HM Insights

Charges for registering property deeds in Scotland set to increase from 5 October 2020

Registers of Scotland (RoS) is increasing its fees, including the cost of registering property deeds, from Monday 5 October 2020.

For our clients, this means that there will be an increase in outlays incurred in a property transaction which settles on or after that date. We have set out the key price changes below.

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Advance notices

In almost any property transaction, we require to register an 'advance notice' with RoS shortly before the transaction is due to complete – usually within five days of completion. The advance notice provides certain protections for the deed before it is registered in the Land Register.

From 5 October the cost of an advance notice will double – up from £10 to £20.

Typically the cost of an advance notice will be met by the seller or the granter of the property deed.

Plans reports

Where there is a plan attached to the deed which is being registered, a plans report will need to be obtained to check that the deed plan is suitable for registration in the Land Register and there are no obvious issues with the boundaries and extent of the property shown on the deed plan.

There are three 'levels' of plans reports. Most of the time a level 3 plans report is required - particularly where the property is being registered in the Land Register for the first time.

RoS has increased the cost of plans reports as follows:-

  • Level 1 - £66 to £89
  • Level 2 - £84 to £107
  • Level 3 - £102 to £127
    (all inclusive of VAT)

We have the option to obtain a plans report from RoS direct or get this from a firm of property searchers. However, most property search firms obtain their plans reports from RoS and have indicated to us that they will have no option but to pass the RoS cost increase on to us and to our clients.

Typically the cost of a plans report will be met by the seller or the granter of the property deed.

Registration dues

The cost of registering a property deed in the Land Register of Scotland, the Register of Sasines or the Books of Council and Session is increasing by a relatively modest £10.

The amount of registration dues payable on a property deed will generally depend on (a) the type of deed, (b) whether the property is already registered in the Land Register or still recorded in the (now fairly historic) Register of Sasines and (c) in certain circumstances, how much the property is worth or how much has been paid for it.

For dispositions and 'voluntary registration' applications, the amount of registration dues payable to RoS will depend on the consideration paid or value of the property.

  • At the bottom end of the scale, the registration dues on the sale of a property worth up to £50k will go up from £60 to £70 (assuming the property is registered in the Land Register under one title number).
  • At the top end of the scale, the registration dues on the sale of a property worth between £3,000,001 and £5 million will go up from £7,500 to £7,510 (again, assuming the property is registered in the Land Register under one title number).

Typically the registration dues will be payable by the purchaser or the grantee of the deed. However, it is often the case that the borrower in a standard security transaction will be expected to pay the registration dues.

Worked examples

To help understand what this could mean for you and your business, we have provided a few worked examples.

Case example 1: Sale of a property worth £250k which forms part of a title registered in the Land Register

In this example, the seller's costs in obtaining an advance notice and a level 3 plans report would go up from £112 to £147 on 5 October – an increase of £35.

The registration dues payable by the purchaser would go up by £10, from £3k to £3,010.

Case example 2: A business takes out a £4 million loan and grants standard securities to the lender over 10 properties registered in the Register of Sasines, each worth £350k-£500k

In this scenario, the borrower is often expected to meet all of the costs (whether directly or indirectly through lender's fees).

Given that the Register of Sasines is now closed to standard securities, the borrower would need to register all the properties in the Land Register by way of a 'voluntary registration application' (which ironically in this situation is not voluntary) before the standard security can be registered in the Land Register. Currently Register of Scotland do not charge registration dues on voluntary registration applications that accompany a registration form for a standard security.

The costs to the borrower would therefore be:

 

Before 5 October 2020

After 5 October 2020

Advance notice x 10

£100

£200

Level 3 plans report x 10

£1,020

£1,270

Registration dues on standard securities x 10

£600

£700

 

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TOTAL COST

£1,720

£2,170

This means that the borrower would need to pay an additional £450 after 5 October 2020.

Case example 3: The owner grants a 25-year lease worth £1.5 million over a commercial property registered in the Land Register

Usually commercial leases for more than 20 years are registered in the Land Register and a title sheet is created for the tenant's interest in the property. Leases are also often registered in the Books of Council and Session and at least two extract leases are obtained – one for the landlord and one for the tenant.

If we assume therefore that the 25-year lease is to be registered in the Land Register and in the Books of Council and Session, with two extracts obtained then the cost difference would be:

 

Before 5 October 2020

After 5 October 2020

Advance notice

£10

£20

Registration dues (Land Register)

£1,000

£1,010

Registration dues (Books of Council and Session) including first extract

£10

£20

Additional extract

£12 (inc.VAT)

£24 (inc.VAT)

 

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TOTAL COST

£1,032

£1,074

This is a £42 increase in outlays. Who pays the cost of outlays depends on what has been agreed between the landlord and tenant.

What Harper Macleod can do to help

There may still be time to complete your property transaction before the RoS price increase takes effect on 5 October 2020.

Our team will do what we can to prioritise the completion of any property transactions before 5 October – particularly bulk transactions, such as in case example 2, which are more likely to be impacted by the cost increase.

Where completion before 5 October is not feasible, we will endeavour to order any required plans reports and, if appropriate, register an advance notice before that date to take advantage of the current RoS fees.

In any case, we will always do what we can to minimise costs and outlays for our clients. This can sometimes involve agreeing sample property searches with a lender or purchaser. We can also utilise our extensive knowledge of land registration and RoS's deed plan requirements to ensure that we get the plan right first time and only require one plans report.

We are happy to provide our client with an indication of any anticipated outlays at an early stage to allow them to budget accordingly.

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