04 Sep 2011

Treatment of Mortgage to Rent in Scottish Reposession Hearings

Treatment of Mortgage to Rent in Scottish Reposession Hearings

Rachel Milne, Solicitor, examines the treatment by Scottish Courts and Sheriffs of Mortgage to Rent Applications in the context of a Repossession Action.

Rachel Milne, Solicitor, examines the treatment by Scottish Courts and Sheriffs of Mortgage to Rent Applications in the context of a Repossession Action.

In the current economic climate, an increased number of borrowers are applying to the Mortgage to Rent Scheme (‘the Scheme’); many on the instruction of local Citizen Advice Bureaus and Legal Service Agencies. With an overall success rate of around 50%, the Scheme allows borrowers to address the arrears on their mortgage account and avoid repossession.

Since June 2011, we’ve dealt with over 150 Mortgage to Rent applications. In that same period, it is evident that courts are also becoming increasingly aware of the Scheme and we now see a growing trend of judicial reluctance to grant a Decree for repossession in a case where an application to the Scheme has been made. Sheriffs across Scotland are treating these applications as an attempt by a borrower to address their arrears with the lender. Providing the borrower with an opportunity to progress the application tends to be the decision taken from the Bench.

There is no set time frame for an application to the Scheme and it can take anything from a couple of weeks to several months for an application to proceed and ultimately be withdrawn, meaning normal action can resume or be successful meaning borrowers mortgage accounts will redeem. Given the timescales involved, it can be prudent to continue an action for a longer length of time, such as eight to twelve weeks or in some cases sist the action (put the action to sleep). It is often the case that one short continuation is just not enough time for progress to be made and by the time the application has concluded, the case has been continued several times given the uncertainty of the process.

Given the anticipated increase in the number of repossession actions, I can unfortunately only predict that the number of applications to the Mortgage to Rent Scheme will continue to follow suit. In order to avoid unnecessary cost, it is often in all the parties’ interest to agree to a longer continuation or indeed to have the action sisted at the earliest opportunity. We work alongside the Home Owners Support Fund, on our clients’ behalf, to shorten timeframes and to ensure applications to the Scheme run as efficiently as possible in the hope of limiting costs to all parties involved.

Rachel Main, Solicitor


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