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Coronavirus & Conveyancing in Scotland

The Latest Update

The prime responsibility of everyone at the moment is to look after their own health and the health of those around them, principally by staying at home.  Here at Kippen Campbell, the buildings at Tay Street and South Street are closed, and those of us who can are working from home.  I miss my buddies from the office, and I shall look forward to seeing them all when the public health crisis passes.

To look after our health and preserve lives, our economy is taking a hit.  The impact on the economy is unprecedented, a word we have heard a lot recently.  The latest sector to feel the effects of the lockdown is the property market, including conveyancing.

Since Tuesday, the position of the Law Society of Scotland is that solicitors should not settle any transaction (purchase, sale, transfer or remortgage) throughout the duration of the “lockdown”.  This is because a crucial aspect of the work of Registers of Scotland can only be dealt with by paper, and settling transactions whilst they are closed would put clients and lenders at unacceptable legal risk.

Following the lockdown, Registers of Scotland closed the Application Record (the main receiving register) and told agents not to send applications for registration to them, as they wish to avoid having staff in their buildings.  The old Automated Registration of Title to Land (ARTL) system was knocked on the head years ago, and there is consequently (bar two very minor exceptions) no way to deal with the registration of title digitally.  One of the updates from the Keeper suggests primary legislation (an act of parliament) is required to set this up, and in the current circumstances that won’t be possible. 

In light of all of this, the Law Society of Scotland have published guidance on their website stating that no transactions should be settled, and missives (contracts for purchase and sale) should not be advanced.  So all conveyancing is paused at present.

An emergency procedure has been agreed with many of the usual lenders, but not all, to assist the most difficult cases.  This procedure was announced late on Thursday 26th March and is only available where missives are already concluded and failure to settle will cause either party “serious personal or financial hardship”, to use the Registers of Scotland’s own words. 

Some lenders are not now releasing funds, including Leeds Building Society and Accord Mortgages.  Others are reducing capacity for certain tasks: Skipton won’t seal Deeds of Restriction for example.  New mortgage applications are not going to be considered, and it is presently difficult to get a mortgage with anything greater than a 60% Loan to Value ratio anyway.

Whilst the position set out yesterday will allow a very small number of settlements to take place during the crisis, the message is very clear.  The Property Market is now closed.  Those settlements currently scheduled should be paused.  Some preparatory work can, of course, continue, with a view to setting a Date of Entry once the movement restrictions have been relaxed.  Missives (the contract of purchase and sale) cannot be advanced at this time.  Conveyancing departments across the country will be very quiet.  But, in time to come, we will never have been busier, getting the backlog cleared when the world starts to revolve again.

The reason for the message is also very clear.  We need to keep ourselves, our families, our staff, our clients, the staff in the various external organisations, and everyone connected to each of these people safe and well. 

Stay safe and well, everyone, and I’ll look forward to seeing you on the other side.

Robert


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