Repossession law changes in Scotland

The Coronavirus (Scotland) Bill has been passed by the Scottish Government in response to the national emergency caused by the Covid-19 pandemic.

Myra Scott, partner at Aberdein Considine, explains what this means for lenders.

The Coronavirus (Scotland) Bill contains provisions which will impact lenders when dealing with secured and unsecured debts.

When a secured lender in Scotland obtains a possession order they normally cannot use it to remove tenants from the property.

The lender needs to serve a notice on the tenant and can then apply to the First Tier Tribunal to seek an Eviction Order if the tenant has not left voluntarily when the notice has expired.

Until now, an application by a lender wanting to sell a property with vacant possession has been a mandatory ground for an Eviction Order to be granted.

The first change brought about by the Bill is an increase in the notice period provided to tenants. This is now six months.

Moreover, a lender wanting to sell a property with vacant possession will no longer be a mandatory ground for an Eviction Order to be granted. This will be awarded at the discretion of the Tribunal.

Lenders dealing with an unsecured debt should be aware of the changes to the moratorium on diligence.

The moratorium provides individuals struggling with debt with a period of breathing space within which creditors are prevented from instigating certain debt recovery procedures, such as bankruptcy proceedings.

This has been extended from six weeks to six months.

Myra Scott is head of the Lender Services Practice Group at Aberdein Considine