Applying to court for repossession

Where the borrower has defaulted on their mortgage payments and has received a calling-up notice that they have not complied with [1] and the lender has complied with the pre-action requirements the lender can force the borrower to sell their home. [2]

Lenders can exercise their right to sell the borrower’s property where a calling-up notice has been served and not complied with only where:

• The borrower decides to voluntarily surrender the property to the lender, subject to certain conditions. [3]

• The lender obtains permission from the court to do so by applying under s.24 of the 1970 Act. [4]

Lenders must use summary application at ordinary cause level under section 24 of the 1970 Act using an initial writ. [5] The borrower must be sent Form E, this contains the same information as in Form E but is addressed to the occupier. [6]Form F, this contains the same information as in Form E but is addressed to the occupier. [7]

Where the court action is being taken using the Heritable Securities (Scotland) Act 1894 the borrower must be sent Form 1, [8] this contains the same information as Form 1 but is addressed to ‘the occupier’ instead.Form 2, [9] this contains the same information as Form 1 but is addressed to ‘the occupier’ instead.

For repossession actions that started before 30 September 2010 borrowers could apply to the court for a suspension of the repossession action using the Mortgage Rights (Scotland) Act 2001, this was known as a ‘section 2 order’. [10] This procedure was repealed by the Home Owner and Debtor Protection (Scotland) Act 2010 [11] and was designed to give borrowers a chance to clear their arrears or remain in their home until they have found alternative accommodation.

From 30 September 2010 these are both factors that the court has to take into account before granting a lender repossession, see the page on Pre-action requirements for more information.

Once the lender has applied to the court to enforce their remedies on default the sheriff will fix a procedural hearing. Copies of the initial writ and Form 11D and Form 11E will be sent to all parties.

The borrower or their representative can choose to defend the action by lodging answers in court in response to the court documents. There is no standard form for lodging answers, however any response from the borrower should describe their defence and what outcome they wish to see from the sheriff.

It is important for advisers to check that the correct repossession procedure has been followed by the lender. For example, that all the pre-action requirements have been carried out correctly, because this may mean that the court action is invalid and the action will have to be restarted.

Sheriffs will not grant the lender’s application unless they are satisfied that the pre-action requirements have been followed and it is reasonable in the circumstances of the case to grant the repossession, or other, order. [12] Where the borrower appears at court, or is represented, the court must taken into account the following matters when considering the lender’s application:

• The nature of default and the reasons for it.

• The ability of the borrower to fulfil their obligations under the mortgage agreement within a reasonable time.

• Any action taken by the lender to help the borrower fulfil their obligations under the mortgage agreement.

• Any participation by the borrower in a debt payment programme.

• The ability of the borrower and anyone else living in the property to find reasonable alternative accommodation. [13]

Once the sheriff has considered all of these matters they will make their decision.

Depending on the circumstances of the case the borrower, or another occupant of the property, may be able to apply to court to recall the decree - this takes the repossession action back to the beginning. If this option is not availble then it is likely that the lender will take possession of the property, either by voluntary agreement with the borrower or by evicting the borrower and any other occupants from the home.