Registering & Discharging Notices of Potential Liability for Costs
October 2017

For over a decade Notices of Potential Liability for Costs (NPLCs) have been a useful tool for property factor and housing association firms to recover common maintenance costs and debts due by owners or occupiers for factoring costs.

We review the introduction of the NPLC (Discharge Notice) Order in recent years and how it has impacted the discharge process so you can ensure your company is taking the correct steps when recovering factoring debt.

Where the three year expiration period of a NPLC has not elapsed but the outstanding debt has been settled it is possible to discharge the notice. Prior to the 2014 Notice of Potential Liability for Costs (Discharge Notice) (Scotland) Order the steps to discharge a NPLC were not entirely clear. Usually a ‘Letter of Satisfaction’ from the factors or the party who registered the NPLC confirming that the outstanding sum had been paid would have been adequate for the title to be amended by the keeper of the register.

However under the recent order ‘Letters of Satisfaction’ are no longer accepted. The Notice of Potential Liability for Costs (Discharge Notice) (Scotland) Order 2014 requires the form of two new discharge notices, which may be registered against a property which previously had a NPLC registered against it. The two forms of Notice of Discharge are as follows:

By instructing a debt collection agency such as ourselves our systems have been designed to automate much of the routine and take the stresses out of the process. Clients can use our free online access service to instruct us to prepare the necessary discharge. Formal instructions are then issued to our panel of solicitors the same working day and we would expect them to have the discharge registered and the clear title reported within 30 working days. That said, an express service can be utilised if a quicker solution is required.

• Notice of Discharge under Section 10A (3A) of the Title Conditions (Scotland) Act 2003, which takes the form set out in Schedule 1 or
• Notice of Discharge under Section 13 (3A) of the Tenements (Scotland) Act 2004 taking the form set out in Schedule 2.

To complete the discharge process the debts detailed in the NPLC will need to have been repaid and the person who registered the original notice must consent to and sign the Notice of Discharge. Following submission of the Notice of Discharge, the entry for the NPLC will be removed from the title sheet by the keeper.

By instructing a debt collection agency such as ourselves our systems have been designed to automate much of the routine and take the stresses out of the process. Clients can use our free online access service to instruct us to prepare the necessary discharge. Formal instructions are then issued to our panel of solicitors the same working day and we would expect them to have the discharge registered and the clear title reported within 30 working days. That said, an express service can be utilised if a quicker solution is required.