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