Inhibition – what is it and can it be effective? Our top ten guide.

An inhibition is a form of diligence which can be used by a creditor – a landlord – to prevent a debtor – a tenant – from selling (and sometimes leasing) their land or property in Scotland until the debt is settled.

The top ten things to know about inhibitions are as follows:-

• You need an extract registered lease.
• It does not transfer ownership of the property or lease to the landlord.
• It is personal and applies only to the inhibited tenant.
• All land and heritable property owned by the tenant is normally covered by an inhibition, meaning the landlord does not need to identify a piece of land or property to successfully inhibit.
• It does not cover land or heritable property obtained by the tenant after the inhibition has taken effect.
• Once registered, if the tenant sells or lets the property or land in breach of the inhibition, the landlord can raise court proceedings to undo the sale or lease.
• An exception to this is where a buyer or tenant acquires the inhibited property in good faith and for adequate consideration.
• In order to remove the inhibition, the tenant is required to make full payment of the debt, any interest due, as well as the legal expenses incurred by the landlord relating to the inhibition.
• It lasts for 5 years and can be renewed after this period has passed.
• It can be an effective form of diligence as it prevents the tenant from disposing of land or property (including sub-letting or assigning) without the landlord's agreement.