Covid-19 and Conveyancing transactions
Registers of Scotland are temporarily closed for applications and our advice is detailed here.
Coronavirus is changing the way we all operate hour by hour. Last week Registers of Scotland announced their closure to all applications. The Law Society of Scotland advised that, as a result, all transactions are not to complete while the application record is closed.
We at Middleton Ross appreciate this will not be an easy time for our clients. We understand that you will have numerous questions about your own sale or purchase, and other conveyancing matters.
Below we have answered some of the most prevalent questions we have encountered over the last week, using information which is currently available.
How will the Registers being closed affect my transaction?
We cannot send deeds for registration, therefore we are unable to settle transactions until a solution can be found. This encompasses all conveyancing transactions, not limited to house sales and purchases.
When you complete a purchase you have some rights of ownership of the purchased property. However, until your title is registered at Registers of Scotland you do not have complete ownership rights, called a “real right”. Without registering the title after the purchase completes, your legal position is vulnerable.
As your solicitors, it is our duty to ensure you receive good title to your property that is not open to any risk. If we are selling a property on your behalf you have to provide good title to the property that you are selling and we as your agents have to ensure that you are able to pass that on. As such we are following the Law Society advice and not settling transactions until Registers of Scotland are open to applications again.
Lenders will also not allow us to proceed in settling a transaction as we cannot register their mortgage security over the property, which leaves them open to risk.
I have a mortgage offer, what will happen to this?
Your mortgage offer will still be valid until the date set by the bank in the mortgage offer, unless they inform you otherwise. This means your purchase can go ahead at an alternative date.
What if my funds have been ordered from the lender?
Your solicitor will contact the lender to inform them that we do not need to draw down the funds. These funds will continue to be available while your mortgage offer is valid.
The lender will not allow you to proceed with settling a transaction if they know their Security with the Registers will not be registered, as this then leaves them open to risk.
Are there any exceptions?
Registers of Scotland will accept a very limited amount of applications on a case-by-case basis, which has been generally approved by most mortgage lenders. However, they will only do so at the moment in cases where extreme hardship would arise as a result of the property transaction not completing immediately. If you think you are affected in such a way and need your transaction to complete then please contact us as soon as possible. We expect that some information would have to be made available to the Registers to show that extreme hardship would arise if such emergency registration did not complete.
What can I do in the meantime?
We are working hard to keep our clients updated and will be sending correspondence to our affected clients providing details on how this will alter their transactions. We will also keep this blog updated with any developments which come from the from Registers of Scotland and the Law Society of Scotland.
The main thing we can all do now is to keep safe and follow government guidelines.