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Letter of Obligation/Undertaking

The letter of obligation was a mainstay of property transactions in Scotland but with the introduction of advance notices on 8 December 2014 under the Land Registration etc (Scotland) Act 2012 there will be very few occasions where a letter of obligation is still required because it will not be possible to use advance notices, such as:

To distinguish the post 2012 Act letters from the pre 2012 Act letters we refer to the new letters as letters of undertaking.

The PSG have also provided two letters of undertaking dealing with the most commonly encountered situations for delivery of a discharge of a standard security:

The PSG has produced a letter of undertaking dealing with obligations by a Borrower to a Lender immediately following completion of a security transaction, in respect of submission of an LBTT return and payment of any tax due:

All of the previous PSG letters of obligation and the guidance notes have been superseded and may be viewed here