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Eviction after bankruptcy or signing a trust deed - Scotland

Eviction after bankruptcy or signing a trust deed - Scotland

So how easy is it to obtain an eviction after bankruptcy or signing a trust deed in Scotland? Over the last few years, we have received a significant number of queries from registered social landlords and private landlords regarding eviction in Scotland when a tenant is sequestrated (declares bankruptcy) or signs a trust deed.

When a person enters into bankruptcy or a trust deed, it becomes impossible to raise court proceedings against them to enforce payment of any debt owed which pre-dates the insolvency. In most cases the rent arrears which exist at the date of sequestration will be written off.

The question is whether tenant eviction proceedings for further rent arrears can be pursued in this situation?

It has always been competent in Scotland to evict someone who has been sequestrated. There are at least two previous reported cases. The eviction ground is that 'rent lawfully due has not been paid' in a sequestration, the rent has clearly 'not been paid'. What you cannot do is obtain decree for payment of any arrears that pre-date the sequestration.

The difficulty is persuading the court that it is reasonable to grant the eviction order. In a case where the tenant has had genuine financial problems which have led to sequestration then it can be difficult to convince a court that the person should also lose their home.

A recent judgement from the English Court of Appeal has emphasised the legitimacy of seeking eviction of a tenant. The Court of Appeal has confirmed that an order for possession based on rent arrears is not a remedy in respect of debt. The court also held that the object of a claim for eviction on the grounds of arrears is not to secure payment of those arrears. It is to restore to the landlord the right to full possession and enjoyment of his property. There is no reason why a bankrupt tenant should be placed in a better position than other tenants and be entitled to greater protection from eviction.

We are happy to provide advice to all organisations who wish to try to pursue eviction action against tenants who have used the insolvency processes.

While it will always be difficult to obtain an eviction order against an insolvent tenant, we are seeing many more cases where, even after sequestration or the granting of a trust deed, the tenant accrues further arrears. In cases like that we would be happy to try to persuade a court that eviction should be granted.

Our team of expert lawyers are on hand to answer any queries you may.

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Written by : Jim Bauld