Removing hardship?

New regulations changing the way that sheriff officers conduct the arranging and carrying out of evictions have been introduced, affecting all repossessions in Scotland where decree has been granted on or after 4 April 2011. The new provisions are contained in the Removing from Heritable Property (Form of Charge) (Scotland) Regulations 2011 (SSI 2011/158). The regulations amplify the terms of s 216 of the Bankruptcy and Diligence etc (Scotland) Act 2007, brought into force on that day.

Where previously only a 48-hour notice period was prescribed, the new regulations introduce a requirement for a “charge for removing” to be served on the borrower as a prerequisite to eviction. The charge has a 14-day notice period, although this can be varied or dispensed with on application to the court on cause shown, after which sheriff officers can enter the property and carry out the eviction. A statutory “form of charge” is contained in the schedule to the regulations; this must be served by an officer of court.

The new rules have been made in the spirit of ensuring that there is no undue hardship on defenders being removed from their property, and to ensure that time is allowed for alternative arrangements to be made. However, in our experience, many lenders were already operating on the basis of a 14-day notice period as a matter of good practice.

Personal effects

Section 216 also introduces a requirement for sheriff officers to prepare an inventory of any effects removed from the property at the time of repossession. Under s 218, the court may direct that steps be taken to preserve them, which may be at the borrower’s cost. It is unclear whether a fee will be payable for the preparation of the inventories, but prior to the regulations, inventories of effects within the property were often provided by sheriff officers as a matter of course, following eviction.

Although not stipulated by the regulations, in our view an inventory could also cover any items left by the borrower and subsequently removed after the date of eviction (by mutual agreement). With a view to avoiding irrecoverable storage costs, goods may not be removed at the time that the occupier is evicted. It is not unknown for borrowers to allege that items belonging to them have been disposed of, and the existence of a full inventory would serve to dispel any such allegations.

If no statutory fee is prescribed in relation to these inventories, it may be that sheriff officers will use their discretion and simply absorb any associated cost on the basis that it is in their interests to prepare and certify the inventory (to assist in defending any subsequent claim by the borrower). However, if providing an inventory in every case will involve further work, they would be perfectly entitled to seek a fee for that. It is understood that the relevant professional body is looking at this aspect.

Climate of protection

Following extensive lobbying by consumer groups, and in response to the difficult economic climate, these new regulations are part of recent moves by the Scottish Government, seen in the Home Owner and Debtor Protection (Scotland) Act 2010, to further protect borrowers’ interests and to ensure that all lenders are in fact following the same procedures. The UK Supreme Court decision in Royal Bank of Scotland v Wilson [2010] UKSC 50 (24 November 2010), provides further protection for borrowers. As readers will know, in terms of that decision, lenders must now issue calling-up notices in every case of default, thus building in an additional two-month waiting period for lenders over and above the onerous measures introduced in the 2010 Act, before action can be raised.

In addition, it is expected that the Government will introduce prescribed forms for intimating eviction dates later this year, together with a requirement to complete a “certificate of removing”, but further information is awaited in relation to these changes.