8.3 Dealings by the entitled spouse

In terms of Section 1 of the 1981 Act, the non-entitled spouse has the right to occupy the matrimonial home for as long as the entitled spouse remains entitled to the property, unless there has been no cohabitation between an entitled spouse and a non-entitled spouse during a continuous period of 2 years, and during that period the non-entitled spouse has not occupied the matrimonial home, in which case the occupancy right ceases (s.1(7) of the 1981 Act as introduced by the Family Law (Scotland) Act 2006).

Section 6 of the 1981 Act provides that the occupancy right of the non-entitled spouse shall not be prejudiced by a dealing of the entitled spouse. The term ‘dealing’ is not defined exhaustively; it includes the grant of a standard security and the creation of a trust, and clearly it must also include any transaction whereby the entitled spouse voluntarily transfers title or ownership to another party. Even the grant of a servitude could prejudice an occupancy right.

In other words, the non-entitled spouse may remain in occupation if the entitled spouse voluntarily transfers title to a third party. In addition, if the entitled spouse enters into a dealing which does not of itself transfer the title but leads to a subsequent transfer (e.g. the grant of a standard security which leads to a disposition in exercise of the creditor’s power of sale), the non-entitled spouse retains his or her occupancy right.

However, the protection afforded by section 6 will not apply in any of the following circumstances:

• where the non-entitled spouse has consented to the dealing or renounced his or her occupancy right (Transfers of title).
• where the entitled spouse is entitled to occupy along with an individual who is not the non-entitled spouse (e.g. where the ownership is held jointly by two or more persons who are not married to each other).
• where the transaction occurred, or implements, a binding obligation entered into by the entitled spouse before the marriage took place. A letter from the solicitor (or a statement on the application form), confirming that that is the case, is sufficient evidence for the Keeper’s purposes.
• where the dealing occurred or implements a binding obligation entered into before the commencement of the Act on 1 September 1982.
• where the circumstances described in Transfers of title apply.

It also seems that the term ‘dealing’ only includes the voluntary acts of the entitled spouse. The definition excludes a schedule conveyance under the Lands Clauses Consolidation (Scotland) Act 1845. By implication, it would also exclude a sale by the owner’s trustee in sequestration (but see Disposal of bankrupt’s family home).

8.4 Transfers of title

The protection previously afforded to a dealing comprising a sale to a third party who has acted in good faith is now extended to cover all transfers for value, not just sales (eg excambions are now included). It still does not extend to cover gifts or transfers other than for value.

Under section 6(3)(e) of the 1981 Act (as amended by the Family Law (Scotland) Act 2006), a transferee for value is protected against the possibility that an occupancy right of a non-entitled spouse of the transferor still exists, if the transferee is given and accepts one of the following documents in good faith:

• a written declaration by the transferor (or a person acting on behalf of the transferor under a power of attorney or as a guardian), declaring that the subjects of the transfer are not (or were not at the time of the dealing) a matrimonial home in respect of which a spouse of the transferor has or had occupancy rights. There is no requirement that the written declaration be contained in a separate document: it can be included within a disposition; nor is there any requirement that the written declaration be sworn before a Notary Public (equally there is no prohibition on this), or even that it be witnessed (although clearly if it is contained within a disposition it will be witnessed). Note that given the terms of the statute the Keeper does not require that a written declaration be self-proving for the Land Register and therefore will not object to a written declaration on the grounds that it is not witnessed. The declaration will however require to be witnessed if it is to acquire self-proving status and be recorded in the Books of Council and Session. It is the appropriate evidence where the transferor is unmarried, but it would also be appropriate if the transferor is married but the property does not fall within the definition of ‘matrimonial home’ or the occupancy rights have prescribed in terms of s.1(7) of the 1981 Act. • a consent by the non-entitled spouse (or a person acting on behalf of the non-entitled spouse under a power of attorney or as a guardian), either in gremio of the disposition or in a separate document. In either case, the consent must conform to the style in the Matrimonial Homes (Form of Consent) (Scotland) Regulations 1982 (SI 1982 No. 971).
   

• a renunciation by the non-entitled spouse (or a person acting on behalf of the non-entitled spouse under a power of attorney or as a guardian) of his or her occupancy rights in the property, as permitted by section 1(5) of the 1981 Act. The renunciation must be sworn in front of a Notary Public, and must be made freely and without coercion. (Renunciations executed prior to 1 Dec. 2003 were previously subject to £5 stamp duty, however while those executed after that date are not subject to SDLT and no SDLT certificate is required).

8.5 Dealings where both spouses have title

Section 6 applies where one of the spouses is entitled and the other is not. Where both spouses are entitled to the property, Section 9 protects each spouse against the consequences of dealings by the other. It provides that a dealing entered into by one spouse shall not prejudice the occupancy rights of the other spouse, and that a third party shall not be able to occupy any part of the matrimonial home on the strength of a dealing by one spouse alone. Where both spouses have title, a dealing by one spouse in relation to that spouse’s share will therefore require to be supported by the consent of the other spouse.

8.6 The Keeper’s role

8.6.1 General  

In terms of rule 5(j) of the Land Registration (Scotland) Rules 2006, the Keeper is required to insert in the proprietorship section of each title sheet a statement as to whether or not there are any subsisting occupancy rights of spouses of former proprietors.

The occupancy right of a non-entitled spouse, within the meaning of section 6 of the 1981 Act, is included within the definition of overriding interest in section 28(1)(gg) of the 1979 Act. Although classed as an overriding interest, the right is one of the exceptions to the noting provisions contained in section 6(4) of the 1979 Act. It is, therefore, not capable of being noted on the title sheet. It does not follow, however, that occupancy rights are of no relevance in land registration.

To ensure vacant possession, a transferee must establish if an occupancy right of a non-entitled spouse subsists (the extent to which he needs to do so will be determined by whether he is a transferee for value, or not). Since a title sheet discloses only the current registered proprietor, it is not possible to identify from it details of former proprietors. To avoid the need to retain and refer to a progress of titles for that purpose after registration, rule 5 (j) requires the Keeper, if satisfied that there are no such subsisting rights, to insert in the proprietorship section of the title sheet a statement to that effect, e.g.:

Note: There are in respect of the subjects in this Title no subsisting occupancy rights, in terms of the Matrimonial Homes (Family Protection) (Scotland) Act 1981, of spouses of persons who were formerly entitled to the said subjects.

This is available on the LRS pick list and is known as the MH1 note.

Where the Keeper is not satisfied, then one of the other appropriate notes from the pick list will be inserted. For example:

Note: The Keeper is satisfied that there are in respect of the subjects in this title no subsisting occupancy rights in terms of the Matrimonial Homes (Family Protection) (Scotland) Act 1981, of spouses of persons who were formerly entitled to the said subjects, except AB (design), who ceased to be entitled on [date of entry] and in respect of whose entitlement no evidence of the non-existence of an occupancy right has been produced to the Keeper

Such a qualified note is known as a MH2 note.

A qualified statement entered in a title sheet under rule 5(j) is not an exclusion of indemnity, as the existence or not of an occupancy right only affects the right to vacant possession and does not affect title. Such a qualified statement indicates that sufficient evidence of the absence of occupancy rights has not been produced to the Keeper. It does not necessarily imply that an occupancy right exists.

Although an occupancy right is an overriding interest, section 12(3)(h) of the 1979 Act does not apply to a statement in terms of rule 5(j), so the full indemnity provisions apply to such a statement. Where sections 6(3)(e) and 8 of the 1981 Act have not operated (see the immediately succeeding paragraph), and the consent etc. is not valid, the occupancy right may prevail over that of the transferee in the dealing. In such an event an unqualified statement in terms of rule 5(j) may allow the registered proprietor a claim for indemnity against the Keeper.

Since rule 5(j) refers only to ‘persons who were formerly entitled to the interest in land’, the Keeper considers that occupancy rights of spouses of persons permitted by the proprietor to occupy the home, for example, a tenant under a short lease, or a beneficiary under a trust which directs the trustees to hold the subjects on the beneficiary’s behalf, are excluded.

For property which cannot fall within the definition of matrimonial home (e.g. commercial or industrial premises), the Keeper will therefore include no note in the title sheet with regard to occupancy rights. However, where a registration officer is dealing with an application submitted before 22 January 2007 (after which more reliance will be placed upon the certification made by the applicant-see Applications submitted on or after 22 January 2007) they should bear in mind that ostensibly commercial or industrial property may include residential accommodation (e.g. a caretaker’s flat), or that it may subsequently be redeveloped for residential use. In such circumstances, the absence of a note might give rise to complications for future proprietors.  Further, for areas of ground with no buildings erected thereon, consideration should be given to whether the area could be considered as required for the amenity of a matrimonial home. Settlers should not, however, insert the MH1 note unless they have seen sufficient evidence or, in respect of applications submitted on or after 22 January 2007, they are satisfied from the certifications made by the applicant, that there are no subsisting occupancy rights.

8.6.2 Applications submitted before 22 January 2007

For applications submitted before 22 January 2007, the Keeper will insert an MH1 note only if an application for registration is supported by evidence (see 8.7 Examination of Evidence- Applications submitted before 22 January 2007) that no occupancy rights of spouses of former proprietors exist. If not satisfied, then one of the other appropriate notes from the pick list will be inserted.

8.6.3 Applications submitted on or after 22 January 2007 

For applications submitted on and after 22 January 2007, applicants are required to provide certain confirmations pertaining to occupancy rights of a non-entitled spouse or civil partner of the registered proprietor on application forms 1, 2 and 3, as introduced by the Land Registration (Scotland) Rules 2006. Registration officers will no longer examine evidence pertaining to occupancy rights but will, in most cases, act in accordance with the information certified by the applicant on the application forms- see section 8.25 Examination of application submitted on or after 22 January 2007.

8.7 Examination of evidence - Where application submitted before 22 January 2007

First registration

In the application forms in use prior to 22 January 2007, in relation to a first registration, the applicant’s agents are required to certify (in answer to question 9 on Form 1) whether they have submitted for examination all the necessary affidavits, consents and renunciations in terms of section 6 of the 1981 Act. Although no reference is made to written declarations, the question may be read to include these where a written declaration is submitted.

Matrimonial homes documentation in respect of transactions prior to the current transaction (provided it represents a transfer for value) need no longer be examined: section 6(1A) of the 1981 Act (as introduced by the Family Law (Scotland) Act 2006) protects the transferee who acquires the home, or an interest in it, in good faith and for value (even if the written declaration, consent or renunciation in the prior transaction proves to be false, defective or invalid) from a person other than the person who is or, as the case may be was, the entitled spouse, and anyone (whether or not such a person is in good faith or has given value) who derives title from such a person, against the occupancy rights of the non-entitled spouse. So, in the case of a transfer for value it is no longer necessary to look beyond the matrimonial homes documentation for the current transaction. If it is not a transfer for value, then it should be referred to a senior team leader for further consideration.

Prior to commencement on 4 May 2006 of s.6(1A) of the 1981 Act, technically, documentation was required in respect of every person, other than the applicant, who had been entitled to the interest since the effective date of the 1981 Act, being 1 September 1982. In practice, however, if question 9 was answered in the affirmative, the legal settler only examined evidence in relation to the transaction inducing first registration. It is stressed, however, that this applied only where question 9 was answered in the affirmative; if it was answered in the negative, a fuller investigation of evidence relating to prior transactions was required.

Dealings and Transfers of Part

In relation to a dealing on transfer of title, the applicant’s agents are required to certify (in answer to question 5 on Form 2) whether they have submitted all the necessary affidavits, consents and renunciations in terms of section 6 of the 1981 Act. In relation to a transfer of part, the equivalent question 7 on form 3 should be answered. Although no reference is made in either the Form 2 or 3 to written declarations, the questions may be read to include these where written declaration is submitted.

In relation to a dealing on transfer of title, the applicant’s agents are required to certify (in answer to question 5 on Form 2) whether they have submitted all the necessary affidavits, consents and renunciations in terms of section 6 of the 1981 Act. Again note that the current (May 2006) application form 2 does not refer to written declarations but may be read to include these where written declaration is submitted. The application forms will be amended in late 2006 and the appropriate wording will be included then.

In relation to a transfer of part, the equivalent question 7 on form 3 should be answered. Again note that the current (May 2006) application form 3 does not refer to written declarations but may be read to include these where written declaration is submitted. The application forms will be amended in late 2006 and the appropriate wording will be included then.

In both dealing with whole and transfer of part cases, if the question is answered in the affirmative, the settler should examine the matrimonial homes evidence in respect of the proprietor disclosed in the title sheet and any person, other than the applicant, who has subsequently been entitled to the interest (unless the applicant is a person who acquires the matrimonial home, or an interest in it, in good faith and for value from a person who derived title from the proprietor disclosed in the title sheet or someone who derives title from such a person, in which case only the matrimonial homes documentation in respect of the last transfer requires to be examined).

The matrimonial homes note regarding occupancy rights under the 1981 Act is entered in the title sheet in respect of persons who were formerly entitled to the subjects. The Keeper gives no such assurances in respect of the current registered proprietor and consequently does not require sight of any documentary evidence for the applicant. It follows, therefore, that when applying to register a dealing that is not a transfer of the property, no evidence under the 1981 Act need be produced to the Keeper.

Any case where the question on the application form is answered in the negative must not be queried with the applicant’s agents. The appropriate MH2 note should be entered in the title sheet in any case where satisfactory evidence has not been provided.

If an occupancy right has been noted in the title sheet and still subsists, the qualified note will remain in the proprietorship section even on a subsequent sale. The removal of qualified notes is discussed in paragraph Removal of qualified statement.

8.8 Time-lapse

In any situation where there is a time-lapse between the granting of a deed under the 1981 Act and the date on which a party ceases to be ‘entitled’ to the subjects, the question must arise as to whether the deed produced under section 6(3)(e) is still the appropriate evidence. For example, the granter of the disposition may have married (or the property may have become a matrimonial home) since the date on which a written declaration was made, an affidavit sworn or the granter of a consent may no longer be married to the transferor. The Keeper reserves the right to judge each case on its merits, taking into account such factors as the length of time that has elapsed, the wording of the written declaration, affidavit, consent or renunciation, the extent to which the requirements of good faith afforded by section 6(3)(e) of the 1981 Act appear to have been met, and the nature of the certification by the transferee’s agent in response to the questions in Part B of the application form. Where a legal settler considers that the time-lapse is sufficiently significant to cause concern, the settler should refer the case to a senior caseworker.

8.9 Fraudulent evidence

It is possible that a written declaration or affidavit may be fraudulent or that a consent or renunciation may be forged. A transferee for value or heritable creditor is protected against such an eventuality, the effect of sections 6(3)(e) and 8 being that such a transferee or creditor who accepts one of those documents in good faith will not be prejudiced by an occupancy right to which the document purportedly relates. Prior to the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990 (i.e. applications registered before 1 January 1991) purchasers and creditors could only gain protection in terms of sections 6(3)(e) and 8 respectively if the documentation was produced ‘at the time of the dealing’ or ‘before the granting of the loan.’ The 1990 Act removed this stipulation and, for all applications registered on or after 3 January 1991, the necessary evidence (written declaration, affidavit, consent or renunciation) may be produced after the time of the dealing.

The provisions under the 1990 Act apply in relation to the registration of a disposition granted in exercise of a power of sale to all standard securities registered or recorded after 3 January 1991. Standard securities registered or recorded prior to 1991 will require the normal evidence (see Grant of/power of sale in standard security) plus an assurance that the document was produced to the creditor ‘before the granting of the loan.’

8.10 Gift of heritage

The protection from challenge afforded to a transferee in good faith who is in receipt of a written declaration or consent or renunciation, by section 6(3)(e) of the 1981 Act, does not extend to a donee who has acquired the property by way of gift. This is because section 6(3)(e) applies only to a “transfer for value". A gift would not be a transfer for value and hence would not be protected. Nevertheless, the Keeper will insert the usual unqualified statement with regard to occupancy rights in the title sheet, if one of the documents referred to in Transfers of title above is submitted.

8.11 Court order dispensing with consent

The court is permitted by Section 7 of the 1981 Act to grant a court order dispensing with the requirement for a consent to a dealing. Such an order may be made if the court agrees that the non-entitled spouse has unreasonably withheld consent; or if the non-entitled spouse cannot give consent because of physical or mental disability; or if the non-entitled spouse cannot be found. Application to the court for such an order may be made by the entitled spouse, or by any other person having an interest (e.g. a subsequent proprietor of the subjects).

8.12 Conveyance by executors

An occupancy right terminates on the death of the entitled spouse. Where a proprietor dies, the non-entitled spouse of such a proprietor therefore loses any occupancy right they may have under the 1981 Act. However, the surviving spouse may of course acquire rights of succession to the property under the Succession (Scotland) Act 1964.

Although section 14 of the 1964 Act provides that the whole estate of the deceased person vests in the executor for the purposes of administration, it is generally held that for all other purposes property vests as at the death of the proprietor in the person entitled to succeed. It is therefore possible for the beneficiary to become an entitled spouse in terms of the 1981 Act.

If the person entitled to succeed, instead of completing title, instructs the executor to sell, that transaction could be construed as a dealing of the entitled spouse. If, on the other hand, an executor is directed by a testamentary deed to sell a house forming part of the estate, or requires to sell to meet the debts of the deceased, or to distribute the estate in appropriate shares, there is no question of the transaction being a dealing of an entitled spouse. Similarly, if more than one person is entitled to succeed to the house then no occupancy right capable of enforcement against third parties is created.

When a sale by an executor leads to an application for registration the Keeper will require to examine one of the following documents:

• a written assurance that more than one person was entitled to succeed to the house; or
• a written assurance that the sale was not instructed or requested by the person entitled to succeed (for example, where the executor requires to sell to meet the debts of the deceased); or

• one of the documents referred to in paragraphs Transfers of title and Court order dispensing with consent above.

If the evidence submitted in support of the application is satisfactory, and confirms that there are no subsisting occupancy rights in the subjects then an MH1 note is entered in the title sheet. If it is unclear from the submitted documents that the party to the written declaration, affidavit, consent or renunciation is the sole beneficiary (or the spouse) but the agent has answered the question on the application form that the necessary evidence has been produced then no further enquiry is required. Should appropriate Matrimonial Homes Act evidence not be submitted, and the questions relating to Matrimonial Homes Act evidence on the application form have not been answered ‘yes’, the Keeper will insert a qualified statement, noting the deficiency in evidence.

For example:

‘Note: The Keeper is satisfied that there are in respect of the subjects in this title no occupancy rights in terms of the Matrimonial Homes (Family Protection) (Scotland) Act 1981, of spouses of persons who were formerly entitled to the said subjects, except any beneficiary of AB (design), said beneficiary having ceased to be entitled on … [date of entry in DIR]. and in respect of whose entitlement no evidence of the non-existence of an occupancy right has been produced to the Keeper.’

This is known as the MH5 note.

8.13 Termination of marriage by divorce

An occupancy right ends on the termination of the marriage. Nevertheless, except where the marriage is terminated by the death of the entitled spouse, evidence of termination of the marriage is not acceptable where the marriage terminated before the occurrence of the dealing, the reason being that the entitled spouse might have remarried and created another occupancy right. Where the marriage was terminated by divorce before the dealing, the appropriate Matrimonial Homes Act evidence is a written declaration or affidavit that there is no non-entitled spouse. If the marriage terminated after the dealing, the Keeper may accept a decree of divorce as evidence that no occupancy rights subsist.

8.14 Body corporate

It is self-evident that no occupancy right can arise out of the entitlement of a body corporate (e.g. a limited company or a local authority), as such a body cannot have a spouse. No evidence need be supplied to the Keeper in respect of the entitlement of such a body.

8.15 Landlord and tenant

A Landlord has a registrable interest in the subjects affected by a lease but, because of the existence of the lease, the Landlord is not entitled to occupy the property. The spouse of a Landlord cannot, therefore, have an occupancy right in the subjects. In the event of the Landlord’s interest being sold, although no consent, renunciation, affidavit or written declaration etc. need be forwarded to the Keeper, a written assurance from the agent that the subjects are subject to a subsisting lease is required. Such an assurance is necessary because on the sale and subsequent registration of the landlord’s interest, it may not be apparent to the Keeper that there is a subsisting lease of the subjects. Even if the Keeper is aware of the lease, there is no way of knowing if the lease still subsists. It may have been renounced or abandoned, which would then entitle the Landlord to occupy the subjects and so give rise to a potential occupancy right.

A Tenant under a long lease is entitled to occupy the property and has an interest which is capable of registration. On a disposal of that interest the possibility of an occupancy right existing must therefore be covered by the submission of the appropriate Matrimonial Homes Act evidence to the Keeper.

8.16 Liferent and fee

A fiar, under a liferent and fee title, has a registrable interest in the property but, because of the existence of the liferent, cannot occupy the subjects. On disposal of the property with the consent of the liferenter, no Matrimonial Homes Act evidence need be supplied to the Keeper for the fiar. The position is different for the liferenter. As the liferenter has both a registrable interest and a right to occupy the subjects, Matrimonial Homes Act evidence will be required.

If the liferent was renounced some time before the conveyance of the subjects but after the commencement date of the 1981 Act, the Keeper will require to examine the appropriate evidence under section 6(3)(e) in respect of both the liferenter and the fiar. In these circumstances the liferenter had an interest up to the time of the renunciation of the liferent, from which point the fiar became entitled to occupy the property.

8.17 Trustees

Where property is held by trustees, there can be no occupancy right of a spouse of any of the trustees because the trustees are not entitled to occupy the property as individuals. No evidence need therefore be supplied for the trustees. Nor will the Keeper require evidence in connection with a sale by a Trustee in Sequestration. The Keeper’s view is that such a transaction is not a voluntary dealing by the entitled spouse. Appropriate evidence, in terms of section 40 of the Bankruptcy (Scotland) Act 1985, will, however, have to be produced to the Keeper (see Disposal of bankrupt’s family home).

8.18 Physical incapacity of seller

If the seller suffers from a physical incapacity such that it would not be possible to sign a written declaration or affidavit, the Keeper will accept a written declaration or affidavit executed in terms of section 9 of the Requirements of Writing (Scotland) Act 1995. In the case of an affidavit the Keeper recommends that the ‘relevant person’ for the purposes of section 9 should be a different individual from the notary public who receives the sworn statement. Note also that the 2006 Act specifically empowers an attorney or guardian to grant the appropriate evidence – see para. 8.20 below.

8.19 Mental incapacity of seller - curators bonis

Where an individual has become incapax, the court may appoint a Guardian to handle that person’s interests. The Keeper’s practice is to accept that a transfer by a Guardian is not a dealing of the incapax to which section 6 of the 1981 Act applies. In such a case, the Keeper is prepared to enter the usual unqualified statement regarding occupancy rights in the title sheet, without seeing documentary evidence in one of the forms provided for in section 6(3)(e) of the 1981 Act (see Transfers of title). Note that the 2006 Act makes this position uncertain as it provides for the guardian to grant appropriate evidence – see para.8.20 below. The submission of any such evidence by the guardian should not be raised with the agents but archived with the application without comment.

8.20 Power of attorney

In terms of s.6(3)(e) of the 1981 Act (as amended by the Family Law (Scotland) Act 2006), a written declaration, consent or renunciation can be signed by a person acting on behalf of the transferor/non-entitled spouse under a power of attorney, or as a guardian (within the meaning of the Adults with Incapacity (Scotland) Act 2004).

8.21 Mental incapacity of the seller since granting the power of attorney

In cases where the relevant power of attorney is a continuing power of attorney or a welfare power of attorney in terms of the Adults with Incapacity (Scotland) Act 2000 the incapacity of the granter of the power of attorney does not affect the attorney’s ability to grant appropriate evidence (see para. 8.20 above).

For applications received before 4 May 2006 (and the powers referred to at para. 8.20 above were therefore not available to the Attorney) the Keeper may be prepared to exercise discretion and accept alternative evidence if the transferor is unable to make a written declaration through becoming incapax since granting the power of attorney (in a case where the power of attorney is not a continuing power of attorney or a welfare power of attorney in terms of the Adults with Incapacity (Scotland) Act 2000). Before exercising discretion, the Keeper would have to be satisfied on two points:

1. That there is good reason why the evidence cannot be obtained in proper form. If this is because the transferor is unable to understand and make a written declaration, the Keeper would expect to see a letter from the transferor’s doctor giving some indication of the nature of the problem, confirming that the transferor is unable to understand and make the relevant written declaration, noting the length of time the person has been incapax and indicating whether the incapacity is likely to be permanent.
2. That there is no risk of the transferor being married. If, for example, the transferor was recently widowed and was already incapax before his or her spouse died, remarriage could not lawfully have taken place; but if the transferor has been widowed for a number of years, or was never married, the Keeper would look for assurances that there was no non-entitled spouse. Such assurances should normally take the form of written declarations from one or more people who have had close and regular contact with the transferor throughout the relevant period.

Settlers should bear in mind that such an exercise of discretion may expose the Keeper to risk if it subsequently transpires that the information provided was inaccurate (e.g. if the person(s) making the written declaration(s) were unaware of the existence of a spouse). Any cases where there is doubt as to the acceptability of the evidence should therefore be referred to a senior caseworker.

8.22 Affidavit/Renunciation sworn/affirmed in foreign country

An affidavit or renunciation under the 1981 Act, which has been sworn/affirmed in a foreign country, will be acceptable to the Keeper in the following circumstances:

It will be acceptable if it is sworn in the presence of a person authorised by the law of the country in question to receive sworn statements, and supported by evidence that the person before whom it is sworn is duly authorised. Such evidence should take the form of an apostille or legalisation, as appropriate.

• An apostille is a certificate of status of the notary or authorised official provided by the foreign office of the country in which the document is signed. It is usually sealed with the seal of the office granting the certificate. The apostille was introduced by the Hague Convention 5 October 1961 in which a number of countries agreed a process for establishing the authenticity of documents signed in a foreign country. The majority of countries are parties to the Hague Convention. The Certificate should normally be translated if it is in a foreign language.
• Legalisation is the process used for authentication if a country is not a party to the Hague Convention. The Certificate is authenticated by British Consular Officials. The Certificate should bear the seal of the Consular Office and signature of the Consul.

It will also be acceptable if sworn in the presence of a UK diplomatic official acting in the country in question and authorised under section 6 of the Commissioners for Oaths Act 1889 or before a Scottish Notary in any country.

If sworn in England, the Affidavit or renunciation will be acceptable if it is sworn in the presence of a Solicitor licensed to practise there, since all English Solicitors are Commissioners for Oaths by virtue of section 81 of the Solicitors Act 1974.

Note that if the evidence provided takes the form of a written declaration made after 30 June 2006 then the foregoing requirements do not apply, whether or not the declaration was made in another country.

8.23 Grant of/power of sale in standard security

The statement regarding occupancy rights under the 1981 Act entered in the title sheet is in respect of persons who were formerly entitled to the subjects. The Keeper gives no such assurances in respect of the interest of the current registered proprietor and consequently does not require sight of any documentary evidence for the applicant. As such, neither the granting of a Standard Security nor the subsequent granting of any Deed of Variation would necessitate the submission to the Keeper of any Matrimonial Homes Act evidence. The only circumstances in which the Keeper would require to examine a consent, renunciation or affidavit granted in respect of a Standard Security or related deed is in the event of a sale by the Creditor under the Power of Sale procedure. The Keeper’s requirements in this respect will depend on whether the standard security was recorded or registered before or after 1 January 1991. Further, with effect from 30 June 2006, a written declaration, as introduced by the 2006 Act, can be made in relation to the grant of a Standard Security. Such a declaration can either be in a separate document or in gremio of the security.

While there is no need for Registration Officers to examine a written declaration, consent, renunciation or affidavit when processing an application for registration of a standard security by a single debtor, if such evidence accompanies the application it should nevertheless be archived (see Items to be archived). However, this is done merely for the pragmatic reason that it may assist the Keeper if the security becomes subject to a power of sale and there is difficulty obtaining the evidence. The Keeper is under no duty to examine or archive the evidence at the time that the security is registered, and is therefore not liable if either the evidence is not archived or it is subsequently discovered that it is defective.

With regard to Section 8, which deals with the interests of heritable creditors, the Keeper applies the same practice to sales by heritable creditors in virtue of the power of sale provisions contained in a heritable security granted in their favour as is applied in relation to dispositions by the proprietors themselves, i.e. no occupancy right can exist if there is more than one person entitled at the time of granting the Standard Security.

Before Schedule 8 Part II Section 31(2)(a) of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990 came into force on 1 January 1991, creditors could only gain protection in terms of section 8 of the 1981 Act if the documentation was produced ‘before the granting of the loan’. So, if the standard security was recorded or registered before 1 January 1991, the Keeper, in addition to examining an affidavit or consent or renunciation in respect of the granting of the standard security, will require an assurance that the document was produced to the creditor ‘before the granting of the loan’. The effect of the 1990 Act was to remove that stipulation, however it was not retrospective. If, therefore, the standard security was recorded on or after 1 January 1991, no such assurance will be required.

If the necessary matrimonial homes act evidence is not produced in relation to the grant of a standard security recorded prior to 1 January 1991 then a note in the following terms (MH4) should be inserted in the proprietorship section:

Note: The Keeper is satisfied that there are in respect of the subjects in this title no subsisting occupancy rights in terms of the Matrimonial Homes (Family Protection) (Scotland) Act 1981, of spouses of persons who were formerly entitled to the said subjects, except AB (design), who ceased to be entitled on [date] and in respect of whose entitlement no evidence has been produced to the Keeper that the requisite documentation was produced to the creditor by said AB before the granting of the loan in terms of Section 8 of the above Act.

If no evidence was produced and the standard security was recorded after 1 January 1991 then the note (MH6) should read as follows:

Note: The Keeper is satisfied that there are in respect of the subjects in this title no subsisting occupancy rights in terms of the Matrimonial Homes (Family Protection) (Scotland) Act 1981, of spouses of persons who were formerly entitled to the said subjects, except AB (design), who ceased to be entitled on [date] and in respect of whose entitlement no evidence has been produced to the Keeper that the requisite documentation was produced to the creditor by said AB in terms of Section 8 of the above Act.

Note: Care should be taken with regard to the date on which the debtor is stated to have ‘ceased to be entitled’ to occupy the property. The safe course is to assume (as with a disposition by the proprietor) that the relevant date is the date of entry of the purchaser in the Power of Sale Disposition. However, where the creditor has acquired possession as a result of a Court Decree, the applicant may request that the relevant date be taken to be the date of the creditor’s possession. If that line of argument is suggested, the Registration Officer should seek advice from a senior officer.

The law is unclear as to whether a further advance under a standard security constitutes a dealing under the 1981 Act. Until such time as it is judicially decided that section 8(2) or 8(2)(A) of the 1981 Act applies to further advances, the Keeper will not, in relation to applications for registration proceeding upon powers of sale, require to examine either an affidavit or a consent or renunciation in respect of such further advances.

8.24 Prescription of occupancy rights

The Family Law (Scotland) Act 2006 reduced the prescriptive period for occupancy rights from 5 to 2 years, however the two year prescriptive period does not apply if the spouses ceased to cohabit prior to 4 May 2006 Act; the registration officer should refer a case through their normal channels if the applicant requests the removal of a qualified statement on the basis of prescription.

(a) Prescription before a dealing

In terms of s.1(7) of the 1981 Act (as amended by the Family Law (Scotland) Act 2006), if there has been no cohabitation between an entitled spouse and a non-entitled spouse during a continuous period of 2 years, and during that period the non-entitled spouse has not occupied the matrimonial home, then the occupancy rights cease. For the purpose of calculating the 2 year period, no account is taken of any time during which the spouse was attempting to assert the occupancy rights in court.

(b) Prescription after a dealing

Section 6(3)(f) of the 1981 Act (as amended by the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 and the Family Law (Scotland) Act 2006) provides that the occupancy right of the non-entitled spouse will prescribe if it remains unexercised for a continuous period of two years after the entitled spouse permanently ceased to be entitled to occupy the property. Prescription will not start to operate if the non-entitled spouse remains in occupation. Equally, where the entitled spouse enters into a dealing which does not lead to the loss of entitlement to the property (e.g. the grant of a standard security), the prescriptive period does not commence from the date of that dealing.

This means that one cannot necessarily ignore transactions which took place more than two years prior to First Registration. However, the Keeper is normally prepared to take a pragmatic view where question 9 in application Form 1 is answered in the affirmative.

By virtue of the provisions of s.6(1A) of the 1981 Act (as inserted by the Family Law (Scotland) Act 2006), it is no longer necessary to consider the position of occupancy rights of non-entitled spouses of former owners: documentation is required only in respect of the current owner (provided the transaction involves a transfer for value and is in good faith). There is doubt that a party is acquiring in good faith when there is already a note on the title sheet regarding potential adverse occupancy rights.  The current situation regarding any such occupancy right would require to be investigated and evidence of its termination, as set out in paragraph 8.26 below, should be submitted with the application if available.

8.25 Examination of application submitted on or after 22 January 2007

The Land Registration (Scotland) Rules 2006 introduced new Forms 1, 2 and 3, each of which now contains an expanded series of questions about the occupancy rights of non-entitled spouses, the answers to which will assist the registration officer in determining whether they will enter any statement regarding occupancy rights in the title sheet, and if so, whether the statement will be qualified to any extent.

Registration Officers are reminded that a decision on entering a statement about occupancy rights of spouses of former proprietors is required only where they are dealing with a transfer of title. The changes in the format of the questions asked on the new application forms have not altered the Keeper's statutory role. For example, the registration officer does not require to consider entering a statement or removing or qualifying an existing statement where the application for registration pertains to the grant of a standard security. Therefore, the questions concerning occupancy rights do not require to be considered by a registration officer where the application being examined does not involve a transfer of title.

If the questions are answered appropriately and the registration officer can proceed on the basis of the certified information there is no requirement to archive any supporting documents that may be submitted. If, however, it is necessary to look beyond the certified in formation on the application forms then any other documentation must be archived.

Question concerning whether application is for registration of a dealing within meaning of Matrimonial Homes Act.

Each application form asks the applicant to certify whether the application for registration pertains to a dealing with the property within the meaning of the 1981 Act. For further information on the meaning of "dealing" in this context, see Dealings by the entitled spouse. Further, a registration officer only requires to consider the questions concerning occupancy rights where a transfer of title is being registered.

Unless the registration officer is dealing with a voluntary registration, in the majority of cases where an application for registration of a transfer of title is being dealt with, this question will be answered in the affirmative. However, where the deed inducing registration is a schedule conveyance or a disposition by a trustee in sequestration, this question may correctly be answered in the negative. If the question is answered in the negative the registration officer must carefully consider any omission of a matrimonial homes note, since it may still be appropriate for the registration officer to enter either an MH1 or a qualified note where the property falls within the definition of a Matrimonial home.

For example, if a transaction is entered into by spouses who both have title to the property, then where this question is answered in the negative it may still be appropriate to enter an MH1 Note where the property involved is of an appropriate type, as no consents are required in this situation. Equally an applicant might answer this question in the negative but further advise that all necessary consents etc had been obtained. If a transaction is entered into by only one spouse, where both have title to the property in question, then the applicant should answer this question in the affirmative and go on to answer the remaining related questions.

If the question is answered in the negative but the transaction is one that falls within the meaning of a dealing in terms of the Act, however no further information is provided that the necessary documents exist, or have been produced, then an appropriately qualified note should be added.

Question concerning whether the subjects could be a Matrimonial Home

If the application is for registration of a dealing within the meaning of the Matrimonial Homes Act, the applicant should proceed to answer this question. If it is answered in the negative, the registration officer does not require to consider the matter further and no 1981 Act note is to be entered. If there is an existing note in the title sheet with which the registration officer is concerned, this may be removed.

Question concerning the existence of appropriate evidence confirming no occupancy rights subsist

Where this question is answered affirmatively, the registration officer may enter an unqualified note in the Proprietorship Section. If it is answered in the negative, a qualified note is appropriate. The appropriate form of note selected from LRS, will be determined by the circumstances of the case. Further information may be required from the applicant if it is unclear from the application in respect of which proprietor there is a lack of evidence in terms of section 6 of the 1981 Act

8.26 Removal of qualified statement

Where the Keeper has inserted a qualified statement, this can be removed on the subsequent submission of satisfactory evidence that the occupancy right has terminated, or in respect of applications received on or after 22 January 2007, where the agent advises that an error has been made in the certifications and appropriate written certifications are subsequently made to the Keeper. The qualified note will not be removed merely due to the passage of time, appropriate evidence to support the removal of the note must be supplied to the Keeper.

Evidence can take a variety of forms and includes:

• evidence that the requirements of section 6(3)(f) of the 1981 Act have been met, namely that the occupancy right has prescribed (see Prescription of occupancy rights).

• The evidence which the Keeper requires is an affidavit from each proprietor during the two year period, to the effect that no non-entitled spouse of the person named in the note in the Title Sheet exercised an occupancy right during the deponent’s period of ownership;

• evidence of the termination of the relevant marriage after the occurrence of the dealing, either on divorce or the death of either spouse. Evidence of termination of the marriage before the occurrence of the dealing, except by the death of the entitled spouse, is not satisfactory evidence because the entitled spouse might have remarried;

• evidence of the death of the entitled person whether or not that person was married.

An application to remove a qualified note should be made on Form 2 (not Form 9) and will be charged the appropriate fee for a miscellaneous event, except where the request is made at the same time as another dealing application is being given effect to.