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Inhibitions New provisions relating to the creation, termination, registration and legal effect of inhibitions and other forms of diligence come into effect on 22 April 2009. The new provisions are contained in Part 5 of the Bankruptcy and Diligence etc. (Scotland) Act 2007 (and supplemented by the Diligence (Scotland) Regulations 2009 and the Bankruptcy and Diligence etc. (Scotland) Act 2007 (Inhibition) Order 2009). This has consequences for those parties who intend to submit inhibitions to the Register of Inhibitions and Adjudications for recording and those undertaking a search of that Register. The main changes introduced by the Act and Regulations can be summarised as follows: • The Court of Session can no longer grant Letters of Inhibition (section 146(6) of the 2007 Act). Instead, inhibitions are to be registered by (i) Schedule of Inhibition served by an officer of the Sheriff Court or the Court of Session and (ii) Certificate of Execution of Inhibition (section 148 of the 2007 Act). These are in the forms prescribed by the Diligence (Scotland) Regulations 2009 (SSI 2009/68). The Office of Public Sector Information Website • Applications for registration of an inhibition in the Register of Inhibitions and Adjudications (ROI) should be accompanied by (1) a copy of the Schedule of Inhibition, certified as a true copy by the Messenger at Arms or Sheriff Officer, and (2) the associated Certificate of Execution of the inhibition. The registration of the Schedule and Certificate will be reflected by a single entry in the ROI minute book in the following style: Schedule of Inhibition [inhibitor] against [inhibited], served [date] per XY, Agent • An inhibition will take effect from the date of registration, except where a Notice of Inhibition is registered in the ROI and is followed by registration of a Schedule of Inhibition within 21 days. In that latter event the inhibition takes effect from the date on which the Schedule is served on the debtor (that date will be provided in the ROI minute book entry) (section 149 of 2007 Act). • Inhibition on the dependence of an action can be converted into an inhibition in execution. Section 152(2) of the 2007 Act (as subsequently amended) introduces a new procedure where a creditor has obtained a decree for payment of all or part of a principal sum in an action in which the creditor had executed inhibition on the dependence, and that inhibition had been limited by the Court to specified property in terms of section 15J(b) of the Debtors (Scotland) Act 1987. The procedure permits the creditor to turn that inhibition into a general inhibition that is no longer specific to that property. This is dependent on registration in the ROI of a Notice accompanied by an Extract of the Decree or a copy Interlocutor certified by the clerk of court. • An inhibition will be breached where the inhibited party delivers a deed to a third party conveying or granting a right in a property which is affected by the inhibition (section 160 of 2007 Act). Section 161 makes clear that a twenty year period of long negative prescription will apply in respect of inhibition (i.e. an inhibitor can have a deed granted in breach of an inhibition reduced for up to twenty years following the date of delivery of that deed). • The Keeper is obliged to enter an inhibition in a Land Register title sheet only when completing registration of an interest in land where the interest has been transferred or created in breach of the inhibition (section 167 of 2007 Act). • Part 5 of the 2007 Act also brings in changes in respect of notices of litigosity. Section 162 of the 2007 Act introduces a new section 159A to the Titles to Land Consolidation (Scotland) Act 1868. An inhibiting creditor who raises an action of reduction of a conveyance or a deed granted in breach of an inhibition must register a Notice of Summons of Reduction in both the ROI and the Land Register or General Register of Sasines (whichever is appropriate). This gives notice that the property is affected by ongoing court action, i.e. has been rendered litigious. The Keeper’s expectation is that solicitors will submit the Notice for registration in both the ROI and the relevant property register simultaneously (i.e. the Notice should be accompanied by both an application for registration in the ROI and the relevant form and fee for registration in the Land or Sasine Register). If the Court action fails, a Discharge of the Notice of Summons is dual registered in the same fashion. Further information and advice about registration procedure in the Register of Inhibitions and Adjudications is available from the Chancery & Judicial Registers at 0131 200 3916 or by email to firstname.lastname@example.org Guidance on the implications for applications for registration in the Land Register is available from Pre-Registration Enquiries at 0845 607 0163 or by email to email@example.com Further information on the commencement of the 2007 Act is also available from the Accountant in Bankruptcy at 0845 762 6171 or by email to firstname.lastname@example.org
"Bankruptcy Legislation - inhibition in execution"