Section 8 of the Matrimonial Homes (Family Protection) (Scotland) Act 1981 addresses how the rights of creditors (like mortgage lenders) interact with a spouse’s right to occupy the matrimonial home. It ensures that a secured lender’s interests in the home are protected even when one spouse who doesn’t own the home has legal occupancy rights (non-entitled spouse). In this article, our Family Law Solicitors in Aberdeen break down what Section 8 means in practice.

What does Section 8 do?

Section 8 is titled “Interests of heritable creditors”, essentially covering mortgages or any secured loans on a matrimonial home. Under the 1981 Act, a “non-entitled spouse” (the spouse who does not own the home) will not prejudice the lender’s rights on a loan by way of their occupancy rights.

Put simply, occupancy rights do not override a secured creditor’s rights. If the mortgage isn’t paid, the lender can still take action, the spouse’s right to occupy the home won’t stop a repossession solely on its own. Section 8 strikes a balance between the non-owner spouse’s right to a home and the creditor’s right to recover the debt. For example, if a husband is the sole owner (entitled spouse) of a family home and takes a mortgage on the matrimonial home, the wife (non-entitled spouse) cannot prevent the bank from enforcing that mortgage just by claiming her right to live in the house.

However, the law also provides a safeguard for such non-entitled spouses who find themselves living in the home while the entitled spouse has left or is not paying the loan. Rather than simply allowing the bank to repossess the home immediately, the Act empowers the court to step in and make orders to protect everyone’s interests. This is where the second part of Section 8 comes into play – allowing the court to require the occupying spouse to cover the payments in certain situations.

When Can a Non-Entitled Spouse Be Ordered to Pay the Mortgage?

Section 8(1) lays out a scenario in which the non-entitled spouse may be compelled by a court order to pay the secured loan (mortgage) instalments that the entitled spouse would normally owe. The court can make such an order on the creditor’s application if the following conditions are met:

• The non-entitled spouse is in occupation of the matrimonial home. In other words, the spouse who isn’t on the title is living in the home (and thus exercising their occupancy right).
• The entitled spouse is not in occupation. The owner spouse has left the home or is not living there at the time.
• There is a secured creditor with an interest in the home. Typically this means there is an outstanding mortgage or secured loan on the property, and a bank or lender is concerned about non-payment.

If all of the above apply, the lender (third party) can ask the court for an order requiring the occupying non-entitled spouse to make the mortgage payments that the entitled spouse should have been making. Essentially, the law is saying: “You’re living in the house, your spouse (who took out the mortgage) isn’t there and isn’t paying, so to protect the house from repossession, you can be ordered to pay the mortgage.”

This provision is important for both sides:

• For the creditor: It ensures the loan payments can continue, even if the original borrower has left, so the creditor isn’t out of pocket due to the spouse’s occupancy right.
• For the non-entitled spouse: It actually helps protect their home from being repossessed. By paying the mortgage, they keep the roof over their head and maintain their occupancy right. In fact, the Act elsewhere gives non-entitled spouses the right to pay housing costs (like mortgage or rent and essential repairs) to secure their occupancy – these are known as subsidiary and consequential rights. Section 8 builds on that by allowing a court order to formalize such payments.

Example: Imagine a scenario where Jane and John are married, and John is the sole owner of the house (the title is in John’s name only). John took out a mortgage on the house. Later, John moves out and stops paying the mortgage, but Jane and the children continue living in the house. Under Section 8, the bank (creditor) can ask the court to order Jane to pay the monthly mortgage instalments since she’s the one benefiting from staying in the home. Jane would then be responsible for those payments going forward, ensuring the mortgage is paid and preventing foreclosure. Jane’s right to stay is thus balanced with the bank’s right to be paid.

It’s worth noting that if the non-entitled spouse does make payments, they do so “as if the entitled spouse” – effectively stepping into the entitled spouse’s shoes for that obligation. They might later have a claim against the entitled spouse for those payments, but the immediate priority is keeping the home secure from the lender’s perspective.

Good Faith Requirement and Spousal Consent

Section 8 doesn’t give carte blanche protection to every creditor in every situation. It imposes certain conditions to ensure lenders act in good faith, especially when dealing with matrimonial homes. The law basically expects a lender to check whether a property is a matrimonial home with a non-entitled spouse before granting a secured loan. If the lender ignores this, they might lose the extra protections of Section 8.

Under subsections (2) and (2A) of Section 8, the section only applies if the creditor, when granting the loan, acted in good faith and was given certain documentation regarding occupancy rights. This typically means one of two things had to happen when the mortgage or security was taken out:

1. Declaration of No Spouse: The spouse who took the loan (the entitled spouse, or “grantor” of the security) provided a signed written declaration stating that there is no non-entitled spouse or that the property was not a matrimonial home with spousal occupancy rights. For example, a person might declare they aren’t married, or that the house isn’t a family home.
2. Spousal Consent or Renunciation: Alternatively, the non-entitled spouse signed a renunciation of occupancy rights or a consent to the loan/security. This means the spouse without title either formally gave up their occupancy rights or agreed to the mortgage being taken out on the home.

If the lender had one of those in hand and was acting honestly (not willfully ignoring a spouse’s rights), then Section 8 will protect the lender’s interests. In practical terms, most banks and lenders in Scotland will require one of these documents before approving a mortgage on a house that could be a matrimonial home. If you buy or re-mortgage a house and you’re married, you’ll usually be asked to declare whether the property is a matrimonial home and, if so, your spouse may need to sign a consent or waiver. This procedure exists to satisfy Section 8’s requirements and to make sure everyone is on notice.

Conversely, if a lender failed to get any declaration or consent and knew (or ought to have known) that the property was a matrimonial home, they may be considered not to have acted in good faith. Essentially, the law’s message to lenders is: “do your due diligence when lending, or you won’t get the full benefit of this section.”

How Section 8 Relates to Other Matrimonial Home Rights

It helps to see Section 8 in the wider context of the Matrimonial Homes Act 1981. The Act’s primary aim is to protect a spouse’s right to live in the family home, even if they aren’t the owner. For instance, Section 1 of the Act gives the non-entitled spouse the right to occupy the matrimonial home. Other sections regulate how those rights are exercised and protected, such as through court orders, exclusion orders (which can bar a spouse from the home for safety reasons), and the subsidiary rights that allow a non-entitled spouse to pay expenses to maintain the home.

Crucially, the Act also addresses what happens when the home is sold or transferred to someone else, and how occupancy rights affect third parties. For example, generally if a home is sold to a third-party purchaser in good faith (and proper declarations or consents were obtained), the non-entitled spouse’s occupancy rights will not override that sale. Similarly, there are rules about one spouse trying to sell or mortgage the home without the other’s consent – typically, the non-entitled spouse’s rights mean such dealings can be set aside if proper consent wasn’t given. (For more on that topic, see our discussion in “Can you sell or mortgage your home without your spouse’s consent?” here.)

Section 8 fits into this scheme by specifically focusing on secured loans (like mortgages) and ensuring that while spouses have strong occupancy rights, these rights do not unfairly impede lenders. It provides a remedy (making the spouse in the home pay) that upholds the overall balance between protecting families and honouring financial obligations.

Key Takeaways of Section 8

• Non-entitled spouses have occupancy rights, but creditors’ security is important: If you live in a house your spouse owns, your right to stay there will not cancel out the bank’s mortgage rights when the bank have acted to ensure everything is above board. The bank can enforce the loan if needed.
• Courts can make you pay the mortgage if you stay and your spouse leaves: To prevent losing the home, the court can order the spouse remaining in the house to pay the mortgage when the owning spouse isn’t paying. This ensures the debt is serviced and your home isn’t repossessed out from under you.
• Lenders must get your consent or a declaration when lending on a matrimonial home: If you’re taking out a loan against a family home, expect to sign a statement that you have no spouse with rights, or have your spouse sign a consent/waiver. This is to meet the Act’s good faith requirements.
• Seek legal advice in complex cases: Situations involving matrimonial homes and loans can get complicated, for instance, if the title is transferred without consent or if a spouse did not disclose your existence to a lender. It’s advisable to consult with a solicitor to understand your position and options.

Conclusion

Section 8 of the Matrimonial Homes (Family Protection) (Scotland) Act 1981 is a crucial protection for lenders that also indirectly protects families by keeping mortgages paid when one spouse leaves. It ensures that family home rights and financial rights are balanced – neither the non-owning spouse nor the creditor should be unfairly disadvantaged. If you are dealing with a matrimonial home and secured loans, whether you’re worried about your rights to stay in the home or concerned about mortgage obligations, it’s wise to get professional legal advice. Our Family Law Solicitors in Aberdeen have extensive experience with occupancy rights and matrimonial home disputes and can guide you through your options. For further reading on related topics, feel free to explore our Reading Room articles on matrimonial home rights and family law, or contact us for personalised advice.

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