S8.2 Ex Facie Absolute Disposition

Until the advent of the Conveyancing and Feudal Reform (Scotland) Act 1970, one of the most common methods of giving security for a loan was to grant an ex facie absolute disposition. Where the debtor was the tenant in a long lease, he could grant an ex facie absolute assignation of the lease. While the grantee’s (or creditor’s) title was on the face of it unqualified, in practice the granter (or debtor) retained the right to have the subjects disponed back to him on repayment of the loan, in terms of either a back letter from the creditor or a minute of agreement signed by both the debtor and the creditor. This right was known as the reversionary right.

Since 29 November 1970, it has not been competent to secure a debt (by way of a heritable security) by means of an ex facie absolute disposition. However, ex facie absolute titles that were created prior to this date remain valid until discharged. Where a creditor under an existing ex facie absolute disposition assigns his interest therein for value (and where the security subjects have not already been registered), the transaction will induce a first registration.

On repayment of the loan, the creditor reconveys the subjects to the debtor. The reconveyance, though normally termed a Disposition, is sometimes called a Reconveyance. This too would induce registration.