Registers of Scotland scramble to find a ‘Digital Solution’ in the time of COVID-19

Registers of Scotland Close with no contingency plan during COVID-19Registers of Scotland today announced that they were closing Meadowbank House, in Edinburgh and St Vincent Plaza, in Glasgow from today. As a consequence, the application record to register title to land in Scotland has been suspended until further notice as they will be unable to process any paper applications after today.

This step was apparently taken following last night’s announcement by the Prime Minister and First Minister even though that announcement was that you should only leave home to go to work “where this is absolutely necessary and cannot be done from home”. Some people appeared confused as to what that actually meant and Matt Hancock (the Health Secretary) clarified today that those who cannot work from home should go to work “to keep the country running”.

Clearly registration of title cannot be done from home so should, according to that guidance, be done from Meadowbank House, in Edinburgh and/or St Vincent Plaza, in Glasgow “to keep the country running”.

Instead the conveyancing system in Scotland has been brought to an abrupt halt.

The statement from Registers of Scotland says:-

We are working on a digital solution that will enable us to allow digital applications to be submitted.

We will provide a firm update on our progress with enabling a digital solution, and next steps, on Friday 27 March. At this stage we cannot commit to when the application record will reopen but we will be able to provide a further update on this as part of Friday’s update.

Times journalist, Gabriella Bennett (palebackwriter), tweeted:-

Registers of Scotland has indefinitely suspended paper applications for completing house sales. Buyers with completion dates of this week onward (until RoS comes up with a digital solution) are now stuck with no answers and no homes they can move into.

Can’t get my head around this. It looks like RoS has stopped all transactions from completing without having a back up plan. “We cannot commit to when the application record will reopen”

In light of this sudden closure by Registers of Scotland, the Law Society of Scotland’s recommendation is that “solicitors should not settle conveyancing transactions until we have a further update from Registers of Scotland.”

This is causing immediate distress to many.

Home movers took to Twitter to express their concern:-

Caroline (@Carolin19990433) tweeted:-

We are due to move on Fri 27th and the missives have been signed. We have 2 young children and am an NHS worker. This is all so stressful. What do we do? Fri is too late for clarification for us. I have been in touch with our MP and MSP and both have said the move should go ahead

Lauren (@Lauren_MCL18) tweeted:-

Help PLEASE. Our house sale due to complete tomorrow 25th March has fallen through due to your closure. Surely registers of Scotland is a vital service and should remain open?

Nadine (@NadineMontgmery) tweeted:-

Was really looking forward to finally moving into my new home tomorrow after 4 months of living out of a suitcase. Registers of Scotland have decided to suspend the application record effective from today. So no solicitors are settling. What a disaster. 😭😭

Elaine Cambell (@EllieCampbell48) tweeted:-

I really hope a way forward can be agreed – our completion date is tomorrow. Everyone in our property chain is packed and ready to go 🙁

James Brown (@jimayr) tweeted to Kate Forbes MSP (Secretary for Finance):-

I was supposed to move home tomorrow but got a phone call at 2:30pm from my lawyer to say my house purchase couldn’t go through as the Registers of Scotland closed its offices without warning. I am due to be out of my rental accommodation on Thursday terrible situ…

Alan Wyse (@alan_wyse) meanwhile took it straight to the top by tweeting to the First Minister:-

Nicola Sturgeon the hotels are closing and we have nowhere to live can you help us complete our move to a new build house this week so we are safe and can protect others.

Mairi (@MairiRasuli_) also directed a tweet at the First Minister:-

We were to complete on Thursday, and now you have made a family of 5 homeless during a pandemic in the middle of LOCKDOWN. Please hurry up and find a solution for this, you cannot make families homeless during a PANDEMIC!!!

Scot Rock (@Firhillthrills) suggested that, on the other hand, some home movers were relieved by the closure:-

Hopefully a solution can be found. However, from my own personal experience today, there was a sense of relief amongst clients understandably anxious about the practicalities – removers cancelling, availability of keys, groups of more than 2 people involved in a move ..perspective

Mark McBride (@McBrideAce) agreed and added:-

There are some who want to move and some who don’t. Issue is the sudden closure denies those who want to or need to.

There are obviously legal issues surrounding all of this especially where there are concluded missives (a contract) to purchase/sell on a specified date. I’ll not go into those here as the purpose of this post is to highlight the situation and hopefully persuade Registers of Scotland to find a sensible solution very quickly i.e. tomorrow not Friday or beyond.

At 8.35pm this evening Registers of Scotland provided an update via Twitter:-

ATT: RoS is working with UK Finance and the Law Society of Scotland, to agree a position that will allow people who have to move in the next week or so, to complete their transaction. Your solicitor should contact the customer service team at RoS to discuss further.

That phone line will be inundated tomorrow. I hope they have all of their homeworkers on it to answer the calls. But why not just publish the solution rather than have lots of individual calls?

And that solution needs to be simple and straightforward.

Solicitors fax or e-mail contractual letters to one another on the basis that the principal signed letter will follow. They do the same with regard to delivering the signed Disposition (title deed) at settlement. They do the same with formal letters of undertaking.

Registers of Scotland should do the same when accepting applications and registering title deeds in the time of COVID-19. Just allow solicitors to scan and e-mail the applications in. Process and acknowledge them on that basis by e-mail. Tell the solicitors to retain the principal deeds (do Registers of Scotland really need to see those?) but on the basis that if there are any queries prior to the Title Sheet being created or updated the solicitor may need to submit the principal deeds. Or, if they must, insist that the principal application must follow by post/DX before the Title Sheet is created or updated. If that was the system this could be up and running tomorrow morning surely?

Please Registers of Scotland don’t, whatever you do, start building a new online portal to deal with this issue. You did that in 2009 and it’s not been used much since, despite me championing it. That can be a project for once the current crisis is over. In the meantime please keep it simple to enable solicitors to easily do their jobs from home and get their clients into their new homes on the dates of entry already committed to.

Let’s see what tomorrow brings.

Update #1 – 25 March 2020

Registers of Scotland have produced an update this morning that now says that solicitors should only call them today (Wednesday) if they have a settlement today. They will then take your details and “will arrange for a RoS Senior Advisor to speak to you as soon as possible to discuss your specific circumstances and find a solution for you.”

So they do have a solution already to enable people to settle their purchase/sale transactions. But what is it?

They go on:-

Please do not call if you are settling tomorrow – we hope that the advice we will be able to provide later today will provide a solution for most people.

We will be able to take calls tomorrow, if required, to discuss specific circumstances for settlements that are due tomorrow and find a solution for you then.

We will continue to deal with cases on a day by day basis, whilst simultaneously working to find a solution to reopen the application record remotely as soon as we can.

So we should expect an update from them later today that will provide a solution for “most people”. I wonder why not all people?

I’ll update this post when we hear further from Registers of Scotland.

Update #2 – 25 March 2020

Some lenders have been confirming that they are happy to allow settlements to take place this week in the circumstances even if there is a delay in registration of their security. You should of course check the position on a case by case basis with the lenders involved to ensure what the position is for you.

However, this would appear to relieve the problem for many in a way that Registers of Scotland and the Law Society of Scotland may not have done as yet. I assume in light of this the Law Society of Scotland will be issuing fresh guidelines to solicitors?

Update #3 – 25 March 2020

The latest update today from Registers of Scotland says that they have made good progress this morning with the Law Society of Scotland and UK Finance to find a solution. We are advised that:-

RoS and the Law Society will be issuing updated guidance today and UK Finance colleagues are engaging with the lending community seeking their consent to move forward with our joint proposals.  This should enable the majority of transactions that are imminently about to settle to proceed as planned.

This solution appears to revolve around extending the period that Advance Notices (these provide protection to a purchaser if they register title within that period) run from 35 days until longer if a ‘digital solution’ will take longer than 35 days to put in place. They may need emergency legislation to do this (a hammer to crack a nut) or will work to renew existing advance notices for a new 35 day period (surely the sensible thing to do). The indication is that a ‘digital system’ may not be in place until sometime during that 35 day period.

Strangely they state that:-

However, it will remain possible for advance notices to be renewed by the parties for as long as is required and we would expect in the usual case that will be achievable. If there is any reason or indication either (a) that the granter in the advance notice may become insolvent or (b) that the protected deed would not be entered on to the application record by the date five working days prior to the expiry of the protected period (under the original or any renewed advance notice) then we would open the application record (digitally) for the application to be taken on (digitally).  Given the likelihood of the wider market slowing down we think it is likely we could make this approach work for all applications pending in this way.

How can they “open the application record (digitally) for the application to be taken on (digitally)” until they have a digital system in place? I may be misunderstanding what they mean but I think this needs clarification.

Also they state that:-

If there are any immediate cases where an advance notice is not in place we will work with the Law Society and the solicitors involved to open the application record for those applications. In particular if there are DPA cases pending which require advance notices we will deal with them digitally.

Again how can they open the application record until they have a digital system in place unless they are going to open it for a one-off paper submission? This will need to be clarified too.

Hopefully the updated guidance promised for later today will provide the clarity on these points required.

Update #4 – 25 March 2020

The updated guidance from Registers of Scotland promised for “today” has not yet materialised at 9.24pm so I’m assuming we will have to wait another day for that.

Meantime the Law Society of Scotland told it’s members at around 8pm tonight that:-

This is an extremely unsettling time for our members and for the public and we will continue working towards a solution, but we will only issue guidance, when we are clear that it is a viable way forward for purchasers, sellers and lenders and is consistent with the overriding priority to protect the health of the public and to combat the spread of Covid-19 in accordance with government restrictions.

We aim to provide further information in the next 24 hours.

Hopefully we will hear further from them and Registers of Scotland well within the working business day tomorrow as there will be a large number of conveyancing settlements teed up for Friday (the most popular day in the week for house moves).

Update #5 – 26 March 2020

We heard news on LinkedIn that at least one settlement took place yesterday. The solicitors did this as follows:-

We had purchase and sale both involving cash purchase and registered titles. Each side just undertook to renew Advance Notices in 30 days and again if necessary if not able to register title within that period. If lenders agree that could be done for mortgages as well. Gives problems for Sasines and dealing with parts where paper Advance Notices.

Also we heard from DUAL Asset Underwriting to the effect that:-

We have being working on policies to help the profession to mitigate any potential risk that can enter into the transaction in light of what is happening.  More formal information on this will be coming out today and tomorrow.

It appears that the Law Society of Scotland were getting ready to issue guidance but an issue got in the way. They tweeted this morning:-

Unfortunately there was a last minute issue identified in the guidance last night which meant we were unable to issue it to solicitors. This has been worked on throughout this morning and we will be issuing updated guidance to solicitors as soon as we can today.

Meanwhile home movers are getting exasperated.

Elaine Campbell (EllieCampbell48) asked Registers of Scotland on Twitter:-

Where is the update with a working solution? There are thousands of people affected by this mismanagement and lack of forethought. We are stuck in limbo while @Lawscot society dithers. In this time of crisis, you would think  helping the people they exist to serve is priority.

The Law Society of Scotland replied to her:-

Hi Elaine, I appreciate that this is a difficult time for everyone affected but our staff and volunteer committee members have been working day and night with partners since the decision to close the applications record of the land register was made to find a workable solution.

It’s not simply a case of finding a quick technical fix, we also need to be sure that the guidance we issue is not creating a problem for the future which would not be in the interests of anyone who is trying to settle a property purchase.

Katie Grier (@Skaty_G) was also looking on Twitter for clear guidance from the Law Society of Scotland:-

pls provide clear guidance on imminent house moves to solicitors. Your ‘recommendation’ of not settling is going to cause homelessness @RegistersOfScot are saying solicitors can push through in hardship. Can you please ‘recommend’ solicitors do that

The Law Society of Scotland replied to Katie that:-

We are working with partners including @RegistersOfScot and @UKFTweets to find a solution which meets the requirements of the law, the financial sector and Registers and which fulfils our duty to our members and defends the interests of property buyers and sellers.

We cannot rely on a sticking plaster solution may have long-term repercussions for our members and their clients. @UKFTweets identified an issue with the guidance we had hoped to issue yesterday, we are now working to resolve that with a view to issuing updated guidance today.

These Tweets from the Law Society of Scotland were confirmed earlier today more officially in a statement from the President, John Mulholland, who said:-

I understand the frustration and distress amongst our members and the people they represent who are trying to conclude domestic and commercial sales and purchases this week. It is an unsettling time for everybody as we readjust to the circumstances and challenges that Covid-19 and the public health implications that has for all of us.

The decision by Registers of Scotland on 24 March to close their offices and suspend the Applications Record of the Land Register without notice was clearly for the important reason of protecting the health of their staff and customers. However, it created a gap in the legal and financial process for property buying which takes more than a simple technical solution to resolve, and it would be irresponsible to pretend otherwise.

I want to assure you that this is a situation we take very seriously. Since the closure was announced our staff and volunteers on the Law Society’s Property Law Committee have been working day and night with stakeholders, including Registers and UK Finance, to come up with a solution.

We hoped that we had found a framework which would enable some transactions to proceed yesterday. However, on reviewing the guidance we’d prepared but not yet issued to our members, UK Finance identified an outstanding issue which it would have been irresponsible to overlook. We have therefore put our guidance on hold and we are now working to resolve this and hope to be able to provide updated guidance later today.

I truly appreciate that this causes problems for people who were hoping to conclude property sales this week, and who may have already taken steps to pause or end that process. However, we cannot rely on a sticking plaster solution which may have long-term repercussions for our members and their clients.

We continue to work to agree a way forward which meets the requirements of the law, the financial sector and Registers and which fulfils our duty to our members and defends the interests of the public they represent.

I will update you again when we hear more, hopefully later today.

Update #6 – 26 March 2020

Registers of Scotland provided an update on their website at 7am this morning:-

Housing transactions completing this week

Information on how we are prioritising enquiries.

Following the Law Society of Scotland’s recommendation to their members that housing transactions should not settle while the application record is closed, an interim measure has been proposed by RoS which we believe addresses the concerns raised.

We have proposed this interim measure to the Law Society of Scotland and UK Finance. We understand the Law Society of Scotland are considering sharing their view on this interim measure with their members, and we understand that UK Finance are discussing this interim measure with their members to obtain their view.

The customer service team have been fielding large numbers of calls in relation to this message. Some of these calls relate to clients who could wait to settle, but would rather not. Dealing with, and responding to, these calls means that we have not yet been able to get back to everyone who has a genuine emergency if they cannot settle. This is not a state of affairs the Keeper can allow to continue.

We appreciate that this is inconvenient for everyone involved, but in the current climate, of a national health emergency, we must ensure that RoS resources are focussed on those people who will face serious personal or financial hardship if they cannot settle on the day required, and for whom the interim measure (if it can be put in place) does not represent a solution.

Therefore you should only contact RoS if your clients will face extreme personal or financial hardship and have no other option but to settle today. If this is the case, please call 0800 169 9391 and select customer services from the options. Please state to the customer advisor who takes your call that you need to settle today. They will take your details and seek to understand the circumstances of your client, so that we can arrange for a suitable RoS Senior Advisor to speak to you as soon as possible to discuss your specific circumstances and find a solution for you.

Update #7 – 26 March 2020

We now, at last, have guidelines from the Law Society of Scotland issued this afternoon that will allow conveyancing transactions to settle in certain circumstances:-

As you know, the Law Society of Scotland has been working around the clock with Registers of Scotland, UK Finance and other stakeholders to try to find a way to settle urgent transactions following the closure of the Applications Record of the Land Register of Scotland.

This morning, UK Finance have confirmed that most major lenders are on board, so, with the Government restrictions and the health and safety of all those involved in any property transactions at the forefront of our discussions we, with the support of the Registers of Scotland and UK Finance, we have issued guidance which will support the RoS Covid-19 interim measures.

The interim measures will apply to a limited number of transactions which do not conflict in any way with the Government restrictions and our recommendation remains that parties to transactions should attempt to reschedule settlements rather than settling during the closure of the Application Record.

Registers of Scotland’s intention is to allow a limited number of ‘emergency’ registrations, where extreme adverse consequences would otherwise result and details of the circumstances where settlements could happen over the next couple of days follow:

  • Where the Covid 19 interim measures announced by the Keeper apply to the particular transaction.
  • Where the Keeper’s emergency measures are applicable to a particular case. Please refer to the RoS website. Members are asked to understand and advise clients that only a very limited number of high hardship cases could be handled under that and are asked to follow the guidance on the website rather than calling RoS and using up essential resource.

Law Society Guidance to support Registers of Scotland interim measures for settlement of conveyancing transactions during Covid-19 restrictions.

Following closure of the Application Record on 25 March, the Law Society of Scotland has been working with Registers of Scotland, UK Finance and other stakeholders on an interim solution which will allow a number of essential transactions to proceed to settlement within the next week or so.

The obvious risk of settling a transaction during the Application Record closure is that, following settlement, the Disposition in favour of the purchaser, and any Standard Security in favour of a lender, will not be capable of registration until such time as the Application Record reopens. This leaves the purchaser’s title and the lender’s security at risk from the insolvency of the granter of either deed.

In the normal course of events, there is protection provided for a period of 35 days from registration of the Advance Notice. The concern at present is that while the Application Record closure is temporary, it is possible – or even likely – that the Application Record will not reopen before the protected period ends and any deed unregistered at that point will be vulnerable to the insolvency of the granter of that deed.

The Covid-19 Interim Measures proposed initially by Registers of Scotland are that the protected period of Advance Notices be extended beyond the period of the Application Record closure. While it is proposed that this be achieved through emergency legislation, as an alternative until amending regulations can be approved, the Keeper proposes to selectively open the Application Record to accept on to the Register extensions of certain Advance Notices. By extending the protected period, the intention is to ensure that a deed for a settled transaction remains protected beyond the period of the Application Record closure so that registration at that point can be effected.

The Property Law Committee (and UK Finance) have carefully assessed these proposals and has worked with Registers of Scotland on the final wording of the Covid-19 Interim Measures and we believe that these do provide a framework that can allow the legal component of transactions to settle.

There are however some essential steps which must be in place before a particular transaction can safely settle:

  1. First and foremost is the requirement that Advance Notices be registered already. The protection from an Advance Notice is essential so cannot be dispensed with in favour of a Letter of Obligation.
  2. Where Advance Notices are not yet registered, Registers of Scotland may – on a case-by-case basis – be able to selectively open the Application Record to allow for registration of Advance Notices for imminent transactions. Guidance on the availability of this measure will come from Registers of Scotland.
  3. There must be delivery of signed deeds. At settlement the Disposition must have been delivered to the purchaser’s solicitor and the Standard Security must have also been delivered to the lender’s solicitor (which in most cases will be the borrower’s solicitor). This could however be constructive delivery by email agreement between solicitors so that the selling solicitor can demonstrate or confirm that the disposition has been validly executed and is being treated as delivered on the basis it will be physically delivered to the Purchaser’s solicitor immediately after the Applications Record re-opens.

Given the above requirements, members will note that the interim solution proposed will only be available in some transactions which, given the requirement for there to be registered Advance Notices, are likely in very late stages and close to settlement. While there is the possibility of reopening the Application Record selectively for new Advance Notices to be registered, this is likely not a guaranteed option and members will need to discuss this with Registers of Scotland before confirming to clients that settlement is possible.

While the above is an interim solution to allow some transactions to settle, the strong recommendation from the Property Law Committee remains that, parties to transactions should attempt to reschedule settlements rather than settling during the closure of the Application Record. The above interim solution is designed solely to deal with one particular important legal problem arising from the closure of the Application Record. A conveyancing settlement requires a number of different parties to be able to implement various legal and practical processes, which in the current circumstances are becoming increasingly difficult to achieve. The current restrictions imposed by Government are for the protection of public health during a national and international emergency. This guidance should be read in conjunction with the current – and any future – advice from Government and the safety of members, their staff, clients and the wider public should be the most important factor in deciding whether or not it is appropriate to proceed with settlement of a transaction in present circumstances.

Members should be careful to obtain clear instructions from clients, including lenders, to settle transactions in the above circumstances. Members should also be wary of the vulnerability of clients looking to purchase a home in the present circumstances and be careful to ensure that a client’s informed consent to proceed is adequately obtained.

We have confirmation from UK Finance that the following lenders are agreeable to these proposals:

Lloyds Banking Group (all brands, i.e. Bank of Scotland, Halifax, Halifax Intermediaries, Lloyds, BM Solutions and Scottish Widow Bank)

Nationwide

HSBC

Barclays

Scottish Building Society

RBS (RBS, Natwest, Ulster Bank brands)

We will continue to update this guidance as we have further information from UK Finance.

None of the measures proposed should be in any way used to compel settlement of a transaction where someone is shielding from the virus

RoS is working hard to respond effectively to your queries and requests. The Customer Service team are able to safely work from home and will continue to be available to you as normal. Contact customer.services@ros.gov.uk  phone: 0800 169 9391 or textphone: 0131 528 3836 to be directed to someone who can help, whatever your enquiry. Please visit the RoS website for the latest updates and Q&A.

Registers of Scotland have published the following statement this afternoon:-

Following further discussions this morning between Registers of Scotland (RoS), UK Finance and the Law Society of Scotland (LSS), a process is now in place that enables transactions to settle where an advanced notice is in place.

Solicitors should view the LSS guidance and the list of lenders who have agreed to the proposals.

Most major lenders have already agreed and solicitors are advised to check the list which will be updated as new lenders come on board.

If these new measures do not apply to your transaction and if you are in exceptional circumstances that mean you must settle today – then and only then, should you contact RoS customer service advisors for additional support.

We would urge solicitors and home movers to consider postponing any non-urgent transactions during the ongoing health emergency.

No sign as yet of the guidance on the availability of the measure to reopen the Application Record to allow for registration of Advance Notices for imminent transactions that is to come from Registers of Scotland.

No further mention of if and when a ‘digital solution’ might be in place or what form that might take.

But at least we appear to have a solution to allow settlements to now take place and home movers to get into their new homes.

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