The introduction of Advance Notices is a major transformation for conveyancing practice in Scotland, and one that many in the profession would regard as long overdue.
The Advance Notice concept is similar to, but not exactly the same as, the priority period which currently exists for registration of documents in the Land Registry of England and Wales. In England and Wales it is tied in with a register search. The system that now applies in Scotland
37 See generally Land Registration etc. (Scotland) Act 2012, Part 4. Specific provisions are discussed in detail below.
38 There is something of a conceptual non sequitur in the way the legislation has been drafted, discussed further below.
39 There is nothing in the legislation about multiple consecutive advance notices for the same deed, but in theory this is technically possible although, in practice, unlikely.
borrows from both the English system40 and the system that applies in Germany.41
It should be borne in mind that the advance notice procedure is voluntary. There is no compulsion to use it, but the advantages of it over the flawed and precarious letter of obligation alternative are compelling.
Under the provisions of the 2012 Act, it is possible to apply to the Keeper for an advance notice in respect of a deed that a person intends to grant.42 For a fee of £10,43 an advance notice application can be submitted,44 for example when a seller has agreed to sell a piece of his land, and consequently will be granting a disposition in favour of the purchaser.
The advance notice application is submitted to the relevant register in advance of the completion date for the transaction, and once it is registered, it provides a period of protection of thirty-five days (beginning with the day after the advance notice is registered in the relevant register)45 in which any competing deed, or another advance notice, would not have priority.46
So, for example, if the seller registers an advance notice for a disposition over his property that he intends to grant in favour of the purchaser, and then some other person presents a competing disposition for registration in respect of the property in question, although the competing disposition would be entered onto the Register initially, the existence of the earlier advance notice would prevent the competing disposition from prevailing, provided always that the purchaser with the benefit of the advance notice submits his disposition for registration within the thirty-five day period of protection.
However, if the purchaser fails to submit his disposition within the thirty-five day period, in that case, the earlier registered disposition will take effect at the expiry of the thirty-five day period.
Advance notices apply to other types of deed, such as a standard security or deed of servitude, and also to a registrable lease or sub-lease,
40 The Land Registration Act 2002 and Land Registration Rules 2003.
41 German Civil Code BGB, Articles 883 to 888.
42 Land Registration etc. (Scotland) Act 2012, s 56.
43 The Registers of Scotland (Fees) Order 2014, SSI 2014/188, sched 1, para 3(b).
44 Land Registration etc. (Scotland) Act 2012, s 57.
45 Ibid, s 58.
46 Ibid, ss 59-61.
but the deed must be a bilateral one,47 that is, with a granter and a grantee.48 Unilateral deeds, such as a local authority charging order, are not covered, nor actually are they likely to have need of advance notice protection.
Only a person who intends to grant the deed and may validly grant the deed can apply for an advance notice.49 However, a person with the consent of such a person may also apply.50 The statutory wording is a little problematic in a situation where the purchaser wants to register an advance notice for a deed that the purchaser plans to grant as part of the purchase transaction, for example, a standard security in favour of its heritable creditor. Only the purchaser can intend to grant that deed, but there is an argument that the purchaser may not validly grant the deed until it is the owner, therefore it needs the consent of the seller to apply for the advance notice. But in these circumstances, the seller cannot intend to grant the standard security by the purchaser, so neither of the parties can fulfil the two part statutory requirement: (i) intention to grant and (ii) ability validly to grant, at the time of applying for the advance notice. However, unless the effect of the statutory provision is to permit a purchaser to apply for an advance notice of this type, its inclusion in the 2012 Act is pointless.
The Registers are in no doubt that the intention of the legislation was that a purchaser would be able to register an advance notice for a standard security it intends to grant, if it has the consent of the seller, and that they will accept such applications.51
An application for an advance notice can be made for a title that is recorded in the General Register of Sasines, as well as for titles that are registered in the Land Register.52 As all dispositions, whether for valuable consideration or not, induce a first registration under the provisions of the 2012 Act, if the title is still in the Sasine Register, advance notices can be recorded in the Sasine Register in those cases. For a title that is already in
47 Note however that it is not currently possible to apply for an advance notice for any bilateral deed. Renunciation of leases and section 75 agreements are two obvious examples of deeds that are conspicuous by their absence from the current advance notice application system.
48 Land Registration etc. (Scotland) Act 2012, s 56(1).
49 Ibid, s 57(1) and (2)(a).
50 Ibid, s 51(2)(b).
51 Registers of Scotland. Land Registration etc. (Scotland) Act 2012 General Guidance – Advance Notices, available at https://www.ros.gov.uk/about-us/2012-act/general-guidance/
advance-notices
52 Land Registration etc. (Scotland) Act 2012, ss 59 and 60.
the Land Register, the advance notice will be registered in the application record of the Land Register.
If for any reason settlement of the transaction is delayed, it is possible to apply for another advance notice giving the purchaser (or other grantee as appropriate) another thirty-five day period of protection. However, it is important to note that this is not an extension of the first advance notice period: it is a separate period of protection. So, in the example above, the competing disposition submitted during the first thirty-five day period would remain on the Register and the second priority period will not protect against it. The competing disposition would of course show up on a search of the Register, which it is recommended be obtained up to a date when the advance notice to be relied on by the purchaser is disclosed in that search. That search would also disclose the competing disposition alerting the purchaser to its existence. This would mean that the purchaser ought not to proceed to settlement without requiring the seller to take steps remedy the position, should he still wish to buy the property. In the face of a competing disposition, no purchaser would be expected to proceed.
Once an advance notice is on the application record of the Land Register, or in the Sasine Register, it is possible to apply to have it discharged, while it is current (i.e. during the thirty-five day period).53 The circumstances where this will be necessary may occur from time to time, but as a general rule there is no need formally to discharge an advance notice. It will expire automatically at the end of the thirty-five day period, and the Keeper will remove it from the application record in the Land Register, and archive it.54 Most advance notices will therefore simply be allowed to lapse. If an applicant wants to have an advance notice discharged, it must obtain the consent of the person in whose favour the notice has been registered (e.g.
the purchaser). This will ensure that the protection given by an advance notice is not cancelled without the knowledge and permission of the person benefitting from the protection.
One innovative effect of an advance notice is that, if an inhibition is registered against the granter of the deed during the protected period, provided the protected deed is registered during the protected period, it
53 Land Registration etc. (Scotland) Act 2012, s 63.
54 Ibid, s 62. An advance notice recorded in the Sasine Register will always be shown on that Register. While a formal discharge of such an advance notice can be recorded, it will be evident from the date of recording of the advance notice when its protection will have expired after thirty-five days.
will not be affected by the inhibition.55 This could mean, in circumstances where an advance notice is submitted before conclusion of missives and the inhibition is also registered before a contract was in place, but after the protected period of the advance notice has begun, that nonetheless the purchaser’s deed would be protected, and he could complete the purchase.
This represents a change in the law of inhibitions,56 although it is unlikely that this particular convergence of circumstances will happen very often.
There are some entries in the Registers that an advance notice does not affect. Notices of potential liability for costs under the Tenements (Scotland) Act 200457 or the Title Conditions (Scotland) Act 200358 are specifically
carved out from the effect of the advance notice protection.59 Scottish Ministers have the power to specify other deeds that should prevail despite the existence of an advance notice on the Register.60