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Home Owner and Debtor Protection (Scotland) Act 2010

Type Act of the Scottish Parliament
Publication 2010-03-18
State In force
Jurisdiction Scotland
Department Statute Law Database
Source legislation.gov.uk
Reform history JSON API

Part 1 — Residential standard securities etc.: creditor's rights on default

Crown application

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(2A) Where the standard security is over land or a real right in land used to any extent for residential purposes, the creditor is entitled to exercise the rights specified in standard condition 10(2) and (3) (and mentioned in subsections (1) and (2) above) only— (a) where the conditions in section 23A of this Act are satisfied, or (b) with the warrant of the court, granted on an application under section 24 of this Act.

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(4) Where the standard security is over land or a real right in land used to any extent for residential purposes— (a) the creditor is entitled to exercise the right specified in standard condition 10(2) only— (i) where the conditions in section 23A of this Act are satisfied, or (ii) with the warrant of the court, granted on an application under section 24 of this Act, and (b) subsection (3) above has effect as if the reference to the last foregoing subsection were a reference to section 24 of this Act.

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(23A) (1) The conditions referred to in sections 20(2A)(a) and 23(4)(a)(i) are that— (a) the security subjects are unoccupied; and (b) each of the persons specified in subsection (2) below has, in writing— (i) certified that that person does not occupy the security subjects and is not aware of the security subjects being occupied by any other person; (ii) consented to the exercise by the creditor of the creditor's rights on default; and (iii) certified that the consent is given freely and without coercion of any kind. (2) Those persons are— (a) the debtor; (b) the proprietor of the security subjects (where the proprietor is not the debtor); (c) the non-entitled spouse of the debtor or the proprietor of security subjects which are (in whole or in part) a matrimonial home; (d) the non-entitled civil partner of the debtor or the proprietor of security subjects which are (in whole or in part) a family home; and (e) a person who has occupancy rights in the security subjects by virtue of an order under section 18(1) (occupancy rights of cohabiting couples) of the Matrimonial Homes (Family Protection) (Scotland) Act 1981. (3) In this section— - “family home” has the meaning given by section 135(1) of the Civil Partnership Act 2004; - “matrimonial home” has the meaning given by section 22 of the Matrimonial Homes (Family Protection) (Scotland) Act 1981; - “non-entitled civil partner” has the same meaning as “non-entitled partner” in section 101(1) of the Civil Partnership Act 2004; - “non-entitled spouse” has the meaning given by section 1 of the Matrimonial Homes (Family Protection) (Scotland) Act 1981.

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Court applications by creditor for remedies on default

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(1A) Subsection (1) above does not apply in relation to a creditor in a standard security over land or a real right in land used to any extent for residential purposes. (1B) A creditor in a standard security of that kind may, where the debtor is in default within the meaning of paragraph (a), (b) or (c) of standard condition 9(1), apply to the court for warrant to exercise any of the remedies which the creditor is entitled to exercise on a default within the meaning of standard condition 9(1)(a). (1C) Before making an application under subsection (1B) above the creditor must comply with the pre-action requirements imposed by section 24A of this Act. (1D) An application under subsection (1B) above is to be made by summary application (regardless of whether it includes a crave for any other remedy).

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(5) The court may, on an application under subsection (1B) above, continue the proceedings or make any other order that it thinks fit; but it may not grant the application unless it is satisfied that— (a) the creditor has complied with subsection (1C) above; and (b) it is reasonable in the circumstances of the case to do so. (6) In considering an application under subsection (1B) above where the debtor appears or is represented, the court is to have regard in particular to the matters set out in subsection (7) below. (7) Those matters are— (a) the nature of and reasons for the default; (b) the ability of the debtor to fulfil within a reasonable time the obligations under the standard security in respect of which the debtor is in default; (c) any action taken by the creditor to assist the debtor to fulfil those obligations; (d) where appropriate, participation by the debtor in a debt payment programme approved under Part 1 of the Debt Arrangement and Attachment (Scotland) Act 2002; and (e) the ability of the debtor and any other person residing at the security subjects to secure reasonable alternative accommodation. (8) Subsections (5) and (6) above do not affect— (a) any power that the court may have; or (b) any rights that the debtor may have, by virtue of any other enactment or rule of law. (9) Where— (a) the default in respect of which an application is made under subsection (1B) above is a default within the meaning of paragraph (a) or (b) of standard condition 9(1); and (b) before a decree is granted on the application, 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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Court powers in action for possession of residential property

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(2) Proceedings under subsection (1) by a creditor in a security over land or a real right in land used to any extent for residential purposes are to be brought by summary application (regardless of whether they include a crave for any other remedy). (3) Before making an application under subsection (1) in a case referred to in subsection (2), the creditor must comply with the pre-action requirements imposed by section 5B.

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(5A) (1) This section applies to an application under section 5(1) by a creditor in a security over land or a real right in land used to any extent for residential purposes. (2) The creditor must— (a) serve on the proprietor a notice in conformity with Form 1 in Part 2 of the schedule to the Mortgage Rights (Scotland) Act 2001, (b) serve on the occupier of the security subjects a notice in conformity with Form 2 in that Part of that schedule, and (c) give notice of the application to the local authority in whose area the security subjects are situated, unless the creditor is that local authority. (3) A notice under subsection (2)(a) or (b) must be sent by recorded delivery letter addressed— (a) in the case of a notice under subsection (2)(a), to the proprietor at the proprietor's last known address, (b) in the case of a notice under subsection (2)(b), to “The Occupier” at the security subjects. (4) Notice under subsection (2)(c) is to be given in the form and manner prescribed under section 11(3) of the Homelessness etc. (Scotland) Act 2003. (5) The court may continue the proceedings or make any other order that it thinks fit on the application; but it may not grant the application unless it is satisfied that— (a) the creditor has complied with section 5(3); and (b) it is reasonable in the circumstances of the case to do so. (6) In considering the application in a case where the debtor appears or is represented, the court is to have regard in particular to the matters set out in subsection (7). (7) Those matters are— (a) the nature of and reasons for the default, (b) the ability of the debtor to fulfil within a reasonable time the obligations under the security in respect of which the debtor is in default, (c) any action taken by the creditor to assist the debtor to fulfil those obligations, (d) where appropriate, participation by the debtor in a debt payment programme approved under Part 1 of the Debt Arrangement and Attachment (Scotland) Act 2002, and (e) the ability of the debtor and any other person residing at the security subjects to secure reasonable alternative accommodation. (8) Subsections (5) and (6) do not affect— (a) any power that the court may have, or (b) any rights that the debtor may have, by virtue of any other enactment or rule of law.

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Pre-action requirements

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(24A) (1) The pre-action requirements referred to in section 24(1C) of this Act are set out in subsections (2) to (6) below. (2) The creditor must provide the debtor with clear information about— (a) the terms of the standard security; (b) the amount due to the creditor under the standard security, including any arrears and any charges in respect of late payment or redemption; and (c) any other obligation under the standard security in respect of which the debtor is in default. (3) The creditor must make reasonable efforts to agree with the debtor proposals in respect of future payments to the creditor under the standard security and the fulfilment of any other obligation under the standard security in respect of which the debtor is in default. (4) The creditor must not make an application under section 24(1B) of this Act if the debtor is taking steps which are likely to result in— (a) the payment to the creditor within a reasonable time of any arrears, or the whole amount, due to the creditor under the standard security; and (b) fulfilment by the debtor within a reasonable time of any other obligation under the standard security in respect of which the debtor is in default. (5) The creditor must provide the debtor with information about sources of advice and assistance in relation to management of debt. (6) The creditor must encourage the debtor to contact the local authority in whose area the security subjects are situated. (7) In complying with the pre-action requirements the creditor must have regard to any guidance issued by the Scottish Ministers. (8) The Scottish Ministers may by order made by statutory instrument make further provision about the pre-action requirements, including provision— (a) specifying particular steps to be taken, or not to be taken, by a creditor in complying with any requirement; (b) modifying or removing any requirement; (c) making different provision for different circumstances. (9) A statutory instrument containing an order under subsection (8) above is not to be made unless a draft of the instrument has been laid before, and approved by resolution of, the Scottish Parliament.

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(5B) (1) The pre-action requirements referred to in section 5(3) are set out in subsections (2) to (6) below. (2) The creditor must provide the debtor with clear information about— (a) the terms of the security, (b) the amount due to the creditor under the security, including any arrears and any charges in respect of late payment or redemption, and (c) any other obligation under the security in respect of which the debtor is in default. (3) The creditor must make reasonable efforts to agree with the debtor proposals in respect of future payments to the creditor under the security and the fulfilment of any other obligation under the security in respect of which the debtor is in default. (4) The creditor must not make an application under section 5(1) to which section 5A applies if the debtor is taking steps which are likely to result in— (a) the payment to the creditor within a reasonable time of any arrears, or the whole amount, due to the creditor under the security, and (b) fulfilment by the debtor within a reasonable time of any other obligation under the security in respect of which the debtor is in default. (5) The creditor must provide the debtor with information about sources of advice and assistance in relation to management of debt. (6) The creditor must encourage the debtor to contact the local authority in whose area the security subjects are situated. (7) In complying with the pre-action requirements the creditor must have regard to any guidance issued by the Scottish Ministers. (8) The Scottish Ministers may by order made by statutory instrument make further provision about the pre-action requirements, including provision— (a) specifying particular steps to be taken, or not to be taken, by a creditor in complying with any requirement, (b) modifying or removing any requirement, (c) making different provision for different circumstances. (9) A statutory instrument containing an order under subsection (8) above is not to be made unless a draft of the instrument has been laid before, and approved by resolution of, the Scottish Parliament.

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Application to court by entitled residents

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(24B) (1) An entitled resident may, in proceedings on an application under section 24(1B) of this Act, apply to the court to continue the proceedings or make any other order that the court thinks fit, despite not being called as a defender in the application. (2) In determining an application under subsection (1) above the court is to have regard in particular to the matters set out in subsection (7) of section 24, reading the first reference to the debtor in paragraph (b) as including a reference to the entitled resident. (3) Subsection (2) above does not affect— (a) any power that the court may have; or (b) any rights that an entitled resident may have, under any other enactment or rule of law. (24C) (1) For the purposes of sections 24B, 24D and 24E, an entitled resident is a person whose sole or main residence is the security subjects (in whole or in part) and who is— (a) the proprietor of the security subjects (where the proprietor is not the debtor in the standard security); (b) the non-entitled spouse of the debtor or the proprietor of security subjects which are (in whole or in part) a matrimonial home; (c) the non-entitled civil partner of the debtor or the proprietor of security subjects which are (in whole or in part) a family home; (d) a person living together with the debtor or the proprietor as husband and wife; (e) a person living together with the debtor or the proprietor in a relationship which has the characteristics of the relationship between civil partners; (f) a person who lived together with the debtor or the proprietor in a relationship described in paragraph (d) or (e) if— (i) the security subjects (in whole or in part) are not the sole or main residence of the debtor or the proprietor; (ii) the person lived together with the debtor or the proprietor 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 (iii) the security subjects (in whole or in part) are the sole or main residence of a child aged under 16 who is a child of both parties in that relationship. (2) In this section— - “child” includes a stepchild and any person brought up, or treated, by both parties to the relationship as their child; - “family home” has the meaning given by section 135(1) of the Civil Partnership Act 2004; - “matrimonial home” has the meaning given by section 22 of the Matrimonial Homes (Family Protection) (Scotland) Act 1981; - “non-entitled civil partner” has the same meaning as “non-entitled partner” in section 101(1) of the Civil Partnership Act 2004; - “non-entitled spouse” has the meaning given by section 1 of the Matrimonial Homes (Family Protection) (Scotland) Act 1981.

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