Help to Buy Affordable New Build 2018: administrative procedures for agents

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]

Help to Buy (Scotland) Affordable New Build 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 Help to Buy (Scotland) Affordable New Build Scheme 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 has introduced an amendment to the 20 year security rule pursuant to the Housing (Scotland) Act 2014. The amendment will provide Scottish Ministers with a power to remove the right to redeem securities after 20 years for those participating in designated schemes including the Help to Buy (Scotland) Affordable New Build shared equity scheme. Secondary legislation will be introduced in 2018. 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.