The creation of Scotland’s digital Land Register may not show up on business radars at the moment. But business owners should not underestimate its relevance.
On the one hand, businesses that register their land voluntarily may make it more marketable; on the other, those that ignore the issue could face legal shocks or commercial setbacks.
The situation has come about because the Scottish Government has instructed Registers of Scotland to register all Scottish land on a new digital map-based Land Register by 2024. With less than 30% of land currently registered, the Keeper of the Register will not rely on ‘trigger’ events, such as sale of land, to get all of Scotland’s property onto the new Register.
Instead, two measures are being used to accelerate registration. Firstly, businesses are being enticed to register their land voluntarily, with a 25% discount on registration fees. Secondly, Registers of Scotland are registering land themselves, without owners even being aware of it.
Indeed, some businesses (as well as homeowners and estate owners) may already have had their land put on the new digital register. There are various areas across Scotland where so-called ‘Keeper-induced registration’ (or KIR) has been trialled, with postcodes in Inverness, Tayside, Lothian and Lanark among the areas involved.
On the face of it, KIR seems an easy option, with no fees payable to Registers of Scotland and no application paperwork to deal with.
However, leaving registration to the Keeper means businesses have no control over the process. Errors and inaccuracies may creep in, and they may face high costs to rectify a mistake or settle a dispute around title.
Another risk of sitting back and leaving registration for another day is that a neighbour may register the land as theirs.
Given that many historic title deeds don’t contain plans, this risk is greater than most businesses think. Even if only a small strip of land is involved, it could lead to the loss of a crucial loading, storage, work or parking area.
Our lawyers’ own experience in Dundee highlights this risk. A business client bought a land-registered plot on an industrial estate, only for the owner of the adjacent property to raise an action that a strip of the land by the boundary was actually included in their own title.
The action was unsuccessful because registration of the land had guaranteed the client’s ownership. But it’s a cautionary tale that it’s better to register your land before someone else does. Had the neighbour been the first to register the land (or had it been left to KIR, under the new measures), the outcome for the business could have been very different.
By taking the bit between their teeth on land registration, businesses are better placed to steer the process and avoid disputes - getting clarity over their boundaries and a state-backed guarantee of their title.
Application fees charged by the Registers of Scotland start from £45, and for those who may want to sell their business or land, registration can simplify the conveyancing and due diligence process and make the land more attractive to buyers.
This article featured in the Scotsman on 16 October 2017 attributed to Susan Law, Partner in our Commercial Property team.
If you would like advice on registering your land or business property, our Commercial Property experts would be happy to help.
