The calling-up notice

Where the borrower fails to make payment towards the mortgage or breaks any other term of the mortgage the lender must serve a notice calling-up the security if they wish to use their power to repossess the property. [1] This is on a prescribed form and is Form A of Schedule 6 of the 1970 Act.

A calling-up notice must be served on the borrower by delivering it to them or by way of registered post or recorded delivery. [2] It has been held when service is made by way of the Extractor of the Court of Session 'a strict interpretation of the statute is required.' [3]

A copy of the notice must also be sent to any other occupiers of the property. For example, the borrower’s spouse or partner, or any tenants.

Pursuers can serve calling-up notices on debtors using sheriff officers. However, how sheriff officers are required to serve calling-up notices has recently been the subject of debate in the sheriff court.

In Santander UK Plc v David Gallagher [4] the sheriff held that sheriff officers must serve calling-up notices on borrowers 'personally', i.e. by placing it into the hand of the borrower. However, in Bank of Scotland PLC v Mr William John Stevenson [5] the sheriff held that sheriff officers could leave a calling-up notice at the address of the borrower, as they are acting in their official capacity as an officer of the court by serving a calling-up notice. [6]

Both cases are not binding on courts across Scotland as they were not made by sheriff principals, and the service of calling-up notices can still be challenged where sheriff officers are used.

The calling-up notice should state the sum that the borrower owes the lender at the time the notice is served. The borrower will be given two months notice within which to pay the outstanding amount. [7]

A calling-up notice will sometimes state that the principal sum may be varied and the interest will be re-determined. Where this is the case the debtor can request that the lender clarifies what the final sum is. This must be provided to the debtor within one month of them requesting it. Where lender does not comply with such a request the calling-up notice will cease to be valid. [8]

Advisers should be aware of mistakes in the calling-up notice as these may affect its validity – so long as the error is substantial not just technical. Where this is the case borrowers can challenge the notice in court. [9]

Where a borrower fails to comply with a calling-up notice this will constitute default and the lender will be able to exercise their right to gain possession of the borrower’s property. [10]

Prior to 30 September 2010 lenders could serve a calling-up notice upon the borrower and where this was not complied with they could then use court action to enforce their right to take possession of the borrower’s home. From 30 September 2010 if a lender wishes to begin an action for repossession they must apply using to court using section 24 of the 1970 Act and serve a calling-up notice.

Download a sample calling-up notice. 

Once the borrower has received a calling-up notice they have the option to:

• Pay the total balance outstanding as stated in the calling-up notice within two months.

• Request that the lender clarifies what the final sum due will be, where it is indicated on the calling-up notice that this may vary.

• Negotiate a repayment programme with the lender. The lender may prefer to raise an action of ejection and then sist (or suspend) the court action before negotiating.

• Object to the service of the calling-up notice on a technical ground by means of an action of declaration, suspension and interdict. A borrower may want to respond in this manner where the lender has not provided them with a certificate of the sum due. [11]

For repossession actions that started before 30 September 2010 borrowers could respond by applying to court with a section 2 order requesting the suspension of the court action. [12]