What is an Inhibition?

An Inhibition in Scotland is a form of diligence, which means a formal, legal debt recovery tool.

It allows a creditor to stop you from selling your home, or re-mortgaging it, without paying them.  It does not give them the right to sell your home.

It is a preventative diligence, in that it prevents you from doing something with your assets, such as selling land or remortgaging your home. 

How do Inhibitions Work?

How an Inhibition works is it is made against an individual, not a specific property, and registered in the Register of Inhibitions.

It affects all property that are heritable, such as land and buildings, but does not effect property that can be subject to an Attachment Order

The way an Inhibition works is anyone who is buying a building or land in Scotland has to have their solicitor check the Register of Inhibitions (see here for more information) before any sale can go through.

If the person who is selling the land or building has an Inhibition registered against them, the buyers solicitor will not proceed with the sale, as to do so could put at risk the buyer’s title to the property. 

The person who has the Inhibition registered against them, therefore, has to agree with the creditor who registered it that they will be paid off in full before the sale of the property completes.

Who can use Inhibitions?

Inhibitions can be registered by any Creditor who has obtained a decree or a Document of Debt against someone.

A Decree is a Court Order and has to contain an order for payment of money for an Inhibition to be registered.

Alternatively the Court Order may contain alternative orders, such as the return of a car or failing which, the payment of money.

Where a decree contains two options like that, an Inhibition can still be registered, but on the return of the car, or the payment of the money, the lender is obliged to recall the Inhibition.

Inhibitions can also be registered with a Document of Debt, which may be a legal agreement that has been registered for preservation and execution in the Books of Council and Session. This means the case never calls in Court.

The process used to register this type of Inhibition is called Summary Diligence and can be used for credit union loans, landlord leases and landlord guarantees.

It cannot be used for consumer credit debts that are regulated by the Consumer Credit Act 1974.

Summary Warrants and Inhibitions 

Where Local Authorities or HMRC use the Summary Warrant procedure to collect Council Tax or other taxes, they cannot use Inhibitions.

This is because Inhibitions are a type of land diligence and land diligence cannot be used with the Summary Warrant procedure.

This does not prevent Local Authorities or HMRC using Inhibitions altogether, it just means if they want to, they need to raise a normal court action, like other creditors do, and get a Decree.

Registering an Inhibition

When a Creditor has a Court Order or Document of Debt, they do not need to serve a Charge for Payment before using an Inhibition.

They only need to serve a Notice of Inhibition to the Consumer to say they intend to register the Inhibition in the Register of Inhibitions. After 21 days the Inhibitions becomes effective.

All property such as land and buildings owned by the Consumer, on the date the Notice is served, is caught by the Inhibition.

What Powers does a Inhibition give a Creditor?

A Creditor that register an Inhibition has the power to stop the person that owes them money from:

• Selling their property;
• Securing more debt over their property, (including re-mortgaging it);
• Gifting their property to someone else.

It does not give the Creditor the right to force the sale of the property or force the owner to sell it.

Where the property is in joint ownership, the Inhibition only affects the owner who has the Inhibition registered against them.

In practice this does not mean the other owner can re-mortgage, but does mean if the property is sold, the debt owed to the Inhibiting Creditor, can only be paid from the debtor’s share of the equity.

The other owner must be paid their money in full.

How long does an Inhibition last?

Inhibitions do not last until a debt is paid off, although on the payment of a debt, they should be removed by the creditor.

Inhibitions automatically expire after five years.

However, the Inhibiting Creditor can re-register the Inhibition after the five years.

However, if the Inhibiting Creditor forgets to re-register the Inhibition, the owner of the property can sell it unencumbered by the Inhibition.

How does the Debt Arrangement Scheme affect Inhibitions?

The rules governing the Debt Arrangement Scheme are very clear.

Once someone is in a Debt Payment Programme, it is not competent for a creditor to execute diligence.

Section 4 (2)

It is not competent….
(b) subject to subsection (2A),other than under subsection (2A), to commence or execute any diligence to enforce payment of…..any debt owed by a debtor who has debts which are being paid under an approved debt payment programme.

Debt Arrangement and Attachment (Scotland) Act 2002

This includes registering an Inhibition, although some Creditors argue it does not apply to Inhibitions.

It does not, however, prevent a Creditor relying on an Inhibition that was registered prior to the Debt Payment Programme being approved.

Where there are doubts, legal advice should be sought.

Inhibitions and Bankruptcy and Protected Trust Deeds

A debt that has been secured by an Inhibition is treated no different from any other unsecured debt in a Sequestration or a Protected Trust Deed.

When the debtor’s liability for the debt is discharged at the end of the Protected Trust Deed or Sequestration, it should be removed by the Inhibiting Creditor.

Readers Questions

  1. Aycha

    What if someone has not followed the process to obtain an inhibition against you? Can you dispute that inhibition? How would do you do that?
    If someone hasn’t gotten a Decree nor a Document of Debt, nor Court order against you but has registered an inhibition against you, is that wrongful?
    Can you apply for it to be removed?

    1. Scottish Adviser Post author

      Hi

      I will be honest. I am a bit confused how this will have been possible, as I would expect the Register of Inhibitions and Adjudications to carry out these checks before any inhibition was registered. It is a serious restriction to place on someone’s property and restricts their ability to deal with their property freely.

      Possible reasons why an Inhibition may be registered are those you mentioned if a decree, or equivalent has been obtained. Document of debt can have a wider meaning, so it may be a debt that has been enforced using Summary Diligence. This pertains to certain types of non-consumer credit debts, where when you are entering an agreement the other party requires you to agree to allow them to register the debt for preservation in the Books of Council and Session. When you default they can extract the agreement and enforce it, like a court order, using Diligence such as an Inhibition.

      Alternatively, you may still have an Inhibition registered if you have previously went Bankrupt or granted a Protected Trust Deed.

      You can also get what is called an Inhibition on the Dependence, which is when a Lender registers an Inhibition in anticipation of the fact they may get a decree against you, not that they have one. This is usually done as a court action is being raised against you and before the action is decided. The authority of the Court to do it is required, but the Court can grant that order, if they think there is a risk you may dispose of assets prior to the action being decided.

      I would contact the Register of Inhibitions and Adjudications, they may be able to give you more information. Otherwise, you may have to contact a Solicitor. If one has been registered and wrongly, I believe that may require an action of reduction to have it removed or possibly an action for Wrongful Diligence. A Solicitor will be able to advise on what is the correct course of action.

  2. Brian

    I just want to thank you for the wealth of information you provide, it is priceless. I hope you don’t mind please providing some information on the following;

    1. My wife has an inhibition order on our property, it is only in her name, we are still married and live together. My understanding is that only half the proceeds from the sale will be granted to the inhibition order as the mortgage in jointly in both our names. Does that then mean that the Creditor can refuse the sale of the property as the amount from her proceeds will not cover the full outstanding debt amount owed by her?
    2. I know an inhibition order has to be renewed by the creditor every 5 years as it expires. However, when I spoke with the register of inhibition order Scotland yesterday to get information about the order, I am sure she mentioned that whilst the order can be renewed every 5 years, the creditor can only renew the order within a total of 12 years before they unable to renew it again. However this contradicts information I see online that to renew the inhibition order every 5 years is unlimited. Can you confirm this for me please?

    Many thanks.

    1. Scottish Adviser Post author

      Hi Brian

      Thank you for getting in touch.

      In relation to your two questions.

      An inhibiting creditor can refuse the sale, even if the debt is owed by one owner. Basically, they need to give their permission for the sale. Even if your wives share of the equity is not enough to pay the debt in full, but will partially pay it, they may allow the sale and get something and seek a repayment plan for the rest.

      In relation to your second question, I obviously don’t want to be contradicting the Register of Inhibitions Office, however, I question whether what they have told you is correct.

      My understanding is that an Inhibition can be renewed every five years whilst the warrant to register it remains in force. Basically this is the court order. Court Orders do not prescribe, which basically means become unenforceable, until they have existed for more than 20 years and there has been no interruption of that 20 years by a relevant claim or relevant acknowledgement. This means the creditor has not taken any action, such as a wage arrestment, bank arrestment or registered and inhibition which would constitute a relevant claim; and the debtor has not written to acknowledge the debt or made any payments (relevant acknowledgement).

      So, my understanding is there is no 12 year limitation per se. My understanding is the limitation is on how long the warrant or right to enforce the court order continues.

      However, the 12 years number is a familiar one and is making me think of English law. The English equivalent of the Scottish rules of prescription are contained in the Limitations Act 1980. The period in those laws are 12 years rather than 20 years. I am therefore, wondering if the debt has been constituted by not a Scottish Court Order, but an English one (a County Court Judgement – CCJ) and the period is 12 years.

      To be honest I cannot be certain, so I won’t pretend. I would generally assume the staff of the Register’s Office would know more than myself, so I don’t want to say they are wrong. I have looked into this a bit since you sent me your query, but couldn’t find anything relating to the 12 years. However, that is not to say there is not something, there. I find it strange a member of staff working in that office would be wrong, so I am reluctant to say they are, but it is a first I have heard of this.

      This may be something you may need to seek further advice on.

  3. Linda

    Hi there
    My husband and I are separated, and I was in the process of remortgaging the family home so I have sole ownership on the title deeds.
    Whilst my remortgage application was going through I received ( at my address for my husband, who no longer lives here) a letter informing him that a schedule of inhibition had been issued against him, due to a large debt that I knew nothing about
    I informed him of this ,and he duly paid off the debt ( he told me and provided reference details for the payment)
    Now my solicitor tells me that if he has paid it it still not showing as being discharged, and therefore my mortgage application is delayed.

    I was told by my solicitor that my husband needed to get a solicitor to register the discharge, and having passed on this info to my husband, his solicitor subsequently told him that it’s not his responsibility to register the dish charge.

    I am now totally confused as to who’s responsible for this, and all the while my remortgage application is being delayed.

    Please If you can advise me on this matter, I will be most great full

    1. Scottish Adviser Post author

      Hi Linda

      I think what your Solicitor is telling you is correct. Normally when a Inhibition is in place, the Lender will agree to it being removed on payment of the debt, but they won’t normally agree to incurring the cost of doing that and so would expect the person to agree to pay that cost.

      I would say your husband has to go back to the Lender and ask for the Inhibition to be removed, as the debt has now been paid, but I would fully expect him to be charged the cost of doing it. They may even say he should get a Solicitor to do it and they will agree to it. There basically is work involved in removing an inhibition and the person that does it normally wants paid before they do it, or want you to incur the costs of arranging it.

      In the meantime, it will prevent the property being re-mortgaged, as that is what it is designed to do and until it is removed, you are stuck waiting.

      Obviously, I don’t know your situation, but I am assuming your husband may be waiting for you to re-mortgage the property so he can get paid. This won’t happen to the inhibition is lifted and ultimately, whoever does it, there will be a cost and your husband will have to pay that cost. Its not sufficient to just pay off the debt, which he has done, he has to arrange for the Inhibition to be lifted.

  4. Derek

    Hi there,

    I have recently applied to remortgage, but it has come back I have a charge on the property. This was in March 2005, I have no idea what it is for but does it not expire after 12years in Scotland?

    1. Scottish Adviser Post author

      Hi Derek

      It depends on what type of charge it is.

      It is most likely an Inhibition, which is used to secure a debt where the person who is owed the money obtained a court order against you.

      They can’t use this to make you sell you home, but you cannot remortgage or sell your home without paying it.

      Inhibitions actually expire after 5 years, but they can be renewed for another 5 years and so on.

      There are possibly other less common things it could be, so it is best to get a solicitor to do a search on the Register of Inhibitions and Adjudications for you.

  5. Edward

    Hi

    Would like abit of advice a notice of inhibition was placed on my property in 2016, but the case aas also dropped in 2016.

    I went to sell my property recently but noticed on my deeds the inhibition is still on my property and cannot sell my property.

    Since march I have been asking to get it removed, but the person who put it on my title deeds is not replying to me.

    Is there anything i can do to get it off myself?

    1. Scottish Adviser Post author

      Hi Edward

      It sounds like a inhibition on the dependence, if the case was dropped.

      Basically there are two types of Inhibitions. One is an Inhibition on the Dependence and an Inhibition in Execution.

      The first you can apply to the Court to register when you raise a court action against someone. This is to secure the assets of the person, incase they try and dispose of them before the Court action is concluded.

      The Second, in Execution, is when you get a court order against someone and lasts 5 years, but you can renew it.

      If you say the court action was abandoned on 2016, this is what make me think it is the first of the two.

      If this is the case, you should be able to request it be recalled if the other Party won’t, but you will probably require a solicitor to do so and there will be a cost. It may be worth speaking to the solicitor you were going to sell your home about this.

      You may also may wish to obtain a credit check (check your credit report) and make sure no one did obtain a court order against you. If they did and this Inhibition is of the latter type, then they will not lift it until the debt is paid or your solicitor gives an undertaking that when he receives the funds from the sale of the property he will repay it. He will want an irrevocable mandate authorising him to do this, from you first though.

      As you can imagine, if it is the first type of inhibition, without the agreement of the other party, it won’t be possible to get this lifted without a court order.

  6. Kerry

    Can you apply for an inhibition order against property that is held on trust for a partnership?

    1. Scottish Adviser Post author

      Hi Kerry

      It is likely some legal advice is required for this.

      Inhibitions are personal and are, therefore, over the person not the property. They affect all heritable (houses, land etc.) that is held by the person.

      The type of person they can be registered against are natural or legal persons. Legal persons include partnerships and trusts.

      It, therefore, depends on who the court order is against (and it is worth remembering partners can be held liable for partnership debts, unless it is a Limited Liability Partnership) and whose name the property is registered under on the title deeds.

  7. Aneka

    I have a joint mortgage with my son who is the sole owner on the title deeds (sole owner proprietor). He got family help to pay the deposit so the mortgage is 50% of the property value. Stupidly there is no legal agreement that protects me in this situation. I am now paying the mortgage. He is not working and is making illegal life choices that I could never ever foreseen (total personality and attitude change and using the property for the illegal sale of substances). I have tried many many times to help him emotionally and financially but he is not cooperating (has not paid a penny to his debts in over a year and I can no longer help).

    Legal advice is that I can stop paying the mortgage which will lead to repossession of my son’s home (in which case I would not see him homeless) OR take court action to recover the mortgage payments and then lodge an inhibition.

    I have no income so the mortgage payments are eating into my small savings. I do not own a property.
    My son is in the process of applying for a DAS (he claims he hasn’t included the mortgage in it).

    My questions are:
    1) How much is a court order and inhibition likely to cost me? A rough estimate please.
    2) If I am continually paying the mortgage and costs continue to rise will that be reflected in the inhibition? Say he owes me £10,000 in mortgage payments at the time of the inhibition but in four years time owes me £20,000 will that be reflected in the inhibition?
    3) If my son gets a DAS will that affect my ability to get the inhibition? He claims he is not including the mortgage in his DAS.
    4) Is there anything else I should be aware of?

    Any information or advice would greatly ease my stress and ability to choose the right course of action. Many thanks.

    1. Scottish Adviser Post author

      Hi Aneka

      Unfortunately, this is not an easy situation and I cannot give you personalised advice. However, I can give you some basic information.

      First, I could not say how much a court order and an inhibition would cost you, but a lawyer should be able to give you an estimate, but costs can vary if the action is defended. There is also no guarantee you will succeed in getting a court order. Nothing is a certainty.

      Also, Inhibitions don’t allow you to sell the property, only to recover what you are owed if your Son tries to sell or remortgage it.

      Also, the Inhibition will only cover the amount the decree is for. It does not increase if the debt increases, though the amount should increase by 8% per annum with the judicial rate of interest.

      Arguably, if your Son’s DAS is approved before you register the Inhibition, then there is an argument you cannot register it if your debt is included.

      If your debt is not included in the Debt Arrangement Scheme, then arguably you could still apply the Inhibition, although your Son could try and include your debt into the DAS through a variation.

      You can only include mortgage arrears into a DAS, so it there are no arrears, he won’t have included it. If he has, then at least the DAS will be making payments to them.

      As far as anything else goes, I would say you need to seek legal advice. Not paying the mortgage may be the only solution, as it may make your Son face up to his responsibilities if he is at risk of losing his home. There also is substantial equity in his home, so this would allow you the chance to recover some of what you are owed.
      He also may lose his home, but that doesn’t mean he will become homeless. He may get social housing or a private tenancy. Its his decision if he doesn’t want to pay the mortgage.
      On a positive note he is entering the Debt Arrangement Scheme to deal with his other debts, so this is responsible and means he is dealing with them. That is a positive sign. Maybe you should say to him if he is serious about the DAS he has to include in his expenditure a provision that allows him to pay his mortgage. That is standard good practice anyway.
      Finally, you should maybe try to speak to him again or if not you, is there another family member who can. Its not uncommon for children to not understand their parent’s financial circumstances.
      If he is used to you just paying everything, he might assume you can just keep doing this to help him.
      Explain your situation to him and don’t give him the choice, tell him you cannot pay the mortgage anymore and ask he speaks to his debt adviser about how much he has to pay, as otherwise he may lose the home.
      If you cannot do it and no-one else can, get a lawyer to send him a letter. That should not cost too much.
      I wish you all the best.

      1. Aneka

        Many many thanks. I think I will sleep better after this.

  8. Dominika

    Hi,
    How many times , after expiring, can inhibition be placed on the the same property?

    1. Scottish Adviser Post author

      Hi Dominika

      I am not aware of any limit to the number of renewals that can be made, providing the debt it is trying to safeguard still exists.

      This is where the Law of Prescription becomes relevant, and as the debts protected by an inhibition will probably have a court order enforcing them, the 20 year prescription rule will apply, and that of course can start running again everytime the debt is relevantly acknowledged or a relevant claim is made.

      One thing though, there can sometimes be gaps between when inhibitions expire and can be renewed, if the creditor is not attentive to the expiry date every five years. If this happens, no inhibition will affect the property.

  9. Debs

    Hi

    My factors have placed an Inhibition on me which I found out about today for the first time because I was due to complete the sale of my property next week. My lawyer has said this now can’t go ahead as there isn’t any profit to pay off the debt. They sent this to an old address and I found out about it today. I don’t have the money to pay it. If I am sequestrated does the inhibition disappear as part of the sequestration?

    1. Scottish Adviser Post author

      Hi Debs

      Inhibitions are personal, so what this means is they affect your ability to deal with any heritable property you have, such as a flat.

      This mean you cannot remortgage, sell or gift the property without getting permission from the inhibiting creditor, who can prevent you doing any of these things without their permission or until the debt is paid.

      Inhibitions last 5 years, but can be renewed by the Creditor.

      You don’t say how much profit there will be from the sale of the property. If there may be some, even if not enough to pay the debt in full, they may agree to the sale if they are going to receive a partial payment from the sale. They will only agree to this if you give your solicitor an irrevocable mandate that allows him to pay any profit over to them.

      This would mean there is still a debt to be paid, but you could then offer to repay them this by instalments afterwards.

      If there is not likely to be any profit to pay them, they will be less likely to allow the sale, but equally if they think you are just going to stop paying the mortgage and let the mortgage provider force the sale of the property and then go bankrupt for any debt left over, getting even a committement to enter a repayment plan with them may be better than nothing.

      If you do go bankrupt, Inhibition debts no longer get any priority over other debts, such as credit cards and loans, so the debt is included in the bankruptcy and your liability for it is discharged when your discharged for other debts. Inhibiting Creditors can make a claim in the bankruptcy like any other ordinary creditoe, but are effectively treated the same. So if they get 3p in the £, so does the inhibiting creditor.

      This is important as if you go bankrupt, your Trustee in Bankruptcy has a choice. They can sell you property themselves if there is any profit to be made, particularly if you don’t object and the proceeds will go to them. They then pay off any mortgage, the costs of the sale and then can use the sum to pay their fees. If there is any money left this goes to the Creditors, but the Inhibiting Creditor doesn’t get paid first over other debts like credit cards and loans, they just get a share.

      You can see, therefore, even if there is some profit to be made from the sale of the home, its probably in their interests to agree to the sale, as if they don’t, you could go bankrupt and they will unlikely receive much if anything.

      For you it may help you avoid going bankrupt.

      It is entirely up them, however, and they can be what you may deem to be unreasonable if they want. However, it may be a letter to them from your solicitor explaining if they don’t want to come to an arrangement you will go bankrupt, and how this would not be in their interests, will result in a change of heart.

      If not, and you don’t want to keep the property you may have to go bankrupt. If your Trustee in Bankruptcy does not want to sell the property, which he may not if he doesn’t think it would be profitable enough, then the only option is to look at Voluntarily Surrendering your property to the mortgage provider to let them sell it.

      You should seek advice on going bankrupt before you go any further and on Voluntarily Surrendering your property to your Mortgage Provider.

      You can get free advice here if your Solicitor cannot provide it.

  10. Chris

    Hi how much would it be to place an inhibition order on a company who owe me money for a vehicle

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