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Shelter Scotland – Home Owner and Debtor Protection Act in Context


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Shelter Scotland – Home Owner and Debtor Protection Act in Context

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Shelter Scotland – Home Owner and Debtor Protection Act in Context

  1. 1. Home Owner and Debtor Protection Act in Context Gavin Corbett Policy Manager
  2. 2. Overview <ul><li>Background </li></ul><ul><li>Repossessions Working Group </li></ul><ul><li>Overview of Act </li></ul><ul><li>The challenge of implementation </li></ul>
  3. 3. Background <ul><li>Economic climate – global banking crisis </li></ul><ul><li>Rise in repossessions </li></ul><ul><li>Housing market conditions </li></ul>
  4. 4. Framework for dealing with repossessions <ul><li>1. Prevention of problems in the first instance: advice and early action. </li></ul><ul><li>2. Provision of support to sustain home ownership through periods of difficulty if it is appropriate to do so . </li></ul><ul><li>3. The opportunity to retain a home under different arrangements. </li></ul><ul><li>4. Smooth transition to other housing. </li></ul>
  5. 5. Background <ul><li>UK / England </li></ul><ul><li>mortgage rescue, </li></ul><ul><li>financial support, </li></ul><ul><li>pre-action protocol, </li></ul><ul><li>Homeowner Mortgage Support Scheme </li></ul><ul><li>2. Scotland: </li></ul><ul><li>Mortgage to Rent, </li></ul><ul><li>Mortgage Rights (Scotland) Act 2001, </li></ul><ul><li>Section 11 of 2003 Act. </li></ul>
  6. 6. Repossessions Working Group <ul><li>Set up January 2009 – concluded in May 2009 (reconvened Spring 2010) </li></ul><ul><li>To look specifically at legal measures and other forms of help for struggling home-owners </li></ul><ul><li>28 recommendations covering: legal changes, advice, financial support, joint working, data collection, court processes and legal aid. </li></ul><ul><li>Reconvened to look at tenants of defaulting owners. </li></ul><ul><li>Some work continues in Repossessions Advice Group </li></ul>
  7. 7. <ul><li>Legislate to strengthen protection for home-owners </li></ul><ul><li>Address gaps in advice provision </li></ul><ul><li>Lenders to exercise forbearance </li></ul><ul><li>Lenders and courts to use plain English </li></ul><ul><li>Eligibility for legal aid to be kept under review </li></ul><ul><li>Better Scottish-specific data on mortgage arrears and repossessions </li></ul><ul><li>The report also directed some recommendations to the UK Government: on SMI, HMS and role of FSA. </li></ul>Some key recommendations
  8. 8. Home Owner and Debtor Protection (Scotland) Act 2010 <ul><li>Passed February 2010; main commencements September 2010. </li></ul><ul><li>Part 1 deals with repossessions; part 2 with sequestration and trust deeds. </li></ul><ul><li>Part 1 amends the following Acts </li></ul><ul><li>Conveyancing and Feudal Reform (Scotland) Act 1970 </li></ul><ul><li>Heritable Securities (Scotland) Act 1894 </li></ul><ul><li>Mortgage Rights (Scotland) Act 2001 (Includes repeal of Section 2) </li></ul>
  9. 9. Overview of HODP Act <ul><li>Requires all repossession cases to call in court (except voluntary surrenders) </li></ul><ul><li>Establishes a set of minimum steps to be taken before a creditor can commence legal action: “Pre Action Requirements”. </li></ul><ul><li>Opens up scope for lay representation </li></ul><ul><li>Allows for recall of decree. </li></ul><ul><li>Certain transitional arrangements </li></ul>
  10. 10. Pre Action Requirements <ul><li>Modelled on Pre Action Protocol in England and Wales (Nov 2008) </li></ul><ul><li>Consistent with MCOB 13 </li></ul><ul><li>Lenders submit a PARs checklist to Court. </li></ul><ul><li>Clear information about arrears and other expenses </li></ul><ul><li>Reasonable efforts made to make arrangements to clear debt </li></ul><ul><li>Desist from action if alternative arrangements are being made </li></ul>
  11. 11. Lay representation <ul><li>Advisers other than solicitors or advocates if: </li></ul><ul><li>Sheriff is satisfied that you are competent; and </li></ul><ul><li>You are from an approved list of authorised organisations set out in secondary legislation </li></ul><ul><li>Guidance published by Scottish Government </li></ul>
  12. 12. Challenge of implementation <ul><li>Transition period </li></ul><ul><li>Advice sector capacity </li></ul><ul><li>Plain English </li></ul><ul><li>Expenses </li></ul><ul><li>Interest rates / economic context </li></ul><ul><li>HODP Act only part of what needs to be done </li></ul>