A. Occupancy Rights

The Family Law (Scotland) Act 2006 made a number of important changes to the Matrimonial Homes (Family Protection) (Scotland) Act 1981 and the Civil Partnership Act 2004 in relation to the occupancy rights of non-entitled spouses and non-entitled civil partners.

1.         Definition of "matrimonial home"/"family home"

(s.22 of the 1981 Act (s.135 of the 2004 Act) as amended)

The definition of a matrimonial home for the purposes of the 1981 Act (and family home for the purposes of the 2004 Act) is amended by the Family Law (Scotland) Act 2006.

The effect of the amendments is to extend the exclusions from the definitions:

(a)       the first additional exclusion is in the case of a home that is provided for separate living where that provision is made by a third party, rather than by a spouse (or a civil partner) - this will no longer be capable of being a matrimonial home; and 

(b)       the second additional exclusion is where the matrimonial home (or family home) is a tenancy, if this has been transferred for separate living by one spouse (or civil partner) to the other, then it ceases to be a matrimonial home (or family home).

2.         Written Declarations

(s.6(3) of the 1981 Act (s.106(3) of the 2004 Act) as amended)

(a)     Where there is no non-entitled spouse (or no non-entitled civil partner) or the property does not form a matrimonial home (or family home), there is no longer any requirement for an affidavit in order for a good faith transferee for value to qualify for the protection of s.6(3) of the 1981 Act (and s.106(3) of the 2004 Act); instead the good faith transferee for value need only obtain a "written declaration" from the transferor. There is no statutory form of written declaration, but apart from the difference in execution (a notary public is no longer required) it will likely be almost identical to the affidavit which it replaces (an affidavit will, of course, still be acceptable). The absence of a notary does not reduce the seriousness of a false declaration: it is a criminal offence under the False Oaths (Scotland) Act 1933 to make a false declaration.

(b)     There is no requirement that the written declaration is contained in a separate document: it can therefore be included within the disposition.

(c)     There is no requirement that the written declaration is witnessed - if the declaration is included in the disposition there will be a witness in any event. If it is made in a separate document, a witness will still be useful, so that the declaration can be registered in the B of C&S (s.6 of the Requirements of Writing (Scotland) Act 1995). Note that given the terms of the legislation, provided the declaration is not included in a disposition, the Keeper will not insist on self-proving status for Land Register purposes.

(d)    The provisions permitting a written declaration (rather than a sworn affidavit) do not apply to standard securities, so an affidavit will still be required for them (s.8(2A) of the 1981 Act/s.108(3) of the 2004 Act). It was thought that this provision would be amended by subordinate legislation before (or at the same time) as the 2006 Act was brought into force but this has not yet happened (although draft subordinate legislation is in course of preparation at June 2006).

(f)    Written declarations (and also consents and renunciations) may be made by persons acting under a power of attorney, or as a guardian (in terms of the Adults with Incapacity (Scotland) Act 2000). If a power of attorney is involved there will need to be a power to enter into the documentation in question; it is possible that a general power will suffice, but a specific power would be better.

3.         Transfers for Value

(s.6(3) of the 1981 Act (s.106(3) of the 2004 Act) as amended)

The protection previously afforded to a dealing comprising a sale to a third party who has acted in good faith and who has obtained the appropriate matrimonial homes (or family homes) documentation) is now extended to cover all transfers for value (not just sales) (e.g. excambions are now included). It should be noted that the protection still does not extend to cover gifts or transfers other than for value.

4.         Termination of Occupancy Rights

(ss.1 and 6 of the 1981 Act (ss.101 and 106 of the 2004 Act) as amended)

(a)       Termination before Transfer

If there has been no cohabitation between an entitled spouse and a non-entitled spouse (or civil partner and non-entitled civil partner) during a continuous period of 2 years, and during that period the non-entitled spouse (or non-entitled civil partner) has not occupied the matrimonial home (or family home), then the occupancy rights cease. (It is not clear whether such occupancy rights can "revive"). For the purpose of calculating the 2 year period, no account is taken of any time during which the spouse or civil partner was attempting to assert the occupancy rights in court.

(b)       Termination after Transfer

(i)         If the entitled spouse (or entitled civil partner) has permanently ceased to be entitled to occupy the matrimonial home (or family home), and at any time thereafter a continuous period of 2 years has elapsed during which time the non-entitled spouse (or non-entitled civil partner) has not occupied the matrimonial home (or family home), then the occupancy rights of the non-entitled spouse (or non-entitled civil partner) cease.

(ii)        Even if the documentation (written declaration, affidavit, renunciation or consent) turns out to be defective, the transferee for value if in good faith is usually protected. But even if there is no documentation, or if the documentation is patently defective, or if the transaction is not for value, the foregoing provisions in (i) may protect the transferee.

(iii)       Where a second transaction follows one in which problematic or no appropriate documentation was obtained, provided the second acquirer is in good faith (having a lack of positive knowledge of a defect in the original documentation or the existence of subsisting occupancy rights) and has given value he is protected and the occupancy rights of a non-entitled spouse (or non-entitled civil partner) in the original dealing cease to be enforceable. It is therefore not necessary to consider the position of former owners: documentation is required only in respect of the current owner (on the basis that good faith does not require a positive duty of enquiry).

There is no requirement for good faith and value for the third and subsequent acquirers in relation to the occupancy rights of the original non-entitled spouse (or non-entitled civil partner).

An example may assist to clarify the effect of the new Act:

A transfers to B who transfers to C who transfers to D

1.         The transfer from A to B

         B is protected from A's non-entitled spouse if B is a transferee for value and in good faith and has obtained a written declaration signed by A or an affidavit made by A, or a form of consent or renunciation bearing to be signed by A's non-entitled spouse.

2.      The transfer from B to C

         C is protected from B's non-entitled spouse if C is a transferee for value and in good faith and has obtained a written declaration signed by B or an affidavit made by B, or a form of consent or renunciation bearing to be signed by B's non-entitled spouse. C is also protected against the occupancy rights of A's non-entitled spouse provided C acquires for value and is in good faith (to the extent of not positively being aware of any subsisting occupancy right of A's non-entitled spouse, but without any positive duty to enquire).

3.      The transfer from C to D

         D is protected from C's non-entitled spouse if D is a transferee for value and in good faith and has obtained a written declaration signed by C or an affidavit made by C, or a form of consent or renunciation bearing to be signed by C's non-entitled spouse. D is also protected against the occupancy rights of B's non-entitled spouse provided D is a transferee for value and is in good faith (to the extent of not positively being aware of any subsisting occupancy right of B's non-entitled spouse, but without any positive duty to enquire). D is also protected against the occupancy rights of A's non-entitled spouse whether or not D is a transferee for value and whether or not he is in good faith or aware of any subsisting occupancy right of A's non-entitled spouse.

If D is not a transferee for value, he is not protected against the occupancy rights of B's non-entitled spouse, or C's non-entitled spouse if either of them has subsisting occupancy rights. But if B and C's non-entitled spouses have not occupied the matrimonial home during a continuous period of 2 years since B and C respectively ceased to be entitled to occupy, then D will be protected as the occupancy rights will have prescribed.

The Matrimonial Homes and Civil Partnership Sections of the manual have been amended accordingly.

B. Special Destinations

Section 19 of the Family Law (Scotland) Act 2006 also makes important changes to the law on survivorship destinations where spouses (and civil partners) in whose favour a special destination has been created have subsequently had their marriage (or civil partnership) terminated by divorce or annulment (dissolution or annulment in the case of civil partners).

In these cases, (unless the destination specifies otherwise) the special destination is effectively cancelled by divorce/dissolution or annulment of the marriage or civil partnership. The share of the property formerly subject to the special destination will simply form part of the deceased's estate, to be dealt with by Will or under the laws of intestacy.

Please note, however, that the new law is not retrospective - it does not apply to divorces/dissolutions or an annulment before this part of the Act came into force on 4 May 2006.

Where a transferee acquires a property in good faith and for value, the title so acquired will not be challengeable on the ground that the special destination did not survive the divorce/dissolution or annulment of the marriage or civil partnership. This protection only extends to the acquisition of title for value (not gifts, or other transfers other than for value).