Letter of Obligation
The Letter of Obligation is a mainstay of the commercial and domestic property transaction. In recent years a number of standard provisions have been adopted in the majority of letters including use of the Law Society Conveyancing Committee approved style of "classic" letter of obligation for Sasine transactions and the styles produced in the Registration of Title Practice Book for first registrations and transfers of registered interests in the Land Register. There can be less consistency when it comes to commercial security transactions and lease transactions.
The PSG has produced a series of Letters which take into account the typical interests and requirements of the seller/purchaser; landlord/tenant; assignor/assignee and lender/borrower, and their respective solicitors in the majority of transactions, and which are designed to meet the criteria for "classic" letters of obligation for Master Policy purposes. Detailed Guidelines also accompany this series.
Guidance Notes
Sales & Assignations
- Letter of obligation for a sale or assignation transaction where the interest is recorded in the General Register of Sasines (v1)
- Letter of obligation for a sale or assignation where the transaction will trigger first registration in the Land Register (v1)
- Letter of obligation for a sale or assignation transaction where the interest is registered in the Land Register (v3)
Loan Transactions
- Letter of obligation for a loan transaction where the interest is recorded in the General Register if Sasines (v1)
- Letter of obligation for a loan where the transaction will trigger first registration in the Land Register or the interest is registered in the Land Register but a Land Certificate is yet to be issued to the Borrower (v3)
- Letter of obligation for a loan transaction where the interest is registered in the Land Register (v3)
Lease Transactions
- Letter of obligation for a lease transaction where the Landlords' interest is not registered in the Land Register but the transaction induces first registration (v1)
- Letter of obligation for a lease transaction where the landlord's interest is registered in the Land Register and the lease is registrable (v4)
- Letter of obligation for a lease transaction where the landlord's interest is registered in the Land Register, but the lease is not registrable (v1)
- Letter of obligation for a lease transaction where the Landlords' title is recorded in the Sasine Register and the Tenants' interest is not registrable (v1)