Publication - Advice and guidance

Open Market Shared Equity (OMSE) administrative procedures: 2020

Published: 15 Dec 2020

Updated guidance for administering agents on the Open Market Shared Equity (OMSE) scheme's administrative procedures.

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Contents
Open Market Shared Equity (OMSE) administrative procedures: 2020
Annex A: The Scottish Ministers ("Scottish Ministers") - Standing Instructions To Solicitors For Use In Open Market Shared Equity Transactions

Annex A: The Scottish Ministers ("Scottish Ministers") - Standing Instructions To Solicitors For Use In Open Market Shared Equity Transactions

Introduction

Please note that the following commentary gives an overview of how the Open Market Shared Equity (OMSE) scheme is intended to work, for the benefit of solicitors acting for purchasers who are being provided with financial support from Scottish Government via the scheme. The commentary is without prejudice to, and is subject to, the remainder of these Standing Instructions, and the legal documentation referred to herein.

In terms of the OMSE scheme, financial assistance is provided to enable qualifying applicants to buy a property suitable for their needs on the open market.

Your receipt of these papers means that the applicant for whom you are being asked to act has been successful in his/her application for such assistance.

For the avoidance of doubt, a qualifying applicant (the "Purchaser") currently means:-

  • those that are intending to be owner/occupiers (properties cannot be bought for investment purposes);
  • those that have satisfied the eligibility conditions as assessed by the administering agent appointed by Scottish Ministers to administer the OMSE scheme (the "Administering Agent");
  • those that are obtaining a first ranking mortgage for the maximum amount which he/she is able to afford on usual terms and is likely to be sustainable by them (as an exception to this requirement, applicants aged 60 or over do not require to take out a mortgage, if they are able to apply savings or the proceeds from the sale of another property towards the purchase price of the new house);
  • the Purchaser is a first-time buyer as defined for the purposes of the OMSE scheme; and
  • applicants who do not (or will not at the point of purchase of the OMSE property) possess any interest in any other dwelling.

By way of background, Scottish Government provides the assistance to the Purchaser by paying an agreed percentage of the full purchase price payable for a property which, added to the amount which the Purchaser can afford to borrow (and including any deposit provided by the Purchaser), enables the Purchaser to purchase their preferred property.

The Administering Agent calculates the minimum amount which the Purchaser is expected to contribute towards the purchase of a suitable property and the maximum threshold price of the property which the Purchaser can offer to buy, via a "passport letter". The financial contribution provided by Scottish Ministers towards the full purchase price will be expressed as a percentage of the initial purchase price of the property. When the Purchaser sells the property he/she will be obliged to pay to Scottish Ministers the contribution percentage of the eventual sales proceeds.

The OMSE scheme is intended to support first-time buyers, which means that the Purchaser must be a first-time buyer as defined by the scheme, and must not have previously been a home owner, unless they fall within a priority target group such as persons over the age of 60.

Where the Purchaser is aged 60 or over and intends to apply the free proceeds from the sale of another property to the purchase of the new property, you will be expected to confirm and certify the amount or anticipated amount of those free proceeds.

A Purchaser who may have opened up a Help to Buy: ISA in which to save a deposit towards the purchase of their home. While the Help to Buy: ISA scheme covers Scotland, it is operated by the UK Government and not by Scottish Ministers, and involves the UK Government providing the ISA holder with a bonus at the point when the savings in the ISA are being withdrawn and applied towards the home purchase. You should note that if your client has a Help to Buy: ISA, then (a) only you as the purchaser's solicitor are able to access and uplift the ISA funds, and (b) you must be registered with the UK Government in order to do so. Please also note that Help to Buy ISAs are not available to persons who are already homeowners or who have been previously.

The obligation to make the repayment to the Scottish Ministers has to be secured on the property by a second ranking standard security (the "Postponed Security") which must rank immediately behind the loan of the lender who will be providing a loan for a sum up to the remainder of the total purchase price. A ranking agreement is also required in Scottish Government's preferred form to regulate the ranking of the two standard securities. In the case of applicants who are aged 60 or over and are not taking out a mortgage the standard security in favour of Scottish Ministers will be first ranking.

The Shared Equity Agreement will subsist for an indeterminate period of time but the Standard Security to be granted by the Purchaser in favour of the Scottish Ministers will not be capable of being redeemed by the Purchaser pursuant to section 11 of the Land Tenure Reform (Scotland) Act 1974 (which is often referred to as the "20-year security rule"). The Redemption of Heritable Securities (Excluded Securities) (Scotland) Order 2018 came into effect on 15 February 2019 and removed the right to redeem securities after 20 years for those participating in designated shared equity schemes including the OMSE scheme.

The Scottish Government has appointed an Administering Agent for the purpose of administering the Scottish Government's financial support to Purchasers, including providing Purchaser's solicitors with these instructions and collecting all payments due including partial and full redemption payments. This will mean that the Purchaser has one nominated point of contact for the shared equity documentation, including the Postponed Security, which governs Scottish Government's financial support.

Please note that Scottish Ministers reserve the right, at their discretion, to decide not to instruct a buyer's solicitor to act in accordance with these Standing Instructions. If Scottish Ministers have determined that they are unwilling to issue the Standing Instructions to you or your firm either permanently or for a period of time and you have been notified of this fact, you must not accept these instructions and must refer matters back to the Administering Agent for further action.

Instructions

1. These standing instructions ('instructions') are designed for use when you are asked to act on our behalf in relation to a Standard Security. (In the instructions, any reference to "we", "us" or "our" means the Scottish Ministers). The key features of our approach are:

  • in all transactions where you receive an instruction to act for us these instructions (as amended from time to time) will form an integral part of our instructions;
  • while these instructions have been divided into a series of separate sections, in some instances it will be necessary for you to cross refer between sections; and
  • all matters which require to be reported or delivered to Scottish Ministers are to be reported or delivered to [insert details of Administering Agent or its subsidiary. If subsidiary substitute subsidiary's details for Administering Agent's details throughout].

We will be relying upon you to carry out our instructions in a professional manner. Although our instructions are intended to be comprehensive they are not exhaustive and it is likely that circumstances will arise where we will require to rely on your professional skill and guidance to deal with situations which are not specifically addressed.

This may include for example but without prejudice to the generality of the foregoing, any additional requirement in the UK Finance Lenders Handbook upon which these instructions have been based. If a situation arises where you identify a gap in the instructions, please let us know.

If you or a member of your immediate family (that is to say your spouse, civil partner or co-habitee, or a parent, sibling, child, step-parent, step-child, grandparent, grandchild, parent-in-law or child-in-law, or a spouse civil partner or co-habitee of any such person) is your client and you are a sole practitioner, you must not act for us.

Your firm must not act for us if the partner or fee earner dealing with the transaction or a member of his immediate family is your client unless we say your firm may act and a separate fee earner of no less standing or a partner within the firm acts for us.

If there is any conflict of interest you must not act for us and must return our instructions.

Unless we otherwise state you must not advise any guarantor or any non-entitled spouse who is to execute a consent to the taking of a standard security, or a renunciation of occupancy rights and you must arrange for them to take independent legal advice. If we do allow you to advise any of these people you must only do so after recommending in the absence of any other person interested in the transaction that such person obtains independent legal advice. Any advice you give any of these people must be given in the absence of any other person interested in the transaction.

Nothing in these instructions lessens your duties to your client.

In addition to these definitions, any reference to any regulation, legislation or legislative provision shall be construed as a reference to that regulation, legislation or legislative provision as amended, re-enacted or extended at the relevant time.

Searches and enquiries

2. Please report to us if the proprietor has owned the property for less than six months, or the person selling to your client is not the proprietor, unless the seller is:

  • a personal representative of the proprietor; or
  • an institutional heritable creditor exercising its power of sale; or
  • a receiver, trustee in sequestration or liquidator; or
  • a developer or builder selling a property acquired under a part exchange scheme.

3. In carrying out your investigation, you must make all usual and necessary searches and enquiries, taking into account the locality and other features of the particular property.

4. All requisite searches in the Personal/Land Register, the Register of Charges, Company File, and any other relevant registers, should be carried out. In addition, local authority certificates, Property Enquiry Certificates, Advance Notices, Legal Reports and Plans Reports as appropriate should be obtained. These reports should not be forwarded to us unless we specifically request in writing that you do so.

5. All Property Enquiry Certificates must not be more than three months old at settlement. In case of a Registered Company we also require a Search in the Register of Charges and the Company File continued to a date not less than 22 days after the date of registration to disclose the security in our favour.

6. We accept searches and reports from private firms in the Land Register of Scotland, Register of Inhibitions and Adjudications, Register of Companies and Register of Insolvencies. We accept Property Enquiry Certificates from private firms. You must be satisfied that you will be able to certify that the title is good and marketable. You must take reasonable steps to check that private firms carry adequate indemnity cover.

7. You must address issues arising from any contaminated land entries revealed in the course of you undertaking your investigations. You must ensure that the following questions relating to contaminated land have been addressed. In particular, please list any entries relating to the property in the Register maintained under s. 78R(1) of the Environmental Protection Act 1990.

  • Has the council served or resolved to serve any notice relating to the property under s. 78B(3)?
  • Has the council consulted, or resolved to consult, with the owner or occupier of the property under s. 78G(3) in relation to anything to be done on the property as a result of adjoining or adjacent land being contaminated?
  • Has any entry been made in the Register, or any notice served or resolved to be served, under s. 78B(3) in relation to any adjoining or adjacent land which has been identified as contaminated because it is in such a condition that harm or pollution of controlled waters might be caused on the property?

Valuation of the property

8. You must take reasonable steps to verify that there are no discrepancies between the description of the property as valued and the title and other documents including e.g. a plans report which a reasonably competent conveyancer should obtain and, if there are, you must tell us immediately.

9. You should take reasonable steps to verify that the assumptions stated by the valuer about the title in the valuation report are correct. If they are not, please let us know as soon as possible as it will be necessary for us to check with the valuer whether the valuation needs to be revised. We are not expecting you to assume the role of valuer. We are simply trying to ensure that the valuer has valued the property based on correct information. Via the Administering Agent, we will require sight before conclusion of missives of either a copy of the property valuation or, if the mortgage provider does not supply a copy of the valuation report, a copy of the mortgage offer (but only provided it expressly confirms the valuation figure). We will require to be satisfied that the valuer owes a duty of care to us and that we can rely on the valuation report. This will normally be done through an over-arching arrangement between Scottish Government and RICS members pursuant to which valuers agree to extend a duty of care to Scottish Ministers in relation to all valuations prepared by them for properties which come within the open market shared equity scheme. If the Purchaser is aged 60 or over and is not taking out a mortgage, a valuation report suitable for mortgage purposes will still require to be instructed and exhibited to us.

Coal mining

10. You must obtain a Coal Authority search, which must not be more than six months old at settlement, where it is reasonable to believe that the property could be affected by underground workings. In the case of a coal mining search, you should follow the current edition of The Law Society of Scotland Guidance Notes. If the results of the search from the Coal Authority are such that the property is not affected by any of the matters mentioned in the report then we do not need to be notified of its contents. Subject to that, you should advise us if any entries are revealed. You should not simply send us a copy of the mining search.

Planning and building regulations

11. You must by making appropriate searches and enquiries take all reasonable steps (including any further enquiries to clarify any issues which may arise) to ensure that:

  • the property has the benefit of any necessary planning and building regulation consents;
  • there is no evidence of any breach of the conditions of those consents or any other consent or certificate affecting the property; and
  • no matter is revealed which would preclude the property from being used as a residential property or indicate that the property may be the subject of enforcement action.

12. If there is such evidence and the seller is not providing a sufficient undertaking to satisfy those outstanding conditions by settlement, then this must be reported to us. Copies of planning permissions, building warrants and other consents or certificates should not be sent to us.

13. If the property will be subject to any enforceable restrictions, for example under an agreement (such as an agreement under section 75 of the Town and Country Planning (Scotland) Act 1997) or in a planning permission which, at the time of settlement, might reasonably be expected materially to affect its value or its future marketability, you should report this to us.

Good and marketable title

14. The title to the property must be good and marketable, and free of any burdens, restrictions, servitudes, charges or encumbrances which, at the time of settlement, might reasonably be expected to materially adversely affect the value of the property or its future marketability (other than any matters covered by indemnity insurance and which may be accepted by us). Our requirements in respect of indemnity insurance are set out below. You must ensure that, following settlement, the title to the property will be vested in your client.

15. Where the property comprises a flat, the cost of maintenance of the foundations and roof must be borne by the owners of the building of which the flat forms part in equitable proportions in terms of the title.

Restrictions on use and occupation

16. You must check whether there are any material restrictions on the occupation of the property as a private residence or as specified by us (for example, because of the occupier's employment, age or income), or any material restrictions on its use. If there are any such restrictions, you must report details to us.

Title conditions

17. You must enquire whether the property has been built, altered or is currently used in breach of a title condition. We rely on you to take reasonable steps to check that the condition is not enforceable. If in your professional opinion you believe that there is a risk of enforceability you must ensure (subject to below) that indemnity insurance is in place at settlement.

18. We will not insist on indemnity insurance:

  • if you are satisfied that there is no risk to our security;
  • the breach has continued for more than 20 years; and
  • there is nothing to suggest that any action is being taken or is threatened in respect of the breach.

Inhibitions and insolvency

19. You must obtain a clear personal search against each proprietor, each person selling to your client if other than the proprietor and your client as at a date not more than three days prior to the date of completion of the advance. You must fully investigate any entries revealed by your personal search against each proprietor or person selling to your client and your client to ensure that they do not relate to them.

20. Where an entry is revealed against the name of the proprietor, the person selling to your client or your client:

  • you must be satisfied that in your professional opinion the entry does not relate to the proprietor, the person selling to your client or your client if you are able to do so from your own knowledge or enquiries (for example in the Register of Insolvencies); or
  • if, after enquiry, you are unable to certify that the entry does not relate to the proprietor, the person selling to your client or your client you must report this to us even if, in the case of an inhibition, it pre-dates the person selling to your client's acquisition of the property. We may as a consequence need to withdraw our offer.

21. If you are aware that any transfer of the title to the property may be open to challenge as a gratuitous alienation or an unfair preference, then you must be satisfied that we will acquire our interest in good faith and will be protected under the relevant statutory provisions against our security being set aside. You must also obtain clear personal searches against all parties to any such transfer. If in your professional opinion you are not satisfied on any such matter you must arrange indemnity insurance for an amount sufficient to protect our interests under the security.

Powers of attorney

22. If any document is being executed under power of attorney, you must see an extract registered power of attorney, the original or a certified copy, and ensure that it is, on its face, properly drawn up, that it is adequate for the transaction contemplated, that it appears to be properly executed by the granter and that the attorney knows of no reason why such power of attorney will not be subsisting at settlement. In the case of joint clients, neither client may appoint the other as attorney.

Payment and title documents

23.1 The payment ('Payment') by Scottish Ministers to you on behalf of your client will not be made until all relevant matters which need to be satisfied before settlement have been complied with and we have received and are satisfied with your certificate of title set out in Appendix 1 to these standing instructions (which is to be submitted by you to the Administering Agent).

23.2 You will require to explain to your client the terms and legal effect of the shared equity documentation which our solicitors will prepare and send to you for completion and signing by your client and (in the case of the Ranking Agreement) the primary lender. The shared equity documentation comprises a Shared Equity Agreement, a Standard Security in favour of Scottish Ministers and a Ranking Agreement, and is intended to regulate and secure the financial assistance given by Scottish Ministers to your client.

24. You should tell us as soon as possible if you have been told that your client has decided not to proceed with the purchase or to not take up the Payment for any reason. You should advise us as soon as possible after missives have been concluded for the purchase.

Boundaries

25. Wherever possible, these must be clearly defined by reference to a suitable plan or description. They must also accord with the information given in the valuation report. You should ensure that the plan or the description accords with your client's understanding of the extent of the property to be secured to us. You must report to us if there are any discrepancies and, where appropriate, a Plans Report should be obtained and any discrepancies reported to us.

Purchase price

26. The purchase price for the property and the amount of loan being advanced by the primary lender must be the same as set out in the accompanying instruction letter ('your instructions') from [insert name of Administering Agent]. If it is not, you must tell us. You must tell us if the missives provide for:

  • a cashback to the buyer; or
  • part of the price is being satisfied by a non-cash incentive to the buyer.

27. This may lead to the Payment not being made or amended.

28. You must report to us if you will not have control over the payment of all of the purchase money (for example if it is proposed that your client pays money to the seller direct) other than a deposit held by an estate agent or a reservation fee of not more than £500 paid to a builder or developer.

29. If your client is using the proceeds of a Help to Buy: ISA towards the purchase price, you must be responsible for applying for the payment (and any bonus payment from the UK Government), which means you will require to be registered for the purposes of that scheme.

Vacant possession

30. Unless otherwise stated in your instructions, it is an essential condition of the Payment being made that vacant possession is obtained. The missives must provide for this. If you doubt that vacant possession will be given, you must not part with the Payment and should report the position to us.

New properties – building standards indemnity schemes

31. If the property is newly built, or newly converted, or to be occupied for the first time, you must ensure that it was built or converted under the following:

  • the National House Building Council (NHBC) Buildmark scheme;
  • the Zurich Municipal Newbuild scheme;
  • the Premier Guarantee for Private Housing and Completed Housing; or
  • any other new home warranty or insurance schemes which we have confirmed in writing as being acceptable to us.

If a new home warranty or insurance scheme is acceptable to your client's primary lender in terms of the UK Finance Handbook, then that scheme will normally be acceptable to us.

If the property will not have the backing of a new home warranty or insurance scheme but the seller has indicated that a professional consultant's certificate will be provided as an alternative, we may be willing to accept such a certificate, but only if it is acceptable to the primary lender and we are satisfied with the details of the proposed certificate including the period of time it will subsist for and the professional indemnity insurance of the consultant, and that Scottish Ministers as the second-ranking secured creditor will be given the benefit of the certificate and will be able to place reliance upon it.

32. You must obtain by settlement a copy of a new home warranty provider's cover note from the developer. The cover note must confirm that the warranty provider has carried out a final/pre-handover inspection and that the new home warranty will be provided. The warranty documentation should not be sent to us after settlement. You do not need to see the cover note before submitting to us the certificate referred to in paragraph 52 below, provided that you do obtain it prior to settlement.

Roads and sewers

33. If the roads serving the property are not adopted or maintained at public expense, but it is intended that they should be so, there must be a road bond in existence where required by statutory regulation, or you must make an appropriate retention from the purchase price, or you must report to us.

34. The property must be served by a public sewer or by private sewerage arrangements which have the necessary approvals from the sewerage authority or you must report to us.

Servitudes

35. You must take all reasonable steps to check that the property has the benefit of all servitudes necessary for its full use and enjoyment. This would include, for example, rights of way (both vehicular and pedestrian), the use of services and any necessary rights of entry for repair. All such rights must be enforceable by your client and your client's successors in title. If they are not, you must report to us.

36. If your client owns adjoining land over which your client requires access to the property or in respect of which services are provided to the property, the land over which such access is to be taken or over or through which such services are to be provided must also be included in our security.

Rights of pre-emption and restrictions on resale

37. You must ensure that there are no rights of pre-emption, restrictions on resale, options or similar arrangements in existence at settlement which will affect our security. If there are, please report this to us.

Improvement and repair grants

38. Where the property is subject to an improvement or repair grant which will not be discharged or waived on settlement, you do not require to report the matter to us unless you are aware of a breach of the conditions of grant or if the purchase and occupation of the property by your client would give rise to such a breach.

Insurance

39. You must:

  • report to us if the property is not insured in accordance with our requirements as set out in the standard security;
  • ensure that the insurance cover starts from no later than the date of settlement;

Prior securities

40. Confirmation must be obtained from the prior security holders that they have no objection to the standard security being granted in our favour before proceeding with the constitution of our security. At the same time confirmation of the total amount to be secured by the prior security must be obtained and the prior security holders should be asked for confirmation that they are not obliged to make any further advances under the contract to which their security relates.

41. If the amount secured by the prior security differs materially from the figure quoted in our instruction letter we must be advised immediately as this may affect our decision to proceed further.

42. If it is found that there are existing securities affecting the subjects or any other encumbrances to which reference has not been made in our instruction letter, we should be advised immediately.

Other occupiers

43. You must ensure that there are no occupancy rights under the Matrimonial Homes (Family Protection) (Scotland) Act 1981 as amended or the Civil Partnership Act 2004 or any similar such legislation which will have priority over our security. Any deed required for this purpose must be executed prior to settlement.

44. You must ensure that no liferent has been created which could result in our not obtaining vacant possession in the event of enforcing our security against your client.

Indemnity insurance

45. If you identify that the taking out of an indemnity insurance policy is a course required to ensure that the property has a good and marketable title at settlement, you must first tell us and only if we agree should you then take steps to take out suitable insurance. For the avoidance of doubt, this paragraph does not relate to mortgage indemnity insurance. Where indemnity insurance is effected you must approve the terms of the policy on our behalf:

  • the limit of indemnity must meet our requirements;
  • the policy must be effected without cost to us;
  • you must disclose to the insurer all relevant information which you have obtained;
  • you must make sure that the policy does not contain conditions which you know would make it void or prejudice our interests;
  • you must provide a copy of the policy to your client and explain to your client why the policy was effected and that a further policy may be required if there is further lending against the security of the property;
  • you must explain to your client that your client will need to comply with any conditions of the policy and that your client should notify us of any notice or potential claim in respect of the policy; and
  • the policy should always be for our benefit and that of the primary lender and, if possible, for the benefit of your client and any subsequent proprietor or heritable creditor. If your client will not be covered by the policy, you should advise your client of this.

Safeguards

46. You must ensure that you comply with all legislation, regulations and guidance from the Law Society of Scotland in connection with money laundering ("money laundering checks") including without prejudice, the Proceeds of Crime Act 2002 and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. For the avoidance of doubt Scottish Ministers are relying on such compliance in terms of Section 39 of The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.

47. If you are not familiar with the seller's solicitors you must verify that they appear in a legal directory or that they are currently on record with the Law Society of Scotland or other supervisory body as practicing at the address shown on their notepaper.

Reporting back to us

48. Although legal advisers have been instructed to act in respect of our interest in the preparation of the Shared Equity Agreement, Ranking Agreement and provision of the template Standard Security, we are placing full reliance upon you to act for us in a proper and professional manner in accordance with these instructions. This is in order to avoid unnecessary costs arising from duplication of work.

49. Where you are required to report matters to us in terms of these instructions you should at first instance address your correspondence to [insert Administering Agent point of contact details] or such other person as we may notify to you in writing making reference to the subject heading under which the matter to be reported upon falls and setting out clearly why it is necessary to report back to us under the instructions. You should also confirm whether you have reported the matter in similar terms to the primary lender. Whilst we may, on occasion, decide to discuss the matter with the legal advisers acting in other aspects of the transaction all correspondence on matters which you are required under these instructions to report to us should be drafted on the basis that we will not do so and that we will rely purely on your firm's advice and recommendation.

50. The main documentation which requires to be completed by you and submitted to us, via the Administering Agent, comprises your certificate of title, which is discussed in detail below. You should also note, however, to notify the Administering Agent as soon as practicable upon missives being concluded for the purchase of the Property. Please also note that, where your client is aged 60 or over and intends to apply the proceeds of sale of an existing property towards the purchase price for the new property, you will be required to confirm the amount of the free proceeds from the sale of that property. You should notify the Administering Agent of the date of conclusion of missives and the anticipated date of entry. Please notify the Administering Agent if you become aware of a delay in the anticipated date of entry.

The documentation

51. You should accurately complete the title description in the Standard Security and Ranking Agreement (if applicable) forwarded to you by our solicitors. You must also ensure the Standard Security is properly executed prior to settlement and that the names and designations of your client are identical to what is shown in the money laundering checks.

Payment and certificate

52. When you are ready to settle, you should forward to us a certificate of title

('Certificate') in the form set out in Appendix 1 to these Standing Instructions. Upon our being satisfied with the terms of the Certificate we will arrange for the Payment to be released directly to you by BACS transfer. You should be aware that this may still take 3 days to be identified in your records and you should take that into account when planning for Completion.

53. Please note that if any disclosures are to be made these must be of matters which have been promptly notified to and accepted on our behalf in terms of the Instructions. You should also confirm that they have been notified to and fully accepted by the primary lender.

54. You are only authorised to release the Payment when you hold sufficient funds to complete the purchase of the property and pay all tax on the transaction (including land and buildings transaction tax) and registration fees to perfect the security forthwith (including the registration of the Ranking Agreement) as well as make payment to our solicitors in respect of the cost of registration of the Shared Equity Agreement in the Books of Council and Session and obtaining one extract or, if you do not have them, you accept responsibility to pay them yourself. You must hold the Payment on trust for us until settlement. If settlement is delayed, you must return it to us when and how we tell you.

55. You should note that although the Certificate will be addressed to us, we may at some time transfer our interest in the security. In those circumstances, our successors in title to the security and persons deriving title under or through the security will also rely on your Certificate.

56. If, after you have requested the Payment, settlement is delayed you must telephone, or e-mail us immediately after you are aware of the delay and you must inform us of the new date for settlement.

57. You can hold the Payment for five working days before returning it to us. If settlement is delayed for longer than that period, you must return the Payment to us. By applying the Payment towards settlement you shall be deemed to have confirmed that the terms of the Certificate continue to apply as at settlement.

58. If the Payment is not returned within the five working day period, we will assume that settlement has been completed. You must advise the Administering Agent and Scottish Government's solicitors of the fact that the transaction has settled within five working days of settlement having been effected.

After settlement

59. You must forthwith after settlement register our standard security and the Ranking Agreement in the Land Register within the period covered by an appropriate Advance Notice. Before making your application for registration, you must place on your file certified copies of the Land Certificate (if any) or copy title sheet, the disposition or other conveyance in favour of your client, our standard security and any discharge from a previous heritable creditor. Following registration, you must check the copy title sheet for accuracy, and ensure there is no exclusion of indemnity or warranty or other adverse entry.

60. Copies of all title deeds, searches, enquiries, consents, requisitions and documents relating to the property must be held to our order and you must not create or exercise any lien over them.

61. You must only send us documents we tell you to.

Your transaction file

62. For evidential purposes you must keep your file in respect of this transaction for at least six years from the date of the Payment before destroying it. Microfiching or data imaging is suitable compliance with this requirement. It is the practice of some fraudsters to demand the conveyancing file on completion in order to destroy evidence that may later be used against them. It is important to retain these documents to protect our interests.

63. You will duly observe your obligations under the Data Protection Act 2018 and the General Data Protection Regulation (EU) 2016/679, which arise in connection with this transaction and will provide us with any personal data relating to this transaction as we may reasonably require. You undertake to us that you will ensure that at all times each relevant individual has been provided with sufficient information (in an appropriate form) so as to enable fair, transparent and lawful processing of the personal data shared with us in accordance with the Data Protection Act 2018 and the General Data Protection Regulation (EU) 2016/679.

64. Subject to any right of lien or any overriding duty of confidentiality, you should treat documents comprising your file as if they are owned by us and you should not part with them without our consent. You should on request supply certified copies of documents on the file or a certified copy of the microfiche to us.

Payment of fees

65. You must not allow non-payment of fees or outlays to delay the completion and submission of a Land and Buildings Transaction Tax return (with payment of the tax if applicable) and registration of all documents including the Ranking Agreement. We will be responsible for registration of the Shared Equity Agreement but you must place solicitors acting on our behalf in funds at settlement in order to enable registration to take place and one extract to be obtained. The extract will be forwarded to you after registration for retention by your client.

Transmission of funds

66. Where appropriate we will provide you, at the outset of a transaction, with details of a contact name with whom you should liaise in order to obtain funds in time for settlement of the transaction.

67. Please note that the Payment we send you must only be used for the purchase of the property. Therefore you should not release the Payment unless you are sure that it will be used solely for that purpose.

68. Furthermore the Standard Security should be registered in the Land Register as soon as possible after settlement.

Sales log form

69. The sales log form is in two parts. The first part (Part A) relates to details of the property that has been bought and is completed by the Administering Agent. The second part (Part B) gives details about the household which has bought the property and is completed by one of the named purchasers. The Administering Agent will provide a web link to the Sales Log Form to you, and you should ensure that Part B of the form is completed by your client.

Disclosure of incentives

70. In the event that the property is a new build (or is yet to be occupied for the first time in its current form, for example, because of a renovation or conversion) you will provide us with a copy of the duly signed Disclosure of Incentives form required by the primary lender and any changes to it and confirm that a copy of the said form (and any such changes) has been provided to the valuer.

Appendix 1

The Appendix is available to download from the supporting files


Contact

Email: Housingmarkets@gov.scot