diff --git a/rm-automation/rm-automation-community-rest-api/src/test/java/org/alfresco/rest/rm/community/files/DeclareAndFileDocumentAsRecordTests.java b/rm-automation/rm-automation-community-rest-api/src/test/java/org/alfresco/rest/rm/community/files/DeclareAndFileDocumentAsRecordTests.java
index cc2646e4a0..db798cf113 100644
--- a/rm-automation/rm-automation-community-rest-api/src/test/java/org/alfresco/rest/rm/community/files/DeclareAndFileDocumentAsRecordTests.java
+++ b/rm-automation/rm-automation-community-rest-api/src/test/java/org/alfresco/rest/rm/community/files/DeclareAndFileDocumentAsRecordTests.java
@@ -87,13 +87,15 @@ public class DeclareAndFileDocumentAsRecordTests extends BaseRMRestTest
     private final static String DESTINATION_PATH_NOT_RECORD_FOLDER_EXC = "Unable to execute create-record action, because the destination path is not a record folder.";
     private final static String CLOSED_RECORD_FOLDER_EXC = "You can't add new items to a closed record folder.";
     private final static String HOLD_NAME = "holdName";
+    private final static String RECORD_FOLDER_NAME_ENCODED = "Folder%20With%20Spaces%20In%20Name";
+    private final static String RECORD_FOLDER_NAME_DECODED = "Folder With Spaces In Name";
 
     private UserModel userFillingPermission, userReadOnlyPermission;
     private SiteModel publicSite;
     private FolderModel testFolder;
     private FileModel testFile;
     private RecordCategory recordCategory;
-    private RecordCategoryChild recordFolder, subcategoryRecordFolder, subCategory, closedRecordFolder;
+    private RecordCategoryChild recordFolder, subcategoryRecordFolder, subCategory, closedRecordFolder, recordFolderWithSpacesInName;
     private UnfiledContainerChild unfiledContainerFolder;
 
     @Autowired
@@ -165,6 +167,7 @@ public class DeclareAndFileDocumentAsRecordTests extends BaseRMRestTest
                 "Unfiled Folder " + getRandomAlphanumeric(), UNFILED_RECORD_FOLDER_TYPE);
         closedRecordFolder = createFolder(recordCategory.getId(), getRandomName("closedRecordFolder"));
         closeFolder(closedRecordFolder.getId());
+        recordFolderWithSpacesInName = createFolder(recordCategory.getId(), RECORD_FOLDER_NAME_DECODED);
 
         STEP("Create rm users with different permissions on the record category");
         userFillingPermission = roleService.createCollaboratorWithRMRoleAndPermission(publicSite, recordCategory, ROLE_RM_POWER_USER, PERMISSION_FILING);
@@ -222,6 +225,27 @@ public class DeclareAndFileDocumentAsRecordTests extends BaseRMRestTest
         assertTrue(hasRecordAspect(testFile), "File should have record aspect");
     }
 
+    /**
+     * Given I am calling the "declare as record" action
+     * And I provide a valid encoded record folder name in the location parameter
+     * When I execute the action
+     * Then the document is declared as a record
+     * And is filed to the record folder specified
+     */
+    @Test
+    public void declareAndFileToValidEncodedLocationUsingActionsAPI() throws Exception
+    {
+        STEP("Declare document as record with an encoded location parameter value");
+        getRestAPIFactory().getActionsAPI(userFillingPermission).declareAndFile(testFile,
+            Utility.buildPath(recordCategory.getName(), RECORD_FOLDER_NAME_ENCODED));
+
+        STEP("Verify the declared record is placed in the record folder");
+        assertTrue(isMatchingRecordInRecordFolder(testFile, recordFolderWithSpacesInName), "Record should be filed to record folder");
+
+        STEP("Verify the document in collaboration site is now a record");
+        assertTrue(hasRecordAspect(testFile), "File should have record aspect");
+    }
+
     /**
      * Given I am calling the "declare as record" action
      * And I provide an invalid record folder in the location parameter
diff --git a/rm-community/rm-community-repo/source/java/org/alfresco/module/org_alfresco_module_rm/action/dm/CreateRecordAction.java b/rm-community/rm-community-repo/source/java/org/alfresco/module/org_alfresco_module_rm/action/dm/CreateRecordAction.java
index 8684092a73..f668e41e28 100644
--- a/rm-community/rm-community-repo/source/java/org/alfresco/module/org_alfresco_module_rm/action/dm/CreateRecordAction.java
+++ b/rm-community/rm-community-repo/source/java/org/alfresco/module/org_alfresco_module_rm/action/dm/CreateRecordAction.java
@@ -27,6 +27,8 @@
 
 package org.alfresco.module.org_alfresco_module_rm.action.dm;
 
+import java.io.UnsupportedEncodingException;
+import java.net.URLDecoder;
 import java.util.Arrays;
 import java.util.List;
 
@@ -171,6 +173,8 @@ public class CreateRecordAction extends AuditableActionExecuterAbstractBase
      */
     private NodeRef resolvePath(NodeRef filePlan, final String pathParameter)
     {
+        String decodedPathParameter = decode(pathParameter);
+
         NodeRef destinationFolder;
 
         if (filePlan == null)
@@ -178,7 +182,7 @@ public class CreateRecordAction extends AuditableActionExecuterAbstractBase
             filePlan = getDefaultFilePlan();
         }
 
-        final String[] pathElementsArray = StringUtils.tokenizeToStringArray(pathParameter, "/", false, true);
+        final String[] pathElementsArray = StringUtils.tokenizeToStringArray(decodedPathParameter, "/", false, true);
         if ((pathElementsArray != null) && (pathElementsArray.length > 0))
         {
             destinationFolder = resolvePath(filePlan, Arrays.asList(pathElementsArray));
@@ -259,4 +263,24 @@ public class CreateRecordAction extends AuditableActionExecuterAbstractBase
         }
         return filePlan;
     }
+
+    /**
+     * Helper method to decode path string
+     *
+     * @param pathParameter The path string to be decoded
+     * @return The decoded path string
+     */
+    private String decode(String pathParameter)
+    {
+        String decodedPathParameter;
+        try
+        {
+            decodedPathParameter = URLDecoder.decode(pathParameter, "UTF-8");
+        }
+        catch (UnsupportedEncodingException ex)
+        {
+            throw new AlfrescoRuntimeException("Unable to execute " + NAME + " action, because the destination path could not be decoded.");
+        }
+        return decodedPathParameter;
+    }
 }