Section 11 duties

The purpose of section 11 is to give local authorities advance notification of tenants who may be at risk of homelessness as a consequence of the landlord or creditor raising proceedings for possession. Local authorities are then required to respond to this information from the landlord or the creditor. [1]

Section 11 requires social and private rented landlords to notify the relevant local authority when they raise proceedings for possession of a property. [2] Proceedings for possession are any proceedings in which decree of removing or warrant of ejection or other like order is sought. [3] If the landlord is the local authority then they are not required to notify. [4]

The proceedings for possession have to be raised before a landlord can lawfully evict a tenant in the social rented sector under the Scottish secure tenancy regime and in the private rented sector under the protected, statutory, assured and short assured tenancy, and private residential tenancy regimes. [5] The notification has to be given to the local authority as soon as proceedings are raised and this can be done by a solicitor acting on behalf of a landlord. [6] Landlords are not required to give notice to the local authority where the tenancy comes routinely to an end. This could happen in the social or private rented sector, where the tenant has given notice to the landlord to end the tenancy. [7]

However, landlords of private residential tenants, assured or short assured tenants cannot make an application to the tribunal for possession proceedings without having proof of sending a section 11 notice.

Social rented landlords should ensure that they do not confuse the duty of section 11 with that of section 14 of the Housing (Scotland) Act 2001. Section 14 requires social rented landlords to serve notice on any qualifying occupiers of the intention that proceedings are being raised to recover possession [8] and the social landlord will still need to fulfill this duty.

Section 11 has amended the Conveyancing and Feudal Reform (Scotland) Act 1970 and the Mortgage Rights (Scotland) Act 2001, resulting in the following duties for creditors to notify a local authority when they:

• serve a calling up notice requiring discharge of the debt secured on property [9]

• serve a notice of default calling on a debtor to remedy a default [10]

• apply to court for a warrant to exercise remedies on default [11]

• raise proceedings to eject a proprietor. [12]

This duty is on all creditors and operates regardless of whether the mortgage is first charge, second charge, buy-to-let or other. [13] There is no duty under section 11 if the creditor is a local authority. Trustees in bankruptcy are not required to notify the local authority where they are operating under the Bankruptcy (Scotland) Act 1985 to obtain a sheriff order to sell or dispose of the debtor’s home or when they raise an action for possession. [14] In this case, the accountant in bankruptcy will provide guidance for the trustees. The Scottish Government stated in its July 2009 guidance that it is considering updating the guidance on this to bring it in line with the arrangements made under Section 11.

The notice given to the local authority is prescribed by the Notice to Local Authority (Scotland) Regulations 2008. These regulations provide guidance and the two different forms to be used by a landlord and a creditor. The names of these forms are:

• notice by landlord of proceedings for possession [15] and

• notice by creditor [16] of;

• service of calling-up notice/notice of default, or

• application to court for a warrant to exercise remedies on default, or

• proceedings to eject proprietor.

The notice from a landlord requires the following information: [17]

• name, address and contact details of the landlord

• name and address of the landlord’s legal representatives

• landlord registration reference

• name and full postal address of tenant

• date of raising proceedings

• court in which proceedings have been raised

• the Act under which proceedings have been raised.

The notice from a creditor requires the following information: [18]

• name, address and contact details of the creditor

• name and address of the creditor’s legal representatives

• name of debtor/proprietor

• full postal address of property

• date the standard security was registered

• date of calling up notice/notice of default or raising of proceedings

• court in which application made or proceedings raised.

The information required under the notices does not include household composition. Although local authorities might find this information useful, the Data Protection Act 1998 prevents personal data being passed on for a purpose other than that for which it was collected. Therefore, the guidance advises that local authorities may work to develop local protocols to allow data sharing within the boundaries of the Data Protection legislative provisions. [19]

Although section 11 allows no direct sanctions for a landlord’s or a creditor’s failure to comply, there are other ways in which a landlord or creditor may be affected by non-compliance. See also eviction proceedings below.

For instance, the Antisocial Behaviour etc (Scotland) Act 2004 requires private sector landlords to register his/her property with the local authority and as part of this registration process, local authorities must be satisfied that the landlord is a fit and proper person to let the property. In this sense, local authorities may also take into account evidence available indicating that a landlord has contravened any area of law relating to housing or landlord and tenant legislative provisions, of which section 11 duties may be one. [20] Additionally, landlords who are members of an accreditation scheme need to comply with the Scottish core standards for accredited landlords. [21] These regulations require accredited landlords to follow the correct legal procedures when seeking possession of a property. In these cases, section 11 duties are of direct relevance from 1 April 2009.

Creditors can also face sanctions for non-compliance in other areas of law to which section 11 has relevance. First charge lenders are regulated by the Financial Services Authority through the Mortgage Code of Business (MCOB). MCOB 13 details how creditors should handle arrears and possession cases, which requires the fair treatment of customers in arrears, contact to be made within 15 days of arrears occurring, use of reasonable efforts to reach agreement with the customer over a method of repayment and taking action to repossess only where all else has failed. Section 11 has direct relevance in these cases. [22]

Second charge and debt consolidations lenders are regulated by the Consumer Credit Act 1974 and it requires businesses in this area to be licensed by the Office of Fair Trading (OFT). The OFT need to be satisfied that businesses in this area are fit for purpose and competent. Furthermore, the Financial Leasing Association (FLA) recommends that all businesses operating in providing second charge mortgages follow the Good Practice Guidelines for Second Charge Mortgages published in November 2008. [23]

Local authorities have a duty under section 2 of the Housing (Scotland) Act 2001 to secure free advice and information about the prevention to homelessness and any services which may assist in the prevention of homelessness for anyone who requests it. Local authorities can use the information provided to them as part of a landlord’s or creditor’s section 11 duties, to inform strategic planning on preventing homelessness and providing homelessness services. [24]

Local authorities can also use the information provided to them by a landlord or a creditor under the section 11 duties to help prevent and alleviate homelessness for the household concerned. [25] In these cases, the local authority will have to find out more about the household concerned, since the information provided under the section 11 notice is limited. Where the property concerned in the proceedings for possession is a private let, a local authority can consult the landlord registration records to contact the landlord to discuss the potential implications for the tenant/s of the property.[26]

Local authorities may provide general financial, housing or legal advice to the households concerned. Advice which could be appropriate includes the following: [27]

• Information and advice on tenants’ rights with respect to the legal process of eviction

• Information and advice on managing debt

• Information and advice on mortgagors’ rights under the Mortgage Rights (Scotland) Act 2001 and Mortgage to rent schemes

• Information and advice on benefits entitlements.

In some cases, a local authority may consider acting on behalf of a household to contact appropriate agencies on behalf of the household or to identify options for alternative accommodation. [28]

Local authorities should take account of delays or failures in housing benefit administration when deciding whether to take action to raise repossession proceedings. Therefore, if a household is in rent arrears caused by a housing benefit administration problem then the local authority should investigate this immediately and give notification to the landlord of the property that they are doing this. [29]

Where rent arrears have resulted from the Local Housing Allowance, authorities have discretion to make a direct payment to landlords where it provides a safeguard to ensure rent is paid on time and therefore that the household can remain in the property. This has to be done in line with DWP guidance. [30]

A landlord of a private residential tenancy, assured tenancy or short assured tenancy who fails to comply with the section 11 duty will not be able to proceed with an application for eviction proceedings. Where a section 11 notice has not been served the tribunal must not grant an eviction order. [31]

• Scottish Government - Section 11 guidance