The impact of occupancy rights when buying or selling property
In part 2 we discussed what occupancy rights are and how they protect a non-entitled spouse from being thrown out of their home if their marriage or civil partnership has broken down. In part 3 we will look at the importance of occupancy rights when you are buying and selling property.
Selling property- who has title?
One of the first things your conveyancer will check is whether the property is owned in joint names or in a sole name. The reason we will ask who has title to the property is to check whether there is a non-entitled spouse who may have occupancy rights to the property you are selling.
If a property being sold is in the name of one party but that person is married or has a civil partner, then the spouse or civil partner may have occupancy rights in the property in terms of the Matrimonial Homes (Family Protection) (Scotland) Act 1981 as amended and the Civil Partnership Act 2004 as amended, and it is a requirement of the legislation that the non-entitled spouse has to consent to the sale.
Whilst asking your spouse or civil partner to consent may sound easy, difficulties can arise if the relationship has broken down and the property is being sold as a “fresh start”. The non-entitled spouse could dig their heels in and not consent to the sale which could make life very difficult and may result in the sale of the property falling through. However, most of the time the non-entitled spouse is happy to consent to the sale as they are moving to a new home with their spouse and there is no issues regarding consent.
Purchasing a new home in one name
If you are married or in a civil partnership but you are purchasing a new property and you will be the only person on the title; there are some points that you should be aware of. If you are obtaining a mortgage to purchase the property, your mortgage provider will require a standard security to be registered against the property in the Land Register of Scotland to protect the bank’s financial interest in the property. If you do not make your mortgage payments the bank can step in and repossess the property by calling up the standard security over your property.
The bank needs to be informed whether the property is intended to be purchased as a matrimonial or family home; if the property is going to be used as a matrimonial or family home then the non-entitled spouse has to sign a formal consent to you granting a standard security. If the non-entitled spouse is not willing to sign the consent the lender will not lend the money as any occupancy rights could prevent the lender being able to repossess the property.
MMI Golden Rule: It is extremely important if you are buying or selling a property that you advise us whether you have a spouse or civil partner so that we can deal with the necessary consents as quickly as possible for you.