4.2.2 Protecting the performance interest: a tale of two approaches

The core of the two possible approaches has been outlined in the initial discussion paper following Sharp.1 According to the researchers, the two approaches are: (a) “to provide for the registration of a contingent interest in the land to the effect of establishing a priority against all subsequent rights” (also known as the priority notice or Vormerkung) and (b) “to continue with a single act of registration but to confer priority against diligence and insolvency for a period before registration”.2 These two approaches can be conceptualised as follows: approach A strengthens the interest of the grantee when this interest competes with creditors and other grantees, whereas option B does not strengthen the interest of the grantee, but weakens the position of just creditors when the interest of creditors conflicts with the interest of the grantee.3 Option B therefore does not operate in the conflict between two grantees, and seems to assume that the ‘normal’ rules of property law suffice in this context. As mentioned in the introduction of section 4, many countries have adopted a priority notice (option A). Why does the Scots law commission even consider an alternative?