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PART 4 continued CHAPTER 2 continued
(7) Where the sheriff makes, under section 97(2) of this Act, an order granting a warrant for sale, the sheriff may suspend the effect of the warrant for a period not exceeding 1 year beginning with the day on which the order is made.
(8) For the purposes of subsection (1) above, a dwellinghouse may be a sole or main residence irrespective of whether it is used, to any extent, by the debtor or a person mentioned in subsection (2) above for the purposes of any profession, trade or business.
(9) In this section—
“child” means—
a child under the age of 16 years; and
includes—
a stepchild; and
any child brought up or treated by any person to whom subsection (3) above applies or by the debtor or the owner as a child of that person, of the debtor or of the owner;
“dwellinghouse” includes any yard, garden, outbuilding or other pertinents; and
“non-entitled spouse” is to be construed in accordance with section 1(1) of the Matrimonial Homes (Family Protection) (Scotland) Act 1981 (c. 59).
(1) This section applies where—
(a) the creditor applies under section 92(1) of this Act for a warrant for sale of attached land; and
(b) a person, at whose instance a notice was, by virtue of section 91 of this Act, registered (in this section, a “prospective purchaser”), has lodged objections to the application.
(2) At the hearing under section 97(1) of this Act, the sheriff may, if satisfied as to the matters mentioned in subsection (3) below, make an order—
(a) sisting the application;
(b) requiring the prospective purchaser to pay the price under the contract to the creditor; and
(c) making such other incidental or consequential provision as the sheriff thinks fit.
(3) The matters are that—
(a) the prospective purchaser did not, in entering into the contract for the purchase of the land, seek to defeat the rights of creditors of the debtor; and
(b) both the prospective purchaser and the debtor will proceed with the purchase under the contract without undue delay.
(4) Section 116 of this Act applies to the proceeds of sale paid to the creditor in pursuance of an order under subsection (2) above as it applies to a sale in pursuance of a warrant for sale subject to the modification that references to the “appointed person” are references to the “creditor”.
(1) This section applies where—
(a) a warrant for sale has been granted under section 97(2) of this Act; and
(b) a person (in this section, the “prospective purchaser”) had, before the notice of land attachment was registered, entered into a contract to purchase attached land from the debtor.
(2) The sheriff may, on the application of the prospective purchaser and if satisfied as to the matters mentioned in section 99(3) of this Act, make an order—
(a) suspending the warrant for sale for a period not exceeding 1 year from the day on which the order is made;
(b) requiring the prospective purchaser to pay the price under the contract to the appointed person; and
(c) making such other incidental or consequential provision as the sheriff thinks fit.
(3) Section 116 of this Act applies to the proceeds of sale paid to the appointed person in pursuance of an order under subsection (2) above as it applies to a sale in pursuance of a warrant for sale.
(1) This section applies where an order is made under section 99(2) or 100(2) of this Act.
(2) The sheriff may, on the application of the creditor or the appointed person, as the case may be, if satisfied as to the matters mentioned in subsection (3) below, revoke the order under section 99(2) or, as the case may be, section 100(2) of this Act.
(3) The matters are that—
(a) the prospective purchaser and the debtor entered into the contract for the purchase of the land in order to defeat the rights of creditors of the debtor; or
(b) there has been undue delay in completing the purchase.
(1) This section applies where attached land specified in an application under section 92(1) of this Act is a pro indiviso share owned in common by the debtor and a third party.
(2) Subject to subsection (3) below, the sheriff may, under section 97(2) of this Act, make an order granting a warrant for sale of the land specified in the application.
(3) The sheriff must specify in the order whether the warrant—
(a) authorises—
(i) division of the land owned in common; and
(ii) sale of the part, specified in the warrant, which, after such division, would belong to the debtor as sole owner (in this section, the “debtor’s part”); or
(b) sale of the land owned in common and, subject to subsection (5) below, division of the proceeds.
(4) Where the warrant authorises division of the land owned in common—
(a) with effect from the day on which the order granting the warrant is made—
(i) the debtor’s part is subject to the land attachment; and
(ii) the remaining land is disburdened of the land attachment; and
(b) this Chapter applies as if the warrant for sale granted were a warrant for sale of the debtor’s part only.
(5) Where the warrant authorises sale of the land owned in common and division of the proceeds, the appointed person must—
(a) subject to the rights of any creditor of the third party holding a security over the third party’s pro indiviso share of the land, pay to the third party the share of the proceeds of sale due to that person; and
(b) deal, under section 116 of this Act, with the share of the proceeds that is attributable to the debtor’s share in the land as if those proceeds were proceeds from the sale of land owned by the debtor as sole owner.
(6) Where land to which this section applies is divided and sold, or sold, in pursuance of a warrant for sale, the third party who, immediately before that warrant is granted, owned the land in common with the debtor may purchase the debtor’s part or, as the case may be, the land.
(7) Where the third party purchases land which is sold under a warrant authorising sale and division of the proceeds—
(a) the third party need pay to the appointed person only the share of the price attributable to the debtor’s share in the land; and
(b) subsection (5)(a) above does not apply.
(1) Where a warrant for sale is granted under section 97(2) of this Act, the creditor must, as soon as is reasonably practicable, send a copy of the warrant to—
(a) the debtor; and
(b) the appointed person.
(2) Where a warrant for sale is refused under section 97(3)(b) or (5) of this Act, the sheriff clerk must, as soon as is reasonably practicable, send a copy of the order to the debtor and to any other person appearing to the sheriff clerk to have an interest.
(1) The sheriff may, either when making an order granting a warrant for sale or subsequently, make such order as appears to the sheriff to be appropriate in connection with the sale of the attached land.
(2) In particular, the sheriff may, on the application of the appointed person—
(a) extend the period specified in the warrant granted under section 97(2) of this Act within which the land is to be sold;
(b) remove that appointed person and appoint another solicitor as the appointed person; and
(c) on the application of the creditor, the debtor or any other person appearing to the sheriff to have an interest—
(i) in a case where the appointed person has died, appoint another solicitor as the appointed person;
(ii) in a case where the appointed person is unable to carry out the appointed person’s functions due to ill health or incapacity, remove that person and appoint another solicitor as appointed person;
(iii) in any other case, on cause shown, so remove and appoint.
(3) An order made under this section after the grant of a warrant for sale must be intimated by the creditor—
(a) in such form and manner;
(b) before the expiry of such period; and
(c) to the debtor and such other persons,
as the sheriff may direct.
Where, under section 97(5) of this Act, an order is made refusing an application for a warrant for sale by virtue of a ground mentioned in paragraph (d), (e), (f) or (g) of subsection (6) of that section—
(a) the land attachment does not, by reason only of that refusal, cease to have effect; and
(b) it is competent for the creditor to make a further application under section 92(1) of this Act.
(1) Where an order is made granting a warrant for sale, the creditor may, by notice served on—
(a) the debtor; and
(b) any other person having a right, derived from the debtor, to occupy the land to which the warrant relates,
terminate, with effect from such day as the creditor specifies in the notice (being a day not less than 7 days after the date of service), any right of the debtor (or other person) to occupy that land.
(2) A notice under subsection (1) above must be—
(a) in (or as nearly as may be in) the form prescribed by Act of Sederunt; and
(b) served on the debtor or, as the case may be, other person.
(3) Any right of a person (other than the debtor) to occupy land which, before a notice of land attachment relating to the land was registered, would have been binding on a singular successor of the debtor is not affected by subsection (1) above.
(4) A certificate, in (or as nearly as may be in) the form prescribed by Act of Sederunt, of service of a notice such as is mentioned in subsection (1) above may be registered.
(1) From the date on which the creditor gives notice under section 106(1) of this Act until the land attachment ceases to have effect the creditor (in place of the debtor) has the rights and obligations of a heritable creditor in lawful possession of the land.
(2) Without prejudice to the generality of subsection (1) above, those rights and obligations—
(a) include any rights and obligations under any lease, or under any permission or right of occupancy, granted in respect of the land, including the right to receive rent from any tenant;
(b) do not include the power to grant a lease.
(3) Subsection (2)(a) above applies only as respects rent payable on or after the date on which the creditor intimates in writing to the tenant that the notice has been given.
(4) A creditor who has given notice under section 106(1) of this Act—
(a) may apply to the sheriff for an order—
(i) authorising the carrying out of works of reconstruction, alteration or improvement if they are works reasonably required to maintain the market value of the land; and
(ii) to recover from the debtor any expenses and outlays reasonably incurred in so doing;
(b) may bring an action of ejection against the debtor; and
(c) has title to bring any action of removing, intrusion or ejection which the debtor might competently have brought in respect of the land.
(5) Any—
(a) expenses or outlays incurred as mentioned in subsection (4)(a)(ii) above; and
(b) expenses of any action of removing, intrusion or ejection brought by virtue of subsection (4)(b) or (c) above,
are expenses incurred in executing the land attachment.
(6) The reference in subsection (3) above to intimation in writing includes a reference to intimation by electronic communication.
(1) The appointed person—
(a) is an officer of the court; and
(b) must act independently of the creditor, the debtor and any other interested person.
(2) Before exercising any functions conferred by virtue of this Chapter, the appointed person must lodge a bond of caution for such amount as may be prescribed by Act of Sederunt.
(3) The appointed person may apply to the sheriff who granted the warrant for sale under section 97(2) of this Act for directions as to how to exercise any of that person’s functions.
(4) In executing a warrant for sale granted under section 97(2) of this Act, the appointed person must—
(a) exercise the functions conferred—
(i) by this Chapter; and
(ii) by the Scottish Ministers under subsection (8) below; and
(b) comply with any directions made under subsection (3) above.
(5) The appointed person is liable to the creditor, the debtor, any person who owns the attached land in common with the debtor and any secured creditor for any patrimonial loss caused as a result of the appointed person’s negligence in executing the warrant for sale.
(6) The creditor is liable for the appointed person’s reasonable remuneration and outlays incurred in exercising functions conferred by virtue of this Chapter.
(7) Such remuneration and outlays are expenses incurred by the creditor in executing the land attachment.
(8) The Scottish Ministers may, by regulations—
(a) confer functions on;
(b) remove functions from; or
(c) otherwise modify the functions of,
appointed persons.
(1) The land in relation to which a warrant for sale is granted under section 97(2) of this Act must be sold in execution of that warrant by the appointed person.
(2) The land may, unless the sheriff otherwise directs, be sold by private bargain or at auction.
(3) The appointed person must consult the creditor before determining which of the methods of sale mentioned in subsection (2) above is to be used.
(4) The appointed person must—
(a) advertise the sale of the attached land; and
(b) ensure that the price at which the land is sold is the best that can reasonably be obtained.
Any legal incapacity or disability of a debtor has no effect on the title passed to a purchaser of attached land which has been sold in execution of a warrant for sale.
(1) Where a disposition bearing to be granted in execution of a warrant for sale is registered in the appropriate property register, the validity of that disposition is not, if the conditions mentioned in subsection (2) below are satisfied, challengeable on the ground—
(a) that the land attachment was irregularly executed; or
(b) that, before the date of settlement of the sale, the land attachment had ceased to have effect.
(2) The conditions are that—
(a) the purchaser acted in good faith in relation to the purchase of the land; and
(b) the appointed person grants a certificate, in (or as nearly as may be in) the form prescribed by Act of Sederunt, to the purchaser confirming that the land attachment was regularly executed.
(3) In subsection (2)(a) above, a purchaser is deemed to have acted in good faith where, immediately before the date of settlement, the purchaser was not aware and could not reasonably have become aware that the land attachment was irregularly executed or, as the case may be, that it had, before that date, ceased to have effect.
Where a disposition of attached land is granted in execution of a warrant for sale to a purchaser, then, on the registration of the disposition, the land is disburdened of—
(a) the land attachment; and
(b) any—
(i) heritable security; or
(ii) diligence,
ranking pari passu with, or after, the land attachment.
(1) Where attached land is sold in execution of a warrant for sale, the appointed person must, before the expiry of the period of 28 days beginning with the day on which the sale price is paid, lodge with the sheriff clerk for the court which granted the warrant a report of the sale.
(2) A report lodged under subsection (1) above must—
(a) be in (or as nearly as may be in) the form prescribed by Act of Sederunt; and
(b) contain—
(i) a description of the land (or part) sold and the sale price;
(ii) a description of any land which is unsold and the price at which it was last offered for sale (or, if offered for sale at auction, the reserve price);
(iii) a statement of the expenses incurred by the creditor in executing the land attachment;
(iv) a statement of the amount due under any security or diligence ranking on the proceeds of sale prior to, or pari passu with, the land attachment;
(v) a statement of the amount due under any security or diligence ranking on the proceeds of sale after the land attachment;
(vi) a note of the amount of any surplus of the sale proceeds payable to the debtor; and
(vii) a note of any balance of the debt due by the debtor to the creditor.
(3) If the appointed person—
(a) without reasonable excuse makes a report of sale after the expiry of the period mentioned in subsection (1) above; or
(b) wilfully refuses to make, or delays making, a report after the expiry of that period,
the sheriff may make an order providing that the appointed person is not entitled to payment from the creditor of the reasonable remuneration and outlays incurred in executing the warrant for sale or so much of such remuneration and outlays as the sheriff specifies.
(1) Where a report is lodged under section 113(1) of this Act, the sheriff must remit it to the auditor of court for the auditor to report on it within such time as the sheriff may specify.
(2) The auditor must—
(a) tax the expenses of the land attachment chargeable against the debtor;
(b) certify the balance due to or by the debtor following the sale; and
(c) submit a report to the sheriff.
(3) The auditor is not entitled to charge a fee in respect of the report submitted under subsection (2)(c) above.
(4) The report of sale and the auditor’s report must be retained by the sheriff clerk for such period as may be prescribed by Act of Sederunt and during that period must be available for inspection by any interested person on payment of such fee as may be prescribed in an order made under section 2 of the Courts of Law Fees (Scotland) Act 1895 (c. 14).
(1) Where the auditor has submitted a report to the sheriff under section 114(2)(c) of this Act, the sheriff may, after considering that report and the report on sale lodged under section 113(1) of this Act—
(a) make an order approving the report of sale subject to such amendments (if any) made—
(i) following a hearing under subsection (2) below, by the sheriff; or
(ii) by the auditor,
as may be specified in the order;
(b) if the sheriff is satisfied that there has been a substantial irregularity in the land attachment, make an order—
(i) declaring the land attachment to be void; and
(ii) making such consequential order as appears to the sheriff to be necessary in the circumstances.
(2) The sheriff may not make an order under subsection (1) above without first giving all interested persons an opportunity to be heard.
(3) The sheriff clerk must intimate the order of the sheriff under subsection (1) above to the debtor and any other person appearing to the sheriff clerk to have an interest.
(4) Any order under subsection (1)(b) above does not affect the title of any person to land sold in execution of the warrant for sale to which the report relates.
(1) Where attached land is sold in execution of a warrant for sale, the proceeds of the sale must be disbursed by the appointed person in the following order—
(a) subject to subsection (2) below, any expenses due to the creditor by virtue of section 114(2)(a) of this Act;
(b) any sums due to any other creditor holding a security or diligence over the land which ranks prior to the land attachment;
(c) any sums due to—
(i) the attaching creditor in respect of the sum recoverable by the land attachment (other than any such expenses as are mentioned in paragraph (a) above); and
(ii) any creditor under a security or diligence which ranks pari passu with the land attachment;
(d) any sums due to any other creditor under any security or diligence which ranks after the land attachment; and
(e) subject to section 37(8C)(b) of the 1985 Act, any balance due to the debtor.
(2) Subject to section 113(3) of this Act, the appointed person may deduct and retain from the sum mentioned in subsection (1)(a) above such remuneration and outlays incurred by the appointed person in executing the warrant for sale.
(3) Where there is a balance due to the debtor, the appointed person must pay it to the debtor or any person authorised to give a receipt for the balance on the debtor’s behalf.
(4) Where, by virtue of subsection (1) above, a creditor receives the sums due to the creditor under a security or diligence, that creditor must grant a discharge of that security or diligence.
(5) If the appointed person is unable to obtain from—
(a) the debtor; or
(b) any creditor of the debtor;
a receipt or discharge in respect of the disbursement of the proceeds of sale, the appointed person may consign the amount due in the sheriff court for the person having right to it.
(6) Any such consignation discharges the obligation to pay the amount due; and a certificate of the sheriff clerk is sufficient evidence of the discharge.
(1) This section applies where the appointed person—
(a) has exposed to sale the land specified in the warrant for sale; and
(b) has—
(i) failed to find a purchaser; or
(ii) succeeded in selling only part of the land, and that at a price which is less than the sum secured by the land attachment and by any security or diligence ranking prior to, or pari passu with, the land attachment.
(2) The appointed person may apply, in (or as nearly as may be in) the form prescribed by Act of Sederunt, to the sheriff who granted the warrant for sale for a decree of foreclosure.
(3) The application under subsection (2) above must be accompanied by—
(a) a statement setting out the whole amount secured—
(i) by the land attachment; and
(ii) by any other security or diligence ranking prior to or pari passu with the land attachment; and
(b) where part of the land has been sold, a report on that sale under section 113(1) of this Act.
(4) A copy of an application under subsection (2) above must be served by a judicial officer on—
(a) the debtor;
(b) where the debtor does not own the land, the owner;
(c) any occupier of the land specified in the warrant for sale;
(d) any creditor in a heritable security affecting the land, as disclosed in a report of a search in the appropriate property register brought down to a date no later than 3 clear days before the day on which the application is made; and
(e) any other person having a land attachment or other diligence over the land.
(5) The sheriff, after affording any person on whom a copy of the application was served under subsection (4) above an opportunity to make representations, may—
(a) grant the decree of foreclosure applied for;
(b) sist the application for a period not exceeding 3 months to allow the debtor to pay the sum recoverable by the land attachment; or
(c) appoint a valuer to fix a reserve price at which the land (or remaining part of that land) must be—
(i) auctioned; or
(ii) advertised for sale and if unsold auctioned.
(6) The debtor may—
(a) bid and purchase at any auction under subsection (5)(c)(i) or (ii) above; or
(b) purchase at the price advertised under subsection (5)(c)(ii) above.
(7) Where an order has been made under subsection (5)(c) above and the appointed person—
(a) produces an auctioneer’s certificate that the land in question has been duly exposed to sale at the reserve price but is unsold; or
(b) certifies in (or as nearly as may be in) the form prescribed by Act of Sederunt that the land has been advertised at the reserve price but is unsold,
the sheriff may, without further intimation, grant decree of foreclosure.
(8) A decree of foreclosure granted under this section must—
(a) be in (or as nearly as may be in) the form prescribed by Act of Sederunt;
(b) describe the land in relation to which it is granted; and
(c) contain a declaration of the price at which, on registration of an extract of the decree, the creditor is deemed to have acquired the land.
(9) Where provision is made by virtue of this Chapter or by any other enactment permitting the application under subsection (2) above to be an electronic communication, the requirement in subsection (3) above that the application be accompanied by the statement and report mentioned in that subsection is satisfied by the provision of electronic communications.
(1) On registration of an extract of the decree of foreclosure in the appropriate property register—
(a) any right to discharge the land attachment by payment is extinguished;
(b) the creditor has right to, and is vested in, the land as if an irredeemable disposition of the land, granted in favour of the creditor by the debtor, had been delivered to the creditor and, on the date of registration of the extract of the decree, duly registered;
(c) the land is disburdened of the land attachment and of any security or diligence ranking after the land attachment; and
(d) the creditor has the like right as the debtor to redeem or as the case may be to discharge by payment any security or diligence ranking prior to, or pari passu with, the land attachment.
(2) Notwithstanding the registration of an extract of a decree of foreclosure, any personal obligation of the debtor under any security remains in full force and effect in so far as not extinguished by the price for which the creditor is deemed to have acquired the land and the price for which any part of the land has been sold.
(3) Title acquired by virtue of a decree of foreclosure under this section is not challengeable on the ground of any irregularity in the proceedings for, or in any diligence which preceded, foreclosure.
(4) Notwithstanding subsection (3) above, nothing in this section affects the competency of any claim for damages in respect of such proceedings or diligence as are mentioned in that subsection.
Bankruptcy and Diligence etc (Scotland) Act 2007