Экзамен зачет учебный год 2023 / SLC, Report on land registration. Vol 1

recording, and which largely duplicates section 16, is applied to the Land Register. The overall result is seriously confusing.

9.13Our policy in this project is that it is, generally speaking, not for the land registration legislation itself to determine what is registrable, what is not registrable, and, in the former case, what the respective consequences are of registration or non-registration. All such matters are within the province of other legislation.20 Hence the topic of which leases are registrable and which are not, the effect of registration and non-registration, and corresponding issues about the registration of alterations of leases and so forth should be governed by the legislation on leases. Hence the draft Bill amends the 1857 Act in two ways. The first is essentially presentational: it becomes clear from the amended text that the 1857 Act applies to the Land Register, and not only to the Register of Sasines. (And it also makes it clear which particular sections of the 1857 Act do not apply to Land Register cases.) The amended text of the 1857 Act will not be attractive, but it is not attractive at present. It needs a thoroughgoing overhaul - indeed it probably needs wholesale repeal and replacement. But such a task would belong to a review of the law of long leases.

9.14The second way in which the draft Bill amends the 1857 Act is that the question of the substantive consequences of registration and non-registration in the Land Register would be set out in the 1857 Act. (As will be explained below, that means shifting certain provisions currently in the 1979 Act into the 1857 Act.) The result would be that the 1857 Act would be equal-handed as between the Register of Sasines and the Land Register: in respect of both registers the 1857 Act would state what is registrable, what the consequences are and so forth. Accordingly we recommend:

38.(a) The Registration of Leases (Scotland) Act 1857 should be amended so that references to the Register of Sasines are supplemented, where appropriate, by references to the Land Register.

(b)The Registration of Leases (Scotland) Act 1857 should be amended so as to set out the consequences of registration of a lease in the Land Register, as it does for the consequences of registration in the Register of Sasines.

(Draft Bill, s 83(1), sch 4)

Alterations to registered leases: (i) What can be registered?

9.15 In the following sections of this part we attempt to analyse the law about alterations to registered leases. We have found this subject difficult; our treatment is necessarily to some extent speculative and may not command agreement. The reason we have thought it appropriate to set out the analysis at some length is to justify the conclusion at which we arrive, which is that the law is uncertain, and that the policy behind the law is also uncertain, and that since a review of the substantive law of leases is outwith the scope of this project, the existing legislative provisions should, with some qualifications, simply be re-enacted, thus preserving the current state of uncertainty.

20 For this policy, see in particular Part 4.

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9.16We use the expression "alteration" in a broad sense to include any agreement or any event that alters its terms, including the termination of the lease. Examples of alteration in this broad sense would include: (a) a mutually-agreed extension of duration; (b) a mutually agreed early termination; (c) a mutually agreed alteration of the rights and obligations of the parties, eg as to repairing obligations; (d) irritancy by the landlord; (e) rescission for breach.21

9.17The issues are: (i) Can a given type of alteration be registered? (ii) If so, what is the effect of such registration? (iii) If an alteration is registrable but it is not registered, what is the effect of the alteration, or, put the other way round, what, if any, are the legal consequences of the lack of registration? (iv) Should the 1857 Act be amended in relation to these issues?

9.18The 1857 Act provided for the recording of renunciations22 and of reductions.23 But it was silent as to the effect of the recording, and as to the effect of the non-recording, of these types of alteration. In other words, it did not say whether a recorded renunciation, or reduction, was in any way different in its effects from one that was unrecorded. As to ordinary deeds of variation (including extension) or irritancies, whether accompanied by decree or not, the 1857 Act was silent.24

9.19The 1979 Act applied to the Land Register the provisions of the 1857 Act about renunciations and reductions.25 In addition, section 2(4) of the 1979 Act contained a provision, applicable across the board, and thus including leases:

"There shall … be registrable … any other transaction or event which (whether by itself or in conjunction with registration) is capable under any enactment or rule of law of affecting the title to a registered interest in land but which is not a transaction or event creating or affecting an overriding interest."

9.20 This probably means that any alteration to a lease can competently be registered, at least if the altered term is inter naturalia.26 If so, it goes further than the 1857 Act which provides for the registrability of only two kinds of alteration, namely renunciation and reduction.27 On the other hand, the fact that the provisions of the 1857 Act mentioned above also apply to the Land Register28 is an argument against a broad construction of section 2(4)(c) of the 1979 Act. After all, it would be odd to say in one breath "(i) all types of alteration can be registered and (ii) two types of alteration can be registered."

Alterations to registered leases: (ii) What is the effect of registration?

9.21Section 3(1) of the 1979 Act provides:

21Rescission might be by either party. Arguably rescission by the landlord is the same as irritancy, but we will not discuss that question here.

22Section 13.

23Section 14.

24According to Angus McAllister, Scottish Law of Leases (3rd edn, 2002), para 7.15, irritancies can be recorded. Whilst we must hesitate to dissent from any view expressed in that admirable work, we think that at this point there is a conflation of decrees of reduction and decrees of irritancy.

251979 Act, s 29.

26A term that is not inter naturalia will in principle not affect transferees. (On this difficult subject see eg Advice Centre for Mortgages Ltd v McNicoll 2006 SLT 591.) If a term is not inter naturalia it could be argued that it is not "capable under any enactment or rule of law of affecting the title".

271857 Act, ss 13 and 14.

281979 Act, s 29(2).

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"(1) Registration shall have the effect of-

(a)vesting in the person registered as entitled to the registered interest in land a real right in and to the interest and in and to any right, pertinent or servitude, express or implied, forming part of the interest, subject only to the effect of any matter entered in the title sheet of that interest under section 6 of this Act so far as adverse to the interest or that person's entitlement to it and to any overriding interest whether noted under that section or not;

(b)making any registered right or obligation relating to the registered interest in land a real right or obligation;

(c)affecting any registered real right or obligation relating to the registered interest in land,

insofar as the right or obligation is capable, under any enactment or rule of law, of being vested as a real right, of being made real or, as the case may be, of being affected as a real right."

9.22This provision applies across the board, not only to the registration of alterations of leases. In general terms, it seems to mean that a registered alteration has effect in relation to third parties. It carries with it the "Midas" effect of registration.29 If a lease were renounced by someone who did not have a good title to it, and the renunciation were then registered, the lease would, it seems, be extinguished, odd though that conclusion may appear.30 Section 3 may apply to all alterations, though it could be argued – see above - that since the 1979 Act incorporates the alterations regime of the 1857 Act, and that regime applies only to two types of alteration (renunciations and reductions), it was not intended to apply to other types of alteration (ie irritancies and ordinary variations).

9.23How the provision should be construed in relation to terms that are not inter naturalia of the lease is unclear, for under the general law of leases such terms do not normally have effect against third parties. Perhaps the section's fullout31 means that the subsection does not apply to such terms.

Alterations to registered leases: (iii) What is the effect of non-registration?

9.24It might be supposed that the "registered alterations have third-party effect" rule (which appears to be contained in section 3(1) of the 1979 Act) implies "unregistered alterations have no third-party effect". But of course such an argument would be logically unsound. "If X then Y" does not imply "if not X then not Y". Indeed, an illustration of this lies to hand: until recently the rule was "a long lease recorded in the Register of Sasines has third-party effect" but it did not follow that an unrecorded long lease lacked third-party effect: such effect could be attained not only by recording under the 1857 Act but also by possession in terms of the 1449 Act.

9.25Section 3(3) of the 1979 Act provides:

29See Part 13.

30Since the change to the Register would be an inaccuracy, there would in principle be the possibility of a subsequent rectification, with the result that the lease would later come back into existence. But under the 1979 Act it is in many cases impermissible for inaccuracies to be rectified. See further Part 17.

31The words "insofar as…"

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"(3) A--

(a)lessee under a long lease;

(b)proprietor under udal tenure,

shall obtain a real right in and to his interest as such only by registration; and registration shall be the only means of making rights or obligations relating to the registered interest in land of such a person real rights or obligations or of affecting such real rights or obligations."

9.26One reading of the final words ("and registration shall be" to "such real rights or obligations") is that registration is the only way of conferring third-party effect on an alteration. For example, suppose that a decree of irritancy and removing is pronounced and extracted, the tenant is removed, and the landlord sells the property to someone else. The extract is not registered. On this view, the lease is terminated, but it still remains in effect as a real right. Whether that idea is a coherent one is open to debate. The possibility of a lease that is valid but lacks real effect is a familiar one: it is the rule of Roman law and hence our common law and it can still happen in certain cases today. But the converse is hard to imagine: a smile lasting after the Cheshire cat has gone.

9.27A more restrictive reading of these words in section 3(3) is that they are only about standard securities and title conditions.32 The reasons for a narrow reading are as follows. In the first place, section 3(3) is about "rights or obligations relating to the registered interest" rather than about the registered interest itself. In the second place, the wording follows quite closely the similar wording in section 3(1), and that wording is probably, though by no means certainly, about standard securities and title conditions. Thirdly, if the policy had been that "what can be registered, must be registered" (ie, to attain third-party effect) one would have expected the wording to track the wording of the "what is capable of being registered" provision in section 2(4)(c). It does not.33

Alterations to registered leases: conclusions and recommendations

9.28 Were it the case that, though the legislative provisions are obscure, the underlying policy is not, the present project would be an excellent opportunity to ensure that the underlying policy was, for the first time, properly implemented. But unfortunately it appears to us that the underlying policy is not clear. The Reid and Henry Reports did not address the issue of alterations. The 1979 Act thus had no clear policy behind it about lease alterations. We incline to think that the same criticism can be made of the 1857 Act.34 Whilst the present project can effect the occasional reform on the periphery of the topic of land registration, it seems to us that the subject of alteration of leases is a large and difficult one, and one that is inextricably tied up with the general fabric of the law of leases, a subject we cannot broach in this project. These issues could be satisfactorily addressed only in the context of a project on the law of leases. We therefore consider that the law should be, for the time being,35 left as it is. Given that there is some uncertainty as to the meaning of the current provisions, the new

32See further DP 128, para 5.6.

33All this presupposes that any alteration can competently be registered in the first place. As mentioned above, it is not quite certain that that is so.

34As mentioned earlier, the focus of interest in 1857 was on the use of leases as collateral for loans.

35In the longer term there should be a review of leases as real rights, which would mean review of the rules about the registration of leases.

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legislation should keep close to the current wording, so as not to change the law inadvertently. Of course, to re-enact such provisions, provisions that we have strongly criticised in the discussion papers, is unsatisfactory, but we have reluctantly come to the conclusion that this is what should be done.36 The current provisions do not appear to be causing major problems in practice. Accordingly, the Bill, whilst repealing the provisions of the 1979 Act discussed in the foregoing paragraphs, re-enacts them for leases, and does so by placing the re-enacted provisions in their natural home, the 1857 Act.

9.29But there is one qualification. An important theme of this Report is that the Keeper's Midas touch is unfortunate and should no longer exist.37 Hence when re-enacting this provision, the Midas effect should be excluded.

9.30Accordingly we recommend:

39.(a) The rules about the registrability of lease alterations in the Land Register should be stated in the Registration of Leases (Scotland) Act 1857, as far as possible using the wording used in the 1979 Act.

(b)The provisions about the effect of the registration of lease alterations, currently contained in section 3(1) of the 1979 Act, should be stated in the Registration of Leases (Scotland) Act 1857, as far as possible using the wording used in the 1979 Act. But the Keeper's Midas touch should be excluded.

(c)The provisions contained in section 3(3) of the 1979 Act relating to the alteration of registered leases should be stated in the Registration of Leases (Scotland) Act 1857, as far as possible using the wording used in the 1979 Act.

(Draft Bill, s 83(1), sch 4, paras 16 and 18)

Registered leases and the guarantee of title

9.31 The guarantee of title has two prongs: "mud" and "money".38 In Part 23 we consider under what circumstances leases should attract the "mud" guarantee. We deal with the "money" issue here. The only special issue concerns – inevitably – off-register alterations. To what extent it is competent for registered leases to be altered39 off-register is not clear: see above. But at all events in so far as there is a competent off-register alteration, the Keeper's warranty should not be engaged. For example, suppose that a lease is altered so as to transfer from the landlord, Alan, to the tenant, Beatrice, certain repairing obligations. The alteration is not registered. Assume (what is uncertain) that the alteration is fully valid, not only between the parties but also in relation to successors. If the tenant, Beatrice, now assigns the lease to Clara, who is unaware of the alteration, Clara would normally have a remedy against Beatrice, but she should not have a remedy against the Keeper for breach of warranty. In our view, it is not reasonable for the Keeper to assume liability for alterations

36The re-enactment of unclear provisions is sometimes done deliberately in consolidating legislation, and in effect this is what we are doing here.

37For the Keeper's Midas touch, see Part 13.

38See generally Parts 19 to 25.

39Using this term in a broad sense: see para 9.16 above.

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which, being off-register, should be known to the parties but are unlikely to be within the Keeper's sphere of knowledge.40 The rule does not place successors in an impossible position, because it is normally possible to check the position in advance of settlement. Indeed, it is arguable that the rule is already encompassed in the more general rule that the Keeper's purse is not to suffer for losses which could have been avoided by reasonable diligence.41

Principal and subsidiary title sheets

9.32The 1979 Act divided "interests in land" into two classes: primary interests, that would have their own title sheet, and secondary interests, that would be registered on one of the primary title sheets. Thus for a given plot of land there might be numerous different title sheets, all independent of each other. Originally there were three types of primary interest, being ownership, superiority (and there could be numerous superiorities at different levels in the feudal hierarchy) and registered lease (and here too there could be several, with a head lease, underlease and so on).42 Superiorities have disappeared,43 but long leases remain. In Part 4 we recommend a rather simpler approach, of one title sheet for each plot of land. That might appear to mean that separate title sheets for leases would cease to exist. More accurately, it means that they would no longer have to exist. They could exist, as subsidiary title sheets.44 In our view this should be a matter for the Keeper's discretion.45 It is a question of administrative convenience. If a lease is registered, then it makes no difference to the substantive rights of anyone whether the lease appears solely on the title sheet of the plot of land or whether there is also a separate, subsidiary, title sheet. Given that the principal title sheet is the plot title sheet, and that that sets forth the subordinate real rights in that land,46 there is no technical need for a separate lease title sheet. The sorts of issues that arise for leases also arise for standard securities, and yet they do not have their own title sheet. For example, standard securities can be assigned. It is competent for there to be a standard security over a standard security. All such matters are handled on a single title sheet, and the same possibility is available for leases. The rights of the parties involved are the same regardless of whether there is a separate title sheet or not. Further we propose abandoning the concept of Certificates of Title and thus the illusory feeling of security arising from holding a Land Certificate for tenanted subjects would no longer be an issue.47

9.33In practice it would no doubt be convenient to have a separate lease title sheet in some cases, though we stress that in our scheme such a title sheet would always have a subsidiary status, the plot title sheet being the principal one. For example, a 999-year lease is virtually a feu right, living a life more or less separate from the right of ownership, and here a separate lease title sheet would make sense.48 Another example would be where a single plot is subject to numerous leases of different sub-areas. Another would be where there is a

40See s 39(1)(b)(vii) of the Bill.

41Draft Bill, s 40(d).

42See Part 4.

43Abolition of Feudal Tenure etc (Scotland) Act 2000.

44In theory there could be separate title sheets for other subordinate real rights as well, but there is no demand, and a separate title sheet brings with it an extra complexity that is unjustified except for leases.

45Draft Bill, s 5(6). We have thus departed from the tentative view expressed in DP 128, para 2.14 (proposal 2). At that stage we had not developed the idea of plot title sheets.

46Subject to certain exceptions.

47See Part 8.

48Such ultra-long leases will disappear if the proposals contained in Scottish Law Commission, Report on Conversion of Long Leases (Scot Law Com No 204, 2006) were implemented.

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nested set of head leases and subleases. But as we say, whether to have separate title sheets should, in our view, be a matter for the Keeper's discretion. We think it likely that, at least to begin with, the Keeper would continue to have separate title sheets, at least for the many leases already registered under the 1979 Act. That is what everyone is used to, and as far as the draft Bill is concerned, such a practice could continue indefinitely. However, it may well be that the future trend of policy at the Department of the Registers would be against having separate title sheets for long leases. But this would be a matter for the Keeper's discretion. By way of background, since 1974 it has not been possible to create leases of residential property for periods of more than 20 years,49 and since 2000 it has not been possible to create leases of other types of property for periods of over 175 years.50 And if our Report on Conversion of Long Leases51 is implemented, a large proportion of existing long leases would be converted into ownership.

9.34Where there is a lease title sheet, it would, as at present, have its own title number. But lease title numbers would differ from other title numbers. Plot title sheets would match the number of the cadastral unit to which they relate. A lease is not a plot, and since cadastral units would exist for registered plots, there would be no cadastral unit for a lease. But this is merely a technical, not a substantive, point. The Cadastral Map would show the lease title number.52 The boundaries of the lease, if different from plot boundaries, would be on the Cadastral Map, and this would be true whether or not the lease had its own title sheet.53

9.35We therefore recommend:

40.(a) Registered leases need not have their own title sheet.

(b)But there may be subsidiary title sheets for such leases, at the Keeper's discretion.

(c)If they do have their own title sheets, the number must appear on the Cadastral Map.

(d)Whether they have their own title sheets or not, the boundaries must appear on the Cadastral Map.

(Draft Bill, s 3(1)(c), and s 5(6) and (7))

Other implications of the concept of plot registration

9.36 One implication of the concept of plot registration has just been mentioned: leases would not have to have their own title sheets and, if they did they would have a subsidiary status. There are also some further implications.

49Land Tenure Reform (Scotland) Act 1974, Part II.

50Abolition of Feudal Tenure etc (Scotland) Act 2000, s 67.

51Scottish Law Commission, Report on Conversion of Long Leases (Scot Law Com No 204, 2006).

52Draft Bill, s 5(7).

53Draft Bill, s 3(1)(c).

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9.37Under the 1979 Act system, property and lease are independent of each other. The property may be registered in the Land Register, and the lease54 still in the Register of Sasines, or vice versa. In the new scheme, once a plot has been registered,55 the idea that a lease over it is "unregistered" would no longer have a meaning. The lease would appear on the plot title sheet, and that is all the registration that there could be. Put another way, and using the concepts of the 1979 Act, where a plot had been registered, every lease that at the day of commencement of the new legislation was an unregistered lease within the meaning of the 1979 Act would be deemed to be a registered lease. This would not involve any change on the commencement day to those pre-existing title sheets which were subject to long leases, as these would already contain a schedule of leases giving sufficient detail of the recording or registration of each lease to allow the lease to be regarded as being incorporated by reference into the title sheet.56

9.38This reconceptualisation might at first seem a little odd to those used to the 1979 Act, but in fact it would be a simplification. There would be few practical consequences, in the sense that conveyancers and the Keeper would need to do things differently. Only one such consequence is worth mentioning. Under current law, if a lease is in the Register of Sasines, and the tenant grants a standard security over the lease, the security goes into the Register of Sasines, not into the Land Register. In our scheme, that would no longer be true. The standard security would go into the Land Register. In the tables below, this case is covered by boxes (10), (12), (22) and (24).

9.39At present, if the property is still in the Register of Sasines, and a long lease is granted, the lease is registered in the Land Register, but the property remains for the time being in the Register of Sasines. In the new scheme, by contrast, the grant of the lease would trigger registration of the plot.57 (That would equally be so if the new lease were a long sublease.) However, where at the date of commencement there are leases that are registered while the property is still in the Register of Sasines, we recommend that an assignation of the lease should not trigger registration of the plot (case (13) in the tables below). This is to ensure that the Keeper can continue "business as usual" with such assignations, handling them as straightforward "dealing of whole" transactions that are ARTL-compatible.

9.40The following table shows what happens when the holder of a long lease that is in the Register of Sasines or the Land Register assigns the lease, or grants a sublease, and grants a standard security over the lease.

54For simplicity, we use the singular. A glance at the chart below shows that even with one long lease matters are complicated enough. In reality there may be a long sublease, or even more than one.

55Property title sheets that exist on the day of commencement will automatically become plot title sheets: see Part 36.

56Draft Bill, s 6(2).

57See "Long leases granted by proprietors holding on a Sasine title" below.

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The current law

	Property is in	Property is in	Both are in LR	Neither is in LR
	GRS. Lease is	LR. Lease is in
	in LR	GRS
Tenant assigns	(1) Assignation	(2) Assignation	(3) Assignation	(4) Assignation
	registered in LR	registered in LR	registered in LR	registered in LR
Tenant grants	(5) Sublease	(6) Sublease	(7) Sublease	(8) Sublease
long sublease	registered in LR	registered in LR	registered in LR	registered in LR
Tenant grants	(9) Standard	(10) Standard	(11) Standard	(12) Standard
standard	security	security	security	security
security	registered in LR	recorded in GRS	registered in LR	recorded in GRS
Our scheme
	Plot is	Plot is in LR.
	unregistered.		Both are in LR	Neither is in LR
	Lease is	Lease is in GRS
	registered
Tenant assigns	(13) Assignation	(14) Assignation	(15) Assignation	(16) Assignation
	registered in LR.	registered in	registered in LR.	registered in LR.
	Plot is not	LR.58 Keeper has	It is for the	Keeper to
	registered in LR	option to create	Keeper's	register plot in
	for time being,	new title sheet.59	discretion	LR. Keeper has
	unless Keeper		whether to retain	option to create
	so chooses.		the existing	either one or two
			separate	new title sheets.
			tenancy title
			sheet.

58What is registered is not the lease but the assignation of the lease. Because the plot is already in the Land Register, the lease is already there as well. In our new scheme the "registration of a lease" means the registration of a new lease.

59The assignation must refer to the plot title number. If the Keeper chooses to open a new title sheet then future deeds will refer to that title sheet.

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Tenant grants	(17) Sublease	(18) Sublease	(19) Sublease	(20) Sublease
long sublease	registered in LR.	registered in LR.	registered in LR.	registered in LR.
	Keeper to	Keeper has	Keeper has	Keeper to
	register plot in	option to create	option whether	register plot in
	LR.	new title sheets	to create a new	LR. Keeper has
		for lease and	title sheet for the	option to create
		sublease.	sublease.	additional title
				sheets for lease
				and sublease.
Tenant grants	(21) Standard	(22) Standard	(23) Standard	(24) Standard
standard	security	security	security	security
security	registered in LR.	registered in LR.	registered in LR.	registered in LR.
	Plot is not	Keeper has		Keeper to
	registered in LR	option to create		register plot in
	for time being,	new title sheet.		LR.
	unless Keeper
	so chooses.60

9.41We recommend:

41.The table above should have effect. In particular, where a plot is registered, deeds affecting long leases should be registrable in the Land Register, not the Register of Sasines.

(Draft Bill, s 5(6), s 20, s 61, and s 62(1)-(4), (9) and (10))

Long leases granted by proprietors holding on a Sasine title

9.42Under current law, if a proprietor with an unregistered title grants a long lease, the lease is registered in the Land Register but the landlord's interest (ie the right of ownership) remains, for the time being, unregistered. The logic of our position requires that in such a case the plot be registered.

9.43In cases (17) and (20), where the tenant grants a long sublease, the plot is registered by the Keeper without any application from the proprietor. But in the present case (ie leases granted by proprietors, not by tenants) we think it preferable that there should be a voluntary registration, that is to say, an application by the proprietor. In Part 33 it is explained that in the new scheme, applications for voluntary registration must be accepted by the Keeper. But it is also provided that the present rule, whereby the Keeper has a discretion to refuse to accept an application for voluntary registration, should continue for an interim period. Clearly, if a proprietor with a Sasine title who wishes to grant a long lease could not first

60 Eventually the Register of Sasines will be closed to all new standard securities. When that happens, and a standard security is granted, the Keeper must register the plot, unless that has already happened.

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