Student Accommodation

What you need to know about the Moveable Transactions Act:

The Moveable Transactions (Scotland) Act 2023 (the “MTSA”) came into force on 1 April 2025 and made fundamental, and very positive, changes to the commercial landscape in Scotland.  The MTSA modernised the law relating to the transfer of contractual rights and the creation of security over those rights, and also introduced two new registers.

What changed?

The MTSA made it easier to use contractual rights, such as the right to receive rental income, as security. It sees the introduction of two new registers which have been set up by the Registers of Scotland:

•    the Register of Assignations; and

•    the Register of Statutory Pledges.

It is now possible to assign present and future debts or rental income and registration in the Register of Assignations will effect a transfer of such debt or rental income, without the requirement to give notice to tenants. This is beneficial for both borrowers and lenders, as effectively securing rental income in student accommodation projects has long been a headache. Under the new regime, effective future-proofed security can be granted in an efficient way at the commencement of a transaction without the cost and practical burden of having to grant ongoing security as rights arise.

It should be noted that it is still be possible to give notice (or intimate) an assignation in security to tenants as an alternative to registration in the new register or in addition to such registration.

The MTSA modernised the law in relation to intimations and brought welcome clarity on the rules on electronic notices.

How did this impact student accommodation?

Registration in the Register of Assignations is attractive in a situation where rental income in relation to student accommodations is secured by way of an assignation of rental income for two main reasons:

It allows an assignation of rents to be taken in respect of all future rental income (for example, future leases) without supplemental security being required to be taken as the law previously stood.

It alleviates an administrative burden as it means that notice to large numbers of swiftly changing tenants is not required where the initial assignation has been registered at the Register of Assignations.

The MTSA also extends the potential assets that can be secured by fixed security with the new statutory pledge, which means that any equipment and other valuable assets held within the student accommodation can be effectively secured. Previously, fixed security over such assets was not practically possible as it involved the lender having possession or effective control over those assets. The new statutory pledge can be granted by a variety of entities, unlike a current floating charge (which is only available to companies and LLPs).

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