| Mortgage Rights (Scotland)
Act 2001 |
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The Bill for this Act of the Scottish Parliament was passed by the
Parliament on 20th June 2001 and received Royal Assent on 25th July
2001
An Act of the Scottish Parliament to provide for the suspension in
certain circumstances of enforcement rights of a creditor in a standard
security over property used for residential purposes and the continuation
of proceedings relating to those rights; to make provision for notifying
tenants and other occupiers of enforcement action by a creditor in a
standard security; and for connected purposes.
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1 Application
to suspend enforcement of standard security
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| (1) |
This section applies where a creditor in a standard
security over an interest in land used to any extent for residential
purposes has-
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(a) served-
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(i) a calling-up notice under section
19 (calling-up of standard security), or
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(ii) a notice of default under section
21 (notice of default), |
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(b) made an application to the court under section
24 (application to court for remedies on default) of that
Act, or
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(c) commenced proceedings under section 5 (power
to eject proprietor in personal occupancy) of the Heritable
Securities (Scotland) Act 1894 (c.44) (in this Act referred
to as "the 1894 Act").
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| (2) |
The following persons may apply to the court for an
order under section 2 of this Act-
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(a) the debtor in the standard security or the
proprietor of the security subjects (where the proprietor
is not the debtor), if the security subjects (in whole or
in part) are that person's sole or main residence,
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(b) the non-entitled spouse of the debtor or
the proprietor, where the security subjects (in whole or in
part) are a matrimonial home and the sole or main residence
of the non-entitled spouse,
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(c) a person living together with the debtor
or the proprietor as husband or wife or in a relationship
which has the characteristics of the relationship between
husband and wife except that the persons are of the same sex,
if the security subjects (in whole or in part) are that person's
sole or main residence,
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(d) a person who has lived together with the
debtor or the proprietor as mentioned in paragraph (c), if-
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(i) the security subjects (in whole or
in part) are the sole or main residence of that person
but not of the debtor or, as the case may be, the proprietor,
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(ii) that person lived together with the
debtor or the proprietor as mentioned in that paragraph
throughout the period of 6 months ending with the date
on which the security subjects ceased to be the sole
or main residence of the debtor or the proprietor, and
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(iii) the security subjects (in whole
or in part) are the sole or main residence of a child
under the age of 16 years who is a child of that person
and of the debtor or the proprietor.
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| (3) |
In paragraph (d)(iii) of subsection (2), "child" includes
a stepchild and any person brought up or treated by the person mentioned
in that paragraph and the debtor or the proprietor as their child.
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| (4) |
An application under subsection (2) must be made-
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(a) in the case mentioned in subsection (1)(a)(i),
before the expiry of the period of notice in relation to the
calling-up notice,
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(b) in the case mentioned in subsection (1)(a)(ii),
not later than one month after the expiry of the period of
notice specified in the notice of default,
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(c) in a case mentioned in subsection (1)(b)
or (c), before the conclusion of the proceedings.
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| (5) |
The period of one month mentioned in subsection (4)(b)
may be dispensed with or shortened by the person on whom the notice
of default has been served, but only with the consent in writing
of-
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(a) any other person on whom the notice of default
has been served,
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(b) if the standard security is over a matrimonial
home, the spouse of each person on whom the notice of default
has been served, and
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(c) any person entitled to make an application
under subsection (2) by virtue of paragraph (c) or (d) of
that subsection.
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| (6) |
An application under subsection (2) in a case mentioned
in subsection (1)(a) must be made by summary application.
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| (7) |
Any rights which the creditor has, or acquires, by
virtue of the enactments mentioned in subsection (1)(a) to (c) may
not be exercised-
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(a) at any time when an application under subsection
(2) is competent,
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(b) at any time when such an application has
been made but has not been determined.
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| (8) |
In a case mentioned in subsection (1)(a)-
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(a) section 19 (calling-up of standard security)
of the 1970 Act has effect as if-
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(i) in subsection (10), the words "effectively
dispensed with or" and "dispense with or" were omitted,
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(ii) after subsection (10) there were
inserted-
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"(10A) Subsection (10) above does not permit
the period of notice mentioned in the calling-up notice to
be shortened to a period of less than one month.
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(10B) The period of notice mentioned in the
calling-up notice may be shortened under subsection (10) above
only with the consent in writing (in addition to any consent
required by that subsection) of-
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(a) any person entitled to make an application
under subsection (2) of section 1 (application to suspend
enforcement of standard security) of the Mortgage Rights
(Scotland) Act 2001 (asp 11) by virtue of paragraph
(c) or (d) of that subsection, and
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(b) where the debtor in the standard security
is not the proprietor-
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(i) the debtor, and
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(ii) if the standard security is
over a matrimonial home (within the definition
referred to in that subsection), the debtor's
spouse.",
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(b) section 21 (notice of default) of that Act
has effect as if subsection (3) of that section were omitted,
and
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(c) Form C in Schedule 6 (procedures as to calling
up and default) to that Act has effect as if the words "dispensed
with (or" were omitted.
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2 Disposal
of application |
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| (1) |
On an application under section 1(2) the court may-
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(a) suspend the exercise of the rights which
the creditor has, or may acquire, by virtue of the enactments
mentioned in subsection (1)(a) to (c) of that section-
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(i) to such extent,
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(ii) for such period, and
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(iii) subject to such conditions,
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as the court thinks fit,
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(b) if the application is made in proceedings
under section 24 of the 1970 Act or section 5 of the 1894
Act, continue those proceedings to such date as the court
thinks fit.
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| (2) |
The court may make an order under this section only
where it considers it reasonable in all the circumstances to do
so; and the court, in considering whether to make such an order
and what its terms should be, is to have regard in particular to-
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(a) the nature of and reasons for the default,
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(b) the applicant's ability to fulfil within
a reasonable period the obligations under the standard security
in respect of which the debtor is in default,
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(c) any action taken by the creditor to assist
the debtor to fulfil those obligations, and
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(d) the ability of the applicant and any other
person residing at the security subjects to secure reasonable
alternative accommodation.
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| (3) |
If, while an order under this section is in force,
the obligations under the standard security in respect of which
the debtor is in default are fulfilled, the standard security has
effect as if the default had not occurred.
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| (4) |
In relation to an application under section 1(2) in
the case mentioned in subsection (1)(a)(i) of that section, the
preceding provisions of this section have effect with the following
modifications-
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(a) the power to specify a period in pursuance
of subsection (1)(a) includes, without prejudice to the generality
of that provision, power to specify the period which expires
on the calling-up notice ceasing to have effect by virtue
of section 19(11) of the 1970 Act,
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(b) subsection (2)(a) is to be read as referring
to the circumstances giving rise to the service of the calling-up
notice,
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(c) subsection (2)(b) is to be read as referring
to the ability of the applicant to comply with the notice
within a reasonable period,
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(d) subsection (2)(c) is to be read as referring
to any action taken by the creditor to assist the debtor to
fulfil the debtor's obligations under the standard security,
and
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(e) subsection (3) does not apply.
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| (5) |
The court may, if requested to do so by the creditor
or the applicant-
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(a) vary or revoke an order made under subsection
(1)(a),
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(b) further continue proceedings continued under
subsection (1)(b).
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| (6) |
Section 1 and this section are without prejudice to
any rights which a debtor, proprietor or non-entitled spouse may
have under any other enactment or rule of law.
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| (7) |
In section 1 and this section-
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"applicant" means the person who makes an application
under section 1(2),
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"court" means the sheriff court,
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"matrimonial home" and "non-entitled spouse"
are to be construed in accordance with the Matrimonial Homes
(Family Protection) (Scotland) Act 1981 (c.59).
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3 Registration
of order under section 2 |
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| (1) |
Where the court makes an order under section 2 the
clerk of court must, as soon as possible, send to the Keeper of
the Register of Inhibitions and Adjudications, for recording in
that Register-
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(a) a certified copy of the order, and
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(b) a notice complying with subsection (2).
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| (2) |
A notice referred to in subsection (1)(b)-
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(a) must be in such form, and
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(b) must contain such particulars of the order,
the proceedings in which it was made and the standard security,
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as may be prescribed by the Scottish Ministers by
order made by statutory instrument.
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| (3) |
A statutory instrument containing an order under subsection
(2) is subject to annulment in pursuance of a resolution of the
Scottish Parliament.
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4 Notices
to debtors, proprietors and occupiers |
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| (1) |
After section 19 of the 1970 Act there is inserted-
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"19A Notice to occupier of calling-up
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(1) Where a creditor in a standard security
over an interest in land used to any extent for residential
purposes serves a calling-up notice, he shall serve a notice
in conformity with Form BB (notice to occupier) of Schedule
6 to this Act together with a copy of the calling-up notice.
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(2) Notices under subsection (1) above shall
be sent by recorded delivery letter addressed to "The Occupier"
at the security subjects.
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(3) If a creditor fails to comply with subsections
(1) and (2) above, the calling-up notice shall be of no effect."
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| (2) |
In section 21 (notice of default) of that Act, after
subsection (2) there is inserted-
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"(2A) Section 19A of this Act applies where
the creditor serves a notice of default as it applies where
he serves a calling-up notice."
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| (3) |
In section 24 (application by creditor to court for
remedies on default) of that Act, after subsection (2) there is
inserted-
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"(3) Where the creditor applies to the court
under subsection (1) above, he shall, if the standard security
is over an interest in land used to any extent for residential
purposes-
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(a) serve on the debtor and (where the
proprietor is not the debtor) on the proprietor a notice
in conformity with Form E of Schedule 6 to this Act,
and
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(b) serve on the occupier of the security
subjects a notice in conformity with Form F of that
Schedule.
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(4) Notices under subsection (3) above shall
be sent by recorded delivery letter addressed-
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(a) in the case of a notice under subsection
(3)(a), to the debtor or, as the case may be, the proprietor
at his last known address,
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(b) in the case of a notice under subsection
(3)(b), to "The Occupier" at the security subjects."
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| (4) |
Where a creditor in a standard security over an interest
in land used to any extent for residential purposes commences proceedings
under section 5 (power to eject proprietor in personal occupancy)
of the 1894 Act, the creditor must-
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(a) serve on the proprietor a notice in conformity
with Form 1 in Part 2 of the schedule to this Act, and
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(b) serve on the occupier of the security subjects
a notice in conformity with Form 2 in that Part of that schedule.
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| (5) |
Notices under subsection (4) must be sent by recorded
delivery letter addressed-
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(a) in the case of a notice under subsection
(4)(a), to the proprietor at the proprietor's last known address,
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(b) in the case of a notice under subsection
(4)(b), to "The Occupier" at the security subjects.
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| (6) |
The schedule to this Act, Part 1 of which amends Schedule
6 to the 1970 Act (forms to be used in relation to calling-up and
default) and Part 2 of which sets out the Forms referred to in subsection
(4), has effect.
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| (7) |
The Scottish Ministers may, by order made by statutory
instrument, amend-
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(a) the Notes inserted in Forms A and B in Schedule
6 to the 1970 Act by Part 1 of the schedule to this Act,
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(b) Forms BB, E and F in Schedule 6 to the 1970
Act,
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(c) the Forms set out in Part 2 of the schedule
to this Act.
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| (8) |
A statutory instrument containing an order under subsection
(7) is subject to annulment in pursuance of a resolution of the
Scottish Parliament.
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5 Crown
application
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This Act binds the Crown.
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6 Interpretation
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Except so far as the context otherwise requires, expressions
used in this Act and in Part II of the 1970 Act have the same meanings
in this Act as they have in that Part.
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7 Commencement
and short title |
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The preceding provisions of this Act come into force
on such day as the Scottish Ministers may by order made by statutory
instrument appoint.
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An order under subsection (1) may include such transitional
and transitory provisions and savings as the Scottish Ministers
think expedient.
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| (3) |
This Act may be cited as the Mortgage Rights (Scotland)
Act 2001.
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| Mortgage Rights (Scotland)
Act 2001 |
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SCHEDULE
(introduced by section 4)
NOTICES TO DEBTORS, PROPRIETORS AND OCCUPIERS
PART 1
AMENDMENTS TO SCHEDULE 6 TO THE 1970 ACT
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Schedule 6 to the 1970 Act (forms to be used
in connection with calling-up of, or default under, standard security)
is amended as follows.
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In Form A (notice of calling-up of standard
security) there is inserted, at the end of the notice-
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"NOTE: The Mortgage Rights (Scotland) Act 2001
gives you the right in certain circumstances to apply to the court
to suspend the rights of C.D. You have two months (which may be
shortened only with your consent) to make an application. The court
will have regard in particular to the circumstances giving rise
to the service of this notice, your ability to comply with this
notice, any action taken by C.D. to assist the debtor in the standard
security to fulfil the obligations under it and the ability of you
and anyone else residing at the property to find reasonable alternative
accommodation. If you wish to make such an application, you should
consult a solicitor. You may be eligible for legal aid depending
on your circumstances, and you can get information about legal aid
from a solicitor. You may also be able to get advice, including
advice about how to manage debt, from any Citizens Advice Bureau
or from other advice agencies."
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In Form B (notice of default under standard security)
there is inserted, at the end of the notice-
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"NOTE: The Mortgage Rights (Scotland) Act 2001
gives you the right in certain circumstances to apply to the court
to suspend the rights of C.D. You have two months (which may be
shortened only with your consent) to make an application. The court
will have regard in particular to the nature of and reasons for
the default, your ability to fulfil the obligations under the standard
security, any action taken by C.D. to assist the debtor in the standard
security to fulfil those obligations and the ability of you and
anyone else residing at the property to find reasonable alternative
accommodation. If you wish to make such an application, you should
consult a solicitor. You may be eligible for legal aid depending
on your circumstances, and you can get information about legal aid
from a solicitor. You may also be able to get advice, including
advice about how to manage debt, from any Citizens Advice Bureau
or from other advice agencies."
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After Form B there is inserted-
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"FORM BB
NOTICE TO OCCUPIER
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To the Occupier (address)
A Notice of Calling-up of a standard security/ Default under
a standard security (delete as appropriate) has been served
by C.D. on A.B. in relation to (address of subjects). A
copy of the notice is attached.
If you are a tenant of A.B., in certain circumstances C.D. cannot
take possession of the property without a court order. You should
obtain legal advice about your rights as a tenant. You may be
eligible for legal aid depending on your circumstances, and you
can get information about legal aid from a solicitor. You may
also be able to get advice from any Citizens Advice Bureau or
from other advice agencies.
If you are the spouse or partner of A.B., the Mortgage Rights
(Scotland) Act 2001 gives you the right in certain circumstances
to apply to the court to suspend the rights of C.D. You have two
months (which may be shortened only with your consent) to make
an application. The court will have regard in particular to-
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(for a Notice of Calling-up) the circumstances
giving rise to the service of the Notice of Calling-up, your
ability to comply with the notice, any action taken by C.D.
to assist the debtor in the standard security to fulfil the
obligations under it and the ability of you and anyone else
residing at the property to find reasonable alternative accommodation.
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(for a Notice of Default) the nature
of and reasons for the default, your ability to fulfil the
obligations under the standard security, any action taken
by C.D. to assist the debtor in the standard security to fulfil
those obligations and the ability of you and anyone else residing
at the property to find reasonable alternative accommodation.
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(delete as appropriate)
If you wish to make such an application, you should consult
a solicitor. You may be eligible for legal aid depending on your
circumstances, and you can get information about legal aid from
a solicitor. You may also be able to get advice, including advice
about how to manage debt, from any Citizens Advice Bureau or from
other advice agencies.
Dated
(Signature of C.D., or signature and designation of C.D.'s
agent followed by the words Agent of C.D.)"
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After Form D there is inserted-
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To A.B. (address)
C.D. (designation), the creditor in a standard security
by you (or by E.F.) in favour of C.D. (or of G.H. to which
C.D. now has right) recorded in the Register for (or, as the
case may be, registered in the Land Register for Scotland)
on (date) has applied to the court under section 24 of
the Conveyancing and Feudal Reform (Scotland) Act 1970 for warrant
to exercise in relation to (address of security subjects)
remedies to which he is entitled on the following default-
(specify in detail the default in respect of which the application
is made)
A copy of the application is attached.
Dated
(Signature of C.D., or signature and designation of C.D.'s
agent followed by the words Agent of C.D.)
NOTE: The Mortgage Rights (Scotland) Act 2001 gives you the
right in certain circumstances to apply to the court for suspension
of the rights of C.D. The court will have regard in particular
to the nature of and reasons for the default, your ability to
fulfil the obligations under the standard security, any action
taken by C.D. to assist the debtor in the standard security to
fulfil those obligations and the ability of you and anyone else
residing at the property to find reasonable alternative accommodation.
If you wish to make such an application, you should consult a
solicitor. You may be eligible for legal aid depending on your
circumstances, and you can get information about legal aid from
a solicitor. You may also be able to get advice, including advice
about how to manage debt, from any Citizens Advice Bureau or from
other advice agencies.
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FORM F
To the Occupier (address)
C.D. (designation) has applied to the
court under section 24 of the Conveyancing and Feudal Reform
(Scotland) Act 1970 for warrant to exercise in relation to (address
of security subjects) remedies to which he is entitled on
the default of A.B. (designation) in the performance
of his obligations under a standard security over (address
of subjects). A copy of the application is attached.
If you are a tenant of A.B. (or, if A.B. is not
the proprietor of the subjects, of E.F. (being the proprietor)),
in certain circumstances C.D. cannot take possession of the
property without a court order. You should obtain legal advice
about your rights as a tenant. You may be eligible for legal
aid depending on your circumstances, and you can get information
about legal aid from a solicitor. You may also be able to get
advice from any Citizens Advice Bureau or from other advice
agencies. If you are the spouse or partner of A.B., the Mortgage
Rights (Scotland) Act 2001 gives you the right in certain circumstances
to apply to the court to suspend the rights of C.D. The court
will have regard in particular to the nature of and reasons
for the default, your ability to fulfil the obligations under
the standard security, any action taken by C.D. to assist the
debtor in the standard security to fulfil those obligations
and the ability of you and anyone else residing at the property
to find reasonable alternative accommodation. If you wish to
make such an application, you should consult a solicitor. You
may be eligible for legal aid depending on your circumstances,
and you can get information about legal aid from a solicitor.
You may also be able to get advice, including advice about how
to manage debt, from any Citizens Advice Bureau or from other
advice agencies.
Dated
(Signature of C.D., or signature and designation
of C.D.'s agent followed by the words Agent of C.D.)"
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PART 2
FORMS RELATING TO PROCEEDINGS UNDER SECTION 5
OF THE 1894 ACT
FORM 1
To A.B. (address)
C.D. (designation), the creditor in a standard security
by you (or by E.F.) in favour of C.D. (or of G.H.
to which C.D. now has right) recorded in the Register for (or,
as the case may be, registered in the Land Register for Scotland)
on (date) has commenced proceedings against you under section
5 of the Heritable Securities (Scotland) Act 1894 to eject you
from (address of security subjects). A copy of the initial writ
is attached.
Dated
(Signature of C.D., or signature and designation of C.D.'s
agent followed by the words Agent of C.D.)
NOTE: The Mortgage Rights (Scotland) Act 2001 gives you
the right in certain circumstances to apply to the court for suspension
of the rights of C.D. The court will have regard in particular
to the nature of and reasons for the default, your ability to
fulfil the obligations under the standard security, any action
taken by C.D. to assist the debtor in the standard security to
fulfil those obligations and the ability of you and anyone else
residing at the property to find reasonable alternative accommodation.
If you wish to make such an application, you should consult a
solicitor. You may be eligible for legal aid depending on your
circumstances, and you can get information about legal aid from
a solicitor. You may also be able to get advice, including advice
about how to manage debt, from any Citizens Advice Bureau or from
other advice agencies.
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FORM 2
To the Occupier (address)
C.D. (designation) has commenced proceedings under section
5 of the Heritable Securities (Scotland) Act 1894 to eject A.B.
from (address of security subjects). A copy of the initial
writ is attached.
If you are a tenant of A.B., in certain circumstances C.D. cannot
take possession of the property without a court order. You should
obtain legal advice about your rights as a tenant. You may be
eligible for legal aid depending on your circumstances, and you
can get information about legal aid from a solicitor. You may
also be able to get advice from any Citizens Advice Bureau or
from other advice agencies.
If you are the spouse or partner of A.B., the Mortgage Rights
(Scotland) Act 2001 gives you the right in certain circumstances
to apply to the court to suspend the rights of C.D. The court
will have regard in particular to the nature of and reasons for
the default, your ability to fulfil the obligations under the
standard security, any action taken by C.D. to assist the debtor
in the standard security to fulfil those obligations and the ability
of you and anyone else residing at the property to find reasonable
alternative accommodation. If you wish to make such an application,
you should consult a solicitor. You may be eligible for legal
aid depending on your circumstances, and you can get information
about legal aid from a solicitor. You may also be able to get
advice, including advice about how to manage debt, from any Citizens
Advice Bureau or from other advice agencies.
Dated
(Signature of C.D., or signature and designation of C.D.'s
agent followed by the words Agent of C.D.)
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