Discussion Paper on Heritable Securities: Pre-Default

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Discussion Paper on Heritable Securities: Pre-Default (DISCUSSION PAPER No.168) Discussion Paper on Heritable Securities: Pre-default discussion paper Discussion Paper on Heritable Securities: Pre-default June 2019 DISCUSSION PAPER No 168 This Discussion Paper is published for comment and criticism and does not represent the final views of the Scottish Law Commission NOTES 1. Please note that information about this Discussion Paper, including copies of responses, may be made available in terms of the Freedom of Information (Scotland) Act 2002. Any confidential response will be dealt with in accordance with the 2002 Act. We may also (i) publish responses on our website (either in full or in some other way such as re-formatted or summarised); and (ii) attribute comments and publish a list of respondents' names. 2. Where possible, we would prefer electronic submission of comments. A downloadable electronic response form for this paper as well as a general comments form are available on our website. Alternatively, our general email address is [email protected]. 3. Please note that all hyperlinks in this document were checked for accuracy at the time of final draft. 4. If you have any difficulty in reading this document, please contact us and we will do our best to assist. You may wish to note that the pdf version of this document available on our website has been tagged for accessibility. 5. © Crown copyright 2019 You may re-use this publication (excluding logos and any photographs) free of charge in any format or medium, under the terms of the Open Government Licence v3.0. To view this licence visit http://www.nationalarchives.gov.uk/doc/open-government-licence/version/3; or write to the Information Policy Team, The National Archives, Kew, Richmond, Surrey, TW9 4DU; or email [email protected]. Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned. This publication is available on our website at https://www.scotlawcom.gov.uk/. Any enquiries regarding this publication should be sent to us at [email protected]. ISBN: 978-0-9500276-6-1 Produced for the Scottish Law Commission by APS Group Scotland, 21 Tennant Street, Edinburgh EH6 5NA. ii The Scottish Law Commission was set up by section 2 of the Law Commissions Act 1965 (as amended) for the purpose of promoting the reform of the law of Scotland. The Commissioners are: The Rt Hon Lady Paton, Chair Catherine Dowdalls QC Caroline S Drummond David Johnston QC Dr Andrew J M Steven. The Chief Executive of the Commission is Malcolm McMillan. Its offices are at 140 Causewayside, Edinburgh EH9 1PR. The Commission would be grateful if comments on this Discussion Paper were submitted by 30 September 2019. Please ensure that, prior to submitting your comments, you read notes 1-2 on the facing page. Respondents who wish to address only some of the questions and proposals in the Discussion Paper may do so. All non-electronic correspondence should be addressed to: Andy Crawley Scottish Law Commission 140 Causewayside Edinburgh EH9 1PR Tel: 0131 668 2131 iii Contents Contents ...................................................................................................................... iv Abbreviations .............................................................................................................. xi Glossary .................................................................................................................... xiii Chapter 1 Introduction ........................................................................................................ 1 General ........................................................................................................................... 1 Background ..................................................................................................................... 2 Reasons for the project ................................................................................................... 2 Scope of project .............................................................................................................. 3 General ....................................................................................................................... 3 Islamic mortgages ....................................................................................................... 4 Evolution not revolution and broad policy considerations ............................................... 4 Two Discussion Papers ................................................................................................... 5 Methodology .................................................................................................................... 5 Structure of this Discussion Paper .................................................................................. 6 Legislative competence ................................................................................................... 6 Impact assessment ......................................................................................................... 7 Acknowledgements ......................................................................................................... 7 Chapter 2 History and current law ...................................................................................... 8 Introduction ..................................................................................................................... 8 Very old forms of heritable security ................................................................................. 8 Wadset ........................................................................................................................ 8 Infeftment of annualrent .............................................................................................. 9 Old forms of heritable security ........................................................................................ 9 General ....................................................................................................................... 9 Bond and disposition in security ................................................................................ 10 Bond of cash credit and disposition in security ......................................................... 10 Ex facie absolute disposition ..................................................................................... 11 Pecuniary real burden ............................................................................................... 11 Halliday Report .............................................................................................................. 12 Introduction ............................................................................................................... 12 Part I: Existing heritable securities ............................................................................ 13 Part II: New statutory security ................................................................................... 13 Part III: Personal charge on heritable property ......................................................... 14 iv Heritable Securities (Scotland) Bill ................................................................................ 15 Conveyancing and Feudal Reform (Scotland) Act 1970 ............................................... 15 General ..................................................................................................................... 15 Pre-default provisions ............................................................................................... 16 Post-default provisions .............................................................................................. 18 General provisions .................................................................................................... 19 Later enactments .......................................................................................................... 19 Redemption of Standard Securities (Scotland) Act 1971 .............................................. 19 Land Tenure Reform (Scotland) Act 1974 .................................................................... 19 Consumer Credit Act 1974 ............................................................................................ 19 Abolition of Feudal Tenure etc. (Scotland) Act 2000 ..................................................... 20 Mortgage Rights (Scotland) Act 2001 ........................................................................... 20 Home Owner and Debtor Protection (Scotland) Act 2010 ............................................ 20 Appraisal of the current law: positives ........................................................................... 21 Appraisal of the current law: negatives ......................................................................... 21 (1) Uncertainty ........................................................................................................... 21 (2) Complexity ........................................................................................................... 22 (3) Inaccessibility ....................................................................................................... 23 (4) Agedness ............................................................................................................. 23 Appraisal: conclusion .................................................................................................... 24 Chapter
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