35.1.1 Partial Assignation of Long Lease by Housing Authority

In counties such as Lanark, Renfrew and Glasgow and in some other counties public sector landlords may hold subjects not as proprietors but on a long lease. Section 84A of the Housing (Scotland) Act 1987 extends the provisions of the right to buy legislation to tenants where the public sector landlord is not a heritable proprietor but a lessee under a under a 999 year lease (or ultra long lease). The public sector landlord is obliged to assign to the tenant their interest in the council house and garden, grant a marketable title to the property and to meet the requirements of the right to buy provisions contained in the 1987 Act.

When dealing with a partial assignation in terms of the 1987 Act, it should be noted that the granter is a tenant and cannot grant heritable servitude rights but may be able to burden the subjects (See also Leasehold property). Where any part of an assignation purports to grant a servitude right this should be referred to a Senior Caseworker. When drafting the property section care should be taken not to inadvertently create a right of property where only a condition or right of use is created in the lease.

35.2 Discount Standard Securities

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.

In terms of section 72(5) of the 1987 Act, a standard security granted in respect of the discount ranks immediately after (1) a standard security granted in security of a loan for the purchase of the house or sums advanced for the purpose of improvements to that house and (2) if the landlord consents, a standard security over the house granted in security of any other loan (i.e. prior to any security, other than the loan to purchase or improve the property whether registered before or after the security for discount). It is important, therefore, that a title sheet should wherever possible disclose that a registered interest is subject to the effect of section 72(5).

If it is declared in gremio of a standard security that it is granted in respect of discount in terms of the Act, that declaration will be reflected in the entry of the standard security in the charges section e.g.

'Standard security in respect of discount under section 72 of the Housing (Scotland) Act 1987 by said A to B Council’.

If the commencement date of the discount period is declared in gremio of a standard security that is granted in respect of the discount in terms of the Act, that declaration will be reflected in the entry of the standard security in the charges section e.g.

‘Standard security in respect of discount under section 72 of the Housing (Scotland) Act 1987, containing undertaking for 3 years from …………. by said A to B Council’.

If it is not revealed in gremio of the standard security that it secures the obligation to repay a discount, but this information is revealed elsewhere in the application (e.g. on the application form or back of the deed), a note in the following form will be added to the entry in the charges section:

‘The standard security in entry 2 was granted in respect of the discount under section 72 of the Housing (Scotland) Act 1987’

If, however, a standard security granted in favour of a local authority following the sale of a house by the authority is not stated to be in security of a loan and it is not stated either in the deed or in the application that it is in security of the discount, no enquiry should be made of the applicant as to whether or not the security was granted in respect of the discount provisions under the 1980 Act or the 1987 Act.

35.2.1 Discount Standard Securities — Secretary of State for Scotland - Scottish Prison Service

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 charges 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 the evidence noted under section 35.6.1 is required to remove the charge from the title sheet.

35.2.2 Standard security to secure a grant subsidy

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. It should be noted that these are separate provisions to those in place for the purchase from Scottish Ministers of former Scottish Homes properties (see The Housing (Scotland) Act 2001 (Transfer of Scottish Homes Property and Liabilities) Order 2005)

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.

The charge certificates for each registered standard security should include an appropriate ranking note and schedule of prior or pari passu charges based on the registration dates of the relative securities (i.e. if registered contemporaneously both charge certificates will include details of the other standard security). It is not for the Keeper to confirm that a standard security was for only the purchase or improvement of the subjects.

35.3 Application with no Discount Security

If an application for registration of a sale by a local authority of a council house is not accompanied by a standard security for the discount, but it is stated in the application that the sale is under the Act, the following note should be inserted in the proprietorship section after the entry of the registered proprietor

‘The subjects in this title were purchased under and in terms of the Housing (Scotland) Act 1987’.

The note is necessary to warn a prospective lender that a security in his favour will rank postponed to a standard security for the discount, even although the latter may be registered after his security.

If the subjects are resold, the note referred to in the previous paragraph will be deleted, even if the sale is within the 3 year period, without the production of evidence of repayment of the discount. If no security for the discount is registered before the resale, the discount cannot thereafter be secured over the subjects.

If a conveyance by a local authority of a council house is not stated anywhere in the application to have been granted under the Act, no enquiry should be made of the applicant as to whether or not the sale is under these Acts and no note should be added to the proprietorship section.

35.4 Security to local authority for both loan and discount

Where, in terms of section 72(5) of the Act, a council secures both the loan (to the purchaser) and the discount by a single standard security, both elements of the obligation will be entered in the charges section, e.g.

Standard Security by said A to B Council for (1) £10,000 and further sums and (2) £5000 in respect of discount under section 72 of the Housing (Scotland) Act 1987.

The discount element will be removed from the entry in the charges section either on receipt of an application to register its discharge, or if the title sheet is operated on after the expiry of the discount period (3 years).

35.5 Charge Certificates.

When property has been purchased under the Act and a charge has been secured against that property, it is important that a creditor be aware of the statutory ranking of any charge secured for the recovery of the discount. It should be noted that the discount can be secured at any time within the 3-year period by standard security.

The restriction on the loan security will be apparent in the title sheet either from the entry relating to the discount security in the charges section or where there is no such security from the terms of the proprietorship section which will have been qualified.

As it is impractical to disclose the restriction in a schedule to the charge certificate for the loan security, it will be drawn to the attention of the creditor in the footnote to the certificate in the following terms:

‘Subject to the provisions of section 72(5) of the Housing (Scotland) Act 1987, there are no heritable securities ranking prior to or pari passu with the abovementioned heritable security appearing on the Register affecting the subjects’.

35.6 Discharging of Discount Standard Securities.

The registration officer will only encounter this situation 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 in chapter 9 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.

35.6.1 Discount Standard Securities —Scottish Ministers (formerly Secretary of State for Scotland)

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.

35.7 Disposals by Executors.

Sections 72 and 73 of the Act set out circumstances in which a discount standard security is repayable. The Lands Tribunal has confirmed the Keeper’s interpretation of the statute and ruled that when there is a disposal by the executor of the purchasing tenant, the discount security flies off completely. By disposal is meant either a sale to a third party or, for example, a docquet of transfer to a spouse or beneficiary.

In practical terms, this means that when processing an application for registration on behalf of someone to whom the executor of the purchasing tenant has ‘disposed’ the property, registration officers should remove the discount from the title sheet. Registration officers should note that production of a death certificate in the absence of any disposal by the executor does not enable the discount security to be so removed.

35.8 Burdens

The case of Highland Council v Patience and others (1996 GWD 40-2294, The Times 9 Jan 1997), concerned the effect of a clause of pre-emption in the title of a housing authority whose tenant claimed the right to buy under the Housing (Scotland) Act 1987. Full details of the clause and the Court’s findings can be found at Highland Council v Patience and Others (1996 GWD 40-2294, The Times 9 January 1997).

The Keeper’s assessment of the effect of the decision is that a public sector housing body, whose title is burdened by a right of pre-emption, may disregard the clause of pre-emption on the occasions of the sale to a tenant who has exercised his statutory right to buy. The effect is NOT that the right of pre-emption is spent or extinguished. The purchasing tenant, when wishing to sell the subjects, will still be bound to offer them first to the party enjoying the right of pre-emption and accordingly the right of pre-emption should be disclosed in the burdens section of the title sheet.

35.8.1 Transfers to Housing Associations - monetary obligations

With the transfer of local authority housing stock to housing associations there has been the development of a practice essentially attempting to gain recompense for previous investment in the properties transferred in the event of the sale of the property by the housing association. This has been done by the insertion of a clause in the sale by the local authority to the housing association, the following is an example of such a clause contained in a feu disposition:

"AND ALSO WITH AND UNDER the following additional real burden and condition, namely the subjects hereinbefore disponed shall not be sold, conveyed or otherwise disponed to the current tenant, Ms Knox, residing at 27 Your Way, Tarbet, or her nominees unless with the express written consent of us or our successors as Superiors of the said subjects which consent we and our successors foresaid shall be taken bound to grant in exchange for payment of a sum comprising fifty percent of the excess amount, if any, by which the net proceeds from the sale to the tenant after deducting the transaction costs comprising the Feuar's reasonable legal fees and outlays and the District Valuer's fee for the valuation of the property exceed the purchase price paid to us by the Feuar, provided always that this burden shall be deemed discharged in the event of the Feuar obtaining vacant possession of the subjects following on the current tenancy being terminated, and in such event the Feuar shall thereafter be free to sell convey or otherwise dispone the subjects without the necessity of obtaining our prior written consent"

Such clauses should not be encountered in deeds granted after 28 November 2004 as section 117 of the Title Conditions (Scotland) Act 2003 provided that it would not be competent to create a pecuniary real burden on or after that date.

Whether or not this condition is disclosed in the burdens section of the title sheet will be dependant on the nature of the transfer inducing registration, as set out in the following paragraphs, and what evidence is produced to the Keeper. If any necessary evidence of compliance is not produced as part of the application it should be requisitioned in the usual manner

Deed effecting registration is sale by local authority to housing association:
As stated above, since 28 Nov. 2004 such clauses should not be included as a burden in a deed.

Deed effecting registration is sale by housing association to 3rd party inducing first registration:
The clause can be omitted in cases where the sale is to the current tenant or her/his nominees provided the local authority consent to the granting of the deed. In cases where the sale is to a party other than the current tenant or her/his nominees the clause should be shown in the burdens section unless evidence that the purchaser has obtained vacant possession following the current tenancy being terminated is submitted. Such evidence must be more than a letter to that effect from the submitting agent.

Deed effecting registration is sale by housing association to 3rd party inducing a dealing with whole or transfer of part:
If no evidence of compliance is produced then the text of the existing burdens entry should not be altered. If the evidence set out in the previous paragraph is produced then the clause should be deleted from any entry in the burdens section for the deed in favour of the housing association; only any other real burdens created by the deed will be disclosed.

Deed effecting registration is sale by 3rd party or successors:
The clause can be omitted if the necessary evidence set out above is produced. Unlike a non-recurring right of pre-emption the clause should not automatically be omitted in this scenario due to the creation of a monetary burden on the land.

See also Statutory Transfers and Rights of Pre-emption

35.9 Scottish Homes – Scottish Special Housing Association.

From 1 April 1989, in terms of section 3 of the Housing (Scotland) Act 1988, the Scottish Special Housing Association (SSHA) was dissolved and all heritable property belonging to it vested in Scottish Homes. With effect from 1 October 2005 the interests of Scottish Homes transferred to Scottish Ministers - see section 35.12.

The following information, while historical, may be relevant if dealing with the first re-sale of ex SSHA or Scottish Homes property.

Those associations operate within the right to buy legislation whereas under the initial tenants’ rights legislation Scottish Special Housing Association were not compelled to sell houses to sitting tenants, however they did so on a voluntary basis at the appropriately discounted price. This discount could not be secured by a security in terms of the legislation, so SSHA created a voluntary form of discount security that reflected the provisions in the 1980 Act by including a ranking clause to effect that the ‘discount’ security would be ranked after any standard security granted in respect of a loan either (a) for the purchase of the subjects or (b) the improvement of the dwellinghouse erected on the subjects.

Discharge of these securities is in accordance with Discharging of Discount Standard Securities at 35.6 above.

As SSHA and their successors were encompassed by the provisions of subsequent right to buy legislation, any discount should be secured under the terms of that legislation and the security entry will be in terms of Discount Standard Securities above.

Schedule 1 to the said 1988 Act contains the constitution of Scottish Homes. At paragraph 19, it provides that a document shall be presumed, unless the contrary is shown, to have been validly executed by Scottish Homes, if it bears to have been subscribed on its behalf by one of its members, or by any other person duly authorised in that behalf, and to have been sealed with its common seal, whether attested by witnesses or not.

Section 178 amends section 76 of the 1987 Act and introduces a new section 84A to the latter Act to extend the application of the right to buy provisions to cases where the selling landlords are themselves the lessees under a registered lease. The new provisions provide for the acquisition of the landlords’ interest in a house by the tenant of the house where the landlords themselves hold only a tenant’s interest under an earlier registered lease of the house or of land which includes it.

The new provisions also provide for the obtaining of a loan by the tenant in the above circumstances.

In the above provisions ‘a registered lease’ is defined as a lease –

1. which is recorded in the General Register of Sasines, or
2. in respect of which the interest of the lessee is registered in the Land Register of Scotland under the Registration of Leases (Scotland) Act 1857.

Registration officers should ensure that the questions on the application forms regarding (1) the corporate body acting intra vires and (2) whether subject to a legal incapacity or disability have been answered YES and NO respectively.

If the questions are so answered, the Keeper can rely on those answers as sufficient warrant that proper consent has been given and can proceed to register without further enquiry.

35.10 Scottish Homes – Housing Corporation.

From 1 April 1989, in terms of section 4 of the Housing (Scotland) Act 1988 all heritable property in Scotland belonging to the Housing Corporation vested in Scottish Homes; with effect from 1 October 2005 the interests of Scottish Homes transferred to Scottish Ministers - see section 35.12.

35.11 Housing Stock Refurbishment.

Over the years public sector landlords have undertaken the refurbishment of various older developments, particularly flatted properties.

In some of these developments, some of the houses or flats with accompanying common rights and obligations have, prior to the refurbishment, been tranferred to sitting tenants, whose titles have been registered in the Land Register.

In most cases, the refurbishment has radically affected the layout of the development and, therefore, the apportionment of the common rights and obligations. Consideration may have to be given to as to whether existing titles require amendment to prevent conflict with titles registered subsequent to the refurbishment (the new titles).

The points agreed with Scottish Homes are:

• Where the common rights and obligations in any development are being radically altered from those laid out in the old title deed it may be most practical to re-convey the individual property with existing rights to the housing association and for the association to grant a new title setting out the amended rights. This would be done by means of counter dispositions.
• Where the housing association title is held in the Sasine Register, this will mean cancelling the title sheets for the existing title. The house proprietor's interest is effectively returned to the Sasine Register and simultaneously returned back to the Land Register with the new rights, and with new closing notes in the Sasine Register using the existing title sheet numbers. The existing title sheets should be used as a basis for generating the new title sheets. Staff should be aware that information such as date of first registration will require to be updated and should keep in mind that the transaction necessitates employing the joint recording/registration procedure. Therefore, the conveyance to the housing association must be accompanied by a Sasine Application Form in order to effect the Sasine recording element and a form 1 in respect of the fresh disposition to the individual. Where the old title to the individual property was also recorded in the Sasine Register, the new dispositionwill automatically generate first registration in the Land Register.
• Where both interests are held in the Land Register the corrective dispositionsshould be accompanied by a Form 2 (in respect of the disposition to the housing association) and Form 3 (in respect of the disposition to the individual).
• Where the old feus are subject to existing ‘mortgage’ standard securities, the latter should be discharged and new standard securities should be granted. The discharge and new standard security should each be accompanied by a Form 2; this also applies with regard to any extant discount security.
• In one or two developments, where the apportionment of common rights and obligations has not been radically altered by the refurbishment, it may be possible for the required remedial conveyancing to be effected by means of a minute of agreement between the housing association and all the current owner/occupiers in the development; the agreement must be recorded and registered against the interest of all relevant parties.

In order to avoid the issuing of Land Certificates with conflicting rights and obligations, remedial conveyancing should be completed before the registrations of new transfers are progressed. If this is not possible, new title sheets cannot be issued with full indemnity and should be referred to a senior caseworker for further guidance.

35.12 The Housing (Scotland) Act 2001 (Transfer of Scottish Homes Property and Liabilities) Order 2005

By section 84 of the Housing (Scotland) Act 2001 the functions of Scottish Homes were transferred to the Scottish Ministers. Section 85(1) of the Act provided that the Scottish Ministers may make Orders to deal with the transfer to the Ministers or such other person as specified in the Order, the property and liabilities to which Scottish Homes was entitled or subject to.

The purpose of the Order is to complete the transfer of all outstanding assets and liabilities from Scottish Homes to Scottish Ministers. This includes all Minutes of Agreement for large scale voluntary transfers since December 2003, standard securities, and all debtors and creditors etc. This process is consistent with the intention set out in the Housing (Scotland) Act 2001, to wind up Scottish Homes.

From 1 October 2005 all rights and interests of Scottish Homes in, and all liabilities of Scottish Homes in relation to, any of the property and liabilities to which Scottish Homes was entitled or subject and in particular relation to -

(a) any property and interests in relation to a loan or security by an individual who was formerly a secure tenant, created in consequence of the exercise conferred on Scottish Homes under Section1(3)(b) of the Housing (Scotland) Act 1988; and

(b) the Minutes of Agreement specified below

are transferred to and vested in the Scottish Ministers in terms of an Order by the Scottish Ministers in exercise of the powers conferred by Section 85(1) and Section 109 (2) of the Housing (Scotland) Act 2001.

35.12.1 The Keeper's requirements

In the light of the 2005 Order, the Keeper has new requirements, set out below, in respect of registration practice.

The term "Scottish Ministers" refers to all Scottish Ministers as a group. They will not be individually identified by name.

35.12.2 Deeds executed before 1 October 2005

Deeds granted in favour of Scottish Homes and executed before 1 October 2005 but submitted as part of an application on or after that date will be acceptable if the following points are met:

(a) The Application Form specifies the Scottish Ministers as the Applicants.

(b) Details of the Act and Order are included in the box on the Application Form headed ‘Name of deed in respect of which registration is required.

(c) The Application Form specifies on page one that application for registration is sought in respect of the deed in favour of the Building Society and the Act and Order.

(d) The Act and Order are listed on the Form 4 submitted with the application. Copies of the documents themselves need not be submitted.

NB: This includes Standard Securities granted in favour of Scottish Homes and executed before 1 October 2005.

35.12.3 Deeds executed on or after 1 October 2005

Deeds should be granted by the Scottish Ministers using the Act and Order as links in title. Likewise where a Standard Security is discharged by the Scottish Ministers the same links will be required.

Settlers should note that the relative sections of the Act and Order have been examined and added to the Common Links Index. No requisitioning or further examination is therefore necessary.

35.12.4 The Minutes of Agreement

1. Minute of Agreement between South Lanarkshire Council and Scottish Homes dated 14th and 20th October both 2004 and registered in the Books of Council and Session on 6th January in the year 2005.

2. Minute of Agreement between Cumbernauld Housing Partnership Limited and Scottish Homes dated 11th and 13th January both 2005 and registered in the Books of Council and Session on 19th January in the year 2005.

3. Minute of Agreement between Govan Housing Association Limited and Scottish Homes dated 29th November 2004 and registered in the Books of Council and Session on 1st December in the year 2004.

4. Minute of Agreement between Clyde Valley Housing Association Limited and Scottish Homes dated 12th and 13th May both 2005 and registered in the Books of Council and Session on 24th May in the year 2005.

5. Minute of Agreement between Shetland Islands Council and Scottish Homes dated 25th and 28th January both 2005 and registered in the Books of Council and Session on 15th April in the year 2005.

6. Minute of Agreement between North View Housing Association Limited and Scottish Homes dated 20th May 2005 and registered in the Books of Council and Session on 26th May in the year 2005.

7. Minute of Agreement between Home in Scotland Limited and Scottish Homes dated 22nd and 24th September both 2004 and registered in the Books of Council and Session on 6th October in the year 2004.

8. Minute of Agreement between Clydesdale Housing Association Limited and Scottish Homes dated 6th November 2003.

9. Minute of Agreement between Clyde Valley Housing Association Limited and Scottish Homes dated 26th September 2003.

10. Minute of Agreement between Sanctuary Scotland Housing Association Limited and Scottish Homes dated 27th June 2005.

11. Minute of Agreement between Comhairle nan Eilean Siar and Scottish Homes dated 29th April and 6th May both 2004

35.13 Deferred financial commitment/Rents to mortgages

The Rents to Mortgages (RTM) Scheme is a non-statutory initiative which complements the Right to Buy (RTB) legislation. The scheme was experimental and originally run from 30 October 1989 to 29 October 1992. The scheme was available to tenants of Scottish Homes and Scottish New Towns. It was aimed at tenants who would like to own their own home, but could not quite afford to do so, even if taking advantage of the discounts available under RTB legislation. The success of the scheme resulted in its extension to include tenants of local authority housing.

The principal features of the scheme are as follows:

1. A tenant will be entitled to purchase his home at a discounted price, but the discount will be protected by a discount standard security, as under RTB.
2. Part of the purchase price will be paid by means of a house purchase loan from a building society or other private sector leading institution. The size of the loan will be such that the monthly repayment will be roughly the equivalent of the monthly rent being paid by the tenant.
3. The balance of the purchase price will be met by a Deferred Financial Commitment (DFC) from the former landlord. This, in effect, is an interest free loan from the former landlord, compulsorily redeemable on the disposal of the property or the death of the purchaser (except where the house is purchased jointly by the tenant and his or her spouse or a member of the tenant’s family). On sale, the purchaser will be bound to repay to the former landlord a portion of the capital gain, being a percentage of the selling price/market value discounted by 1% (or 2% in the case of flats) for each year that the purchaser has lived in the house between the date of purchase by RTM and the date of sale; the discount available is restricted to a maximum of 45% for houses and 55% for flats, including the original discount received. The DFC will be protected by a further standard security in favour of the former landlord.
4. In the case of new town development corporation tenants, it was a pre-requisite that the ownership of the landlord’s interest would pass from the development corporation to Scottish Homes, before a purchase was made; accordingly, missives were completed between the development corporation and Scottish Homes, followed by an exchange of missives between Scottish Homes and the purchasing tenant. The eventual conveyance would be granted by the development corporation, with consent of Scottish Homes in favour of the purchasing tenant. Where the practice in a new town was to transfer properties by way of feu writs, it is assumed that the development corporation or its successor retains the superiority interest. If, however, Scottish Homes were to become the superior, a separate title in name of Scottish Homes would require to be completed before a feu is granted in favour of the purchasing tenant.

Each sale will result in a minimum of 4 deeds to be registered:

• Conveyance to the purchasing tenant;
• Standard security to a building society etc.;
• Discount standard security; and
• Standard security protecting the DFC

Unlike a time-expired discount standard security, a DFC standard security will require to be formally discharged.

The major cause of difficulty is the ranking provisions in the discount security and the DFC security. Both are to rank postponed to any loan for the purchase or improvement of the property along with interest thereon and, in some cases, expenses. The DFC security is to rank postponed to the discount security. The problem is that, in the DFC security, Scottish Homes reserve to themselves the right to decide whether any loan is for the improvement of the property or not. In consequence, where the loan security is for a set amount and further sums, any further advance could be postponed to the DFC security, if Scottish Homes decided that it was not for the improvement of the property. The charges section of the title sheet must somehow alert readers to the possibility and the charge certificate must contain sufficient information to allow a shareholder to be as certain of his position as he can be. The situation is complicated by the fact that the Rents to Mortgages Scheme is non-statutory and accordingly the statutory ranking arrangements do not apply.

The following procedures should therefore be followed:

35.13.1 Charges Section

• Loan standard security – normal standard security entry
  Note: The above Standard Security is affected by ranking provisions contained in the Standard Securities in entries 2 and 3.
• ‘Discount’ standard security in voluntary sale – normal standard security entry (not discount security)
  Note: The above Standard Security contains ranking provisions affecting the Standard Security in Entry 1.
• DFC standard security –standard security entry on LRS referring to section 73(c) of the Housing (Scotland) Act 1987
  Note: The above Standard Security (a) contains ranking provisions affecting the Standard Security in Entry 1 and (b) ranks postponed to the Standard Security in Entry 2.

35.13.2 Charge Certificates

Loan Standard Security: Schedule prepared disclosing both the discount security and the DFC security and copies of both to be bound into the charge certificate.

‘Discount’ security in: Schedule prepared disclosing the loan security and a copy of that security to be bound into the charge certificate.

DFC Security: Schedule prepared disclosing both the loan security and the ‘discount’ security and copies of both to be bound into the charge certificate.

35.14 Extension of ‘Right to Buy’ Provisions to Private Sector

The provisions added to the Housing (Scotland) Act 1987 by section 128 and section 135 of the Housing Act 1988 in connection with tenants’ preserved right to buy even when the existing landlord (e.g. local authority) disposes of the landlord’s interest to a landlord in the private sector came into effect on 20 February 1992. These provisions are to be applied in accordance with regulations contained in a statutory instrument which came into effect on 13 March 1992. The existing ‘right to buy’ provisions are also slightly amended.

Any transfer which could be taking place under these provisions (that is to say, any sale by a local authority, Scottish Homes or any other body bound by the right to buy provisions to a private body or individual of any property likely to comprise mainly of the landlord’s interest in council or other rented houses, situated on the property conveyed) should be brought to the attention of Legal Services.

35.15 Dissolution Orders.

Glenrothes Development Corporation was dissolved on 5 April 1996 while East Kilbride, Cumbernauld, Livingston and Irvine Development Corporations were dissolved on 31 March 1997.  Their rights and property transferred respectively to:

• Fife Council on 1 April 1996,
• South Lanarkshire Council on 1 April 1996,
• North Lanarkshire Council on 31 December 1996,
• West Lothian Council on 22 March 1997 and
• North Ayrshire Council on 22 March 1997