Rights of crofters and cottars to acquire their subjects

19 Provisions relating to existing loans and heritable securities.

1

Where—

a

a crofter who acquires the site of the dwelling-house on or pertaining to his croft is on the date of the acquisition under any liability to the Secretary of State or Highlands and Islands Enterprise (“HIE”), or

b

a cottar who acquires the site of the dwelling-house on or pertaining to his subject is on the date of the acquisition under any liability to the Secretary of State,

in respect of any loan, the amount outstanding in respect of such liability shall be deemed, as from the last day on which the crofter or cottar was liable to pay rent in respect of that site or on which the cottar was entitled to occupy the site as a cottar, to be a loan by the Secretary of State to the crofter or cottar or, as the case may be, by HIE to the crofter, and the provisions of Schedule 5 to this Act shall apply in relation to any such loan by the Secretary of State and, subject to any necessary modifications, to any such loan by HIE.

2

Any question arising under subsection (1) above as to the day from which the outstanding amount is deemed to be a loan shall be determined by the Land Court.

3

Any rights of HIE created under subsection (1) above shall be postponed to any rights, whensoever constituted, of the Secretary of State under that subsection; and such rights of the Secretary of State and HIE shall have priority over any other loan in respect of which the crofter or the cottar or his nominee as owner of the site of the dwelling-house is under any liability and shall be postponed only to such items as are referred to in heads (i), (ii) and (iii) of paragraph 4(b) of Schedule 9 to the M1Housing (Scotland) Act 1987.

4

Any heritable security which immediately before the execution of a conveyance in pursuance of sections 12 to 18 of this Act burdened the subjects conveyed shall, as from the date of recording of the conveyance in the Register of Sasines or of registration of the interest conveyed in the Land Register of Scotland (as the case may be)—

F1a

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

b

in the case of a conveyance F2... where the heritable security burdened only the subjects conveyed, cease to burden those subjects;

c

in the case of a conveyance F2... where the heritable security also burdened other land, burden only that other land;

and, unless the creditors in right of any such security otherwise agree, the landlord shall pay to them according to their respective rights and preferences any sum paid to him by the crofter or cottar as consideration for the subjects conveyed.