Q. Is there such a thing as a personal right of ownership in Scots law?
A. No. A personal right is a right against a person. Ownership is a real right, indeed the primary real right. You can have a personal right to acquire ownership, from a particular person. But you cannot have a personal right of ownership.
A personal right to acquire ownership can be defeated by the insolvency of the seller or by a subsequent sale by the seller, where the second acquirer completes the transfer of ownership – in the case of land, by registration. The distinction between real and personal rights is considered here.
Q Can I acquire ownership of land without registration in the Land Register or Register of Sasines?
A. No. Scotland introduced property registration in 1617. From that point, and as confirmed by the House of Lords in Young v Leith in 1848, ownership of land is only transferred when registration of the deed of transfer (the disposition or conveyance) takes place. The rule is now set out in statute in s 50 of the Land Registration (Scotland) ACt 2012. This provides that “Registration of a valid disposition transfers ownership.” and in s 50 (3) “An unregistered disposition does not transfer ownership.” That’s discussed here.
Q. Can I register ownership of a souvenir plot?
A. Afraid not. Even if there is a document that appears to be a valid conveyance of the plot section 22 of the LAnd Registration (Scotland) Act 2012 expressly prevents a conveyance of a souvenir plot from being registered. That was approved by the legislature following the recommendation of the Scottish Law Commission. That’s discussed here.
Q So, if I don’t register my conveyance I don’t get ownership of the land?
A. Afraid so. Section 50 of the 2012 Act is clear on this. As was the Scottish Law COmmission in its report on land registration. THere’s more on that here.
Q But section 50 of the 2012 Act talks about an exception for any enactment or rule of law? What’s that about?
A. Scotland has a practice in the acquisition of land where if property is bought by two people (spouses or cohabitants) they often put in a survivorship clause. In the conveyance of the property it is provided it is conveyed to “A and B and the survivor”. Normally, if there is no such clause (which is known in Scotland as a special destination) then if either party dies their share of the property has to be formally transferred to their executor (using the court procedure for executries known as confirmation) and the executor has to transfer the property on to the deceased person’s heir. This takes time. And money. THe use of a special destination means that, on death of one party, the law automatically transfers the deceased person’s share to the other owner without the need to register again. But this is justified partly because the owner and the special destination are clear from examination of the Land Register.
Q. So if I don’t register I definitely don’t get ownership of the plot?
A. Sorry. The law may not expressly prohibit a contract to sell a souvenir plot but given that a contract of sale is a contract for the transfer of ownership it is, given s 22 of the 2012 Act, a contract that can never be implemented. The buyer does not get ownership.
Q. BUt what about beneficial ownership?
Q. beneficial ownership. It’s on some of these websites.
A. Ah, well Scotland is a unititular system. This means there can be only one right of ownership in any one thing at any one time. Ownership is not split or divided. The person on the register remains the owner (because registration is required for ownership). There is no such thing as beneficial ownership. The nearest you get in Scots law is beneficial interest, a concept from the law of trusts. A beneficiary in a trust has a beneficial interest in the trust fund, but the beneficiary does not have ownership. Indeed, the case law is clear that the beneficiary’s right is merely a personal right against the trustees. See Inland Revenue v Clark’s Trustees 1939. That case also criticises the use of an expression “personal right of property” in an earlier case. That’s the last trace you can find of that idea in Scottish case law.
So, in summary, you don’t get beneficial ownership because there’s no such thing in Scots law.
From the perspective of a seller, the seller – according to a case on the law of floating charges, Sharp v Thomson, in 1997 – loses the seller’s beneficial interest in the property when price is paid, conveyance delivered, and the buyer moves in but this has no impact on ownership (as the seller can still sell the property on, and grant real rights affecting the property). Sharp v Thomson confirms that if each of these elements is present it serves to remove the property from the scope of any floating charge granted by a seller company over its assets. The Sharp case has been expressly limited to application in the law of floating charges by the later case of Burnett’s Trustee v Grainger, which is the leading modern case on the transfer of ownership. Burnett’s Trustee reasserts the position of Young v Leith, and nearly 400 years of conveyancing practice and the understanding of Scottish property lawyers.