The Application Record of the Land Register of Scotland closed on 24 March 2020 as a result of the risk of Coronavirus.
As a result, the Property Law Committee of the Law Society of Scotland is strongly recommending that parties to conveyancing and security transactions should attempt to reschedule settlements rather than settling during the closure of the Application Record.
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, protection against the registration of another deed is 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. It is proposed that this be achieved through emergency legislation. 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.
Further guidance from Registers of Scotland and the Law Society of Scotland will follow.