Property 10-11

What is a security right?

A right held by a creditor to ensure payment of a debt.

What is the difference between real and personal security?

Real security is a real right in property; personal security (caution) is a personal obligation.

What is caution?

A personal security where a third party guarantees another’s debt.

What is a real security?

A subordinate real right in property.

What is the effect of a real security on transfer of property?

It binds singular successors.

Why are security rights subject to publicity?

To protect third parties and determine ranking.

What principle governs ranking of securities?

Prior tempore potior jure.

What does that principle mean?

Earlier in time ranks ahead.

What is the accessory nature of security?

The security depends on the existence of the debt.

Can a security secure future debts?

Yes, if drafted as “all sums due and to become due”.

What is a third-party security?

Security granted for someone else’s debt.

What case illustrates protection for third-party grantors?

Smith v Bank of Scotland.

What is the difference between proper and functional security?

Proper security is a real security; functional security operates like security but is not one.

Give examples of functional security.

Retention of title, hire purchase, trust.

What is a pledge?

A real security over corporeal moveables requiring possession.

What is required to create a pledge at common law?

Delivery of the goods.

Can incorporeal moveables be pledged at common law?

No.

What Act created the statutory pledge?

Moveable Transactions (Scotland) Act 2023.

What can be subject to a statutory pledge?

Corporeal moveables and certain incorporeal moveables.

How is a statutory pledge constituted?

Registration in the Register of Statutory Pledges.

Can consumers grant statutory pledges?

No.

What is a floating charge?

A security over a company’s fluctuating assets.

Who can grant floating charges?

Companies and certain corporate bodies.

What is the main security right over land?

The standard security.

Which statute created the standard security?

Conveyancing and Feudal Reform (Scotland) Act 1970.

How is a standard security created?

Writing and registration.

What are Form A and Form B?

Prescribed forms for standard securities.

Where are standard conditions found?

Schedule 3 of the 1970 Act.

How do standard securities rank?

Prior tempore potior jure.

What complicates ranking of standard securities?

“All sums” securities.

How is a standard security enforced?

Statutory procedures, including court authority.

Which case restricted repossession without court order?

Royal Bank of Scotland v Wilson.

Which statutes protect homeowners?

Mortgage Rights (Scotland) Act 2001 and Home Owner and Debtor Protection (Scotland) Act 2010.

What duty does a creditor owe on enforcement?

To advertise and obtain the best price.

What is lien?

An involuntary real security arising from possession.

What is required for a lien?

Lawful possession.

What is a special lien?

A lien arising from mutuality of contract.

What is a general lien?

A lien securing a general balance.

Who commonly has a general lien?

Solicitors, bankers, agents.

What is a statutory lien under SOGA?

Seller’s lien for unpaid price.

Which sections of SOGA govern lien?

Sections 39 and 41.

What is landlord’s hypothec?

A tacit security for rent over tenant’s moveables.

What is an involuntary security?

A security arising by law, not agreement.

Give examples of involuntary securities.

Lien, hypothec, diligence.

What is warrandice?

An implied guarantee of title by the transferor.

Is warrandice implied in dispositions?

Yes.

What remedy exists for breach of warrandice in missives?

Rescission or refusal to settle.

What remedy exists for breach of warrandice in a deed?

Damages.

Which case governs damages for breach of warrandice?

Welsh v Russell.

What is absolute warrandice?

A guarantee of ownership.

What is the doctrine of accretion?

Title later acquired passes to prior disponee.

Which case explains judicial eviction?

Clark v Lindale Homes.

What does warrandice “free from encumbrances” cover?

Hidden securities or burdens.

Which case illustrates encumbrance warrandice?

Lothian & Border Farmers v McCutcheon.

What is the pass mark for the exam?

25 correct answers.

How many correct answers are needed for an A?

40.

What replaced negative marking?

Statistical adjustment for guessing.

How are exam questions structured?

D questions first, then A–C questions.

What is a key revision point for SOGA?

Ownership passes when parties intend under s 17.

What are the two elements for common-law transfer of moveables?

Intention and delivery.

What is the difference between public rights of way and access rights?

Rights of way enable travel between public places; access rights allow recreational access.