First Homes Fund: Administrative Procedures

Appendix 3

Notice Relating To Section 11 of The Land Tenure Reform (Scotland) Act 1974

To be addressed to the Purchaser Dear [Insert name(s of Purchaser]

Scottish Government First Homes Fund Scheme Purchase of [Insert address of the Property]

Section 11 of the Land Tenure Reform (Scotland) Act 1974

It is a condition of the Purchaser receiving financial support from Scottish Ministers under the First Homes Fund for the purchase of the Property that the Purchaser must grant in favour of Scottish Ministers a Standard Security over the Property. Because the financial support given by Scottish Ministers will subsist for an indeterminate period of time, the Standard Security to be granted by the Purchaser in favour of the Scottish Ministers is potentially capable of being redeemed by the Purchaser pursuant to section 11 of the Land Tenure Reform (Scotland) Act 1974 (often referred to as the “20-year security rule”).

The Scottish Government intends to make an order pursuant to section 11 (3D) of the 1974 Act to remove the right to redeem securities after 20 years for those participating in the First Homes Fund scheme. Accordingly, the purpose of this letter is to make the Purchaser aware of this and to make clear that the Purchaser should not enter into the shared equity documentation on the assumption that, after 20 years, the Purchaser will be able to rely on section 11 of the 1974 Act as that section currently applies.