The proposal to transfer the provision of local land charges searches to Land Registry has been on the cards for a while. The initial steps in the process were mooted in the January 2014 consultation document, Land Registry: wider powers and local land charges.2
Following responses to the consultation from the government, stakeholders and interested organisations, a further consultation was published in May 2016, Land Registry: Local Land Charges Rules.3 The new Rules are scheduled to come into force from 6 April 2017.
The Infrastructure Act (IFA) 2015 proposed:
extending Land Registry’s powers to take up the provision of information and register services relating to land and other property in England and Wales; and
the provision of consultancy and advisory services relating to land and other property generally in England and Wales and elsewhere by extending Land Registry’s legal powers under the Land Registration Act (LRA) 2002. This would make Land Registry an overarching repository of property and land-related matters.
IFA s34 and Sch 5, amended the Local Land Charges Act 1975, providing for Land Registry to take statutory sole responsibility of the LLC Register. Land Registry would, therefore, take over LLC searches. The idea behind this was as follows:
Local authority searches, when delivered by Land Registry, will probably be delivered using Land Registry’s Portal where requests would be submitted online and processed electronically. This would fall in line with the government’s strategy for cutting red tape, with services being ‘digital by default’ and transparency and cost efficiency at the forefront of the agenda.
The proposal to transfer the provision of local land charges searches to Land Registry has been on the cards for a while … The new [Local Land Charges] Rules are scheduled to come into force from 6 April 2017
Land Registry will retain all search income it receives. However, Land Registry confirmed that LLC is a statutory service and the department will operate it on a cost-recovery basis.4
Land Registry has experience of managing registers electronically, and all property registers would be maintained under one roof. With Land Registry's recent experiences in digital working, potentially, this would reduce the problem of lack of consistency in both the search results provided and fee charged. The standardisation of LLC searches, in terms of turnaround times, fees and the format of results, should speed up and improve the conveyancing process. Property markets are the backbone of a stable economy, and the move would signal positive growth in this direction.
Greater efficiency in the public sector will be generated and, in particular, to the land and property market. It would provide for the reuse of data for the benefit of the wider economy.
The introduction of uniform LLC fees will end the current ‘postcode-lottery’ fee range, and enable payments to be made via a Land Registry account similar to that used by the department for its core registration services.
The quality and integrity of data will be better maintained, with transparency at the centre of the services provided by Land Registry. The services provided by the local authorities vary in standard and speed as, depending on where they are located, each authority is likely to operate under differing circumstances. For example, some local authorities still rely on paper records that have the potential, over the years, to be damaged, destroyed or to lose part of the information. To implement the transfer of responsibility for the LLC Register Service from local authorities to Land Registry will, temporarily, be costly in terms of a loss of time efficiency and the need to increase resources; however, the department’s new responsibilities will mean that a consistent service will be achieved.
However, a number of concerns have been raised by stakeholders and organisations. Aside from the disruption that any change could cause, the issues are two-fold : resistance by various affected organisations to the change itself and to the actual processes involved in bringing about the change.5
Opposition to the changes
Organisations have expressed the following concerns:
While they embrace the single register concept, interested parties believe that the transfer will lead to a fragmented and more costly service especially as Land Registry is only proposing to take over LLCs and not the CON 29 dealing with enquiries of local authorities. The two searches complement each other, with both being requested simultaneously in almost all conveyancing transactions. This could potentially create difficulties for conveyancers having to request searches from two parties, with consequent complexities and delays in the process.
Originally, Land Registry planned to weed out information older than 15 years from an LLC official search. This idea was withdrawn following concerns raised by stakeholders of losing vital information, such as listed buildings or whether a property is located in a conservation area or subject to an enforcement notice. A conveyancer or purchaser could thus be embroiled in criminal activities without being aware of it.
Land Registry will continue to rely on local authorities to input data to their systems while keeping the fees the department receives. Currently, local authorities recover their costs for this through fees charged for LLC and CON29 searches. If the department takes over LLC responsibility, local authorities will be forced to recover the data-inputting costs themselves at a time of heavy cutbacks on funding. Conversely, Land Registry will not have any control over timelines for input or the reliability of the data supplied.
Certain bodies saw this change as a prelude to Land Registry privatisation as a way for making money, but the proposal has since been stalled.
Land Registry has cited the provision of electronic LLC search results as a significant advantage of taking over the services, as results can be produced more quickly and speed up the conveyancing process. When surveyed for Land Registry, 82% of conveyancers found the proposal unappealing or very unappealing, and did not identify searches as a significant cause of delays.6 6 The Council of Property Search Organisations states that over 300 local authorities already hold data in digital format, providing electronic search results for over 80% of England and Wales.7 It reckons than local authorities could digitise the remaining 20% by spending as little as £10m. On the contrary, it is estimated that Land Registry’s takeover would cost around £50m, requiring a complete overhaul of processes.
Stakeholders also fear a setback in Land Registry’s core operation of land registration as a result of the additional LLC search responsibilities.
The financial implications on local authorities caused by the change could be astronomical. Authorities would have the double whammy of losing a part of the services they provide, with the consequent loss of income, while continuing to have responsibility for providing data to Land Registry and bearing associated costs.
The loss of the LLC search service means possible local authority staff redundancy costs, which ‘have the potential to be between £6.6m and £16.8m, with a budgeted contingency of £11.2m’.8 The overall effect of this level of staff loss can hardly be ignored.
The second part of this article will appear in (2017) May CILExJ. It will set out the provisions of the new Local Land Charges Rules 2017 and review Land Registry’s plans for the implementation of the changes.
1 The digitisation and migration of data from the Welsh local authorities will be dealt with as a separate piece of work, see Land Registry: Local Land Charges Rules, p9, available at: http://tinyurl.com/gm93nkz
2 Available at: http://tinyurl.com/hq6ctun. See also, Land Registry Local Land Charges Rules consultation: supplementary information, May 2016, available at: http://tinyurl.com/jc72klu
3 Available at: http://tinyurl.com/gm93nkz
4 See comments and replies to Gavin Curry, ‘Local Land Charges: a local authority officer’s view’, Landnet, 24 February 2015, available at: http://tinyurl.com/hjfzmaa
5 Land Registry. Consultation on Draft Local Land Charges Rules 2017: summary of responses, October 2016, available at: http://tinyurl.com/jeu4soo
6 Written evidence submitted by the Local Land Charges Institute during the passage of the Infrastructure Bill, available at: http://tinyurl.com/grkrscd
7 James Sherwood-Rogers, ‘Another Land Registry fiasco ?’, Mortgage Finance Gazette, 2 February 2015, available at: http://tinyurl.com/hmunft7
8 Infrastructure Bill [HL] Bill No 124, 2014-15. Research paper 14/65 4 December 2014, available at: http://tinyurl.com/z2zg3pt