Conveyancing FAQs
I am having extreme difficulty getting lenders to execute a discharge. What can I do?
I am regularly asked by clients and lenders to confirm the nature of title held. What is the correct terminology for ownership following the abolition of the feudal system?
Is it correct that I no longer require to Notarise Matrimonial Homes Affidavits?
Why do solicitors in Scotland settle house purchase and sale transactions using cheques with the consequent delay in the release of funds pending clearance?
I have a problem regarding Letters of Obligation
I am having extreme difficulty getting lenders to execute a discharge. What can I do?
The root cause of the problem would appear to be that most of these smaller secondary lenders are based in England where discharges are not required in the same format and the registers can be cleared more readily.
Section 18 of the Conveyancing and Feudal Reform (Scotland) act 1970 effectively permits a debtor to apply to the local Sheriff Court and on satisfying the Court that the debt has been redeemed the court will issue an order equivalent to a discharge. Intimating in writing to the lender that you intend raising proceedings under section 18 and seeking expenses is often effective.
The 1970 act outlines the procedure and you should also see ACT OF SEDERUNT (SHERIFF COURT ORDINARY CAUSE RULES) 1993 No.1956 (S.223)
I am regularly asked by clients and lenders to confirm the nature of title held. What is the correct terminology for ownership following the abolition of the feudal system?
No statutory term for ownership (which is not a form of tenure) was used in the Abolition of Feudal Tenure etc (Scotland) Act. The Act avoided terms like absolute or simple ownership deliberately, as these might suggest that the ownership was unrestricted, whereas real burdens and servitudes continued to exist.
Text book writers are starting to refer to "Outright ownership". Professor Kenneth Reid for example uses this phrase, in his text book "The Abolition of Feudal Tenure in Scotland" and this is becoming the de facto terminology.
Is it correct that I no longer require to Notarise Matrimonial Homes Affidavits?
This change (in regard to dispositions ) is embodied in section 6 of the Family Law (Scotland) Act 2006. The matter was overlooked in regard to standard securities and remedied in section 3 of the Family Law (Scotland) Consequential Amendments Order 2006.
Essentially there are two changes of note.
(1) The affidavit has been replaced by a declaration and it is stated to be no more than a declaration. It is the view of Professor Rennie that the Act and Regulation contain no specific requirement to have the document witnessed. It is however prudent to have it witnessed and both Professor Rennie and indeed the Keeper's Office have confirmed that they are happy with the declaration in Gremio.
(2) The Statute also provides specifically for Attorneys to execute a declaration. It has long been held that Attorneys could not have this personal knowledge in regard to Affidavits but this clarifies just how informal this declaration is.
Why do solicitors in Scotland settle house purchase and sale transactions using cheques with the consequent delay in the release of funds pending clearance?
In practice the default position (in the absence of any specific contractual provision to the contrary) in conveyancing transactions is that they settle by post. There are several issues to be considered in relation to the practice of using cheques in such settlements.
(1) You can send a cheque subject to conditions (see Practice Guideline on Settlement Cheques) but you cannot attach conditions to an electronic transfer. If the buyer's solicitor does not get the titles, keys etc in return he cannot stop an electronic transfer but can either demand the return of a cheque or stop the cheque (in extreme circumstances). Settlement by cheque therefore protects the buyer by giving their solicitor control over the money even after it has been sent.
(2) Sellers also have protection as their solicitors can attach conditions to deeds etc sent by post, including a condition about interest on the price if settlement has been delayed (a not infrequent problem these days).
(3) When a solicitor receives another solicitor's client account cheque, although there is a short delay while the cheque clears such cheques are effectively guaranteed by the Law Society of Scotland's members in terms of the Solicitors (Scotland) Act 1980.
(4) With ARTL (automated registration of titles to land) due to come in later this year, many sales will no longer need a paper title deed, and that may have an impact on how transactions settle. Both sides will execute the deed electronically in their own office.
(5) If we returned to the days of personal settlements where the solicitors for buyer and seller would physically travel to each other's offices and exchange documents and payment, fees would go up as more time would have to be taken in each transaction, including instructing in many transactions additional local solicitors to carry it out if the firms are in different parts of the country (very common these days).
