by the remaining trustees. Production of the extract death certificate is sufficient authority for the Keeper to accept a deed granted by the surviving trustees; there is no need for the registration officer to requisition an assurance that the destination has not been evacuated.

If a sole trustee (or last surviving trustee) dies, the result is a lapsed trust. New trustees may then be appointed by way of petition to the court under section 22 of the Trusts (Scotland) Act 1921. For the Keeper’s purposes the resulting court order is sufficient evidence of the appointment of the trustees.

7.18.1.5 Incapacity or bankruptcy of a trustee

Medical incapacity (e.g. insanity) does not terminate the trustee’s infeftment, but it does prevent him or her from dealing with trust estate. Equally, an insane person cannot validly resign as a trustee, and a curator bonis, guardian, authorised person (under an intervention order) or attorney will not normally be able to act for him or her with regard to the trust property. Section 23 of the Trusts (Scotland) Act 1921 therefore provides for incapax trustees to be removed from office by way of petition to the court.

Bankruptcy does not, however, prevent a trustee from continuing to act in a trust capacity. If a trustee who is also a partner of the firm is sequestrated, this may well mean that he ceases to be a partner, but he should still be the granter of a future deed dealing with the trust property. His trustee in sequestration has no involvement in the trusteeship of the firm.

7.18.1.6 Resignation of a trustee

An outgoing partner will normally record his or her resignation from the firm in writing. This may take the form of a formal deed or merely a letter. However, resignation as a partner does not necessarily entail resignation as a trustee. In order to resign as a trustee, the partner must sign a deed of resignation following the style in schedule A to the Trusts (Scotland) Act 1921, which is as follows:

I, AB (designed), do hereby resign the office of trustee under [specify the trust deed] granted by … dated the … day of … [if recorded, specify register and date of recording] [if the trustee was assumed add] and to which office of trustee I was assumed by deed of assumption granted by … dated … [etc.]
(To be attested)

The style (which is not designed expressly for partnership trusts) will normally require some modification to suit the circumstances – e.g. the ‘deed of trust’ will normally be the disposition to the firm’s trustees. However, it is important that the style is followed as closely as possible. If it is not clear that the outgoing partner has resigned as a trustee, that individual should be presumed to have remained a trustee and will require to sign future deeds granted by the trustees, even if he or she is no longer a partner or actively involved in the running of the firm.

Unfortunately, experience shows that firms frequently do not arrange for outgoing partners to sign a formal deed in the necessary style for resignation as a trustee. This can lead to difficulties at a later stage, where one or more of the trustees (who held a completed title) has left the firm and may perhaps no longer be on good terms with the remaining partners. Any situation where one or more of the trustees (with a completed title) is not a party to the deed, and insufficient documentary evidence of resignation is available, should be referred to a senior caseworker.

7.18.1.7 Assumption of a new trustee

Just as an outgoing partner does not necessarily cease to be a trustee of the firm, so an incoming partner does not necessarily become a trustee. When a new partner joins the firm, he or she will only become a trustee if the trustees with a completed title grant a formal deed of assumption and conveyance. There is a style for such a deed in schedule B to the Trusts (Scotland) Act 1921. Alternatively, however, it may be less cumbersome for the trustees with a completed title to grant a disposition of the firm’s heritage in favour of themselves and the incoming trustee.

7.18.2 Partnership holding Title to Land

7.18.2.1 Background

Coming into force on the Appointed Day of 28 November 2004, Section 70 of the Abolition of Feudal Tenure etc. (Scotland) Act 2000 states that: “A firm may, if it has a legal personality distinct from the persons who compose it, itself own land.”

Section 70 is intended to clarify the position of firms owning property after feudal abolition. On the face of it, the provision appears to allow firms to take title to land without hindrance.

Partnerships are rarely static for long. Individual partners will occasionally resign and leave the firm, or they may die, and new partners may come in. The Partnership Act 1890 governs the position. For example, Section 33(1) of the Partnership Act provides that, subject to any agreement to the contrary, a partnership is dissolved automatically on the death or bankruptcy of a partner. Consequently, firms sometimes come to an end as legal entities even although they may continue as business entities.

Because of the tendency for partnerships to dissolve on changes of membership, the idea of a partnership taking title to land under s.70 of the Feudal Abolition Act is widely held to be impracticable. Legal commentators are suggesting that the only safe course is to continue the traditional practice under which trustees acting on behalf of the partnership hold title to land.

It is therefore highly improbable that there will be many applications to the Keeper to register in the Land Register, or record in Sasines, a title in the name of a partnership.

There are Law Commission proposals for amending partnership law, which intend to address inter alia this issue by providing for continuity of legal personality notwithstanding changes of membership. However until revised legislation resolves the foregoing practical problems the following instructions should be followed.

7.18.2.2 Instructions

In the unlikely event that an application to register or record a title in the name of a partnership is received, registration officers may not reject it provided everything else in the application is in order, in view of the effect of s.70 of the 2000 Act. They should instead refer it to Legal Services for a decision.

The need for referral to Legal Services is due to the difficulty that, if the Keeper were to register a title in the name of a firm, the partnership might no longer legally exist by the time of a subsequent sale or mortgage, notwithstanding the fact that the business is continuing in practice.

For the avoidance of doubt, the rule should be followed:

• • whether the property is leasehold or non-leasehold
  • whether the firm is Scottish or not.

Again for the avoidance of doubt, there is no problem with trustees for a firm continuing to register or record a title to land.

This instruction does not apply to limited liability partnerships (LLPs) (see next paragraph) that can hold title to property in its own name, without difficulty.

7.19 Limited liability partnerships

Introduction

The Limited Liability Partnerships Act 2000 (hereinafter referred to as ‘the Act’) came into force on 6 April 2001. It introduced a new type of legal entity known as the Limited Liability Partnership (hereinafter referred to as ‘LLP’). The LLP is, as its name suggests, a combination of both a partnership and a company. Its main purpose is to ‘enable two or more persons associated for carrying on a lawful business with a view to profit’ to limit their liability whilst trading in partnership mode. This limited liability is possible because an LLP is a legal person separate from its members.

To achieve the status of LLP it is necessary to register with the Registrar of Companies. The Registrar of Companies issues a Certificate of Incorporation stating inter alia the LLP’s trading name and the date of incorporation. In return for being allowed to trade with limited liability, LLPs have to disclose more information about themselves than is the case with traditional partnerships. They do this by filing annual reports, accounts and details of their composition and constitution etc. with the Registrar of Companies.

7.19.1 Legal persona

Once incorporated, the LLP becomes a body corporate possessing a legal personality separate from that of its members. In addition an LLP has unlimited legal capacity. This means that an LLP can do anything that a natural person can do. It has the ability to hold property in its own name and enter into contracts in its own name. Thus where the LLP is, for example, the disponee in a conveyance the deed will simply narrate the name of the LLP, i.e. ‘do hereby dispone to and in favour of Smith and Jones LLP’. Similarly the subsequent entry in the proprietorship section of the title sheet will simply read ‘Smith and Jones LLP’, followed by its address. This position differs markedly from that of the traditional partnership, in which title is taken on the partnership’s behalf by the partners as trustees thereof. It can be seen therefore that the LLP’s existence as a separate legal entity makes it more closely akin to a company than to a partnership. For the avoidance of doubt, standard securities by limited liability partnerships require to be registered in the Register of Charges.
Part I of the Schedule to the Act provides that an LLP must end its name with the words ’limited liability partnership’ or the abbreviation ’llp’ or ’LLP.’ (There is, in addition, a special provision for LLPs registered in Wales to use the Welsh equivalent of LLP viz.: "partneriaeth atebolrwydd cyfyngedig" or its abbreviation "pac" or "PAC").

7.19.2 Execution of deeds

See Examination of Title at Authentication and Execution — Limited Liability Partnership.

7.19.3 Completion of application Forms 1, 2 & 3

The relevant questions in the application forms that relate to corporate bodies other than companies registered under the Companies Acts, will apply to LLPs. Legal settlers should therefore check that these questions have been adequately answered.

7.19.4 Stamp duty and Stamp Duty Land Tax– transitional relief

Stamp duty- transfers to LLPs contracted prior to 1 Dec 2003

It is anticipated by the Government that a significant number of existing partnerships, particularly professional partnerships of doctors, lawyers, architects, surveyors and the like, will wish to convert to LLP status. In many cases this will involve the transfer of property from the existing partnership to the LLP. Section 12 of the Act provides for relief from stamp duty for such property transfers occurring within one year of the date of incorporation of the LLP, providing certain conditions are met. Essentially these are that the property transferring from the former form of partnership to that of the LLP should be the same, or similar, and that there should be at least one partner of the former partnership who transfers as a member (partner) to the LLP.

By virtue of section 12(6) any deed on which stamp duty exemption is sought required to be submitted to the Inland Revenue Stamp Office for adjudication. Provided the Stamp Office are satisfied it falls within the exempt category the deed will be stamped with a particular stamp denoting that it is not chargeable with any duty. For transfers occurring more than one year after the date of incorporation of the LLP the normal provisions for calculating stamp duty will apply. It will not always be apparent whether or not the transitional relief provisions apply. For that reason a deed will be acceptable to the Keeper if it has been either denoted or otherwise stamped/adjudicated by the Stamp Office or contains a Finance Act certificate stating that the value of the property being conveyed falls under the stamp duty threshold.

Stamp Duty Land Tax- transfers to LLPs contracted on or after 1 Dec 2003

The registration officer is not responsible for ensuring that the correct SDLT certificate is submitted, but for information, the relief continues to pertain under Stamp Duty Land Tax arrangements. The relief must be claimed and therefore, a Revenue certificate is required to be submitted with an application for registration.

It is stressed that the transitional provisions apply solely to stamp duty and stamp duty land tax. Registration dues will be charged as per the current Fee Order.

7.20 Deeds in favour of the Trustees of a Church of Scotland Congregation or the Church of Scotland General Trustees

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 6(g) of the Land Registration (Scotland) Act 1979, whereby the Keeper is given the discretion to enter such information as he or she considers fit, 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.

7.21 Deeds in favour of 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. It has been agreed, in similar terms as with the Church of Scotland above, 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.