Securities Section Information

An entry in the securities section will normally contain the following particulars:

• the entry number;

• the name of the deed creating/affecting the security or charge;

• the name(s) and designation(s) of the granter(s) of the security;

• the name(s) and designation(s) of the creditor(s) taking account of guidelines on company designations.
  Note that no attempt should be made to update creditors names in existing entries unless application is made to register a deed which affects that interest (e.g. ranking agreement or variation);

• the capacity of the creditor(s) (where appropriate);

• the effect of the deed on the interest (where appropriate e.g. assignations or variations, or where only part of the subjects in the title are affected by the security);

• the debt or obligation (e.g. the amount or ‘in respect of discount’);

• ranking provisions;

• the date of registration, or the date of recording in the sasine register if the charge has not been registered in the land register (see Variation of Security below for guidance on securities which have been recorded and are subsequently registered):

• any authorised limitation or exclusion of warranty.

* For more information on discount securities, see Discount Standard Securities below.

A standard security may be granted by the registered proprietor and also by another borrower, who is not the proprietor but is undertaking to repay the loan. While this is incorrect and the proprietor(s) alone should grant the security, provided that all of the registered proprietors grant the security the Keeper will accept it for registration. All parties granting the security should be reflected in the securities section.

The Keeper’s former practice in such situations was to exclude indemnity. If an application is submitted affecting a title sheet bearing an exclusion of indemnity in this respect, the exclusion note should be removed. 

Where the registered title is in the name of two or more persons with a survivorship destination in the proprietorship section, and the standard security received for registration is granted by less than all of the registered proprietors, the registration officer can assume that the survivorship destination has operated provided the application form does not indicate that the validity of the security is dependent upon another deed being submitted for registration

An update to the proprietorship section is required to remove the deceased proprietor(s), see Names and Changes of Name in the Proprietorship and Securities Sections.

It is acceptable in situations where title is held equally by A and B for A to grant a standard security in favour of B over A's 1/2 share as it is A's share being burdened by the security. In the event of a transfer by A to B of their 1/2 share this security would be extinguished confusione. Any variation on this should be referred to a senior caseworker who will consider whether the form of undertaking is sufficiently clear to enable registration of the security and a decision to be made on the appropriate level of warranty

Applications for registration of a standard security not granted by the registered proprietor of the property affected may take a range of forms and should be processed according to the guidance below.

Section 77(3) of the Abolition of Feudal Tenure etc. (Scotland) Act 2000 amended the wording of Note 1 to Schedule 2 to the 1970 Act. This came into effect on 9 June 2000 and it now reads:

The security subjects shall be described sufficiently to identify them; but this note is without prejudice to any additional requirement imposed as respects any register.

The 2000 Act brings the standard of description into line with the standard of description required in other deeds, such as a disposition. A standard security will no longer be deemed void because of the absence of a particular description or a description by reference to an earlier deed that contained a particular description. This is a considerable relaxation of the pre-Abolition of Feudal Tenure Act position. While it is not possible to offer hard and fast rules for what will and will not be acceptable to the Keeper, the following offers a general guide to acceptable methods of description:

• Particular description – this is essentially a bounding description where the subjects are identified by reference to actual physical features on the ground. A deed plan may or may not be included.
• Description by reference – the subjects are identified by reference to a previous recorded deed which contains either a particular or a general description (note that reference to a deed being registered of even date with the security is not acceptable and one of the other forms of description must be adopted).
• Description by exception – this is where the subjects are described by reference to the whole area under exception of the subjects conveyed in earlier deeds.
• General description – in essence this comprises a simple postal address.

It is emphasised that whilst the Keeper will now accept security deeds which contain solely a general description (i.e. a postal address), there may be occasions when such a description will not be sufficient. The postal address given must always be adequate to identify the property being secured and this will be dependent on the particular circumstances of the deed.

An example of where a postal address would not be adequate is where the subjects are described as, for instance, ‘a flat at 53 Marchmont Road …’. Clearly this is not sufficient to identify the particular flat in question.

If, on the other hand, the subjects were described as ‘the northmost flat on the first floor above the ground floor entering by the common passage at 53 Marchmont Road…’, this would be acceptable.

In cases of doubt, guidance on whether the description of the security subjects is adequate should be sought from a senior caseworker.

Section 77(3) of the Abolition of Feudal Tenure Act provides that the revised Note 1 to Schedule 2 to the 1970 Act has retrospective effect. In other words, Note 1 is to be deemed as having always been in such terms. The consequence of this is that descriptions in standard securities recorded or registered prior to the passing of the Feudal Abolition Act and which fell foul of the rules which emerged from the Beneficial Bank cases will be deemed to be valid so long as the description of the security subjects meets the new criterion (i.e. ‘described sufficiently to identify them’). This would, of course, include standard securities executed prior to 9 June 2000 but not presented for recording or registration until after that date which will similarly be acceptable for recording or registration, provided the description of the subjects meets the new criteria. 

Accordingly, standard securities registered prior to the change to Note 1 with an exclusion of indemnity in respect of the description having not met the standard required following the Beneficial Bank cases may now have the exclusion removed provided the description meets the new standard.

Points to note:

• Registration officers should ensure that the description is now acceptable before removing the exclusion note.
• An application form and the appropriate fee should accompany any request by an agent for the removal of the exclusion note from the title sheet (unless the request is made at the same time as an application for registration in respect of some other matter regarding the title).
• In cases of doubt, the matter should be referred to a senior caseworker. 

"But the security hereby effected shall be ranked and preferred on the subjects prior to all sums secured by the Standard Security granted by the said AB and CD in favour of Big Bank PLC registered in the Land Register of Scotland over the said subjects hereby secured on fourth of May two thousand and fourteen, and the said Big Bank PLC hereby consent to said provisions as regards ranking as is evidenced by their subscription hereto"

Resulting entries and notes:

Standard Security by said AB and CD to BIG BANK PLC, incorporated under the Companies Act (Number 12345) and having their registered office at 123 High Street, Auchterarder
Note: The above Standard Security is affected by ranking provisions contained in the Standard Security in Entry 2

Standard Security by said AB and CD to BIGGER BUILDING SOCIETY, incorporated under the Building Societies Act and having their registered office at Bigger House, Park Avenue, London
Note: The above Standard Security ranks prior to the Standard Security in Entry 1.

"But the security hereby effected shall be ranked equally and rateably with all sums secured by the Standard Security granted by us, the said AB and CD, in favour of Big Bank PLC, dated first registered in the Land Register of Scotland over the said subjects hereby secured on fourth of May two thousand and fourteen, with the consent of the said Big Bank PLC as is evidenced by their subscription hereto."

Resulting entries and notes:

1. Standard Security by said AB and CD to BIG BANK PLC, incorporated under the Companies Act (Number 12345) and having their registered office at 123 High Street, Auchterarder
   Note: The above Standard Security is affected by ranking provisions contained in the Standard Security in Entry 2
2. Standard Security by said AB and CD to ANOTHER BANK PLC, incorporated under the Companies Act (Number 54321) and having their registered office at 321 High Street, Port Seton
   Note: The above Standard Security ranks pari passu with the Standard Security in Entry 1.

"But the security hereby effected shall be ranked and preferred on the subjects after and postponed to all sums secured by the Standard Security granted by us, the said AB and CD, in favour of Big Bank PLC, dated tenth of December two thousand and fourteen and to be registered in the Land Register of Scotland of even date with the registration of this deed"

Styles of entries and notes:

1. Standard Security by said AB and CD to BIG BANK PLC, incorporated under the Companies Act (Number 12345) and having their registered office at 123 High Street, Auchterarder
   Note: The above Standard Security is affected by ranking provisions contained in the Standard Security in Entry 2
2. Standard Security by said AB and CD to ANOTHER BANK PLC, incorporated under the Companies Act (Number 54321) and having their registered office at 321 High Street, Port Seton
   Note: The above Standard Security ranks postponed to the Standard Security in Entry 1.

The entry of an advance notice on the application record (or Sasine Register) has the effect of enabling a deed to be registered up to 35 days after the advance notice as if an intervening deed had not been registered, provided that the intervening deed was not itself protected by an advance notice that pre-dated that for the current deed being registered.

For example, suppose A had granted the following securities:

1. Standard Security to B, registered 17 December 2014

2. Standard Security to C, registered 7 January 2015

In this example, if an advance notice had been registered prior to 17 December as regards the standard security to C (and within 35 days of registration) then, in the event of a power of sale by either creditor, C's security would be considered to rank prior to the standard security in favour of B. However, if the standard security in favour of B was itself properly protected by an advance notice registered prior to that protecting the standard security to C then B's security would benefit from the prior ranking and no notes would be required.

The effect of advance notices altering the ranking order achieved by sequence of registration of the deeds is the only instance, in the absence of specific ranking provisions, when notes will be added to both entries in the securities section to explain the ranking position (see examples below).

Where one or both standard securities contains specific ranking provisions, this may affect how advance notices operate in terms of altering the ranking order. Specific agreement by the parties as to the prospective ranking position is not the type of scenario an advance notice is intended to guard against. In such circumstances the notes below may not be required, and the usual ranking note guidelines should be followed. However, any cases of this nature should be referred to a senior caseworker in the first instance.

See Advance Notices for additional information.

Where two (or more) securities are registered simultaneously and the deeds contain straightforward reciprocal ranking provisions, the securities section entry will be in the following terms:

Entry 1 Standard Security for £40,000 by said AB to CD (desig)
Note: The above standard security ranks prior to the standard security in entry 2.

Entry 2 Standard Security for £5,000 by said AB to EF (desig)
Note: The above standard security ranks postponed to the standard security in entry 1.

Where two (or more) securities contain reciprocal ranking provisions as above, but are not registered simultaneously, the entry in respect of the first registered security will remain silent as regards the ranking provisions until the registration of the other security(ies). The footnotes will then be added as above.

Where only the first standard security contains a straightforward ranking clause and the second one is silent, the notes will be as follows:

Entry 1 Standard Security for £40,000 by said AB to CD (desig)
Note: The above standard security ranks postponed to (or prior to or pari passu with) the standard security in Entry 2.

Entry 2 Standard Security for £5,000 by said AB to EF (desig)
Note: The above standard security is affected by ranking provisions contained in the standard security in Entry 1.

Where only the second standard security contains the ranking provisions and the first one is silent, the notes will be reversed:

Entry 1 Standard Security for £40,000 by said AB to CD (desig)
Note: The above standard security is affected by ranking provisions contained in the standard security in Entry 2.

Entry 2 Standard Security for £5,000 by said AB to EF (desig)
Note: The above standard security ranks postponed to (or prior to or pari passu with) the standard security in Entry 1.

More complex ranking clauses may provide that one security should rank prior to another but only to a certain extent, with advances above that amount then ranking pari passu with or postponed to the second security. No attempt should be made to reflect the exact terms of the ranking in the securities section. Notes in the following general terms will be added.

Where both standard securities contain complicated ranking clauses in reciprocal terms, each will have the following note added after the entry:

Note: The above standard security contains ranking provisions affecting the standard security in Entry ….

Where only one of the securities contains a ranking provision, then the note after that entry will be in the terms above, and the following note will be added after the other entry:

Note: The above standard security is affected by ranking provisions contained in the standard security in Entry ….

These notes will only be added when the second standard security is registered.

Such a deed should be granted by, and signed by, all of the affected creditors. A ranking agreement can be registered in advance of any of the standard securities which it purports to regulate the ranking of- it is not a reason to reject the application for registration that one or more of the securities is unregistered. Section 13(4) of the Conveyancing and Feudal Reform (Scotland) Act 1970 (inserted by clause 7(c) of Schedule 5 to the 2012 Act) permits the registration of such agreement but does not require that any or all of the securities are registered at the date of application for the ranking agreement. 

Where all securities affected are registered, then the ranking agreement should be reflected in the securities section by simply referring to the document in a note after each of the affected securities:

Entry 1 Standard Security for £40,000 by said AB to CD (desig)

Note: The above Standard Security and the Standard Securities in Entries 2 and 4 are affected by ranking provisions contained in Ranking Agreement registered 24 Dec 1999.

Similar notes will be added after entries 2 and 4. 

In the less common event that only one of the securities is registered, the note to the registered entry can be amended as follows:

Note: The above Standard Security and a Standard Security by said XY to CD (design) are affected by ranking provisions contained in Ranking Agreement registered 22 Dec 2015.

If a registration officer encounters a ranking agreement where none of the securities referred to is registered, the following note should be entered in the charges section of the title sheet:

Note: Standard Security by said XY to AB (design) and Standard Security by said XY to CD (design) are affected by ranking provisions contained in Ranking Agreement registered 22 Dec 2015.

A deed of postponement is a form of ranking agreement that need only be granted, and signed, by the creditor accepting the postponed ranking. 

Where a deed of postponement affects the ranking of two standard securities a note is added after each of the two entries in the securities section, e.g.

Entry 1 Standard Security for £40,000 by said AB to CD (desig)

Note: The above Standard Security and the Standard Security in Entry 2 are affected by ranking provisions contained in Deed of Postponement registered 24 Dec 1999.

A similar note will be added after entry 2. 

If any of the standard securities referred to are not registered, see above at Ranking Agreements. 

The Tenants Rights etc (Scotland) Act 1980 gave council tenants the right to purchase their homes from the council, normally at a discounted price. The amount of the discount depended on the length of the tenant’s tenure. The Act was consolidated and extended by the Housing (Scotland) Act 1987. Originally, only council tenants could apply to buy their houses. However, with the 1987 legislation that right was extended to include tenants of the development corporations, Scottish Homes and others. Section 1 of the 1980 Act and Section 61 and Section 62 of the 1987 Act made provision for tenants to purchase the houses they occupied at a discounted price. 

Section 6 of the 1980 Act and Section 72 of the 1987 Act provided for the recovery of the discount (or a proportion of it) if the person who purchased their property under the previous sections sold off the property before the expiry of 3 years. As a form of protection, the council or authority may take out a heritable security for the amount of the discount. In terms of Section 6 of the 1980 Act and Section 72 of the 1987 Act, a security granted in respect of the discount ranks immediately after: 

• A standard security for a loan to purchase or improve the property;
• If the landlord (i.e. the Council) consents, a security for any other loan.

In other words, by statutory provision, a discount standard security ranks prior to any security other than one which provides for the purchase or improvement of the property, regardless of whether the other security was registered before or after the discount security. It is important that a title sheet should, wherever possible, disclose the fact that a registered interest is subject to the effect of either of the above situations i.e. that the standard security is granted in respect of a discount. 

As discount securities have statutory ranking, there is no need for a ranking clause. The following example shows how the most straightforward type of discount standard security is reflected in the securities section of the title sheet:

However, Local authorities and housing associations have not followed a standard conveyancing procedure when it comes to securing the discount money, so there cannot be blanket instructions to cover all eventualities. The following examples cover the most common scenarios. 

The Scottish Prison Service (SPS) has operated a staff discount scheme for the disposal of prison quarters since 1981. Prison officers do not have a statutory right to buy, but in certain circumstances officers may purchase official quarters at a discount. Under the 1981 scheme when a member of SPS staff purchases an official quarter, a standard security is granted in favour of the Scottish Ministers (formerly the Secretary of State for Scotland) for a discount over a three year period. In addition to the three year discount period a further discount period operates dependant on the anticipated length of service of the member of SPS staff purchasing the quarter. A proportion of the discount secured in respect of the second period becomes repayable if either the debtor sells or disposes of the property, or if the debtor ceases to be employed in the Scottish Prison Service.

The entry in the securities section of the title sheet should reflect the terms of the standard security, e.g.: 

'Standard security by said A to the Scottish Ministers in respect of discount containing undertaking for 3 years from …..[ with further provisions to …….]

It should be noted that these securities are not granted in terms of section 72 of the Housing (Scotland) Act 1987. In view of this a formal discharge, or letter from Scottish Government Legal department to the effect that no sums remain due in terms of the security, is required to remove the charge from the title sheet.

There are provisions in place for subsidies to be made to individuals to cover part of the purchase price of a property; this is described as a grant subsidy and is secured by means of a standard security, granted by the purchaser of the property, in favour of the grant provider, frequently Scottish Ministers. 

The deed makes no reference to it having been granted in terms of a relevant statute but does include ranking provisions similar in terms to those contained in section 72(5) of the Housing (Scotland) Act 1987. It also contains conditions regarding the debtors ownership and occupation of the subjects.

For registration purposes the standard security should be entered in the Title sheet as an "ordinary" standard security but the following note should be added:

Note: The amount secured by the above Standard Security shall be ranked after any standard security by the debtor granted in security of a loan either (a) for the purchase of the subjects in this Title or (b) the improvement of the subjects in this Title.

Any other standard security should be entered in the normal way with the following note added to that entry:

Note: The above Standard Security is affected by ranking provisions contained in the Standard Security in Entry xx.     

This situation should only be encountered when dealing with a subsequent sale of a property which was originally purchased in terms of the Act.

A registration officer does not require a discharge for the discount security if the charge was secured more than 3 years prior to the date of registration of the application.

If the charge was secured within 3 years prior to the date of the current application, the registration officer will require a discharge of the discount security. The usual procedure for outstanding standard securities or charges (set out below) should be applied, and details of the outstanding charge should be entered in the title sheet if the discharge is not submitted timeously. In place of a discharge (the Act makes no provision for a compulsory discharge), a receipt for the proportion of the discount repayable would be sufficient evidence for the registration officer to omit details of the charge from the title sheet.

If the property has been disposed of within the 3-year period, the discount (or a proportion thereof) is repayable at the time of disposal. The discount security will therefore remain in place until the relevant sum has been paid to the local authority. In terms of section 73 of the Act, there will be no repayment of the discount where disposal is (a) by an executor of the deceased owner, (b) as a result of a CPO or (c) to a member of the owner’s family who has lived with him for 12 months and disposal is for no consideration, in which last event, the discount provisions for the remaining period still apply.

When dealing with the first re-sale of a house after it has been purchased from the Scottish Ministers, consideration has to be given to any standard security to the Scottish Ministers that was to secure discount provisions. In the absence of a formal discharge, the Keeper will accept a letter from the Scottish Government Legal Directorate (SGLD) as sufficient in lieu of a discharge where there is an expired discount standard security to the Scottish Ministers (or Secretary of State for Scotland) which refers neither to the Tenants Rights etc (Scotland) Act 1980 or the Housing (Scotland) Act 1987. The registration officer should add the letter to the archive. 

Where the creditor only assigns part of the security or charge the footnote should follow the form set out below:

‘Note: The above Standard Security was assigned to (New Creditor) (designation) to the extent of £XXXX conform to Partial Assignation registered (date)’

The original creditor’s designation should not be removed from the entry in the securities section as they retain an interest in the security.

A security can be partially assigned and partially discharged by the same deed. The note made against the relevant entry in the securities section in these circumstances would be:

‘Note: The above Standard Security was (a) assigned to (New Creditor) (designation) to the extent of £XXXX and (b) discharged to the extent of £YYYY, all conform to Assignation and Discharge registered (date)’

The entry in the securities section for the standard security will narrate the original party/ies to the security, and if the deed was originally recorded this should also be reflected in the entry. Any party/ies not named in the proprietorship section will have to be designed. The variation is given effect to by adding a note after the existing entry for the standard security, e.g.:

1. Standard Security … by said A and B (desig) ….

Note: The personal obligations in the above Standard Security have been undertaken by said A in terms of Deed of Variation registered …

If the variation relates to a matter referred to in the title sheet entry then the note will give short particulars of the variation e.g.:

‘Note: The amount secured by the above Standard Security was increased by £5000 to a total sum of £45000 conform to Variation registered (date)’

‘Note: Variation of the above Standard Security was registered (date)’

A standard security will be extinguished if the debtor and the creditor are the same person, acting in the same capacity. If such a situation comes to the Keeper’s attention then the security should be removed from the securities section as if it had been formally discharged.

If a title sheet being worked on includes a standard security with the following note:

‘Note: The above Standard Security was discharged conform to Discharge registered (date)’

then both the entry and the note should be removed, along with any associated next application note.

If the secured subjects have been sub-divided, or are in multiple title sheets (and possibly also sasine titles), then any application to register a discharge must be made against all of the affected title numbers (and also joint recorded in sasines if necessary). If this is not done then separate applications will consequently have to be made to clear the security from other titles.

A standard security can be partially discharged, or part of the secured subjects released from the security, so that part can be sold unburdened by the security. The deed effecting this can be:

• a partial discharge,
• a deed of restriction, or
• a deed of disburdenment.

Where a security is partially discharged, the details of this must be entered on the title sheet. The note under the entry in the securities section should contain the appropriate details, e.g.:

‘Note: The above Standard Security was discharged to the extent of £XXX conform to Partial Discharge registered (date)’

The deed should be accompanied by an application form and fee.

The part transferred and released from the security will be removed from the parent title sheet to the TP title sheet and no mention of the standard security or of the deed of restriction/disburdenment will be made on the new title sheet. If the standard security is already disclosed on the title sheet for the smaller part that is being disburdened, then the entry should be removed from the title sheet.

As the subjects no longer remain in the parent title, no note relating to the partial discharge is necessary on the parent title sheet.

The deed of restriction/disburdenment will be archived only under the TP title number.

In principle, a separate plans reference or verbal description is required for identification of the part disburdened and a footnote added to the relevant entry of the standard security on the parent title sheet. This will thus maintain the up to date position of that title sheet by showing that the security no longer affects the whole subjects in the title viz.

‘Note: The part tinted pink on the cadastral map [or the north house on the top flat X] was disburdened of the Standard Security conform to Deed of Restriction registered ...’

In practice the TP application is usually lodged soon after the deed of restriction, so making the foregoing procedure unnecessary.

The application for registration of the deed of restriction/disburdenment should be accompanied by an application form and the appropriate fee.

If the procedure in the first paragraph above has been carried out and, subsequently, the disburdened subjects are transferred to a new title sheet, the footnote should be removed as it is no longer appropriate to the parent title sheet. Any plans references provided solely for the purpose of identifying the disburdened area should be removed from the cadastral map.

When a registered security over the parent title is partially discharged as well as restricted, and the application is being processed at the same time as or after the application to register the area disburdened of the security, then the note appended to the security entry in the parent title sheet should only refer to the partial discharge, viz.:

'Note: The above Standard Security was discharged to extent of £... conform to Partial Discharge registered ...’

A note will always be entered in the above form, whether the partial discharge forms part of a combined partial discharge and deed of restriction lodged in connection with a TP, or whether it is a simple partial discharge.

A combined discharge and deed of restriction submitted with the application to register the area being disburdened of the security will require an application to be created against both the TP (for the disburdenment element of the application) and also the parent title (for the partial discharge element).

A similar situation exists for first registration applications. When the FR application is accompanied by a discharge covering other (unregistered) subjects, the deed should also be recorded in the sasine register.

If an application to register a combined partial discharge and deed of restriction is lodged after the TP application relating to the subjects being disburdened, the application for registration should be against both the parent and TP title sheets.

If the TP application has not yet been submitted, the application is only against the parent title sheet. The effect of both elements of the deed on the security will be entered on the title sheet in the form of footnotes to the relevant entry as follows:

‘Note: (1) The above Standard Security was discharged to the extent of £xxx and (2) the part tinted pink on the cadastral map [or the north house on the top flat X] was disburdened of the Standard Security conform to partial Discharge and Deed of Restriction registered ...’

When the registration of the TP eventually takes place, the footnote should be amended so that it refers only to the partial discharge as the deed of restriction element relates to subjects no longer in the parent title sheet.

It is possible for a debt to be discharged by the operation of negative prescription; i.e. if no steps have been taken by the debtor to pay interest on the money owed, nor has the creditor sought to recover the debt for a period of more than 20 years. It will be unusual for a creditor not to take action to enforce the obligation in the security to recover the debt. Accordingly, the discharge of a security (including a bond in security) by the operation of prescription will be rare.

If the applicant considers that a security deed that would otherwise be disclosed on their title sheet has been discharged by the operation of prescription, then it is for them to advise the Keeper that this is the case.

Registration officers should proceed to register the discharge. The following note should be added to the application workdesk notes and instructions:

"Standard security being discharged was missing from title sheet in error. Rectification undertaken by this application."

(a) Error has arisen because the submitting agent certified on the FR application form that a search for outstanding securities had been completed, but the standard security in respect of which the discharge has been submitted was not noted

Registration officers should proceed to register the discharge. The following note should be added to the application workdesk notes and instructions:

"Standard security being discharged was missing from the title sheet as a consequence of agent's responses to questions on the application form at first registration. Rectification undertaken by this application."
 

(b) Standard security correctly no longer appears in the title because it has already been discharged

Registration officers should reject the application. The following text should be included in the rejection letter:

"The standard security referred to in the discharge does not appear in the securities section of the title sheet as it was discharged on ... (date)."  

Calling-up notice and notice of default

When a debtor is in default, the Conveyancing and Feudal Reform (Scotland) Act 1970 (the "1970 Act") allows the creditor options on how to proceed, depending on the circumstances. The calling-up notice and notice of default represent two of these options. They involve different procedures. A notable point of difference is that the calling-up notice requires 2 months' notice, but the notice of default only 1 month's. However, very broadly speaking, the similarities between the procedures outweigh the differences, from a registration viewpoint.

The calling-up notice and the notice of default are not mutually exclusive. There will be situations in which both options are available to the creditor. In some cases a notice of each type will be served on the debtor.

The period of notice

A person on whom a calling-up notice or notice of default has been served can choose to dispense with or shorten the period of the notice. The person does so by writing or endorsing a minute on the notice or a copy of it.

Life of notices

A calling-up notice ceases to have effect (for the purpose of the power of sale) 5 years after (a) the date of the notice, if there has been no offer or exposure to sale of the security subjects (or a part of them), or (b) the date of the last offer or exposure.

A notice of default will cease to be authority for the power of sale on the expiration of 5 years from the date of the notice, even if the debtor has failed to comply with the requirements in it.

Service of notices

Evidence of the service of a calling-up notice or notice of default can be either:

• • an acknowledgement of receipt by the person on whom service was made, per Form C of Schedule 6 to the 1970 Act;

     Form of acknowledgement

    The acknowledgement must be signed and dated. The form is as follows:

    ‘I, A.B., above named, hereby acknowledge receipt of the foregoing Notice of (Calling-up), (Default) of which the foregoing is a copy of the notice.

    Dated this day of……………………………………………………………..

    (To be signed by the person on whom notice is served, or by his agent, who will add his designation and the words Agent of the said A.B.)’

    or

  • a certificate by the person making the service as per Form D of Schedule 6 to the 1970 Act.

     Form of certificate

    The certificate must be signed and, if the notice was served by post, a postal receipt provided. The form is as follows:

    ‘Notice of (Calling-up), (Default), of which the foregoing is a copy, was posted (or otherwise, as the case may be) to A.B. on the ……………………..day of …………………..

    (To be signed by the creditor, or by his agent, who will add his designation and the words Agent of the said A.B. and if posted the postal receipt to be provided.)’

Advertising for sale

The creditor is under a duty to advertise the sale, but that is qualified by another duty to take all reasonable steps to ensure that the price is the best that can be reasonably obtained. That implies that the advertisement must be reasonably adequate, both as to the length of the period during which it is published and to the newspapers or other publications in which it appears. Consideration is given to the nature and location of the property and the market for it.

Failure by the creditor to advertise the property in a reasonably adequate way is a serious breach of duty and opens the power of sale to challenge.

Default through insolvency of the debtor

If the default arises because the debtor is insolvent (Standard Condition 9(1)(c)), a section 24 application to the court is necessary before any of the rights arising on default may be exercised.

Registration officers should consider the information contained in the application form. This is a scenario where the question relating to links in title may be answered either "yes" or "no", and the application should not be dependent on the registration of another deed. While the creditor granting the deed is not vest as the proprietor they are acting in place of that proprietor. Accordingly, provided there are no other contrary indicators to the validity of the application, the registration of the applicant's title can proceed.

Registration of the disposition in exercise of power of sale automatically disburdens the subjects of the creditor's standard security and all other heritable securities and diligences that rank pari passu with, or postponed to, that standard security (see Ranking of Standard Securities above for more information on ranking), provided that all of the statutory procedures have been complied with.

When a notice of grant is submitted for registration, it will be entered in the securities section in a style similar to a standard security and the date of registration will need to be entered. The format of the grant is not prescribed but will need to conform to the following criteria:

• Include reference to the appropriate section of the Housing (Scotland) Act 2006 containing the conditions that are to apply;
• Subjects must be described by reference to the title number;
• The deed should be self-proving;
• If a second notice is registered in respect of the same grant that must refer to the registration date of the original notice.

If these criteria have not been met the application should be cancelled - see Notice of Payment of Grant or Loan - Housing (Scotland) Act 2006 - Example Deeds.

Registration officers should be aware that the person to whom the grant may have been made need not be the registered proprietor of the subjects in question. Where the person who received the grant is not named in the proprietorship section, they must be designed in the securities section. 

Where the conditions of the grant cease to apply before the expiry of the stipulated period, a notice of repayment or a notice of cessor of conditions may be drawn up and registered. Registration of such a notice will have the effect of terminating the grant and the entry will be removed from the title sheet.

• Absolute Order by Secretary of State for Scotland under section ……. of the …… ……… Act {insert year}.. – Charging the subjects in this Title with payment of a yearly sum of £ ….. , payable half yearly, for …. years from …………..[date].
  
  
• Charging Order by …………… Council in exercise of powers conferred by …………….. Act {insert year}… - Charging the subjects in this Title [or the area …… on the cadastral map] with payment of an annuity of £ …… payable on ……[date] in every year for …. years commencing ……. [date].
  
  
• Repayment Charge by …… Council in exercise of powers conferred by section … of the Housing (Scotland) Act yyyy, CHARGE the subjects in this Title [or describe as appropriate] with a repayable amount of £xx, payable in thirty equal annual instalments on the same date every succeeding calendar year.

Sections 21 to 24 of the Health and Social Services and Social Security Adjudications Act 1983 (HASSASSA) were brought into effect by subordinate legislation on 12 April 1993. These sections gave local authorities in Scotland, England and Wales powers to recover charges for residential accommodation from the assets of residents. Previously local authorities had no means of recovering such charges, if a resident was unwilling or unable to pay, and would merely rank as an ordinary creditor on the estate of the resident after his or her death.

Only one of the new powers is relevant to the work of Registers of Scotland. Section 23 provides that a local authority in Scotland, England or Wales may record or register a charging order over any one interest in land in Scotland owned by a resident.

The legal registration officer should note:

• • if a resident owns several properties in Scotland, only one property can be made subject to the charge;

• • a charging order is competent even where the resident only owns a pro indiviso share of property (e.g. a husband and wife situation);

• • a charging order is also competent when the resident has not recorded or registered their title as proprietor (i.e. has right to the property or a share therein based on a midcouple or link in title). The order will have included a clause of deduction of title if it was recorded in the Sasine Register, for Land Register purposes it is for the submitting agent to have satisfied themselves that the party has a right to the property that could be made real by registration;

• • a charging order under this legislation is similar to a standard security in some ways. It ranks in the same way as a standard security, i.e. according to the date of registration, unless there is an agreement stating otherwise. However, it cannot be assigned, see below for the recommended style of entry in the securities section.

Execution of charging order under HASSASSA

A charging order under this Act could not be executed before 16 July 1993. To be accepted for recording or registration, a charging order or discharge must conform (or as nearly as circumstances permit, conform) to the prescribed statutory form in the schedule to the Charging Order (Residential Accommodation) (Scotland) Order 1993 (SI 1993/1516), which is as follows:

See also guidance in example deeds - Charging Order (HAASSASSAA).

In the case of a charging order by a Scottish local authority, it must be executed as a deed. Orders under HASSASSA merely executed in terms of section 193 of the Local Government (Scotland) Act 1973, purporting to bear the signature of the proper officer (or facsimile thereof), which is permitted in documents such as notices of grant, are not acceptable for recording or registration. (For further information on execution under section 193 see Notices of grant above and also Authentication of Registrable Deeds)

Prior to 1 August 1995, the order had to be executed in terms of section 194 of the Local Government (Scotland) Act 1973. This required that a deed to which a local authority was a party had to be sealed with its common seal and subscribed by two members of the council and the proper officer (whether attested by witnesses or not) or, alternatively, the deed was executed in a manner provided for in a local act. After 1 August 1995, the order must be executed in terms of section 3 and Schedules 1 and 2, paragraphs 1 and 4 of the Requirements of Writing (Scotland) Act 1995.

English and Welsh local authorities will still require to execute charging orders or discharges in accordance with the general Scottish law on execution of deeds. As there is doubt as to the exact form such executions should take, any such instances should be referred to a senior case worker.

Discharge or calling-up of a charging order under HASSASSA

There is provision for the charging order to be formally discharged upon payment being made. The form is prescribed in the 1993 Order as follows:

A local authority is able to call up a charging order once the resident has died. If the resident is still alive, the local authority may only call-up the charging order in the event of:

• • the resident’s insolvency;

• • the sale or transfer of the interest in land;

• • the calling-up of any standard security over the same interest.

When an applicant for registration derives title from a local authority exercising a power of sale under a charging order, the legal registration officer should follow guidance provided under Power of Sale below.

Where the resident has alienated the property

Section 21 of HASSASSA contains avoidance provisions intended to defeat a resident’s attempt to avoid the assessed charge by, for example, transferring the property to a family member. The avoidance provisions do not affect the title to the property in any way. Local authorities are not empowered to make charging orders over property already alienated by residents, whether prior to or during their residence in the local authority accommodation. Instead, the party benefiting from the alienation will be personally liable to pay the assessed charge up to the value of the property received.

Thus, if a charging order is presented for registration, but the debtor is no longer the proprietor of the subjects, the order may be ultra vires. In such cases the registration officer should refer the case through normal channels for further advice. If the transfer appears to be at arms length for full market value the application to register the charging order should be rejected. However if the transaction is not at arms length the charging order should be registered. It will remain open to either party to seek rectification if additional facts are available that indicate an inaccuracy in how the application has been processed.

If a charging order was recorded or registered prior to the alienation, then the charge is already secured over the property and the local authority would be able to call it up if need be.

Since 26 August 1991 it has not been competent to make charging orders under the above Act, but discharges of such charging orders already recorded or registered may still be submitted.

The concept of a floating charge was introduced to Scottish conveyancing law by the Companies (Floating Charges) (Scotland) Act 1961. This has been variously repealed, re-enacted and incorporated into subsequent company legislation. While primarily granted by companies it is also competent for limited liability partnerships, industrial and provident societies and European Economic Interest Groupings to grant floating charges.

A floating charge may be granted over all or any part of property which may from time to time form part of the granter's property, including heritable property, but the floating charge only "attaches" to property on either of the following:

• the date of commencement of winding up the company, or
• the date when a receiver is appointed.

The floating charge requires to be registered in the Register of Charges kept by the Registrar of Companies, but it is not recordable or registrable in the Sasine or Land Registers. In addition, there is no provision for noting the existence of a floating charge in a title sheet in the 2012 Act. Consequently, if the existence of a floating charge comes to light in a new application for registration, the floating charge should not be disclosed in the title sheet. Unless absolutely necessary, no mention of the floating charge should be made in any ranking note, rather it should merely reflect that the security is affected by ranking provisions, e.g.:

Note: The above Standard Security is affected by ranking provisions contained in the Ranking Agreement registered 11 Jan. 2015.

If the existence of a floating charge has been noted in a previously registered title, reference to the floating charge should only be removed where it is feasible and where (i) a notification of inaccuracy by an external party has been submitted, or (ii) where an application undergoing registration discloses a request to remove an existing reference. In either case, there must be a specific request for the charge to be removed and sufficient information must be submitted to the Keeper as evidence that the charge has been satisfied. If these conditions are met and only a single standard security and the floating charge are affected by ranking provisions, then this will become an off-register matter and the floating charge and note can be deleted. However, if there are multiple securities and the floating charge is affected by ranking provisions then the entry for the floating charge should not be removed if this would result in any existing ranking notes becoming unclear and possibly misrepresenting the position regarding ranking. Guidance should be obtained from a referral officer as required.

A debenture and debenture stock are English legal terms that relate to documents of debt. These would only be considered for inclusion in a title sheet as an overriding interest in terms of the 1979 Act if the debenture incorporated a floating charge. Consequently, in terms of the 2012 Act, the existence of a debenture that comes to light in a new application for registration should also not be referred to in a title sheet and any existing entry should only be removed if feasible and where the same conditions are met as detailed above for floating charges. 

Where there exists an outstanding security at the time of first registration, it must be entered in the securities section before any charges that are being registered to preserve the right of the creditors and show the current position of the title.

• The granter must be designed if they are not the current registered proprietor.

• Where it is known that the creditor at the time of the first registration is not the original creditor, as a consequence of recording an assignation, particulars of the current creditor (based on the assignation or if provided as part of the application) will be added below the entry as a note.

• The date of recording in the Register of Sasines will be included in the entry, as the creditor’s real right dates from the date of recording.

 Example of style of entry:

Bond for £5000 and Disposition in Security by said AB [or by AB (desig)] to CD (desig), recorded GRS (Renfrew) 29 Jul 1968.

Note: The above Bond was assigned to (new creditor) (designation) conform to Assignation recorded GRS (Renfrew) 4 Sep 1974.

In the case of a first registration, the creditor’s interest in the outstanding standard security is not covered by the Keeper’s warranty as it was not itself the subject of an application for registration, even though its recording is disclosed in the securities section.

Should the agent wish the security to be registered (e.g. if the applicant is undertaking obligations in the security), an application with accompanying form and relevant fee should be submitted. The date of registration will then be entered, but the original date of recording must still be narrated as it remains the date of the creation of the creditor’s real right.

Where there exists an outstanding security at the time of the transfer of part, it must be entered in the securities section before any charges that are being registered against the new title, to preserve the right of the creditors and show the current position of the title.

• Where the granter is not the current registered proprietor, he or she must be designed.

• Where the creditor at the time of the transfer of part is not the original creditor, particulars of the current creditor (obtained from the existing entry, a pending application for an assignation against the parent title or from the current application) will be added below the entry as a note.

• Where the security subjects are more extensive than the subjects in the transfer of part (e.g. the security was over the whole of the parent title subjects) the entry in the new title sheet must reflect this.  

Example of style of entry:

Parent title sheet

Transfer of part title sheet

As the outstanding security has already been registered under the parent title the creditor already has the benefits of registration (e.g. warranty).

• Absolute Order by Secretary of State for Scotland under section ……. of the …… ……… Act {insert year}.. – Charging the subjects in this Title with payment of a yearly sum of £ ….. , payable half yearly, for …. years from …………..[date].
  
  
• Charging Order by …………… Council in exercise of powers conferred by …………….. Act {insert year}… - Charging the subjects in this Title [or the area …… on the Title Plan] with payment of an annuity of £ …… payable on ……[date] in every year for …. years commencing ……. [date].
  
  
• Repayment Charge by …… Council in exercise of powers conferred by section … of the Housing (Scotland) Act yyyy, CHARGE the subjects in this Title [or describe as appropriate] with a repayable amount of £xx, payable in thirty equal annual instalments on the same date every succeeding calendar year.
  
  
• Notice of Payment of (Improvement/Repairs) Grant of £500 by ……….. Council to ……….., under the Housing (Scotland) Act 1987, in respect of the subjects in this title (or in respect of ….. … part of the subjects in this title) containing conditions to be observed for 5 years from ………., recorded GRS (Renfrew) …….
  
  
• Notice of Grant [of £xxx] by [name authority making grant} to ……….., in accordance with the provisions of section ?? of the Housing (Scotland) Act 2006, in respect of the subjects in this title (or in respect of ….. … part of the subjects in this title) containing conditions to be observed for 10 years from dd mmm yyyy.
  
  
• Charging Order by [local authority] in exercise of powers conferred by Section 23 of the Health and Social Services and Social Security Adjudications Act 1983 – Charging the subjects in this Title [or the area tinted ….. on the Title plan] with payment of the sum of £ …. [with interest thereon] [or all debts due or to become due] by Y [design if appropriate] to said Council in respect of assessed charges for accommodation.
  
  

The name of the relevant Act can only be narrated if the registration officer has sight of the deed itself. If the deed is not submitted with the application, the details of the grant will have to be taken from the sasine minute. If the details of the relevant Act have not been minuted in sasines, details may be obtained by viewing the deed on the sasine archive viewer. If details of the relevant Act are not available from these sources then it will not be possible to narrate them in the entry in the securities section. For the avoidance of doubt registration officers should not requisition any notice of grant that has been recorded in the sasine register.

A pecuniary real burden was a rarely used method of creating a charge over land. The sum secured was usually an unpaid portion of the purchase price or a sum to be paid toward the cost of forming a road, known as Road Money. Such burdens were almost invariably created by way of a reservation in a conveyance of the subjects. Although there was usually no separate deed to create such a burden, there was no reason why a separate deed would not have been used to create one.

Under s.8(1) of the 2012 Act, a pecuniary real burden for payment of a capital sum should be entered in the securities section of the title sheet. However, it may not be necessary to make an entry in the securities section at all. Deeds which appear to have created pecuniary real burdens can usually be dealt with in one of the following ways:

• The agent may have given explicit reasons in the application form why the pecuniary real burden has been extinguished or no longer subsists. In such cases, all reference to the pecuniary real burden can be entirely omitted from the title sheet.
  
  
• The pecuniary real burden was created in a conveyance of the subjects and relates to ‘Road Money’. It is considered highly probable that the obligation will have been fulfilled by the time there is an application for registration. There is almost never a discharge of road money so no entry will be made in the securities section as it would have to remain for ever. Just in case the obligation has not been fulfilled, and to avoid losing the burden, it will be entered in the burdens section along with any other burdens from that conveyance.
  
  
• The pecuniary real burden is created by a reservation in a conveyance and is for an unpaid portion of the purchase price. If there has been at least one transfer of the property for full value since the creation of the burden then it is assumed that the unpaid portion of the price will have been repaid and no entry will be made in the securities section. If the only transfer of the subjects since the creation of the burden is the deed inducing registration, then reliance should be placed on the information regarding burdens contained within the application and the repayment obligation should be disclosed if the deed is referred to for burdens. If real burdens are also created in the deed, the obligations should be included as part of the entry in the burdens section. Where no other real burdens are created, an entry should be made in the securities section in the following style:

Real Burden for £xxx in favour of CD (design) constituted by Disposition to AB (design), recorded G.R.S. (County) dd mmm yyyy.
 

• A pecuniary real burden may also have been created under statutory powers. For example, under the Housing (Scotland) Acts a local authority is entitled to charge owners with a proportion of the cost of demolishing their houses. If the owners are absent or if they are unable to meet this expense a Notice, which becomes a real burden on the subjects until it is discharged, is recorded/registered by the Local Authority. This form of burden will be entered in the securities section in this style:

Notice by [Local Authority] of Real Burden of £XXX under [specify Act], recorded G.R.S. (County) dd mmm yyyy.

Any other variant on creating a pecuniary real burden should be referred to a senior adviser.

Discharge

A pecuniary real burden, like a normal heritable security, can be discharged, assigned or restricted by the creditor or their successors. If an application to register a formal discharge is submitted, the entry relating to the burden is simply removed from the title sheet. If an assignation or restriction is submitted, a note will be added under the entry in the securities section. The style of the note will be similar to those used for heritable securities.

Whilst  it is theoretically possible to create real burdens that affect the land owned by the granter in a standard security, the format would have to comply fully with the requirements of the 2003 Act as regards the characteristics and creation of the real burden. Accordingly any such deed should be referred to a senior caseworker.

When the secured subjects are only part of a larger area owned by the debtor, a creditor will frequently attempt to incorporate servitudes into the security deed in an attempt to protect their interest in the event of selling the secured subjects under power of sale procedures. The rights are frequently appended to the description of the subjects in the same form as in a conveyance (e.g. together with a servitude right of access …).

The form of a standard security is prescribed in the 1970 Act and incorporates the words "grant a standard security in favour of the creditor over (subjects)"; the Keeper is doubtful that these words are capable of creating a stand-alone servitude. Further the right will normally be granted in favour of the creditor, but not in their capacity as proprietor of the benefited land. 

Any attempt to create a servitude in a standard security should be referred to a senior caseworker in the first instance. If the deed is not drawn in appropriate form to properly create a servitude, the right will not be shown in the title sheet and a letter should be prepared for issue to the submitting agent on completion of the registration explaining why the rights are not shown (this is to pre-empt an enquiry from the agent). 

Alternatives that may be encountered to address this matter would be:

• a standalone servitude defining the benefited property that would become effective when the two tenements were held by separate owners;
• a deed of conditions specifying the servitude that could be referred to in a subsequent sale of the relative area; or
• another standard security over the remaining land covering an obligation to grant a servitude.

A title sheet entry relating to a standard security protecting an obligation to grant a servitude should not attempt to reflect the terms of the deed, rather it will be in the format:

Standard security by said AB to CD (designed).