Introduction

This section deals firstly with the situation for under 18s entering into a transaction on heritable property; this is covered in sections 13.1 to 13.13. The second half of the chapter, from section 13.14, deals with the issues for parties aged 18 years and older who are deemed incapable of transacting on their own behalf.

13.1 Legal capacity of young people

Most legal systems have difficulties with the capacity of children to enter into transactions that have legal effect. Scots law has seen 2 major changes in this respect in recent years, and different rules apply to different age-groups and different periods of time. This section of the Manual is divided into 4 parts:

the position before 25 September 1991
for persons under 16, the position between 25 September 1991 and 31 October 1996
for persons under 16, the position on and after 1 November 1996
for persons aged 16 and 17, the position on and after 25 September 1991 to the present time.

When examining deeds relating to transactions involving children or young people, registration officers should exercise particular care and refer to the instructions applicable to the dates when the deeds were granted.

13.2 The position before 25 September 1991

Until 25 September 1991, Scots Law followed a Roman law solution, which had a 2-tier system of capacity for people under the age of 18.

Pupils (girls under 12 and boys under 14) had no capacity: they could not transact with heritable property. Tutors had to act for them.
Minors (girls from 12 to 17 and boys from 14 to 17) had limited capacity. Minors' transactions usually required the consent of curators in order to be valid.

For the Land Register, there used to be a special problem where a party to a deed within the prescriptive progress was a minor. Until his or her 22^nd birthday, the minor could seek the reduction of any deed to which he or she was a party during his or her minority, if the transaction caused substantial harm to the minor. If the minority was disclosed in the application, indemnity was excluded until the party reached the age of 22.

Since 25 September 1991, the passage of time has eliminated that particular problem. Registration officers may, occasionally, have to examine a deed granted before 25 September 1991 to which a tutor or curator was a party, but there is no longer a need to take any action in that respect.

13.3 Persons under 16: the Position between 25 September 1991 and 31 October 1996

The Age of Legal Capacity (Scotland) Act 1991 came into force on 25 September 1991, restructuring the law relating to the capacity of young people. Some extra changes were later imposed, mainly by sections 7 and 8 of the Children (Scotland) Act 1995, these being sections which took effect on 1 November 1996. Details of these later changes are given at section 13.5 - "Persons under 16: the position on and after 1 Nov. 1996". Given the passage of time the following information is provided in case relevant as regards the foundation deed in the prescriptive progress.

The Age of Legal Capacity (Scotland) Act 1991 brought a new two-tier system into being, featuring age bands of 0-16 and 16-18. The terms ‘pupils’ and ‘minors’ disappeared. Young people covered by the 1991 Act are simply known as ‘persons under the age of sixteen.’ Similarly, the offices of tutory and curatory were abolished and replaced with ‘guardianship’.

13.3.1 Legal capacity of persons under the age of 16

Persons in the 0-16 band have no legal capacity to enter into transactions, subject to a few exceptions. The word ‘transaction’, in this context, has a very wide definition and includes the making of contracts, the giving of any consent having legal effect, acting as a trustee and acting as an instrumentary witness.

The only exception to this rule that has any bearing on land registration matters, is that a person aged 12 or over can make a will. This may have some significance in relation to links in title.

Any contract, or other transaction that involves heritable property, entered into by a person under 16, is void. An entitled adult must perform the legal undertaking on behalf of the person under 16. From 25 September 1991 until 31 October 1996, the entitled adult was known as the guardian.

Table of Contents

13.3.2 The role of guardian

The right of guardianship was accorded to the mother of the child and to the father if he was married to the mother at the time of the child's conception or at some time thereafter. The right could also be obtained by someone appointed as guardian by a parent in a testamentary deed or by the court under sections 3 or 4 of the Law Reform (Parent and Child) (Scotland) Act 1986.

Because a person under 16 has no capacity to transact with heritable property, any deed affecting his or her interest, e.g. a disposition or standard security, had to be granted by the guardian during the period between 25 September 1991 and 31 October 1996. Similarly, if a person under 16 took title on the purchase of property, or assumed obligations on taking title, the deed should indicate that the guardian effected the transaction. It should also indicate that the title was taken in the name of the person under 16 by direction of the guardian. (In this connection, it should be noted that The Age of Legal Capacity (Scotland) Act 1991 focuses on the capacity to transact. It does not prevent a person under 16 from receiving or holding any right, title or interest in his or her own name. Also, if the property is being acquired by way of a gift in the course of distribution of an estate, in which the person under 16 is a beneficiary, there is no need to involve a guardian.)

Generally, then, transactions contained in writs executed on or after 25 September 1991 and before 1 November 1996 require the participation of a guardian for persons under 16. This has implications for registration officers processing first registrations, who may find such writs in the prescriptive progress of titles.

The involvement of a guardian in a deed is an obvious indication that the interest of a young person is affected. In other cases, it may not be so patently obvious, but there may be indications in a deed or in an application form that a young person's interest in heritable property is being dealt with. Registration officers should always be alert for these indications. For example, the unexplained execution of a deed by one person on behalf of another person is something that should be queried with the agent. However, registration officers are not under a general duty to make enquiries as to parties' ages in all cases. Only if there is a suggestion or indication, on the face of a deed, application form or other document, that a party may be under 16 should the registration officer ask the agent for further details.

13.3.3 Appointment of guardian: evidential requirements

Where a guardian has participated in a transaction, evidence of the guardian's status/appointment must be examined. If not produced with the application for registration, it should be sought from the agent. Satisfactory evidence will normally comprise:

- for the mother as guardian, the child's extract birth certificate
- for the father as guardian, the child's extract birth certificate and the extract marriage certificate showing the father's marriage to the mother
- for any other person as guardian, the child's extract birth certificate and the testamentary deed or court order of appointment (or an extract or certified copy).

In all of the above cases, the child's birth certificate is essential. The registration officer should check the child's details, in particular the date of birth. If the guardian is a parent, the parent's name in the deed should match the name in the birth certificate: any material discrepancy should be queried with the agent.

13.4 Potential registration problems

There are at least 4 possible situations in which problems can arise for the Keeper, though the list is not exhaustive. These situations, and instructions for dealing with them, are set out below. In these situations, it is assumed that the problem occurs in a writ in the prescriptive progress, but not in the deed inducing registration. For deeds inducing registration, see subsequent paragraph Potential registration problems.

13.4.1 Deed granted by person under 16

If a deed in a prescriptive progress is known to have been granted by a person under 16, rather than by a guardian, the agent should be advised that the transaction was void and corrective conveyancing is advisable. If the agent does not choose to withdraw the application for registration, so that corrective conveyancing can be carried out, registration may proceed, but indemnity should be excluded in the following terms, or similarly:

Indemnity is excluded in terms of Section 12(2) of the Land Registration (Scotland) Act 1979 in respect of any loss arising from the fact that A, then being a person under the age of 16 years, and in terms of Section 1 of The Age of Legal Capacity (Scotland) Act 1991 having no legal capacity to enter into any transaction, granted to B a Disposition of the subjects in this Title, recorded GRS [county] [date].

13.4.2 Deed granted by guardian: no evidence of appointment

If a deed in a prescriptive progress was granted by someone purporting to be a guardian, but for whom evidence of the guardianship is not produced, indemnity should be excluded in the following terms, or similarly:

Indemnity is excluded in terms of Section 12(2) of the Land Registration (Scotland) Act 1979 in respect that evidence has not been submitted to the Keeper that C was entitled to act as guardian of D in granting a Disposition to E of the subjects in this Title, recorded GRS [county] [date].

13.4.3 Grantee under 16

If a deed (other than a disposition involving a gift to a beneficiary*) in a prescriptive progress has been granted in favour of a person under 16, but the writ does not narrate the participation of a guardian, the agent should be advised that the transaction was probably void and corrective conveyancing is advisable. If the agent does not choose to withdraw the application for registration so that corrective conveyancing can be carried out, registration may proceed, but indemnity should be excluded in the following terms, or similarly:

Indemnity is excluded in terms of Section 12(2) of the Land Registration (Scotland) Act 1979 in respect of any loss arising from the fact that F granted to G a Disposition of the subjects in this Title, recorded GRS [county] [date], G then being a person under the age of 16 years, and in terms of Section 1 of the Age of Legal Capacity (Scotland) Act 1991 having no legal capacity to enter into any transaction.

13.4.4 Grantee under 16: involvement of guardian but no evidence of appointment

If a deed (other than a disposition involving a gift to a beneficiary*) in a prescriptive progress has been granted in favour of a person under 16, and the writ narrates the participation of a guardian, but no evidence of the guardianship is produced, indemnity should be excluded in the following terms, or similarly:

Indemnity is excluded in terms of Section 12(2) of the Land Registration (Scotland) Act 1979 in respect that evidence has not been submitted to the Keeper that H was entitled to act as guardian of J in the transaction comprising the Disposition by K to J of the subjects in this Title, recorded GRS [county] [date].

* There is no problem for the Keeper in relation to dispositions involving gifts to beneficiaries under 16.

In cases (3) and (4), the person under 16 is acquiring an interest in land. Solicitors may therefore argue that, because the person under 16 benefited from the transaction, there is little or no risk to the Keeper. However, in these cases - as in cases (1) and (2) - the Keeper requires to protect himself against claims that the transaction was void.

13.5 Persons under 16: the Position on and after 1 November 1996

In relation to registration matters, there are several important implications arising out of the Children (Scotland) Act 1995 and the interaction of that Act with The Age of Legal Capacity (Scotland) Act 1991. In fact, the position has become complex and registration officers should proceed with great care when examining deeds which involve the interest of people under 16. Staff should read the whole of this section of the Manual, before taking any action.

13.6 The role of legal representative

One of the main aspects of the Children (Scotland) Act 1995 is that it redefined and clarified the office of guardian. During the period between 25 September 1991 and 31 October 1996 (see above), it was assumed that the guardian was the person who undertook legal transactions on behalf of the child. The title of guardian, during that period, was conferred primarily on the mother; sometimes on the father; and sometimes on another person appointed as a guardian by a parent in a testamentary deed or by the court under section 3(1) of the Law Reform (Parent and Child) (Scotland) Act 1986. On I November 1996, the position changed subtly. The Children (Scotland) Act 1995 introduced the concept of the parents and guardians as ‘legal representatives’ of under-16 children. Strictly speaking, parents undertaking property transactions on behalf of children under 16 will act (and be designed in deeds) as legal representatives, not as guardians.

13.6.1 Legal representatives: persons authorised to act

Under the 1995 Act, the child's mother clearly has parental responsibilities and rights and can therefore act as the child's legal representative. The child's father has parental responsibilities and rights, including the capacity to act as the child's legal representative, only if married to the mother at the time of the child's conception or subsequently, or if empowered by an agreement with the mother that has been registered in the Books of Council and Session (an ‘Extract Registered Parental Rights Agreement’).

Guardianship is now limited to persons appointed by testamentary deed or court order, who thereby acquire parental responsibilities and parental rights.

A parent may appoint a person or persons to be the child's guardian(s) in the event of the parent's death. The appointment has to be in writing and signed by the parent and can therefore be described as a testamentary deed. The appointment is invalid if the parent was not entitled to act as the child's legal representative at the time of the parent's death. A guardian may similarly appoint someone to take his or her place, as guardian, in the event of his or her death.

A guardian or guardians may also be appointed by court order under section 11 of the Children (Scotland) Act 1995.

A guardian who acts for a child in a property transaction is acting as the child's legal representative and the relevant deed should therefore make this clear. (However, no action need be taken if the deed states the guardian simply as the guardian and not as the legal representative.)

Persons, other than parents and guardians, may acquire parental rights and responsibilities, including the responsibility to act as the child's legal representative in transactions. The courts can confer such rights and responsibilities on a person under section 11 of the 1995 Act, even without giving the person the status of guardianship. Adoptive parents may acquire the rights and responsibilities via an adoption order. Step-parents, however, cannot act as legal representatives unless appointed under section 11.

A person's power to act as a child's legal representative can be removed by the courts. It is thought that this possibility does not pose enough of a risk to the Keeper's indemnity to merit enquiry by registration officers. The Keeper will instead rely on the answers to relevant questions in the application form.

13.7 Administration by Accountant of Court

Under section 9 of the 1995 Act, if certain conditions apply, an executor or trustee holding property owed to a child must or may (depending on the value of the property) apply to the Accountant of Court for a direction as to the administration of the property. (Other persons so holding property may likewise apply to the Accountant of Court). The application must be made if the value of the property exceeds £20,000, which will usually be the case in relation to heritable property. If the value of the property is between £5,000 and £20,000, the executor or trustee has a discretion to apply or not.

If an application for registration in the Land Register discloses that the Accountant of Court has made a direction, the registration officer should refer the case to a senior caseworker who will examine the direction and determine whether or not the conveyancing transaction complied with it. Any instance of a transaction not complying with the direction, or appearing not to comply, should be referred on to the Legal Services.

13.8 Legal capacity of persons under the age of 16

In respect of the capacity of young persons, the position from 1 November 1996 onwards is virtually the same as it was from 25 September 1991 till 31 October 1996. There is still the two-tier system brought into being by The Age of Legal Capacity (Scotland) Act 1991, featuring age bands of 0-16 and 16-18. Persons in the 0-16 band have no legal capacity to enter into transactions, subject to a few exceptions. The one exception that has any bearing on land registration matters is that a person aged 12 or over can make a will, which may have some significance in relation to links in title. Generally, therefore, any contract or other transaction entered into by a person under 16 is void.

Because a person under 16 has no capacity to transact with heritable property, any deed affecting his or her interest, e.g., a disposition or standard security, has to be granted by the child's legal representative from 1 November 1996 onwards. Similarly, if a person under 16 takes title on the purchase of property, or assumes obligations on taking title, the deed should indicate that the legal representative effected the transaction. It should also indicate that the title is taken in the name of the person under 16 by direction of the legal representative. (In this connection, it should be noted that The Age of Legal Capacity (Scotland) Act 1991 focuses on the capacity to transact. It does not prevent a person under 16 from receiving or holding any right, title or interest in his or her own name. Also, if the property is being acquired by way of a gift in the course of distribution of an estate, in which the person under 16 is a beneficiary, there is no need to involve a legal representative.)

Generally, then, transactions contained in writs executed on or after 1 November 1996 require the participation of a legal representative for persons under 16, whether the legal representative is a parent or a guardian or some other person. This has implications for registration officers, who may find such writs as deeds inducing registration or as deeds in the prescriptive progress of titles.

The involvement of a guardian in a deed is an obvious indication that the interest of a young person is affected. In other cases, it may not be so patently obvious, but there may be indications in a deed or in an application form that a young person's interest in heritable property is being dealt with. Registration officers should always be alert for these indications. For example, the unexplained execution of a deed by one person on behalf of another person is something that should be queried with the agent. However, registration officers are not under a general duty to make enquiries as to parties' ages in all cases. Only if there is a suggestion or indication, on the face of a deed, application form or other document, that a party may be under 16 should the registration officer ask the agent for further details.

13.9 Legal representative: evidence of appointment

Where a child's legal representative has participated in a transaction, evidence of the legal representative's status/appointment must be examined. If not produced with the application for registration, it should be sought from the agent. Satisfactory evidence will normally comprise:

for the mother as legal representative, the child's extract birth certificate

for the father as legal representative, the child's extract birth certificate and either (a) the extract marriage certificate showing the father's marriage to the mother or (b) an Extract Registered Parental Rights Agreement

for an adoptive parent as legal representative, the child's extract birth certificate and the adoption order (or an extract or certified copy) evidencing the adoptive parent's rights and responsibilities

for a person appointed as guardian (and hence as legal representative) under a testamentary writing signed by a parent or a guardian, the child's extract birth certificate; the testamentary deed (or an extract or certified copy); and a written assurance from the agent that the parent was entitled to act as legal representative at the time of his or her death

for a person appointed as guardian (and hence as legal representative) under a court order, the child's extract birth certificate and the court order (or an extract or certified copy)

for a person given parental rights and responsibilities (including those of a legal representative) under a court order, the child's extract birth certificate and the court order (or an extract or certified copy)

for a person administering a child's property by direction of the Accountant of Court, the child's extract birth certificate and the document containing the direction by the Accountant of Court.

In all of the above cases, the child's birth certificate is essential. The registration officer should check the child's details, in particular the date of birth. If the legal representative is a parent, the parent's name in the deed should match the name in the birth certificate: any material discrepancy should be queried with the agent. Marriage certificates, court orders, etc., should also be examined carefully. Unusual cases or circumstances should be referred upwards for decision.

13.10 Potential registration problems

There are at least 6 possible situations in which problems can arise for the Keeper, though the list is not exhaustive. These situations, and instructions for dealing with them, are set out below.

13.10.1 DIR granted by person under 16

If the deed inducing registration is known to have been granted by a person under 16, rather than by a legal representative on behalf of that person, the transaction is void. The application should be rejected on the basis that it is frivolous or vexatious, in terms of section 4(2)(c) of the 1979 Act, since the deed has no legal effect.

13.10.2 Prescriptive progress deed granted by person under 16

If a deed in a prescriptive progress (other than the deed inducing registration) is known to have been granted by a person under 16, rather than by a legal representative on behalf of that person, the agent should be advised that the transaction was void and corrective conveyancing is advisable. If the agent does not choose to withdraw the application for registration so that corrective conveyancing can be carried out, registration may proceed, but indemnity should be excluded in the following terms, or similarly:

Indemnity is excluded in terms of Section 12(2) of the Land Registration (Scotland) Act 1979 in respect of any loss arising from the fact that A, then being a person under the age of 16 years, and in terms of Section 1 of The Age of Legal Capacity (Scotland) Act 1991 having no legal capacity to enter into any transaction, granted to B a Disposition of the subjects in this Title, recorded GRS [county] [date].

An exclusion of this type may be removed 10 years after the date of recording of the deed in question, provided that the proprietor applies for its removal and supplies satisfactory evidence of unchallenged possession for the prescriptive period.

13.10.3 Deed granted by legal representative: no evidence of appointment

If a deed (either the deed inducing registration or a deed in the prescriptive progress) was granted by someone purporting to be a child's legal representative, but for whom evidence of that status is not produced, indemnity should be excluded in the following terms, or similarly:

Indemnity is excluded in terms of Section 12(2) of the Land Registration (Scotland) Act 1979 in respect that evidence has not been submitted to the Keeper that C was entitled to act as legal representative of D in granting a Disposition to E of the subjects in this Title, recorded GRS [county] [date] [or registered ….].

13.10.4 Grantee in DIR under 16: no legal representative

If the deed inducing registration has been granted in favour of a person under 16, but the writ does not narrate the participation of a legal representative, the agent should be advised that the transaction may be void. The agent has 3 options.

(i) He or she may be able to provide satisfactory written evidence to the effect that the child's legal representative sanctioned the transaction. In that case, registration may proceed without exclusion of indemnity in this respect.

(ii) He or she may choose to withdraw the application for registration in order to re-engross the deed.

(iii) If the agent insists that the transaction is not void, but does not produce satisfactory evidence of the legal representative's approval of the transaction, registration may proceed, but indemnity should be excluded in the following terms, or similarly:

Indemnity is excluded in terms of Section 12(2) of the Land Registration (Scotland) Act 1979 in respect of any loss arising from the fact that F granted to G a Disposition of the subjects in this Title, registered [date], G then being a person under the age of 16 years, and in terms of Section 1 of the Age of Legal Capacity (Scotland) Act 1991 having no legal capacity to enter into any transaction.

13.10.5 Grantee in prescriptive progress deed under 16: no legal representative

If a deed in the prescriptive progress (other than a disposition involving a gift to a beneficiary*) has been granted in favour of a person under 16, but the writ does not narrate the participation of a legal representative, the agent should be advised that the transaction may be void. The agent has 3 options.

(i) He or she may be able to provide satisfactory written evidence to the effect that the child's legal representative sanctioned the transaction. In that case, registration may proceed without exclusion of indemnity in this respect.

(ii) He or she may choose to withdraw the application for registration while remedial conveyancing is carried out.

(iii) If the agent insists that the transaction is not void, but does not produce satisfactory evidence of the legal representative's approval of the transaction, registration may proceed, but indemnity should be excluded in the following terms, or similarly:

Indemnity is excluded in terms of Section 12(2) of the Land Registration (Scotland) Act 1979 in respect of any loss arising from the fact that F granted to G a Disposition of the subjects in this Title, GRS [county] [date], G then being a person under the age of 16 years, and in terms of Section 1 of the Age of Legal Capacity (Scotland) Act 1991 having no legal capacity to enter into any transaction.

13.10.6 Grantee under 16: involvement of legal representative but no evidence of entitlement

If a deed (either the deed inducing registration or a deed in the prescriptive progress, other than a disposition involving a gift to a beneficiary*) has been granted in favour of a person under 16, and the writ narrates the participation of a legal representative, but no evidence of the person's status as legal representative is produced, indemnity should be excluded in the following terms, or similarly:

Indemnity is excluded in terms of Section 12(2) of the Land Registration (Scotland) Act 1979 in respect that evidence has not been submitted to the Keeper that H was entitled to act as legal representative of J in the transaction comprising the Disposition by K to J of the subjects in this Title, recorded GRS [county] [date] [date] [or registered ….].

* There is no problem for the Keeper in relation to dispositions involving gifts to beneficiaries under 16.

In cases (4), (5) and (6), the person under 16 is acquiring an interest in land. Solicitors may therefore argue that, because the person under 16 benefited from the transaction, there is little or no risk to the Keeper. However, in these cases - as in cases (1), (2) and (3) - the Keeper requires to be protected against claims that the transaction was void.

13.11 Multiple legal representatives

Lastly, registration officers should note that it is entirely possible that a child will have more than one legal representative. For example, there may be 2 parents, or a parent and a guardian, or 2 guardians, etc.

Under section 2(2) of the 1995 Act, each person who has parental rights and responsibilities may exercise them without the consent of the other(s), unless any decree or deed (following divorce, for example) conferring or regulating the rights provides otherwise. Moreover, section 3(5) of the 1995 Act allows people having parental rights and responsibilities in respect of a child to arrange matters among themselves. Consequently, a deed concerning a child's interest in heritable property need not be granted by, or to, all the possible legal representatives. Because section 2(2) of the 1995 Act means that the consent of other legal representatives is (normally) unnecessary, registration officers are not required to investigate the possibility that other, undisclosed legal representatives may exist. If a deed does involve 2 or more legal representatives, then the appropriate evidence of each legal representative's status should be provided by the agent.

13.12 Persons aged 16 and 17: the position on and after 25 September 1991

The Age of Legal Capacity (Scotland) Act 1991 allows a person aged 16 or over the legal capacity to enter into any transaction. Moreover, for persons aged 16 and 17, there is no need for the consent of adult curators or guardians. So, for a person aged 16 or over, deeds should be granted by, or in favour of, the person alone.

13.13 Prejudicial transaction

However, the 1991 Act introduces the concept of ‘prejudicial transaction’. A prejudicial transaction is one which (a) an adult, exercising reasonable prudence, would not have entered into and (b) has caused or is likely to cause substantial prejudice. A person under the age of 21 may apply to the court to set aside a prejudicial transaction which he or she entered into at the age of 16 or 17.

Because of the risk that a court may overturn it, any transaction to which a person aged 16 or 17 was a party will entail an exclusion of indemnity in terms such as the following, when it is registered in the Land Register:

Indemnity is excluded in terms of Section 12(2) of the Land Registration (Scotland) Act 1979 in respect of any loss arising from the exercise by A, who attained the age of 16 on [date], of any right in terms of Section 3 of the Age of Legal Capacity (Scotland) Act 1991 to set aside the Disposition by the said A to B, registered [date], of the subjects in this title.

Whether or not a transaction falls into the ‘prejudicial’ category should always be apparent from answers on the application form or supporting documentation.

13.13.1 Ratification of prejudicial transaction

However, the 1991 Act does provide a method of ratifying a proposed transaction involving a person aged 16 or 17. All parties to a transaction to be entered into by a 16 or 17-year-old can jointly apply to the Sheriff to have the transaction ratified. The result of ratification is that neither the young person nor anyone else can challenge the transaction afterwards.

The information available to the Keeper is that the court ratification procedure is rarely used. But if evidence is submitted that a transaction was ratified before it was entered into, it will not be necessary to exclude indemnity in the terms stated above. Satisfactory evidence of ratification will consist of a copy of the Sheriff's determination.

A transaction can be ratified subsequently by the young person once he or she is 18, in the knowledge that it could be the subject of an application to the court under Section 3 of the Act to have it set aside. Again, ratification has the effect of barring a future application by the young person to have the transaction set aside. There is no prescribed form for this type of ratification. For the Keeper's purposes, it will suffice to have sight of a simple letter from the young person. The letter should (a) ratify the transaction and (b) state that the young person knows that the transaction could be the subject of an application to the court under Section 3 of the Act to have it set aside. The exclusion of indemnity described above can then be removed.

It follows that, unless a Sheriff has ratified the transaction, indemnity will be excluded in all cases, at least until the person turns 18. After the age of 18, indemnity will continue to be excluded for 3 more years unless the young person ratifies the transaction. Once the young person is 21, the removal of the exclusion of indemnity can be considered.

Removal requires production of

1. the person's extract birth certificate (or a certified copy), if it has not already been exhibited to the Keeper, and
2. an affidavit from the person swearing that he or she made no application to the court to set aside the transaction.

There are two positions relevant to the Registers of Scotland in which a person under 21 is barred from applying to the Court to set aside a transaction into which he or she entered at the age of 16 or 17, on the grounds that it is a prejudicial transaction. The first is a transaction in the course of the applicant’s trade, business or profession. The second is a transaction into which another party was induced to enter by fraudulent misrepresentation by the applicant as to age or other material fact.

Registration officers may come under pressure from agents not to exclude indemnity, on the allegation that either of the two above positions applies. The answer is that it will be for a court and not the Keeper to decide the matter. In the absence of ratification (by whatever method) the Keeper must exclude indemnity until a court has rejected an application to set aside a transaction as a prejudicial transaction. Another reason for the Keeper to take this cautious line is a provision of the 1991 Act, which states that a trustee in bankruptcy and certain other representatives could apply on the same basis as the young person to have the transaction set aside. So, whenever a person between 18 and 21 is made bankrupt and a transaction entered into before that person was 18 has not been ratified, the trustee in bankruptcy is liable to mount a challenge.

13.14 LEGAL INCAPACITY IN ADULTS

Despite being over the age of legal capacity, a person may have no or impaired legal capacity by reason of disease, injury or birth defect. The issue arises most commonly in respect of degenerative mental illnesses such as senile dementia and Alzheimer's disease. Physical incapacity without mental impairment does not usually present a bar to performing legal acts as the procedure in Section 9 of the Requirements of Writing (Scotland) Act 1995 (for full details see Authentication Section 3.25) can be followed to allow a ‘relevant person’ to sign deeds on behalf of a person who is blind or physically unable to write. However, very severe physical impairment which prevents the adult from communicating his or her wishes can amount to legal incapacity.

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

Firstly, before loss of capacity the adult may have appointed an attorney to manage his or her affairs. Provided that certain criteria are met a power of attorney can continue to be effective after its granter has lost capacity.

Secondly a person may be appointed by the court to look after the incapable adult’s affairs, or some aspect of them.

The law in this area has been comprehensively reviewed and modernised by the Adults with Incapacity (Scotland) Act 2000. Part 2 of that Act, which deals with powers of attorney, came into force on 2 April 2001. Part 6, which covers appointment by the court, will come into force on 1 April 2002. The 2000 Act has subsequently been amended by the Adult Support and Protection (Scotland) Act 2007 (hereinafter referred to as 'the 2007 Act'), specific guidance is provided below for powers of attorney granted after 5 October 2007.

This section deals only with internal Scots law. Cross-border issues such as the effect in Scotland of a power of attorney entered into under foreign law, or the ability of a mental welfare guardian appointed under a foreign legal system to transact with heritable property in Scotland are not considered. A member of staff who encounters such issues should refer them to the Legal Services for advice.

13.15 Power of Attorney

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

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

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

The remainder of this section deals specifically with powers of attorney in relationship to legal incapacity.

13.16 Powers of attorney granted prior to 2 April 2001

Until 1 January 1991, the law was that an attorney’s power to act ceased when the principal lost capacity. This was changed by section 71 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990.

Section 71(1) changed the position for powers of attorney granted on or after 1 January 1991. Such powers of attorney survive the incapacity of the principal unless they contain an express provision that the attorney’s powers are to end when the principal loses capacity.

13.17 Powers of attorney granted after 2 April 2001

Part 2 of the Adults with Incapacity (Scotland) Act 2000 (hereafter referred to as ‘the 2000 Act’) introduced new rules in respect of powers of attorney intended to survive loss of capacity taking effect on 2 April 2001. The Act applies to powers of attorney ‘granted’ on or after 2 April 2001. The Keeper takes this to mean powers of attorney executed by the principal on or after that date. The Keeper is aware of, but does not accept, an alternative argument that the Act intends ‘granted’ to mean the point at which the attorney accepts appointment.

13.18 The new types of power of attorney

The 2000 Act provides for two new types of power of attorney which continue to be effective after the principal has lost capacity. A ‘continuing power of attorney’ relates to the principal’s property and financial affairs whereas a ‘welfare power of attorney’ relates to questions of personal welfare, such as consent to medical treatment. Only continuing powers of attorney require to be considered here. The attorney appointed by a continuing power of attorney is termed a ‘continuing attorney.’

13.19 Creation of continuing power of attorney

Section 15(3) of the 2000 Act requires that a continuing power of attorney must contain a clear statement that the principal intends it to be a continuing power which will survive the principal’s loss of capacity.

Section 57(1)(a) of the 2007 Act amends section 15(3) of the 2000 Act by introducing an additional requirement of validity for powers of attorney granted after 5 October 2007 which include a provision that the powers only come into effect after the principal's loss of capacity; these must also contain a statement to the effect that the principal has considered how the determination as to their incapacity is to be made.

The continuing power of attorney must also bear a certificate by a solicitor, practising member of the Faculty of Advocates or registered medical practitioner that, at the time of signing the power of attorney, the principal understood its nature and extent. The form of certificate is laid down by the Adults with Incapacity (Certificates in Relation to Powers of Attorney) (Scotland) Regulations 2001 and is reproduced below. From 5 October 2007 a certifying solicitor must be a "practising solicitor" (section 57(1)(b)(i) and section 57(1)(c) 2007 Act amend section 15 of the 2000 Act). This is defined as a solicitor holding a practising certificate issued in accordance with Part 2 of the Solicitors (Scotland) Act 1980 (section 57(9) 2007 Act), therefore it is not possible for a certificate to be granted by a solicitor not licensed to practice in Scotland. Unless there is something from the face of the certification that suggests the solicitor is not licensed to practice in Scotland (e.g. statement that the certifier is licensed to practice in England and Wales), the registration officer need not make any further enquiries. In cases of uncertainty the registration officer may in the first instance search for the certifying solicitor on the Law Society of Scotland website before seeking further information from the Agent.

Although it cannot be signed until after the principal has signed the power of attorney, such a certificate is by statute then incorporated into and forms part of the power of attorney without being either witnessed or referred to in the testing clause of the power of attorney. Section 15(4) stipulates that the person signing the certificate must not be named as an attorney in the power of attorney.

The 2000 Act appoints a new public office, that of Public Guardian. Section 19(1) stipulates that a continuing attorney shall have no authority to act until the continuing power of attorney has been registered with the Public Guardian. The Public Guardian has advised that, where the power of attorney has previously been registered for preservation in the Books of Council and Session, he will accept an extract for registration in his register. Upon registering, the Public Guardian will issue the person applying for registration with a copy of the power of attorney together with a certificate of registration.

Section 19(4) provides that a copy continuing power of attorney which has been authenticated by the Public Guardian will be for all purposes sufficient evidence of the terms of the original.

Insert names and date	This certificate is incorporated in the document subscribed by ("the granter") on that confers a continuing power of attorney on
Insert date	I certify that: A. I interviewed the granter on immediately before he/she subscribed this continuing power of attorney AND B. I am satisfied that, at the time this continuing power of attorney was granted, the granter understood its nature and extent I have satisfied myself of this:
Delete either (a) or (b) if not applicable. Both may apply but one must apply	(a) because of my own knowledge of the granter; (b) because I have consulted the following persons, who have knowledge of the granter on the matter:
Insert name, designation, addresses and relationship with granter, if any	AND C. I have no reason to believe that the granter was acting under undue influence or that any other factor vitiates the granting of this continuing power of attorney
Include full name, and state whether address given is business or personal	Signed: Date: Print name: Profession: Address: Note: any person signing this certificate should not be the person to whom this continuing power of attorney has been granted.

13.20 Events terminating appointment of continuing attorney

(a) The appointment of a continuing attorney may be terminated by the principal, either before loss of capacity or upon regaining capacity. Under section 20(2)(e) of the 2000 Act, the Sheriff may revoke an attorney’s appointment. The principal may revoke the power of attorney (or any of the powers granted by it) by giving a revocation notice to the Public Guardian. The revocation has effect upon the registration of the revocation notice at the Public Guardian's office. (Section 22A of the 2000 Act)

(b) If (after 1 April 2002) the court appoints a guardian to the principal, the attorney’s appointment automatically terminates at that time.

(c) An attorney’s appointment is also automatically terminated, if the attorney is the spouse of the principal, when decree of divorce, separation or nullity of marriage is granted.

(d) Section 57(1)(d) of the 2007 Act clarifies the common law position that a continuing power of attorney ceases to have effect if either the attorney or the principal become bankrupt. There is no declaration that the authority to act resumes upon discharge of bankruptcy. It should be noted that in line with the Agency's ROI searching policy an attorney is not a party that requires to be searched against.

The Keeper will normally assume that termination of the attorney’s appointment will have been disclosed in the answer to question 14 on the Form 1 (or question 8 on Form 2 or 13 on Form 3). However, if it appears from other information in the application that the appointment might have terminated the applicant’s agents should be asked to confirm the position.

Normally termination will render any action taken by the attorney after termination invalid. Thus a deed signed by an attorney after his appointment has been terminated is not validly executed. An exceptional situation arises where a purchaser in good faith and without knowledge of the termination acquires title from an attorney whose appointment had earlier been terminated by one of the court orders mentioned at (b) or (c) above. Here the purchaser’s title is protected from challenge by section 24(4) of the 2000 Act.

13.21 Other types of Power of Attorney executed on or after 2 April 2001

Section 18 of the 2000 Act provides that a power of attorney which is not a continuing or welfare power of attorney granted, certified and registered in terms of the Act has no effect during any period when the granter is incapable in relation to decisions about the matter to which the power relates.

It follows that any power of attorney granted by a natural person which is dated on or after 2 April 2001 and which does not meet the conditions of the 2000 Act is only effective for so long as the principal has capacity.

The Keeper will normally assume that any lack of capacity on the part of a principal will be disclosed on the application for registration. If, however, any aspect of the application suggests that an attorney acted at a time when the principal was incapable, the applicant’s agents should be asked to confirm the position.

13.22 Registration implications

It will be noted from the foregoing paragraphs that powers of attorney by natural persons need to be checked to see if the provisions of the 2000 Act affect them. The following flowchart may be used as a guide:

13.23 Notes

(a) There is nothing in the 2000 Act to prevent a single document being drawn up which confers both a non-continuing power of attorney and a continuing power of attorney, the first being operational before loss of capacity and the second to come into play after loss of capacity. If such a document is encountered, check at this stage whether it has been registered with the Public Guardian. If so, treat it as a continuing power of attorney; if not ,as a non-continuing power of attorney.

(b) See Other types of power of attorney executed on or after 2 April 2001 above. Unless anything in the application suggests that the principal did not have mental capacity, answer this question ‘yes.’

13.23.1 Foreign Powers of Attorney- Background

As stated in Powers of Attorney, under Scots law the terms of a power of attorney are strictly construed. Therefore, express powers in relation to heritable property and the execution of deeds are usually required by the Keeper to demonstrate that the granter of the power of attorney (the principal) intended to allow the attorney to have powers to transact with heritable property. This position had also been adopted in relation to foreign powers of attorney, which merely granted a general power to the attorney to do on behalf of the granter anything which the granter could lawfully do by attorney.

However, recent legal authorities have suggested that a foreign power of attorney should be recognised in Scotland as giving power to deal with heritable property without express powers, provided that the legal system of the country under which the power was constituted would have recognised that the attorney did have the appropriate power to transact with heritable property.

Powers of Attorney constituted under a foreign law are rarely encountered in practice. However, of those which are received, most will have been formed under the law of England and Wales, such as powers constituted under section 10 of the Powers of Attorney Act 1971, or the Enduring Powers of Attorney Act 1985 or a Lasting Power of Attorney in terms of the Mental Capacity Act 2005.

In the case of foreign powers of attorney encountered by registration officers, which do not meet the Keeper's usual requirements for those constituted under Scots law, as a general rule the Keeper will require a written opinion from a lawyer qualified in the jurisdiction to confirm that the power of attorney has been executed in accordance with the law of the jurisdiction in question, that under that law the power authorised the attorney to take the action in question, where possible, that it had not been revoked at the date of the granting of the deed inducing registration and that it was correctly made under statutory provision, if appropriate. There may also be additional requirements depending upon the circumstances.

No foreign attorney can have power to do something in Scotland which no attorney appointed under Scots law could ever do; therefore matters such as whether an attorney is acting auctor in rem suam, and whether the principal had the legal capacity to enter into the power of attorney or to contract under Scots law remain relevant.

It is intended to provide further information in the Legal Manual on powers of attorney constituted under the law of England and Wales. Meantime, in the unusual case where a foreign power of attorney is produced with an application, the registration officer should refer the case to Legal Services for guidance on the appropriate evidence to requisition in the circumstances.

13.24 Appointment by the Court - The position prior to 1 April 2002 – curator bonis

13.24.1 Background

Until Part 6 of the Adults with Incapacity (Scotland) Act 2000 comes into force on 1 April 2002, the procedure for appointment of a person to manage an incapable adult’s property is to Petition the Court of Session for the appointment of a curator bonis. The procedure is cumbersome and expensive and therefore very rarely used. Accordingly it is only discussed briefly here.

The person appointed by the court is termed ‘the curator’ whilst the incapable adult is termed ‘the ward’ or ‘the incapax’. The Petition to the court includes medical evidence of the incapacity, an inventory of the adult’s property and nominates a person (usually a solicitor or accountant, but sometimes a relative of the ward) to be curator. If satisfied with the evidence, the court pronounces an interlocutor appointing the curator subject to him or her finding caution (pronounced kay-shun). Caution is a monetary guarantee against any default by the curator and normally takes the form of a single premium insurance policy called a ‘bond of caution.’

Curators act under the supervision of the Accountant of Court and require the prior consent of the Accountant of Court to any transaction with heritable property carried out on the ward’s behalf. A curator is also only permitted to sell heritable estate of the ward where the court has granted ‘special powers’. The special powers will often be contained in the original interlocutor appointing the curator but they may appear in a subsequent order.

13.24.2 Keeper’s policy – sale by curator

In an application for registration of a disposition or other conveyance granted by a curator, the Keeper will require to examine the Court order appointing the curator and the Accountant of Court’s consent to the transaction.

13.24.3 Keeper’s policy – Matrimonial Homes Act evidence

The Keeper takes the view that a sale by a curator is not a dealing of the incapax to which Section 6 of the Matrimonial Homes (Family Protection) (Scotland) Act 1981 applies. Therefore no Matrimonial Homes Act evidence is required.

13.24.4 Keeper's Policy - Purchase

Where an application for registration indicates that the applicant/purchaser in the transaction has had a curator appointed, the Interlocutor should, if not already submitted, be requisitioned. The existence of the curator should be disclosed in the Proprietorship section of the Title Sheet by means of a note in the following style:

Note: Thomas Petty, Solicitor, 123 High Street, Pitlochry, was appointed Curator Bonis to said (Proprietor) conform to a Certified Copy Interlocutor dated 9 Jul. 2000.

Further information on Curators is contained on the Legal Database (T/46)

13.25 The position from 1 April 2002 - guardianship and intervention

Part 6 of the Adults with Incapacity (Scotland) Act 2000 (hereinafter referred to as the 2000 Act) came into force on 1 April 2002 and from that date introduced two new forms of court appointment to replace the position of curator bonis. When it is only necessary for a single transaction with the incapable adult's property to be carried out, the Sheriff will pronounce an Intervention Order authorising a named person to carry through the particular transaction on behalf of the adult. If there is a need for long-term, ongoing management of the adult's property and affairs, the Sheriff will appoint a Guardian to act for the adult. In both Intervention and Guardianship, the transfer to the person appointed by the court is not a transfer of property but merely a transfer of management power and further is not a complete transfer but is limited to the extent specified in the Sheriff's interlocutor. Amongst the detail it is provided that some intervention and guardianship orders are to be recorded in the Register of Sasines, or given effect to in the Land Register. For the properties concerned, new conveyancing and registration issues arise.

13.26 Registration of intervention and guardianship order - general points

13.26.1 A right of management, and not of property, is transferred

Sections 56(1) and 61(1) of the 2000 Act provide that certain orders which vest rights in relation to heritable property in a guardian or person authorised to intervene fall to be registered in the Land Register of Scotland or recorded in the General Register of Sasines. In these cases the Sheriff's interlocutor transfers the personal right of management from adult to guardian or authorised person. On general registration principles, third parties need only have regard to this transfer when it has been completed and made public by registration in one or other of the property registers. A guardianship or intervention order does not transfer ownership of the adult's property to the guardian or authorised person. Ownership remains with the adult and the transfer of management power to the guardian or authorised person is limited to the extent specified by the Sheriff.

13.26.2 Intervention and guardianship interlocutors cannot be used as midcouples

The 2000 Act requires a guardian or person authorised under an intervention order to forthwith apply for registration of the interlocutor in the appropriate property register (2000 Act ss. 56(3) and 61(3)). As a midcouple or link in title does not enter either register it is not enough to rely on the interlocutor as an unregistered midcouple or link in title.

13.26.3 Situations where the interlocutor falls to be registered contemporaneously with the adult's title

The Land Register and Register of Sasines are registers of real rights in specific property. Although the 2000 Act requires that relevant orders be registered forthwith, the transfer of management power cannot be registered in advance of the adult's real right to particular subjects. Three main situations arise in which it is appropriate to register the interlocutor at the same time as the adult's real right:

- Where the authorised person or guardian has been authorised to acquire heritable property for the adult. The interlocutor should be registered along with the disposition in favour of the adult.
- Where the adult has no recorded/registered title. In the Register of Sasines, the interlocutor should be recorded alongside a Notice of Title in the adult's favour. For registered subjects, application for registration of the interlocutor and application for registration of the adult as proprietor should be made together.
- Where registered title is in joint names A has died and the guardianship/intervention order is to affect B's interest in the whole subjects. The order cannot be accepted for registration prior to an application to register the death certificate of A supported by a letter confirming no-evacuation of the destination - see Proprietorship Section at Applications affected by Evacuation/non-evacuation of a special destination)

13.26.4 Intervention and guardianship interlocutors do not induce first registration

The grant of an intervention or guardianship order in relation to any given heritable subjects is not an event which induces first registration of those subjects in the Land Register (s.2(1) of the Land Registration (Scotland) Act 1979).

13.26.5 Identification of the property

An interlocutor which falls to be registered in one or other property register must adequately identify each property (2000 Act ss 56(2) and 61(2)). Where title to the subjects is registered in the Land Register, the description in the interlocutor will require to refer to the Title Number (1979 Act s. 15(1)). Where title to the subjects rests on Sasine deeds the description should be either a particular description or a description by reference to a recorded deed which, in either case, gives the public adequate notice of the subjects involved.

13.26.6 Certification of copy interlocutors

There is a distinction to be drawn between cases where the intervention or guardianship order to be registered is an extract decree and those where it is some other form of copy interlocutor. An extract decree is authenticated by the Court. However, with other types of copy interlocutor, authentication is an issue. It is desirable for all those placing reliance on the registers to have the assurance that the terms of the copy interlocutor appearing on the register are correct. The Keeper therefore requires that, where a copy guardianship or intervention order is not in the form of an extract decree, it be certified a true copy. The Keeper will accept certification by a solicitor, a clerk of the court or a member of the Public Guardian's staff.

13.26.7 Archiving and Office Copies

An intervention or guardianship order should always be archived. As it is a document that will be referred to in the Title Sheet it would be appropriate for an office copy of the order to be requested in terms of section 6(5) of the Land Registration (Scotland) Act 1979.

13.26.8 Death of guardian or incapax

In the event of the death of the guardian or person authorised to act under an intervention order it will be necessary for a new authorised person or guardian to be appointed and the interlocutor submitted for registration; the existing note regarding guardianship should be deleted and replaced with details of the new appointment.

If the incapax dies the office of the public guardian will submit an extract of the death certificate for registration; the note regarding the intervention order/guardianship should be deleted. A note should be added to the proprietorship section that "The said AB died on dd mmm yyyy".

13.27. Which orders are registrable in the property registers?

13.27.1 The Keeper's policy

The 2000 Act both requires and authorises registration of orders which vest in an authorised person or guardian a right to deal with, convey or manage an interest in heritable property. The first qualification to this is that the heritable interest of the adult must in itself be capable of registration (2000 Act ss. 56(1) and 61(1)). Further, the explanatory notes to the 2000 Act indicate that the object is to disclose the guardianship or intervention order on a conveyancing search. This is clearly only necessary where the guardian or authorised person is empowered to carry out the sort of activity in which a search or equivalent report might be obtained. In the Keeper's interpretation the requirement to register is for interlocutors empowering dealings, conveyances or management activities of authorised persons or guardians which alter the real or quasi real heritable rights of the adult.

13.27.2 Examples of orders which should be registered:

- An order which permits the authorised person or guardian to acquire or dispose of heritable subjects; to grant, assign or renounce a long lease; to grant or vary a heritable security; to renounce or vary a proper liferent.
- An order which permits an authorised person or guardian to renounce, waive or vary a registered or recorded title condition.
- An order which permits a guardian or authorised person to enter into an agreement creating real or quasi real rights or conditions affecting the adult's heritage, such as an agreement under section 75 of the Town and Country Planning (Scotland) Act 1997 or a boundary agreement under section 19 of the Land Registration (Scotland) Act 1979.

13.27.3 Orders which are not registrable

- An order authorising the authorised person or guardian to renounce or assign the adult's right as lessee in a short lease (e.g. a council house tenancy). As the adult's right of tenancy is incapable of registration there is no purpose to registering a variation of the right.
- An order authorising the authorised person or guardian to arrange routine maintenance to or insurance of the adult's heritable property but which confers no power to alter the real rights or conditions over the subjects.

There will inevitably be some situations in which there is doubt whether or not an interlocutor should be registered. These should be referred to a Senior Caseworker for advice. Where it is clear that there is no cause for registration and that an application is frivolous, the application will be rejected (s.4(2)(c) of 1979 Act).

13.28.1 Registration of intervention order

Section 56(4) of the 2000 Act requires that an application for registration in the Land Register contain (a) the name and address of the person authorised to intervene, (b) a statement that the person has powers relating to each property specified in the order and (c) a copy of the interlocutor. The name and address of the authorised person or guardian may be given by completing the applicant fields on the Form 2 application form. The statement required by s.56(4)(b) of the 2000 Act (to the effect that the authorised person has powers relating to the subjects) may be made in the answer space for question 8(c) on the Form 2, or alternatively in a covering letter.

The application for registration should be made on a Form 2 and accompanied by Form 4 in duplicate. The appropriate registration fee is a miscellaneous event fee.

Completion of Form 2:

The name of deed box should be completed 'intervention order.' The applicant box should be completed with the authorised person's details. Question 8(a) inside the Form should be answered YES and a note added along the following lines; '[name of adult] has restricted capacity - see interlocutor.'

How interlocutor will be registered:

The adult will remain registered as proprietor but registration officers should amend the entry to disclose that the authorised person has management powers as described in the interlocutor. If short, the whole terms of the interlocutor can be noted in the B section. Where the interlocutor is lengthy a summary of its terms in so far as relevant to the particular subjects should be given as a copy of the Interlocutor will be retained on archive. (This will enable the Keeper to supply an Office Copy of the full terms under section 6(5) of the 1979 Act should this be necessary.) Examples of the style of note to be entered in the B Section are noted below.

Form of Note

Note: By an interlocutor of the Sheriff of Lothian and Borders at Peebles dated 27 May 2002 Ian John Smith, 21 Roslin Gardens, Peebles [authorised person's name an address] was vested as authorised person in management powers of the above Colin Munro Smith [adult's name as appearing in proprietorship entry] in terms of section 53 of the Adults with Incapacity (Scotland) Act 2000. The terms of the interlocutor are:- [repeat whole terms of interlocutor].

N.B. If repeating the whole terms of an interlocutor consideration should be given to information that may be sensitive in nature (e.g. details of bank accounts or detailed care requirements) - such details should be omitted if possible as it is unlikely they will impact on any action affecting the registered title

Or

Note: By an interlocutor of the Sheriff of Grampian, Highland and Islands at Tain dated 4 June 2002 Brian McDonald, 34 High Street, Elgin was vested as authorised person in management powers of the above Rose Lamont McDonald in terms of section 53 of the Adults with Incapacity (Scotland) Act 2000. The terms of the interlocutor include power to agree and execute a long lease of the subjects in this title on such terms as may be approved by the Public Guardian.

Checklist - Land registration of intervention order

Copy interlocutor (certified if it is not an extract decree)
Form 2 completed (and giving name and address of authorised person)
Statement required by s.56(4)(b) made on Form 2 or in covering letter
Form 4
Miscellaneous event registration fee

13.28.2 Registration of guardianship order

Section 61(4) of the 2000 Act gives the statutory requirements for the application to contain (a) the name and address of the guardian, (b) a statement that the guardian has powers relating to each property specified in the order and (c) a copy of the interlocutor. Criterion (a) may be met by completing the guardian's name and address in the relevant fields on the Form 2. The statement required by criterion (b) can be entered in the answer field to question 8(c) on the Form 2, or otherwise be given in a covering letter.

The various comments above on land registration of intervention orders apply mutatis mutandi. An example of the style of note to be entered in the B Section is noted below.

The guardian - if directed by the Sheriff - must find caution or give such other security prior to applying for registration. (This follows from sections 58(6) and 61(3) of the 2000 Act). A copy of the bond of caution or other evidence that this requirement has been met should be submitted with the application and listed on the Form 4. Given the terms of s.58(7)(b) of the 2000 Act, the Keeper will accept a copy of the guardian's certificate of appointment issued by the Public Guardian as evidence that caution or such other security has been found. In cases where the relevant evidence is not forthcoming, the application for registration should be rejected.

The form of B section note is similar to those for intervention orders given above but the statutory reference is to sections 57 and 58 of the 2000 Act; for example

Note: By an interlocutor of the Sheriff of North Strathclyde at Campbeltown dated 16 April 2002 Duncan Kennedy MacLean, 14A Castlehill, Campbeltown [guardian's name and address] was vested as guardian in management powers of the above Elizabeth Jane Munro [adult's name as appearing in proprietorship entry] in terms of sections 57 and 58 of the Adults with Incapacity (Scotland) Act 2000. The terms of the interlocutor are:- [repeat whole terms of interlocutor].

N.B. If repeating the whole terms of an interlocutor consideration should be given to information that may be sensitive in nature (e.g. details of bank accounts or detailed care requirements) - such details should be omitted if possible as it is unlikely they will impact on any action affecting the registered title.

Checklist - land registration of guardianship order

- Copy interlocutor (certified if it is not an extract decree)
- Form 2 completed (and giving name and address of guardian)
- Statement required by s.61(4)(b) made on Form 2 or in covering letter
- Form 4
- Evidence of guardian having found caution or given such other security submitted (if required in terms of interlocutor)
- Miscellaneous event registration fee

13.29. Sale of adult's subjects by authorised person or guardian

13.29.1 Form of disposition

In considering the form of any disposition or other conveyance to be granted by an authorised person or guardian it must be borne in mind that the adult remains proprietor of his or her heritable interests. However, the registered guardianship or intervention order has transferred power to convey to the authorised person or guardian. As an example, the opening clauses of a disposition granted in terms of an intervention order could take the following form:

I, A.B. (authorised person - design) being authorised person under a intervention order in terms of section 53 of the Adults with Incapacity (Scotland) Act 2000 in respect of the affairs of X.Y. (adult - design), the heritable proprietor of the subjects and others hereinafter disponed, in consideration of the price of paid to me by C.D. (disponee -design) hereby DISPONE to and in favour of the said C.D. ALL AND WHOLE (subjects) together with ….. the whole right title and interest, present and future, of the said X.Y. therein and thereto….

Where this error was not spotted at intake, and the application has been accepted onto the register, then the matter should be referred to a senior caseworker who will consider whether the Keeper’s normal requisition policy can apply, or whether cancellation is appropriate if the deed is granted and executed by the adult.

13.29.2 Matrimonial Homes (Family Protection)(Scotland) Act 1981

The Keeper's current policy in relation to sales by curators bonis (see paragraph 13.24.3 above) to sales by guardians and authorised persons is to apply, and therefore adopts the view that such a sale is not a dealing by the adult and will not require to see any Matrimonial Homes Act evidence for such transactions.

13.29.3 Registration of disposition by authorised person

Registration officers will require to check the terms of the interlocutor to ensure that the transaction undertaken falls within the powers conferred on the authorised person.

In a sale by an authorised person, if the Keeper is to indemnify the grantee's title, certain additional evidence may also require to be submitted with the registration application.

First, the Keeper will require confirmation that the authorised person has complied with any obligation to find caution or to give such other security under s. 53(7) of the 2000 Act. (Note. "finding caution" is effectively the authorised person taking an insurance policy as a "guarantee" that they will act within the scope of their powers.) Acceptable evidence will include either a copy of the bond of caution or such other security or letter from the authorised person's law agent which confirms that caution or such other security has been found. Should such evidence not be forthcoming indemnity will require to be excluded.

Note: 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 William Goodall acting as authorised person for Kathryn Wells having failed to comply with any requirement to find caution or to give such other security imposed under section 53(7) of the Adults with Incapacity (Scotland) Act 2000 prior to granting a Disposition in favour of Elspeth Davidson, registered 25 June 2002.

Second, if the subjects are accommodation which had, for the time being, been used as a dwelling house by the adult, section 53(6) of the 2000 Act imposes a requirement for the Public Guardian to have consented to the price or other consideration achieved. In such transactions the Keeper will require to examine the Public Guardian's consent. Sometimes it will be apparent that this consent is not necessary - for example where the property is commercial or unbuilt land. However uncertain cases will occur. Where there is uncertainty the Keeper's policy is to require production of either (a) the statutory consent of the Public Guardian or (b) certification by or on behalf of the authorised person that consent under section 53(6) was not required. If not produced with the application, this evidence should be requisitioned. Should the requisition not be complied with the case should be referred for a decision on what further action is appropriate.

Dealing with Whole/Transfer of Part

Where the adult is registered proprietor of the subjects, an application should already have been made for registration of the intervention interlocutor. If this application has not been made it should be made (with a separate Form 2 and fee) at the same time as the application for registration of the disposition by the authorised person. In any case in which the Keeper receives an application for registration of a disposition by an authorised person in advance of application for registration of an interlocutor empowering the transaction, the policy will be as follows: - (a) the Keeper will contact the agent presenting the application for registration of the disposition suggesting that the application be withdrawn pending application being made for registration of the authorised person's right of management; (b) if the disposition is not withdrawn, the Keeper will make a requisition requiring that application for registration of the empowering interlocutor be made within 60 days (Land Registration (Scotland) Rules 1980, Rule 12). If this requisition is met, an express exclusion of indemnity will be made in respect of any consequence of the date of registration of the conveyance to the disponee pre-dating the date of registration of the authorised person's right to convey the subjects.

The exclusion is made in the proprietorship section. An example is given below but the terms will need to be adjusted to suit the particular facts.

Note: Indemnity is excluded in terms of section 12(2) of the Land Registration (Scotland) Act 1979 in respect of any loss arising from a Disposition by Ian John Smith, acting as authorised person for Colin Munro Smith in terms of section 53 of the Adults with Incapacity (Scotland) Act 2000, in favour of Sarah Fiona Brown registered on 14 June 2002 having been so registered in advance of the interlocutor of the Sheriff of Lothian and Borders as Peebles dated 27 May 2002 (and subsequently registered on 1 July 2002) vesting in the said Ian John Smith the power to grant the said Disposition.

Any request for removal of such an exclusion note should be referred a senior caseworker.

If the requisition is not met the application for registration of the disposition will be rejected (this result is permitted by Rule 12).

First Registration

Where the disposition induces first registration, the same policy will apply. The interlocutor should have been presented for recording in the Register of Sasines no later than the day prior to the application for registration of the disposition. If it has not been so recorded, registration officers should contact the submitting agent and suggest that the application for registration of the disposition be temporarily withdrawn pending the interlocutor being presented to the Sasine register. If the disposition is not withdrawn, it will be impossible for the interlocutor to be recorded in the Register of Sasines after the application for first registration of the subjects has been made (Other than where the interlocutor confers management right to larger subjects than those conveyed by the disposition). Instead application will need to be made for registration in the Land Register. As above, a 60 day requisition will be made. If complied with, an exclusion of indemnity will be made in respect of any consequence of the registration of the disponee's interest pre-dating that of the authorised person. For a style of exclusion note see the above example for dealing with whole/transfer of part.

Checklist - land registration of disposition granted by authorised person

- Intervention interlocutor registered/on record in advance - or contemporaneous registration application.
- Granter of deed is authorised person but adult is proprietor (see above)
- Transaction within powers conferred by intervention order
- Evidence that any requirement to find caution or to give such other security in terms of the interlocutor met
- Any necessary consent or evidence in respect of s.53(6) [consent to consideration on sale of accommodation] submitted.

13.29.4. Registration of disposition by guardian

The points discussed above in relation to registration of a disposition by an authorised person apply also to a disposal by a guardian subject only to some minor differences. Where the guardianship interlocutor has already been given effect to on the Land Register, the Keeper will already have examined evidence of the guardian having found caution or such other security, if required. In such case the Keeper will not require to re-examine evidence of caution or such other security having been found. In practical terms this means that the Keeper will only require evidence of caution or such other security as required having been found in cases where the guardianship order is registered in the Register of Sasines and the disposal by the guardian induces first registration. Where the disposal is of accommodation which had been used for the time being as a dwelling house by the adult, a guardian needs two consents of the Public Guardian. Firstly consent to the disposal in principle and secondly consent to the price (2000 Act, Schedule 2 paragraph 6(1)). Unless it is clear that subjects could not have been such a dwelling house, the Keeper's requirement is to see either (a) the two consents of the Public Guardian required by Schedule 2 paragraph 6(1) or (b) certification by or on behalf of the authorised person that consents under Schedule 2 paragraph 6(1) were not required. If such evidence is not be provided then indemnity should excluded as follows:

Note: Indemnity is excluded in terms of section 12(2) of the Land Registration (Scotland) Act 1979 in respect that no evidence has been produced to the Keeper that the requirements of Schedule 2 paragraph 6(1) of the Adults with Incapacity (Scotland) Act 2000 have been met in relation to the granting of the Disposition by John Baillie, acting as guardian of Jim Gray in favour of Elizabeth Day, registered 5 March 2002.

Checklist - land registration of disposition granted by guardian

- Guardianship interlocutor registered/on record in advance - or contemporaneous registration application.
- Granter of deed is guardian but adult is proprietor (see above)
- Transaction within powers conferred by guardianship order
- Evidence that any requirement in terms of interlocutor to find caution or such other security met (first registration transactions only)
- Any necessary consents or evidence in respect of sched. 2 para 6(1) [consents as to principle and price on sale of accommodation] submitted.

13.30 Purchase of subjects for adult

The grantee of the disposition or other conveyance should be the adult although the deed may narrate that the consideration was paid by the authorised person or guardian acting in that capacity. Where the disposition or other deed is to be registered in the Land Register the Keeper will require to see evidence that the authorised person or guardian has complied with any direction to find caution or such other security in his or her appointing interlocutor. If no such evidence is available then Indemnity should be excluded. The interlocutor appointing the guardian/authorised person must be registered at the same time as the disposition – see 13.26.3.

Where the subjects purchased are accommodation for use as a dwelling house by the adult, consents of the Public Guardian are required. In purchase under an intervention order, the Public Guardian must consent as to the price (2000 Act s. 53(6)). In respect of guardianship consents to both the principle of the purchase and the price is needed (2000 Act Sch. 2, para. 6(1)). Unless it is clear that the subjects will not be a dwelling for the adult, it is necessary to examine, and if not submitted to requisition either (a) the appropriate statutory consent(s) of the Public Guardian or (b) certification by or on behalf of the authorised person or guardian that no such consent is necessary. If such evidence is not submitted indemnity should be excluded in the following terms:

Note: Indemnity is excluded in terms of section 12(2) of the Land Registration (Scotland) Act 1979 in respect that no evidence has been produced to the Keeper that said John Pringle, as guardian of said Catherine Bell, has fulfilled the requirements of Schedule 2 paragraph 6(1) of the Adults with Incapacity (Scotland) Act 2000 in relation to the acquisition of the subjects in this title by Disposition by Jack Luther in favour of Catherine Bell, registered 5 March 2002.

(If the consideration has been paid by the authorised person under an intervention order the reference will be to section 53(6) of the Act and as 'authorised person' instead of 'guardian'. The term 'said' can be used as the person will already be named in the appropriate note intervention | guardianship.)

The applicant fields on Land Register Form 1, 2 or 3 are completed as follows:- In surname enter the adult's surname. In forename enter the adult's forename and the type of appointee, for example 'Mary, guardian of' or 'William, authorised person for.' The address fields are completed with the adult's address. For the avoidance of doubt 'guardian of' and 'authorised person for' should not be included as part of the indexed material.

13.31. Discharge of standard security where adult is proprietor/debtor

The normal style at Form F in schedule 4 to the Conveyancing and Feudal Reform (Scotland) Act 1970 should be followed inserting the name of the adult at C.D. If the loan was repaid (wholly or partly) by the authorised person or guardian acting in that capacity, the Keeper will take no objection to this being narrated in the deed. However, in all cases, the grantee of a discharge is the adult. On a Land Register Form 2, the application is made by the guardian or authorised person on behalf of the adult. The applicant fields should on Form 2 should be completed as described above. Question 8(a) on the Form 2 should be answered YES and an explanatory note along the following lines added;

'[Name of adult] has restricted capacity. This application is made by [name of authorised person or guardian] in terms of intervention (or, as the case may be, guardianship) order dated (date).

In an application for registration of a discharge in an adult's favour, the Keeper does not require production of any evidence or documentation showing the authorised person's or guardian's power to act.

13.32 Discharge of standard security where adult is creditor

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

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

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

Browser not supported