Introduction to possession procedures
The Conveyancing and Feudal Reform (Scotland) Act 1970 as amended by the Mortgage Rights (Scotland) Act 2001 and the Home Owner and Debtor Protection (Scotland) Act 2010 set out the procedures that lenders must follow in order to repossess a property, or enforce any other remedy available to them on default.
First step in a repossession action
The first step in an action for repossession is usually that standard arrears letters are sent to the borrower by the lender after the borrower’s first or second missed payment. The lender will usually ask the borrower to bring their mortgage account up to date, or to contact the lender as soon as possible to discuss any difficulties s/he may be having in relation to meeting mortgage payments.
If the borrower is unable to keep the mortgage account up to date then a second, more strongly worded letter will be sent. This will advise the borrower that their mortgage account is seriously in arrears and if the borrower does not manage to clear the arrears, or does not make contact with the lender within seven days, then their case will be passed to the lender’s solicitors.
Initiating possession procedures
The next step depends upon the type of procedure that the lender chooses to use. The lender can either:
Go straight into the repossession process by serving a calling-up notice [1] and making an application to court under s.24 of the 1970 Act. [2]
Wait to see if the borrower can comply with the mortgage agreement by serving a notice of default and waiting to see if the borrower can make good the default. [3] If the borrower does not make good the default then they can serve a calling-up notice and make an application under s.24 of the 1970 Act.
From 30 September 2010 all lenders must apply to the court using s.24 of the 1970 Act if they wish to repossess the borrower’s property.
Last updated: 29 December 2014