Date lodged: 17 November 2017
To ask the Scottish Government what legal provisions protect homeowners against the registration of a potentially fraudulent Notice of Potential Liability for Costs (NPLC) on a property’s title deeds.
Answered by: Annabelle Ewing 29 November 2017
There are a number of protections in place.
First of all, to take effect the Notice of Potential Liability for Costs (NPLC) must be registered at least 14 days before the incoming owner becomes the new owner, to allow time for the property registers to be searched by solicitors acting for the purchaser.
Second, only a limited group of people can register an NPLC. In relation to flats, those people are the owner of the flat; the owner of any other flat in the same tenement; a local authority entitled to recover costs and any manager of the tenement.
In relation to properties other than flats, the people who can register an NPLC are the owner of the property; the owner of any property entitled to enforce payment of the costs; and any property manager. The legislation lays down forms when applying to register an NPLC and by signing the form the applicant is certifying they have the legal right to make the application.
Third, under section 112 of the Land Registration etc. (Scotland) Act 2012, it is a criminal offence for any party submitting an application to the Keeper for registration in the Land Register knowingly or recklessly to include materially false or misleading statements or fail to disclose material information in such an application. Fraud is also a criminal offence at common law.
Fourth, any property factor submitting an application would be subject to the provisions of the Property Factors (Scotland) Act 2011 and the statutory Code of Conduct under the 2011 Act. More information on the 2011 Act is at https://beta.gov.scot/policies/homeowners/property-factor-registration/ Section 2.1 of the Code lays down that factors must not provide information which is misleading or false. This can be taken into account in determining whether a person is fit and proper to be a registered factor.
Fifth, a notice only makes incoming owners potentially liable. The actual liability would still have to be recovered using ordinary legal remedies, subject to scrutiny by the courts.
Finally, NPLCs expire after three years unless renewed.