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Commercial Real Estate completions in Scotland unlocked

01 May 2020
Those involved in the property sector will no doubt be aware that the Registers of Scotland closed their doors on 24 March 2020 in response to the COVID-19 pandemic.

 As the Registers operated on the basis of paper applications, this meant that deeds transferring or otherwise affecting titles could not be registered in Scotland.  Whilst advance notices (the Scottish equivalent of priority searches) can be registered electronically, and emergency legislation enacted by the Scottish Parliament has automatically extended the period of these notices to ten days after the Land Register application record (or Sasine Register if relevant) is fully reopened, the closure meant that most commercial real estate transactions, and particularly those involving funding, ground to a halt.  Few funders looking to take a fixed (standard) security over a borrower's assets have been willing to complete transactions on the basis of an advance notice alone. 

However, on 27 April 2020, the Registers of Scotland opened a brand new digital submissions service allowing for scanned copy deeds to be submitted for registration in the Land Register of Scotland (note deeds will still require to be physically signed).  Initially registrations are to be taken on in a phased manner on the basis of the date of submission of the advance notice relating to the transaction.  As at 4 May 2020 the Registers of Scotland are accepting applications for deeds where the advance notice has a start date up to an including 28 February 2020.  This date will gradually roll forward as the backlog is cleared.  

The Registers of Scotland have also recognised that they will be able to accept a digital application for commercial transactions "that absolutely cannot wait", although the application process will vary slightly.  The Law Society of Scotland have issued guidance which provides more detail.  They state that where there are "compelling" reasons for a transaction to be submitted for registration then it may be possible to seek agreement for earlier electronic submission (without having to wait for the advance notice submission date to roll around) by contacting the Registers of Scotland.  There is no further guidance on what "compelling" might mean, but it is helpful that the Law Society of Scotland indicate that they expect "that the existing backlog of commercial and other transactions that have been postponed pending Registers of Scotland’s electronic submission solution, and which were not able to settle in terms of the interim measures for Advance Notices, will proceed to registration through the digital portal for electronic submission by arrangement with Registers of Scotland’s Customer Services team".

This paves a way for commercial real estate completions to get under way again in Scotland, provided that the above criteria can be met, and achieved safely in compliance with all public health and safety requirements.  Please note that whilst the digital submission portal has now opened, the applications record of the Land Register has not been formally reopened for the purposes of the relevant legislation, so the benefit of the extended advance notice period also remains for the time being.

For more information, please contact our Real Estate team.

Author: Louise Harkness

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