34.2 A Crofting Tenancy is not a Registrable Interest in Land.

As a crofting tenancy is based on a one year lease, it is not capable of constituting a registrable interest in land. As such, a title sheet can never be created for a crofting tenancy.

34.3 A Crofting Tenancy is an Overriding Interest Capable of being noted on the Landlord’s Title Sheet.

Section 28(1) of the 1979 Act specifies that a crofter’s tenancy is an overriding interest, and so may be noted on the landlord’s title sheet. Attention is drawn to Overriding Interests which look at the general topic of overriding interests. In short, a crofting tenancy must be noted if it is disclosed in a document accompanying an application for registration of the landlord’s title.

It may be noted in other circumstances, namely when a specific application is made to note it, or if it is disclosed in any other application, or if it otherwise comes to the Keeper’s attention, but will only be so noted if satisfactory evidence of its constitution is submitted. Such evidence should comprise either a copy of the lease or, where there is no written lease, a statement by the landlord affirming the existence of the croft.

Any crofting tenancies that are noted as an overriding interest should appear in a schedule of crofts within the burdens section of the title sheet. The actual entry in the schedule will be determined by the information provided by the applicant. Very often no written lease will exist or, where a lease does exist, it may be in very rudimentary terms and may not accurately reflect the occupied extent of the croft. Consequently, no attempt should be made to locate or plot tenanted crofts on the landlord’s title plan. The following example is a style of entry and schedule that should be used:

Burden Entry Number 4: Those parts of the subjects in this title to which the entries in the schedule below relate are subject to crofting tenure within the meaning of the Crofters (Scotland) Act 1993:

SCHEDULE OF CROFTS

34.4 Crofter’s Right to Buy

Under the 1993 Act crofters are given statutory rights to buy both their croft agricultural lands and also the dwellings pertaining thereto. Unless the subjects that are purchased are formally decrofted, they will remain subject to the controls contained in the 1993 Act. It is as regards a crofter’s right to buy, that most problems will arise. The practical implications for legal settlers are as follows:

34.4.1 Noting on Title Sheet that the Subjects are a Croft.

In most cases, it will be possible to determine whether or not the subjects in respect of which registration is sought comprise a former tenanted croft, from either the deed inducing registration or, where the application is in respect of a re-sale of the former tenanted croft, the foundation deed. The subjects will invariably be described as the ‘croft of’ or the ‘area of croft land’ or some variation thereof and it will be indicated that the purchase is under the 1993 Act or earlier crofting legislation.

Similarly, it may be disclosed in the application form, or in an accompanying letter, that the subjects are a croft within the meaning of the 1993 Act. Where it is clear that the subjects do comprise a croft within the meaning of the 1993 Act, the title sheet should indicate that the registered interest is subject to various crofting regulations. Accordingly, legal settlers should enter a note in the following terms in the property section of the crofter’s title sheet:

‘Note: The subjects in this title are subject to crofting tenure, as defined in the Crofters (Scotland) Act 1993.’

N.B. This note was previously worded as ‘the subjects in this Title comprise a croft as defined in the Crofters (Scotland) Act 1993’; any existing entry in that style should be amended to reflect the above note that the subjects are subject to crofting tenure.

34.4.2 Problems in Determining whether the Subjects are a Croft.

Unfortunately, the situation can arise whereby subjects are referred to as a croft (or croft land or croft house) in the title deeds, but no mention is made of the 1993 Act or earlier crofting legislation, in either the deeds or elsewhere in the application. In those circumstances it will not be apparent whether the subjects are a croft in the strict legal sense and so subject to the 1993 Act, or simply an area of land or a dwellinghouse whose owners have at some point simply chosen to call a croft.

Where the latter applies, the subjects will not be subject to any of the crofting regulations and consequently it would create an inaccuracy in the title sheet if the aforementioned note were to be added. It is, therefore, important to establish whether or not any subjects that are described in the title deeds as a ‘croft’, are in fact a croft in the strict legal sense. If this cannot be ascertained from either the title deeds or the application (i.e. if there is no reference to the 1993 Act or earlier crofting legislation) clarification should be sought from the applicant’s agent before deciding whether to omit or include the aforementioned note. The following is a suggested style for the letter:

"I note that the above subjects are referred to in the deeds as "forming (part of) the croft XXXXXXXXX". However there is no specific mention of the Crofters (Scotland) Act 1993 nor any prior legislation which may affect.

I would therefore be obliged if you could confirm whether

• •  the subjects are/are not a croft as defined in the above act and
  • If the subjects are a croft as defined in the above Act, but are affected by a de-crofting direction or resumption order, please submit the appropriate evidence in support of your response.

I draw your attention to the terms of Rule 13 of the Land Registration (Scotland) Rules 2006. If you do not reply within 60 days hereof the Keeper will proceed with registration on the basis that the subjects are not a croft.

Yours faithfully"

The correspondence should be added to the archive.

34.4.3 Decrofting direction and resumption orders

The only circumstance whereby the aforementioned note need not be shown, or can subsequently be removed, is where the subjects have been decrofted or are subject to a Land Court resumption order (section 20 of 1993 Act).

Decrofting is an administrative process carried out by the Crofting Commission that frees ground from the restrictions imposed by the 1993 Act, and is evidenced by the grant of a decrofting direction by the Commission.

Section 20 of the 1993 Act provides that a landlord of a tenanted croft may apply to the Land Court to resume the croft (or any part including common grazings).  The effect of resumption is that the landlord takes the land back into his ownership and cannot thereafter be compelled to re-let the land by the Crofting Commission.  This effectively enables the landlord to dispone the land free from the effects of crofting legislation.  It is also possible that the Land Court may authorise a temporary resumption order that will be for a specified period.

When faced with a decrofting direction or resumption order, consideration should be given as to whether the whole of the subjects in the title have been freed from the crofting legislation in which case the note mentioned at 34.4.1 is not required on the title sheet. In the event of only part of the subjects being affected by the direction or order the note (The subjects in this title are subject to crofting tenure, as defined in the Crofters (Scotland) Act 1993) should be amended as appropriate, e.g.

The subjects in this Title are subject to crofting tenure, as defined in the Crofters (Scotland) Act 1993, under exception of the area tinted xxxxxx on the Title Plan, which is the subject of a Decrofting Direction/Resumption Order dated xxxxxx.

Where it is not possible, or practical, to reference the exception on the title plan, a verbal description of the excepted area, based on the terms of the direction or order, should be used.

Where the resumption order is only for a temporary period the foregoing note should be amended to reflect the duration of the order.

The decrofting direction or resumption order may also contain conditions, such as maintenance of fencing; there is no provision in the crofting legislation providing that these conditions are enforceable against the proprietor of the relevant land (or a future proprietor) and as such, they should not be shown in the title sheet. The conditions may affect the overriding interest of the crofting tenant in land not decrofted, but conditions affecting the overriding interest are not disclosed on the title sheet for the interest of an owner. Equally, the conditions imposed in an order may be replicated as real burdens in an appropriate deed submitted for registration against the land, which should meet the requirements for constitution of real burdens in terms of legislation extant at the time of the document.

With regard to decrofting directions section 25(4) of the 1993 Act states that:

Such a direction shall not have effect until the land to which it relates has been acquired by the crofter or his nominee and unless the acquisition is made within 5 years of the date of the giving of the Direction.

The effective date of the acquisition is the date of registration or recording of the deed transferring ownership; any occasion where the transfer was outwith the 5 year period should be referred to a senior caseworker as the result is likely to be that the subjects continue to be affected by the crofting legislation and the note detailed in 34.4.1 above will be required in the property section.

34.4.4 Apportionment

In terms of sections 52(4) and (10) of the 1993 Act (as amended) "the Crofting Commission may, on the application of any crofter who holds a right in a common grazing…apportion a part of the common grazing…for the exclusive use of the applicant". 

Section 52(3) provides that common grazings shared by multiple townships may be apportioned into separate parts for the exclusive use of the townships, or apportion a part for the exclusive use of one township.

The apportionment can be for a specific period and also be reviewed by the Commission during its duration.

Apportionment does not remove the area from the crofting regulations covering common grazing, unlike decrofting or resumption.  Accordingly unless other evidence is submitted that the area is no longer subject to crofting legislation the note specified in section 34.4.1 should be added to the title sheet, and in the case of an area of common grazings the information in section 34.4.9 should be considered.

34.4.5 Right to Buy: Automatic Disburdenment of Standard Security by the Former Landlord over Croft Land.

Under section 19(4) of the 1993 Act, any subjects purchased under the right to buy provisions are automatically disburdened of any prior standard security granted by the former landlord, without the need for a formal discharge or deed of disburdenment. Before omitting such a standard security from the purchasing crofter’s title sheet, settlers’ will require a written statement from the seller’s solicitor confirming that the transaction was within sections 12 to 18 of the 1993 Act.

34.4.5.1 Right to Buy: Outstanding Notice of Payment of Grant.

Section 42 provides for the payment of loans or grants by the Secretary of State for Scotland (now Scottish Ministers) for erecting, repairing or improving crofts. A loan will be secured by a standard security whereas securing the provisions relating to payment of a grant will be achieved by recording or registering a Notice of Grant; this will contain conditions to subsist for a specified period. Any outstanding grant should be disclosed on the Title Sheet reflecting the terms of the deed, e.g.

Notice of Payment of Grant of £xxxx by Secretary of State for Scotland to [crofter], in terms of the Crofters (Scotland) Act 19?? and the Crofters etc. Building grants (Scotland) Regulations [year], in respect of the subjects in this title (or in respect of ….. … part of the subjects in this title) containing conditions to be observed for yy years from dd mmm yyyy, recorded GRS (Inverness) …….

The said regulations provide for repayment of the grant in the event of breach of the conditions; if the grant is still outstanding at the time of de-crofting then it should be shown as a prior ranking charge to any security being registered.  Any instances where a grant is being registered subsequent to a security to any party other than the Scottish Ministers or Highlands and Islands Enterprise should be referred through the usual channels to consider the ranking implications.  Consideration will have to be given as to whether the landlord had been instructed to sell by the Land Court and may be entitled to repayment of discount money.

The various regulations contained in Statutory Instruments governing grants have included variations of the duration that the grant would subsist. The current duration is set out in the 2006 regulations and under them a grant subsists for a maximum of 15 years. The 2006 regulations also provide that a grant made under the 1990 regulations shall cease to have effect on the expiry of 15 years. Accordingly a grant made under the 1990 regulations can be ignored if the time period of 15 years has expired. However it is not clear that this time limit would apply to grants made under earlier regulations. Therefore until 8 Nov 2017 there will be 40 year grants that continue to subsist unless a Notice of Cessor of Conditions of Grant has been recorded in Sasines. Any request by an agent to remove a grant because they consider the time period to have expired should be supported by appropriate evidence, and make reference to the appropriate Statutory Instrument.

34.4.6 Right to Buy: Standard Securities in favour of Scottish Ministers and Highlands and Islands Enterprise

Effect on Ranking.

Section 19(3) of the 1993 Act alters the normal rules on ranking of securities. The section provides that where a tenant crofter has received lending to fund improvements to the croft, from either the Scottish Ministers or Highlands and Islands Enterprise (HIE), and then subsequently buys their croft, either of those bodies may obtain a standard security from the crofter. Regardless of the date of registration of such a standard security, these securities rank prior to any other security. If both bodies take security, the Scottish Ministers’ security ranks prior to that of Highlands and Islands Enterprise.

Consequences for the Keeper.

The Keeper is not in a position to know whether such a section 19(3) security is likely to be forthcoming, for, in virtually all cases, they will not be submitted for registration until some considerable time after the application for registration in respect of the purchase of the croft. However, this only becomes an issue if another standard security is submitted for registration. In that event, and in the absence of any evidence to the contrary, the Keeper must guard against the possibility of a security to Scottish Ministers or HIE being presented at a later date.

Once the original purchaser of the croft (the former tenant crofter) has sold the subjects any application to register a security would fall to be rejected as not being granted by the proprietor; the provisions of section 19(3) will not require to be reflected on the Register.

Procedure to be followed by legal settlers:

Where the FR or TP application is the first sale of a croft to the tenant crofter then there is the possibility of a section 19(3) security being submitted for registration a next application note should be added to the title to ensure that any registration officer dealing with a subsequent application is aware of the potential for this security to be submitted.  The note should be in the following form:

Add note CR13 after any entry for a st sec by [applicants] unless for a standard security in terms of S.19(3) of 1993 Crofters Act (see section 34.4.5 of legal manual) - please delete this NAN once said [applicant] is no longer a proprietor or a S19(3) security has been registered.

In the C section insert the following footnote (CR13 note) to the entry for the ‘other’ standard security:

‘Note: The above standard security is affected by ranking provisions contained in section 19(3) of the Crofters (Scotland) Act 1993.’

Two notes will accordingly be required in the Charge Certificate. In addition to the customary note regarding ranking, a further note, as per note 2 in the following example, will be required. For example:

Note 1: There are no heritable securities ranking prior to or pari passu with the above mentioned heritable security appearing on the Register affecting the subjects.

Note 2: The above standard security is affected by ranking provisions contained in section 19(3) of the Crofters (Scotland) Act 1993.

Similarly, if HIE register a section 19(3) standard security, the above footnote should be entered after the entry for it in the Charges Section, as it will rank postponed to a later section 19(3) security in favour of the Scottish Ministers. The style of security should include the section of the 1993 Act under which it is granted.

The above note (i.e. Note 2 in the above example) may be omitted if evidence is submitted from both Scottish Ministers and HIE that no section 19(3) standard security will be forthcoming. Legal settlers need not requisition such information.

If a Section 19(3) standard security is submitted after any other security, the existence of the CR13 note after the earlier entry will note the ranking position, and will therefore require no amendment.

It is possible to have section 19(3) standard securities to both Scottish Ministers and HIE If section 19(3) standard securities in favour of both Scottish Ministers and HIE are submitted prior to any other security then no such note will be required in the event that a subsequent security is registered. The section 19(3) security(ies) will have prior ranking by virtue of the earlier date of registration.

It should be noted that Scottish Ministers are authorised by section 45 of the 1993 Act to grant loans, supported by a standard security, to owner-occupier crofters for a period of up to 7 years after the date of purchase. Section 45 standard securities are affected by the ranking provisions in section 19(3). However, as Scottish Ministers are the heritable creditor, they will be in a position to confirm whether or not a section 19(3) security will be forthcoming. The legal settler should, therefore, enquire of the agent whether any such security will be forthcoming. If advised that no such security will be forthcoming the note detailed above can be omitted. These securities are bound by the normal rules of ranking. It should be apparent from the text of the security whether it is being granted in terms of section 19 or section 45. If it is not, clarification should be sought from the ingiving agent. The guidelines relating to the section 19 (3) ranking provisions apply equally to ‘discount’ standard securities.

Discharge of standard securities by Scottish Ministers.

Provision is made in schedule 5 of the 1993 Act for standard securities granted by Scottish Ministers to be discharged by means of a certificate as opposed to a formal discharge.

34.4.7 Right to Buy; ‘Discount’ Security in Favour of Landlord

Circumstances in which a ‘discount’ standard security may be granted

Crofters are permitted to buy their agricultural land at a reduced price and any subsequent disposal by the crofter within a certain period may give rise to a duty to repay the difference between the reduced price paid and the then market value to the landlord: this is often referred to as "clawback". That duty normally arises where the Land Court has ordered the landlord to sell the croft land and in doing so has also ordered the crofter to grant a standard security in favour of the landlord to secure this payment. The period during which the clawback arrangement strikes depends on the date that the Land Court order was made (see below). Similar provision does not exist in relation to purchases of the croft house. 

Although the concept is similar to discount standard securities granted in council house purchases, three important differences should be noted:

1. 1. Where the Land Court order directing the landlord to sell is made before 1 July 2011, the security strikes at disposals within a five year period.
   2. Where the Land Court order directing the landlord to sell is made on or after 1 July 2011, the security strikes at disposals within a ten year period.
   3. There is no statutory alteration to the ranking of these securities. In contrast to the position with council houses where the discount security always ranks postponed to a security for the purchase or improvement of the subjects, a discount security in favour of a former landlord will simply rank according to its date of registration.

Any instance where apparent clawback provisions are contained within the disposition should be referred to a senior caseworker.

Procedure for entering ‘discount’ security in title sheet

If it is declared in gremio of a standard security that it is granted under the terms of section 14(3) (or 13(4)) of the Crofters (Scotland) Act 1993, that declaration should be reflected in the entry of the standard security in the charges section as follows:

‘Standard Security to secure sums which may become payable under section 14(3) of the Crofters (Scotland) Act 1993 by said A to B.’

If it is not disclosed in gremio of the standard security, but revealed elsewhere in the application (e.g. on the application form or the backing of the deed) a note in the following form will be added to the entry in the charges section:

‘Note: The standard security in entry x was granted in respect of sums which may become payable under section 14(3) of the Crofters (Scotland) Act 1993.’

If a standard security granted in favour of the former landlord is not stated, either in the deed or elsewhere, to be in respect of sums which may become payable etc. the standard security should be treated as a straightforward loan security.

Removal of ‘discount’ security

If the five or ten year period has clearly elapsed without any disposal of the property, the Keeper will not insist upon a formal discharge being registered for a security that is clearly stated on the title sheet to have been granted in terms of section 14(3) (or 13(4)) of the 1993 Act. The security may be removed from the title sheet at the time of the next dealing or on separate application being made. It is stressed that this instruction only applies to those securities expressly granted in terms of section 14(3) (or 13(4)) of the 1993 Act).

Where a security in favour of the former landlord is not granted under those provisions, a discharge will be required before the security can be removed from the title sheet.

34.4.8 Right to Buy: Pre-emption Rights

There are two possible scenarios concerning pre-emption rights, namely:

34.4.8.1. Sale by landlord to tenant in pursuance of Land Court order.

Section 17(3) of the 1993 Act disapplies any rights of pre-emption in relation to sales of crofts in pursuance of a Land Court order. There is, unfortunately, no judicial authority on the point that determines whether this has the effect of disapplying the pre-emption right for all time or simply for the particular transfer to the crofter. In the absence of any judicial authority, the Keeper’s approach is to assume the latter. Accordingly, any pre-emption rights should be disclosed in the burdens section of the title sheet. The next transfer should then be counted as the first where that is important for determining whether a pre-emption right can continue to be exercised (see Rights of pre-emption on the general topic of pre-emption rights).

34.4.8.2. Sale by landlord to tenant in pursuance of voluntary agreement.

Where the sale is by the agreement of landlord and tenant, the normal rules regarding pre-emption apply (see Rights of pre-emption on the general topic of pre-emption rights).

34.4.9 Common Grazings

See also paragraph 34.5 if your subjects form part of the Glendale Estate, Isle of Skye.

There is no statutory definition of common grazing although actions under statute allows for the constitution of certain areas as common grazings and gives credence to the land being subject to crofting tenure. It is generally considered that a common grazing is an area of land belonging to a landlord but used by tenants (there must be more than one), who have a right to a share in the grazing (normally by virtue of their tenancy of the croft). It is possible to distinguish Township Common Grazings, which are shared by tenants in a township, and General Common Grazings, which are shared by several townships, some of which may also have their own township common grazings. The common grazings are not usually divided by fencing into individual shares, all stock being allowed to range over the entire area.

The extent of the common grazing can be reduced following successful application by the landlord for a resumption order, or can be temporarily affected by the apportionment by the Crofting Commission of part of the common grazing following application by the crofter.  Apportionments are not a permanent alteration of the extent of the common grazing (see 34.4.4).

Shareholders are nearly always crofters, who have shares by virtue of their crofting tenancies or ownership of the land. They have rights to graze animals and to take peat and seaweed, if available, for their own use on their crofts. They also have the right to apply to the Crofting Commission for the apportionment, for their exclusive use, of a part of the common grazings. Non-crofters may also have shares by virtue of their occupation of holdings other than crofts, and if so are bound by the grazings regulations. They are also entitled to apply for apportionments.

In addition to the foregoing there is another form of common grazing which still exists in many townships; this practice is called Open Township. During the winter months, usually from a set date in November to a set date in April, each shareholder opens the arable ground on which the croft is built (the in-bye land) to stock belonging to the other shareholders in the common grazings. A shareholder has the right of appeal to the Crofters Commission to be excused from this regulation if the practice interferes with his individual use of his in-bye land. Any application identifying subjects as comprising open township common grazing should be referred to a senior caseworker.

34.4.9.1 Right to use common grazings

If, in addition to title to the croft, the purchaser is granted a right to use common grazings then this should be reflected in the title sheet, replicating the terminology in the deed.  Even if identified on a plan the Keeper will not replicate this on the title plan given the potential for this extent to diminish through apportionment; instead a note should be added to the A section in the following terms:

The right to common grazings is subject to the provisions in sections 47 to 52 of the Crofters (Scotland) Act 1993.

34.4.9.2 Sale of common grazings

If rights to use common grazings are excepted from warrandice in the deed inducing registration then registration can proceed with an appropriate note being added to the A section. If there is no plan identifying the part of the disponed subjects comprising common grazings then the following note should be added:

Part of the subjects in this Title forms (part of) the [name] Common Grazings and is subject to the Crofters (Scotland) Act 1993.

If the common grazings are identified on a plan this should be reflected on the title plan and the above note amended appropriately.

That part of the subjects in this Title tinted xxxx on the Title Plan forms (part of) the [name] Common Grazings and is subject to the Crofters (Scotland) Act 1993.

In any other instance where title to common grazings is being transferred the application should be referred to a senior caseworker.

Consideration needs to be given to whether the area in question has been the subject of (a) a resumption order, (b) a decrofting direction following a final notice of apportionment of the common grazings, or (c) a decrofting direction covering only the site of the croft house.

34.5 Glendale Estate, Isle of Skye

Titles described as forming part of the Glendale Estate should be referred to a senior caseworker in the Glasgow office who will have access to background documents regarding prior investigation of title.

34.6 Transfer of Crofting Estates (Scotland) Act 1997

Section 1 of the above Act enables Scottish Ministers to transfer their crofting estates to approved bodies. Scottish Ministers may also transfer any interests in mineral, sporting or other rights relating to crofting estates. By virtue of Section 5, any right of pre-emption affecting the property being disposed of by the Secretary of State is permanently extinguished. Thus, in contrast to the position outlined in Right to Buy: Pre-emption Rights, pre-emption rights should not be disclosed in the burdens section, where it is clear the transfer of crofting interests is being made under the 1997 Act.

34.7 Division of owner-occupied crofts

34.7.1. Background

Section 34 of the Crofting Reform (Scotland) Act 2010 (‘the 2010 Act’) came into effect on 1 October 2011 and inserted a new section 19D into the 1993 Act. Under section 19D, an owner-occupier crofter requires the consent of the Crofting Commission before dividing his or her croft. If the croft has not been divided with the Commission’s consent prior to the transfer, then the transfer and any deed purporting to transfer ownership of part of the croft is null and void. Section 19D applies to any such transfer, where missives are concluded on or after 1 October 2011. (Where there are no formal missives, the Keeper assumes that the provisions apply to a disposition delivered on or after that date.) The provisions apply only to the division of an owner-occupied croft, not to a sale by a crofting landlord.

Where property in a crofting area is being acquired, the Keeper takes the view that the onus should be on the acquirer’s solicitor to consider whether any provisions of the Crofting Acts are relevant, and in the case of Land Register applications, to draw to the Keeper’s attention any failure to comply which is material to the validity of the title.

When registering an application that has the effect of dividing an owner-occupied croft the following procedures should be followed.

34.7.2. Dealings with Whole

As the new provisions affect only the conveyance of part of a croft there should be no implications when registering a dealing of whole.

34.7.3 First Registrations

In the absence of specific confirmation from the applicant’s solicitor, it is unlikely that registration officers will be able to establish whether section 19D applies in a given case. Registration staff should not investigate whether section 19D applies, unless

• • it is apparent from the title description (in the deed inducing registration and/or a prior deed) that the subjects are in crofting tenure, and/or
  • there is other information in the application for registration (e.g. the answer to question 5(c) or 14 on Form 1, or a copy of a search sheet etc.) which reveals that the subjects are in crofting tenure.

Examples of relevant information in the title description would be where the subjects are described as ‘part of croft x in the township of y’, or where a deed indicates that the subjects were previously sold under ‘right to buy’ provisions contained in the 1993 Act. The mere fact that the subjects are rural land in a crofting area is not sufficient to justify investigation, unless it is clear that the subjects of the application are in crofting tenure.

If it is apparent that the subjects are in crofting tenure, the registration officer should check whether either the deed inducing registration or a prior deed in the prescriptive progress implements a split-off transaction concluded on or after 1 October 2011. In the limited circumstances where it is apparent that the subjects may be affected by the provisions of section 19D, settlers should ask the agent to submit either a letter confirming that section 19D does not apply or evidence of compliance with the provisions (e.g. evidence of division of the croft with the Commission’s consent).

If satisfactory evidence is not submitted, the following exclusion of indemnity should be added to the B Section of the title sheet:

Note: [As regards the part tinted xxx on the title plan,] 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 Disposition by A to B registered [recorded G.R.S. (xxx)] [date] being reduced or declared or found to be void because of any failure to comply with the provisions of section 19D of the Crofters (Scotland) Act 1993.

Settlers should note that section 19D will not apply to an FR within a research area.

34.7.4 Transfers of Part

Registration staff should not investigate whether section 19D applies, unless

• • the A Section of the parent title sheet contains a note stating that the subjects (or part thereof) comprise a croft as defined in the Crofters (Scotland) Act 1993, and/or
  • there is other information in the application for registration (e.g. the answer to question 1(d) or 11 on Form 3) which reveals that the subjects are part of a croft.

Registration staff should bear in mind that section 19D only affects owner-occupier crofters' title sheets, and has no bearing on a crofting landlord's title. Accordingly, unless the application reveals otherwise, registration staff can assume that section 19D does not apply if the subjects of the TP application are part of a croft listed in a schedule of crofts in a D section entry.  Staff should also bear in mind that TPs for which the relevant transaction was concluded prior to 1 October 2011 are not affected by section 19D.

In the limited circumstances where it is apparent that the subjects may be affected by the provisions of section 19D, settlers should ask the agent to submit either a letter confirming that section 19D does not apply or evidence of compliance with the provisions (e.g. evidence of division of the croft with the Commission’s consent).

If satisfactory evidence is not submitted, the following exclusion of indemnity should be added to the B Section of the title sheet:

Note: [As regards the part tinted xxx on the title plan,] 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 Disposition by A to B registered [recorded G.R.S. (xxx)] [date] being reduced or declared or found to be void because of any failure to comply with the provisions of section 19D of the Crofters (Scotland) Act 1993.

34.7.5 Referrals

Any problematic cases should be referred in the first instance to a senior caseworker.  In the event that a solicitor states that the transaction inducing registration is in breach of section 19D (i.e. that section 19D is relevant but has not been complied with), then the application for registration should be cancelled on the basis that the deed is null and void.