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Home Owner & Debtor Protection (Scotland) Act 2010 – key issues for the advice sector, lay representatives & sol

Home Owner & Debtor Protection (Scotland) Act 2010 – key issues for the advice sector, lay representatives & solicitors. Eleanor Hamilton, Principal Solicitor Shelter Housing Law Service . Home Owner & Debtor Protection (Scotland) Act 2010 .

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Home Owner & Debtor Protection (Scotland) Act 2010 – key issues for the advice sector, lay representatives & sol

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  1. Home Owner & Debtor Protection (Scotland) Act 2010 – key issues for the advice sector, lay representatives & solicitors Eleanor Hamilton, Principal Solicitor Shelter Housing Law Service

  2. Home Owner & Debtor Protection (Scotland) Act 2010 • Amends Conveyancing & Feudal Reform (Scotland) Act 1970 & Heritable Securities (Scotland) Act 1894 • New provisions relating to enforcement of standard securities • Applies to standard securities over residential property

  3. Court action must be raised • Sections 1 & 2 – lender must raise court action to enforce standard security • One exception – voluntary surrender • Action raised as summary application by lender lodging Initial Writ at Sheriff Court

  4. Pre-Action Requirements • Lender must certify having complied with PARs and detail compliance • Clear information on terms of security, amount due, charges and any other default • Made reasonable efforts to agree proposals • Has given notice to borrower if default on previous agreement • Borrower hasn’t taken steps likely to result in payment of arrears • Has provided borrower with information on advice • Has encouraged borrower to contact local authority • Has had regard to guidance issued by Scottish Ministers

  5. Initial Court Procedure • All cases must call in court • Hearing assigned when application made by lender • Borrower will receive copy of Initial Writ and intimation of hearing • No need for borrower to lodge Notice of Intention to Defend or Section 2 Minute

  6. Court hearing • If borrower doesn’t attend hearing decree not necessarily granted against him • Sheriff can only grant application if satisfied that lender has complied with PARs and that it is reasonable to grant decree

  7. Court hearing – borrower present • If borrower attends or is represented at hearing he can oppose application. • Borrower can inform court that PARs not complied with • Borrower can suggest that even if PARs complied with is not reasonable to grant decree

  8. Matters for court to consider • Nature of and reasons for default • Ability of borrower to fulfil obligations within a reasonable period of time • Any action taken by creditor to assist borrower • Participation by borrower in a debt payment programme • Ability of debtor and other residents to secure reasonable alternative accommodation • Not an exhaustive list

  9. Further Court procedure • Sheriff may order Answers • Sheriff decides how best to proceed in circumstances of case • May fix further hearing after Answers lodged • May allow time for adjustment • May continue or sist action • May fix an evidential hearing • May grant decree or refuse application

  10. Entitled residents • Entitled residents to be disclosed in Initial Writ or Answers • Sheriff will order Initial Writ to be served on them • Can apply to court for an order using form 11E • Hearing assigned when application made • Sheriff can also order Answers • Application and hearing to be intimated to other parties • At hearing Sheriff to have regard to same matters as for borrower’s first hearing

  11. Minute for Recall • Done by lodging form 11F • Hearing will be fixed on application • Application and hearing to be intimated to other parties • Decree must be recalled at hearing • If applicant doesn’t attend Sheriff will fix peremptory diet • Only one application may be submitted by each party • Application can only be made if client has not appeared, been represented or submitted application in proceedings

  12. Lay representatives • Must be an approved lay representative • Must be able to satisfy Sheriff throughout proceedings that suitable person to represent borrower or entitled resident and is authorised to represent that person

  13. Legal Aid & Expenses • Consider whether client eligible for legal aid • May have a contribution to pay towards costs • May be a recovery of money/preservation of property • Effect of award of legal aid on expenses • Advise client about cost implication of opposing application

  14. Transitional Provisions • Actions raised pre 30 September 2010 • Calling up notice/notice of default served pre 30 September 2010 • In future cases recall of decree will depend on whether decree granted in action raised pre 30 September 2010 or after

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