Guidance to the Mortgage Repossessions (Protection
of Tenants etc) Act 2010
www.communities.gov.uk
Guidance to the Mortgage Repossessions
(Protection of Tenants etc) Act 2010
October 2010
Department for Communities and Local Government
Department for Communities and Local Government
Eland House
Bressenden Place
London
SW1E 5DU
Telephone: 030 3444 0000
Website: www.communities.gov.uk
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October 2010
ISBN: 978 1 4098 2574 6
Disclaimer
This guidance does not give an authoritative interpretation of the law; only the
courts can do that. Nor does it cover all circumstances that tenants may be
experiencing. Tenants who are in doubt about their legal rights or obligations
should seek information from a reputable advice agency, such as Shelter, or the
Citizens Advice Bureau, or seek advice from a solicitor or housing law centre. Help
with all or part of the cost of legal advice may be available under the Legal Aid
scheme, depending on individual personal circumstances.
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Contents
1. What is this guidance about? 5
2. Who should read this guidance? 6
3. Policy background 6
4. The legislation explained 7
5. Commencing possession proceedings 8
6. The possession hearing 9
7. After the possession hearing 13
8. The application hearing 15
9. Related and relevant legislation 16
10. Questions and answers 17
Annex A: Mortgage Repossessions (Protection of Tenants etc) Act 2010 20
Annex B: The Dwelling Houses (Execution of Possession Orders by
Mortgagees) Regulations 2010 24
Annex C: Changes to the Civil Procedure Rules 29
Annex D: Relevant Court forms 30
Form N5: Claim for Possession of Property
Form N11M: Defence Claim form for Mortgaged Residential
Premises
Form N325: Warrant for Possession of Land
Form N244: Application Notice
Annex E: Lenders’ step-by-step checklist 43
Annex F: Contact details (implementation partners and advice agencies) 44
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1. What is this guidance about?
1.1 Information on rights/responsibilities under the Act
This guidance document aims to inform lenders, landlords and tenants of their
rights and responsibilities under the Mortgage Repossessions (Protection of
Tenants etc) Act 2010 (Annex A), as well as providing an explanation of how it is
envisaged that the legislation will operate. The Act and its supporting regulations
come into effect on 1
October 2010 within England and Wales.
1.2 The Mortgage Possessions (Protection of Tenants etc) Act 2010
The Act provides unauthorised tenants with the right to request a delay to eviction
of up to two months if their landlord (the mortgage-holder) falls into arrears with
their mortgage payments and the lender (the mortgagee) commences possession
proceedings. This puts an unauthorised tenant on a level playing field with
‘authorised’ tenants holding an assured shorthold tenancy. It is not intended to
grant ‘unauthorised’ tenants any greater rights than they would have if they were
‘authorised’ tenants.
1.3 Meaning of ‘unauthorised tenants’/‘unauthorised tenancy’
The term ‘unauthorised tenants’ refers to those tenants who are renting a
mortgaged residential property from a landlord who has let the property without the
knowledge or consent of the lender, and in contravention of the mortgage
agreement. Such a tenancy is known as an ‘unauthorised tenancy’ because the
tenancy agreement is unenforceable against the lender.
When letting a mortgaged property on which there is a residential mortgage, the
borrower should obtain consent from their lender. Tenants whose landlord has
such consent are ‘authorised’ tenants and this legislation does not apply to them
as they have comparable existing rights.
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2. Who should read this guidance?
2.1 Who should read this guidance?
This guidance document should be read by:
unauthorised tenants, who find that the property they are renting is subject
to possession proceedings brought by their landlord’s lender
lenders
landlords and landlord bodies
housing departments of local authorities
legal professionals and solicitors acting for lenders or tenants
solicitors specialising in housing law for tenants and landlords and
advice bodies
Given the audience, the guidance is necessarily broad in scope and not all parts of
it will be relevant to all parties.
2.2 Extent of legislation and guidance
This guidance and the legislation do not apply to:
tenants in any form of social housing
authorised tenants of landlords who hold buy-to-let mortgages with consent
to let as part of their mortgage terms and conditions
authorised tenants whose landlord’s lender has given consent to let by
another means
owner-occupiers
lodgers or other occupiers under licence
3. Policy background
3.1 Rationale for legislative intervention
Prior to the Mortgage Repossessions (Protection of Tenants etc) Act 2010,
unauthorised tenants could be evicted from their homes at very short notice
because their landlord had fallen into arrears with their mortgage payments and
the lender had started proceedings for possession of the property. The tenant had
no legal rights to be heard in the proceedings as the tenant was ‘unauthorised’ and
had no rights against the lender as the tenancy was unauthorised.
The issue was brought to the Government’s attention by the housing charity sector.
The sector provided many examples of eviction at short notice and the heightened
distress and disruption it caused to a variety of households. Due to the hidden
nature of the problem, it is not possible to give an accurate picture of how many
tenants are affected. However the impact assessment supporting the legislation
estimates the numbers to be 5,000 – 20,000 in a ten-year time scale between 2010
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and 2020. Alternatives to legislation, such as a voluntary code of conduct were
considered with partners from both the advice sector and lenders, however the
shared conclusion was that legislation was the only way to address the gap in legal
protection for tenants.
The purpose of the Act is to ensure that tenants of landlords whose properties are
repossessed by their lenders do not suffer eviction at short notice. This has been
achieved by giving tenants a statutory right to request that the date that the lender
may take possession is delayed by up to two months to give the tenant time to find
an alternative place to live once they are aware that a possession is likely. It does
not prevent the possession but delays it. The legislation has been introduced to
provide protection and give unauthorised tenants the same rights of notice as
authorised tenants on an assured shorthold tenancy while causing minimum delay
to lenders and borrowers.
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In order to make these new rights effective, the tenant must have notice that a
lender has, or intends to, obtain a warrant for possession. The Act requires the
lender to now issue a notice (Notice of Execution of Possession Order) to all
properties where it plans to enforce a possession order via a warrant.
4. The legislation explained
4.1 What does the Act achieve?
The Act tackles the problem of tenants being evicted at short notice when their
home is repossessed by their landlord's lender. The Act protects those tenants
whose tenancies are not binding on their landlord’s lender, (defined by the Act as
‘unauthorised tenants’) by giving them the opportunity to request a delay of the
date of possession of up to two months. The unauthorised tenant may make a
request to the lender and if the lender refuses or does not respond to the request,
the tenant can make an application to the court. Applications can be made at the
initial possession hearing, or, if that opportunity is missed, when the lender seeks
to enforce a possession order. Occupiers are already notified of possession
proceedings and the new legislation requires the lender to notify the occupier if,
and when, they intend to enforce the possession by seeking a warrant of
possession.
The Act:
gives unauthorised tenants the right to be heard at a possession hearing
gives the court the power to delay the date for delivery of possession for up
to two months, on application by the tenant
requires the lender to give notice, at the property, of the proposed
enforcement of the possession order. (This requirement will apply to all
residential properties subject to possessions proceedings, it is not restricted
to 'unauthorised' tenancies)
gives lenders the right to dispute tenancy claims
1
Lender Repossession of residential property: protection of tenants consultation: Department for
Communities and Local Government, August 2009
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gives lenders the right to receive income from the tenant during the
intervening period before possession
gives tenants the right to request that the lender delay the possession for up
to two months, with a right to apply to the court upon refusal
gives courts the power to delay an order for enforcement of possession (i.e.
to stay or suspend the execution of a possession order) for up to two
months, on application by the tenant (provided that the tenant has asked the
lender to undertake not to enforce the order for two months and such
undertaking has not been given)
5. Commencing possession proceedings
5.1 When a lender commences possession proceedings
Under the terms of the mortgage agreement, lenders have the right to start
possession proceedings if the landlord/mortgage-holder does not make the
required mortgage payments. Although two months of arrears is legally sufficient
for a lender to take action, most lenders will usually try to come to an arrangement
to clear the arrears over a period of time and thus avoid taking possession
proceedings. Lenders have to operate under rules set down by the Financial
Services Authority contained within Mortgage Conduct of Business Rules, which
state how forbearance should be managed.
However, if the lender continues to have concerns about the level of arrears the
landlord/mortgage-holder is accruing, or is not satisfied with the landlord/mortgage-
holder’s proposals to repay them, they may take possession proceedings in the
local county court.
To initiate possession proceedings, the lender will make a claim for possession of
property to the county court. This involves the completion of a claim form. (N5:
Claim for Possession of Property.) The landlord/mortgage-holder will get a copy of
this, along with a date for the hearing. The claim form will include a description of
the property and a description of the state of the landlord/mortgage-holder’s
mortgage account. It will also state the details of the lender's attempts to recover
the arrears and what the lender currently requires from the proceedings – which
might be possession of the property and repayment of all mortgage arrears.
The landlord/mortgage-holder will also receive a defence form N11M. (Defence
form mortgaged residential premises), which should be completed and returned to
the court within 14 days. This form gives the landlord/mortgage-holder the
opportunity to explain the circumstances of why they are in arrears, and how they
plan to repay the arrears.
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5.2 Upon obtaining a hearing date
(a) Tenant/Occupier Notification (‘intention to repossess property’)
Within five days of receiving notification from the court of the date of the hearing,
the Civil Procedure Rules
2
require the lender to send a notice to the property,
addressed to ‘the tenant or the occupier’. This notice must:
state that a possession claim for the property has started
show the name and address of the claimant, the defendant and the court
which issued the claim form and
give details of the hearing
(b) Local Authority Notification
The Civil Procedure Rules also state that the lender must also send a notice to the
housing department of the local authority within which the property is located
explaining that a possession claim has started relating to a mortgaged residential
property. The notice should be addressed to the Head of Housing (Homelessness)
Service. This notice must contain the information as above, and must state the full
address of the property.
The provision covers all possession claims relating to mortgaged residential
property, including buy-to-let.
6. The possession hearing
6.1 What happens at a possession hearing?
Possession hearings are usually heard by a district judge and are in private. Until
commencement of the Act, the only people with a right to be heard were the lender
(usually represented by their solicitor) and the landlord/mortgage-holder (and/or
their legal representative). The possession hearing gives the landlord/mortgage-
holder another opportunity to explain why there was a failure to pay the mortgage
and to state how they plan to repay the mortgage, including any arrears, and the
terms under which these payments will be made. If the lender agrees to these
terms, the court will make an order accordingly. This is a suspended possession
order. An alternative to repayment is to give the mortgage-holder time to sell the
property – in order to pay off the mortgage debt and arrears – and avoid the
process of possession. If no agreement can be reached, the court may decide that
there is no alternative but to make an outright order for possession.
If the landlord/mortgage-holder fails to turn up at the hearing the judge will make a
decision based on the information available. If a party does not attend the hearing,
the court may make an order in their absence.
The tenant may have received and opened the notification of commencement of
possession proceedings and the date of the hearing. The 2010 Act ensures that
any unauthorised tenants now have a right to attend and be heard at the hearing.
2
Ministry of Justice Civil Procedure Rule 55.10 on possession claims relating to mortgaged
residential property.
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A tenant may simply attend the hearing and ask the court to delay the date of the
possession in order to enable them to arrange alternative accommodation. The Act
gives the court power to delay the date for a period of up to two months. A tenant
should bring with them to court any evidence of their tenancy.
6.2 Possible outcomes
There is a range of possible outcomes of a possession hearing, depending on the
situation of the landlord mortgage-holder and any unauthorised tenants and the
circumstances of the case:
Case dismissed
This means the court has refused to make a possession order. If the claim is
dismissed it no longer exists.
Adjournment
This means that the hearing does not proceed at the time (for example, due to
absence of the parties or the need for further information or clarification). The court
may adjourn the hearing to another date. The parties may bring the case back to
court unless the adjournment is conditional (e.g. if not restored in six months it is
dismissed)
Suspended order for possession
A suspended order is a relatively common outcome. It gives mortgage-holders a
further chance to pay – and retain their property – and also gives the lender
security.
The possession order is granted – the lender has a right to possession and the
order fixes a date for possession – but the court has suspended possession upon
compliance with particular conditions. In the case of the landlord/mortgage-holder,
such conditions may be the payment of the current monthly instalment and an
agreed amount towards the arrears.
However, upon a breach of those conditions, the lender is entitled to enforce the
possession order immediately by applying for a warrant of possession. This is an
administrative process with no hearing.
Outright order for possession
This means that the lender has a right to possession after a fixed period – typically
14 or 28 days – without conditions or further process. The lender can apply for a
warrant of possession to enforce the order for possession.
6.3 When the court orders the tenant to make payments
The 2010 Act enables the court to order the tenant to make payments to the lender
for their occupation of the property during the period of postponement.
6.4 Income from tenant not implying or creating a tenancy agreement
The making of payments for occupation of the property to the lender for the period
before possession takes effect does not imply that a tenancy agreement exists or
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has existed, and any payments made are not to be regarded as evidence of any
tenancy agreement and do not give rise to landlord obligations on the part of the
lender.
Any property repair and maintenance obligations and liabilities remain those of the
landlord as the tenancy is between the landlord and tenant. If any major repairs are
required within the two month period when possession is delayed (e.g. a faulty
boiler) the lender may wish to consider stepping in, when to do so would be in
order to protect the value of their asset.
6.5 Agreement to remain not implying or creating a tenancy agreement
Any agreement by the lender for the tenant to remain in the property without any
payment is not to be regarded as evidence of a right to occupy the property and
does not give rise to landlord obligations on the part of the lender.
6.6 What constitutes a genuine tenancy?
The court will decide whether the tenant has a genuine tenancy on the basis of the
evidence presented. A tenancy does not need to have a written agreement to be
legally binding. Usually once a person is given exclusive possession and the owner
accepts rental payments, a tenancy exists.
The following documents could be used to provide evidence of the existence of a
tenancy agreement between the borrower and the tenant:
tenancy agreement
rent book or equivalent, with proof of payments
bank statements (or passbook; showing regular payments in line with the
terms of the agreement)
housing benefit documentation (or LHA documents held by the local
authority)
receipts (including the name of the payer and payee, amount paid, and
purpose of payment, i.e. rent)
correspondence between the borrower and tenant indicating that a tenancy
exists, or existed
where a deposit is paid, notification of the deposit by the landlord or
evidence it has been lodged with one of three Government-endorsed
deposit schemes:
- Tenancy Deposit Solutions Limited (TDSL) (www.mydeposits.co.uk)
- The Dispute Service (TDS) (www.tds.gb.com)
- The Deposit Protection Service (www.depositprotection.com)
6.7 What the court will and can take into account
In accordance with the Act, the court will take into account whether the tenant has
complied with the terms of the tenancy or, if the tenant has committed a breach of
the tenancy, what was the nature of the breach and to what extent the tenant was
responsible. It is expected that anti-social behavior would be considered a breach
of the tenancy agreement. The court has discretion to take into account the wider
circumstances of the tenant, the landlord/mortgage-holder and the lender.
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Joint tenants have equal rights and are both responsible, individually and together,
for keeping to all the conditions of their tenancy agreement. Each tenant is
responsible for making sure that rent and other charges are paid in full. If there is a
breach of the Tenancy Agreement, either tenant can be held fully responsible.
The tenant’s right to request a delay to the possession order can only be exercised
in respect of the tenancy in court once. The tenant has two opportunities to make
the request: at the possession hearing or by application to the court following issue
of a notice of execution of possession and if the lender has refused to give an
undertaking to delay the possession.
6.8 Landlords who let out a property after a possession order has been
granted by the court
Sometimes a landlord will knowingly let a property that is already the subject of a
possession order. Landlords may deliberately install new tenants to delay
possession by colluding with the tenant to request the two month delay to
possession. Courts have discretion to refuse the two month delay period if, based
on evidence, they are of the view that the tenancy is not valid or has been falsely
devised.
Where the court is of the view that the tenancy was taken out in good faith by the
tenant, then the tenant would be entitled to a delay to possession upon receipt of
the Notice of execution of possession order.
6.9 Lender appointment of Law of Property Act Receivers
A lender has the ability to appoint a Law of Property Act receiver (under the Law of
Property Act 1925). A Law of Property Act receiver is someone appointed to take
charge of a mortgaged property by a lender to act on behalf of the borrower whose
loan is in default, either with a view to sale or to collect rental income for the lender
and/or manage the property. In some instances a lender may chose to exercise
this right and use a Law of Property Act receiver to collect payment from the
tenants rather than receive income directly. This is acceptable although clear
communication to any tenants of this course of action is recommended in order
that they are clear on whom they should pay. Tenants who are unsure as to who
to pay rent to (whether landlord, lender or receiver should take legal advice).
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7. After the possession hearing
7.1 Enforcing the possession order (obtaining a warrant of possession)
To enforce a possession order, the lender must request that the court issues a
warrant of possession using form N325: Request for Warrant of Possession of
land.
7.2 Tenant/occupier notification
Before a lender can take possession of a property, the 2010 Act requires the
lender to send to the property a Notice of Execution of Possession Order (see the
Schedule within the regulations contained at Annex B.)
(a) Methods of delivery of notice
The notice can be sent to tenants or occupants by the following methods:
first class post
registered post
leaving the notice at the property
personal service by an agent of the lender
(b) Information required on the notice
The regulation requires the lender (or their agent) to state the following
information/detail on the notice:
the date on which they have applied, or intend to apply, to the court for a
warrant of possession against the property. The possession order will only be
executed after the end of 14 days beginning with the day on which the notice is
given. This means that although a lender is able to apply for the warrant of
possession at the same time as sending the notice, the warrant will not be able
to take effect until the prescribed period of 14 days has expired. The lender
does not have to wait for the prescribed period to end before applying for the
warrant.
the name, address, and telephone number of the court at which they have
applied, or intend to apply, for a warrant of possession against the property
the name of the tenant (if known) on whom the notice is served (or
“tenant/occupier” if the tenant’s name is not known) and the address of the
property
the name, telephone number and full address of the lender (or their agent)
where enquires about the notice can be made. (The agent should always
indicate the name of the lender (and provide their details), on whose behalf the
agent is acting.)
the signature of the lender or lender’s agent and the date of the signing
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(c) Failure to supply the information required on the notice
Section 2 of the Act states that the “mortgagee's notice of execution of the
possession order must be in the form set out in the Schedule to the Regulations.”
At the time of application for the warrant of possession, the lender will need to
have evidence of the tenant having been informed of the application via the use of
the appropriate form. If a lender fails to use the appropriate form, as prescribed, or
fails to include the information required on the form, the court will not grant the
warrant for possession.
Where the lender makes a request for the issue of a warrant of possession using
the Pcol system (electronic issue of proceedings) the lender must file a certificate
of service indicating that the notice has been served. Where the lender uses N325
to request the warrant, the box on the form certifying that the regulations have
been complied with must be completed.
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(d) Timescale
Lenders should be aware that the possession order will only be executed by
warrant after the end of the 14 days beginning with the day on which the notice is
given. The application for the warrant can run concurrently with the Notice of
Execution of Possession Order and a lender does not have to wait for the
prescribed period to expire before applying for the warrant. However any warrant
will not come into effect until after the 14 day period of notice.
Where lenders have applied to the court for a warrant when the notice is sent,
tenants will have minimal time in which to act and request the two month delay.
This is the second opportunity that the legislation provides for and is intended to be
a second chance for tenants who may have missed the opportunity to attend the
initial possession hearing.
The tenant can request a delay of the lender. There is no obligation on behalf of
lenders to grant this request. However if the tenancy was taken out in good faith
the lender would need to be very cautious about not agreeing to delay the
possession, given that the tenant has the right to apply to the court should the
lender refuse the request or not respond.
If the lender agrees to delay possession, the tenant should request that the lender
send written confirmation of this to the tenant. It is important that written
confirmation is obtained since this is the only evidence the tenant will have to show
that they have a (temporary) right to occupy the property.
If a tenant has already received a postponement of possession they cannot
request another delay.
If tenants do not ask for a postponement, the lender may go ahead and obtain
possession of the property on the date fixed.
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7.3 Applicability to all possession cases
The requirement for lenders to send the Notice of Execution of Possession Order
is applicable to all mortgaged dwelling houses where a possession order is to be
enforced, not just tenanted properties. In the majority of cases this will be owner-
occupier properties.
7.4 Tenant right to appeal the decision of the lender to court
If the lender does not give an undertaking to postpone seeking the warrant, and
the tenant has not previously requested the delay at the original possession
hearing, the tenant may apply to the court for a postponement of the enforcement
of the order.
Tenants in these circumstances would not apply to appeal the order for possession
but would be applying to the court so that the warrant for possession, which
executes the possession order, is postponed for up to two months. Tenants
cannot apply to the court for a reconsideration of the validity of the original
possession order.
The tenants application should be made on an Application Notice form N244 and
should be submitted as soon as possible in order to tenants the maximum amount
of time should the application be refused.
The name and address of the court to which the tenant should apply is stated on
the notice. Information on fees for all court applications is available at:
http://www.hmcourts-service.gov.uk/infoabout/fees/index.htm.
8. The application hearing
8.1 What happens at an application hearing?
In cases where the lender has refused permission to postpone the possession of
the property (or has failed to acknowledge or reply to the tenant’s request for
postponement) and the tenant has applied to the court for a postponement of the
execution of the warrant of possession, the court will fix a hearing so that it can
consider the application. The claimant and the landlord/mortgage-holder will be
notified of the date of the hearing.
8.2 Possible outcomes
Application is adjourned
This means that the hearing does not proceed (for example, due to non attendance
of parties or the need for further information or clarification). The court will adjourn
the hearing and may give a new date. Note: the court may make an order in the
absence of the parties.
Application dismissed
If the tenant’s application to have the date of execution of the warrant for
possession postponed has been dismissed, for example because the tenant’s
application has been deemed invalid, the date fixed for possession of the property
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stands. Accordingly the date by which any tenants should have vacated the
property remains valid.
Execution of the warrant for possession is postponed
This means that, following an application by the tenant, the date for execution of
the warrant for possession of the property is postponed for a specified period of
time set by the court and a further date for execution will be fixed. Upon the date
specified in the warrant, the lender will take possession of the property. Any
tenants or residents should have vacated the property by that date and found
alternative accommodation.
9. Related and relevant legislation
9.1 Other legislation
Law of Property Act 1925
Administration of Justice Act 1970
Administration of Justice Act 1973
Rent Act 1977
Housing Act 1988
Housing Act 1996
Data Protection Act 1998
9.2 Data protection issues
Under the Data Protection Act 1998 the lender is constrained from discussing the
individual details of a landlord’s mortgage with tenants. However, if a tenant makes
contact with the lender or the agent, as a result of receiving the notice of the
possession hearing or the notice of execution of possession order, the lender can
confirm the details of the possession hearing, and the tenant can make himself
known to the lender (or agent). The lender can then consider the tenant’s status
and a course of action and consider any request for postponement. Data protection
rules do not prevent this level of communication between lender and tenant.
The Information Commissioner’s Office has confirmed that lenders are able to
disclose some information to tenants (such as whether they have appointed a
receiver and when a repossession order may be enforced). Lenders should not
disclose more details than are necessary to enable tenants to obtain advice and to
understand their rights and obligations.
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10. Questions and answers
(Some of these points are covered in the guidance but are repeated here for ease
of reference.)
10.1 How can a tenant check if their landlord has obtained the necessary
consent to let?
Professional letting agents should request evidence from a landlord that the
property has received consent to let from the landlord’s lender. Letting agents
should not market a property for letting if they have not satisfied themselves that
this has been obtained. The tenant can request this assurance from their landlord.
10.2 What if the tenancy agreement pre-dates the mortgage agreement?
If a tenant was in the property before the mortgage was taken out the tenancy will
usually be binding on the lender. This is a complicated area of law. Tenants who
find themselves in this situation should immediately take independent legal advice
from a local housing law centre.
10.3. Does the tenant always get two months delay?
Any postponement of possession must not exceed two months but it does not have
to be two months, for example if the tenant feels that one month is adequate for
their circumstances and there is a mutual agreement to this with the lender. The
court will make the final determination if necessary. Tenants may not get any
delay if the court does not allow their application.
10.4 Deposit arrangements
If the tenancy started on, or after, 6 April 2007, the landlord should have protected
the deposit using the Deposit Protection Scheme. The tenant should have been
notified of this by the scheme provider and informed of how to recover their
deposit.
The deposit belongs to the tenant and should be returned to the tenant unless the
landlord can show that they have had to deduct money because of the condition of
the property. The tenant can ask to be shown receipts or estimates for items that
have been deducted from their deposit. The tenant should take up any issues
connected with the deposit with their landlord or, if this is not possible, the deposit
scheme provider. There is no role for the lender.
10.5 Can the Notice of Execution of Possession Order be served before an
absolute order becomes effective?
Yes. The Notice of Execution of the Possession Order can be served so it is
running concurrently with an absolute possession order. To minimise delay lenders
could serve the notice before the possession order is effective. In the majority of
cases therefore there would not be any additional time to add to the possession
process, as the recipients of the notice will be owner-occupiers or authorised
17
tenants, in both cases known to the lender. The only delay would occur if an
unauthorised tenant made themselves known and came forward to the lender. The
lender would then need to engage with the tenant as per the legislation.
10.6 When exactly do the legislation and regulations take effect?
The Mortgage Repossessions (Protection of Tenants etc) Act 2010 and The
Dwelling Houses (Execution of Possession Orders by Mortgagees) Regulations
2010 both come into effect on 1
October 2010.
Where a lender has obtained a possession order under the old rules, but seeks a
warrant of possession on or after 1
October, it will have to serve notice in
accordance with section 2 of the Act and the new regulation on the execution of
possession orders.
10.7 How does the legislation work where there is more than one tenant?
If there are joint tenants, there would still be only one period of delay.
10.8 Compatibility with FSA Mortgage Conduct of Business (MCOB)
The Financial Services Authority (FSA) imposes a number of requirements on
lenders repossessing a property which are set out in the Mortgages and Home
Finance: Conduct of Business (MCOB) Rules. This includes the requirement that
lenders must market a repossessed property as soon as possible and must obtain
the best price that might reasonably be paid.
In guidance supporting this rule, the FSA recognises that a balance has to be
struck between the need to sell the property as soon as possible, to reduce or
remove the outstanding debt, and other factors which may prompt the delay of the
sale, which may include, for example, things necessary to achieve the optimal
selling price.
Whilst much will depend on the facts of each case, lenders giving tenants
reasonable notice to leave the property will not necessarily conflict with the current
requirements under MCOB which imply to delay a sale would be detrimental to the
borrower.
10.9 What happens if a landlord hands in the keys?
It is feasible, although likely to be rare, for a landlord to hand in the keys to a
property – a so called ‘voluntary possession’ - whilst tenants are still in occupation.
Lenders are likely to still request a possession order and apply for a warrant to
enforce the possession in order to be sure that they have legal vacant possession.
In this instance therefore the lender will need to send the notice of execution of
possession order to comply with the legislation. Any tenants will be captured this
way.
18
10.10 What happens if a tenant is in receipt of Housing Benefit which has
been paid direct to the landlord?
If the court delays possession for a tenant who is in receipt of housing benefit,
which is paid directly to the landlord and the court has made an order that the
rental payments must be paid to the lender, then the tenant will need to apply to
their local authority to have their housing benefit/local housing allowance payments
directed to the lender for the period that possession is postponed. The lender may
need to accept some delay in receipt of payments whilst this is administered.
10.11 Can the tenant request another delay to possession if their landlord
clears arrears and then falls into arrears again?
A landlord may receive a suspended possession order and at the same time the
tenant may have requested and received a delay to possession. If the landlord
complies with the terms of the suspended possession order in full then the order
may fall away. If this happens quickly the tenant, despite having previously
received a delay to possession, may decide to remain in the property now that the
possession will not be enforced. If subsequently the landlord falls into arrears
again, the lender will have to bring new proceedings and seek a new possession
order. In this situation it is our view that there is nothing to prevent a tenant
requesting a delay to possession again as this is a new possession process and
that it would be within the jurisdiction of the court to allow this. This is ultimately a
matter for the courts to decide.
19
Annex A: Mortgage Repossessions (Protection of
Tenants etc.) Act 2010
20
Annex B: The Dwelling Houses (Execution of
Possession Orders by Mortgagees) Regulations 2010
24
STATUTORY INSTRUMENTS
2010 No. 1809
LANDLORD AND TENANT, ENGLAND AND WALES
The Dwelling Houses (Execution of Possession Orders by
Mortgagees) Regulations 2010
Made - - - - 13th July 2010
Laid before Parliament 19th July 2010
Coming into force - - 1st October 2010
The Secretary of State makes the following Regulations in exercise of the powers conferred by
section 2(2) to (5) of the Mortgage Repossessions (Protection of Tenants etc) Act 2010(a) (“the
Act”).
The Lord Chancellor has consented to the making of these Regulations.
Citation and commencement
1. These Regulations may be cited as the Dwelling Houses (Execution of Possession Orders
by Mortgagees) Regulations 2010 and come into force on 1st October 2010.
Notice of execution of possession order: prescribed step and prescribed period
2. The prescribed step referred to in section 2(2)(a) of the Act is the mortgagee making an
application to the court for a warrant for possession of the property.
3. The prescribed period referred to in section 2(2)(b) of the Act is fourteen days.
Prescribed form of notice of execution of possession order
4. The mortgagee’s notice of execution of the possession order must be in the form set out in
the Schedule to these Regulations.
Manner of giving notice
5.—(1) The mortgagee’s notice under regulation 4 may be given in any of the following
ways—
(a) by sending the notice to the property by first class post or registered post in an envelope
addressed—
(i) to the tenant by name, or
(ii) if the tenant’s name is not known, to “The Tenant or Occupier”;
(a) 2010 c. 19
2
(b) by leaving the notice at the property
(i) in an envelope addressed as described in subparagraph (a), or
(ii) affixed to and displayed in a prominent place where its contents can be read by a
person entering the property; or
(c) by personal service upon a person who appears to be in residence at the property.
Signed by authority of the Secretary of State for Communities and Local Government
Grant Shapps
Minister of State
12th July 2010 Department for Communities and Local Government
The Lord Chancellor consents to the making of these Regulations.
Jonathan Djanogly
Parliamentary Under Secretary of State
13th July 2010 Ministry of Justice
SCHEDULE Regulation 4
Notice that your home is at risk
If you are paying rent to live in this property, please read the following carefully.
If you are an owner occupier, please seek advice on your
position as different rules apply
This notice is given under Section 2(4) of the Mortgage Repossessions (Protection of
Tenants etc) Act 2010.
I give you notice that the Lender/the Lender’s Agent has applied/will apply (delete as
appropriate) to the court for a warrant for possession against this property
on:………………………………..
(Insert the date on which the application for the warrant for possession was made or will be
made. The order will only be executed after the end of the 14 day prescribed period.)
At:……………………………………………………………………………….
Tel:………………………………………………………………………………
Address:…………………………………………………………………………
…………………………………………………………………………………...
(Insert the name, address and telephone number of the court at which the application has
been or will be made.)
1. This notice advises you that you could be evicted from your home. For tenants, be
advised that your landlord’s Lender has obtained an order for possession against the
property. It is now seeking to enforce that order through the courts. Please read this notice
carefully. If you need advice you should contact any of the following:
—a Citizens’ Advice Bureau;
—a housing advice organisation, or charity such as Shelter;
3
—a housing aid centre;
—a Law Centre;
—a solicitor.
2. The law gives certain tenants the right to apply to the Lender to ask it not to enforce the
order for a period of two months. You should contact the Lender or its Agent on the number
given to ask for this delay if you require it. This is to give you time to find somewhere else
to live. If you are unsure whether you may qualify, you should seek advice immediately
from one of the organisations listed, or a similar organisation. If the Lender agrees to your
request, they must confirm this to you in writing. If the Lender refuses your request, or if
you receive no reply, you may be able to make an application to court for a similar delay.
The Lender may make any agreement with you conditional on you continuing to pay to live
at the property. An application to the Lender or to the court should be accompanied by any
evidence you have to prove the existence of your tenancy.
3. This notice is not directed at owner occupiers. If you pay a mortgage to live at the
property, you should urgently seek advice on your position as you have different rights.
4. If you do not ask for a delay, the Lender can go ahead to obtain possession of this
property. Although the warrant for possession cannot be executed earlier than 14 days after
the date on which the Lender sent you this notice you must act quickly if you are seeking
the delay, otherwise you may run out of time.
Served on:……………………………………………………………………….
(Insert address of the property. Address to: “Tenant/Occupier” or name of tenant(s) if
known).
Served by::………………………………………………………………………(“the
Lender”)
Tel:………………………………………………………………………………
Address:…………………………………………………………………………
………………………………………………………………………………….
………………………………………………………………………………… .
(Insert full name of Lender, telephone number and address where enquiries about this notice
can be made.)
If served by Lender’s Agent:
Served on:……………………………………………………………………….
(Insert address of the property. Address to: “Tenant/Occupier” or name of tenant(s) if
known).
Served by:………………………………………………………………………(“the Lender’s
Agent”)
On behalf of:……………………………………………………………………(“the Lender”)
Tel:………………………………………………………………………………
Address:…………………………………………………………………………
………………………………………………………………………………….
………………………………………………………………………………… .
(Insert full name of Lender’s Agent, telephone number and address where enquiries about
this notice can be made.)
Signed………………………………………………….. Date……………………………….
To be signed and dated by the Lender or the Lender’s Agent
EXPLANATORY NOTE
(This note is not part of the Regulations)
The Mortgage Repossessions (Protection of Tenants etc) Act 2010 (“the Act”) empowers the
Secretary of State to make Regulations providing for the giving of notice of execution of
possession orders by mortgagees in relation to dwelling houses. These Regulations, which extend
to England and Wales, provide for a notice of execution of possession order to be given at all
residential properties where the mortgage lender (“the mortgagee”) is seeking to execute a
possession order against the borrower.
Regulation 2 specifies that the prescribed step for the purposes of section 2(2)(a) of the Act is the
making, by the mortgagee, of an application to the court for a warrant for possession of the
mortgaged dwelling house. Regulation 3 prescribes a period of fourteen days after the mortgagee
has given notice of this step at the premises, during which the possession order may not be
executed (see section 2(2)(b) of the Act).
Regulation 4 introduces the Schedule to the Regulations which prescribes a form for the purposes
of giving notice at the property. Regulation 5 prescribes acceptable methods of giving the notice
of execution of the possession order.
An impact assessment has been prepared in respect of the Act. It has been deposited in the Library
of each House of Parliament and is available from the Department for Communities and Local
Government, Eland House, Bressenden Place, London SW1E 5DU or email
kirstin.blagden@communities.gsi.gov.uk.
£4.00
E7465 7/2010 107465T 19585
9 780111 500071
ISBN 978-0-11-150007-1
____________________________________________________________________________________________________________
© Crown copyright 2010
Printed and published in the UK by The Stationery Office Limited under the authority and superintendence of Carol Tullo, Controller
of Her Majesty’s Stationery Office and Queen’s Printer of Acts of Parliament.
Annex C: Changes to the Civil Procedure Rules
Part 55 Possession Claims and CCR O.26 Warrants of Execution, Delivery
and Possession
Amendments are made to allow unauthorised tenants living in a mortgaged
property to apply to the court for postponement of the date of delivery of
possession. Amendments are also made requiring a lender to notify all
tenants/occupiers of a property before taking steps to enforce a possession order.
An unauthorised tenant may then apply to the lender for a delay in execution of the
warrant of possession to allow the tenant time to find another home. If the lender
does not agree to an extension of time the unauthorised tenant may apply to the
court for a decision. Note: Form N325 is amended to support this change.
29
Annex D: Relevant court forms
Page
Form N5: Claim for Possession of Property 31-32
Form N11M: Defence Claim form for Mortgaged Residential Premises) 33-38
Form N325: Warrant for Possession of Land 39
Form N244: Application Notice 40-42
30
N5 Claim form for possession of property (08.05) HMCS
Claim form for
possession of
property
Court fee
Solicitors costs
Total amount
£
The claimant is claiming possession of :
Defendant’s
name and
address for
service
which (includes) (does not include) residential property. Full particulars of the claim are attached.
(The claimant is also making a claim for money).
Claimant
(name(s) and address(es))
SEAL
In the
Claim No.
Defendant(s)
(name(s) and address(es))
This claim will be heard on: 20 at am/pm
at
At the hearing
• The court will consider whether or not you must leave the property and, if so, when.
• It will take into account information the claimant provides and any you provide.
What you should do
• Get help and advice immediately from a solicitor or an advice agency.
• Help yourself and the court by lling in the defence form and coming to the hearing to make sure the court
knows all the facts.
Issue date
£
£
Click here to clear all fields
Click here to print form
Claim No.
Grounds for possession
The claim for possession is made on the following
ground(s):
rent arrears
other breach of tenancy
forfeiture of the lease
mortgage arrears
other breach of the mortgage
trespass
other (please specify)
actual or threatened anti-social behaviour
actual or threatened use of the property for
unlawful purposes
Anti-social behaviour
The claimant is alleging:
Does, or will, the claim include any issues under the Human Rights Act 1998? Yes No
See full details in the attached particulars of claim
Statement of Truth
*
(I believe)(The claimant believes) that the facts stated in this claim form are true.
*
I am duly authorised by the claimant to sign this statement.
signed
*
(Claimant)(Litigation friend (where the claimant is a child or a patient))(Claimant’s solicitor)
*
delete as appropriate
(if signing on behalf of firm or company)
Full name
Name of claimant’s solicitors firm
position or office held
date
Is the claimant claiming demotion of tenancy? Yes No
Is the claimant claiming an order suspending the right to buy? Yes No
Claimant’s or
claimant’s solicitors
address to which
documents or payments
should be sent if
different from overleaf.
Postcode
fax no.
e-mail
DX no.
Tel. no.
Ref. no.
if applicable
Click here to print form
Defence form
(mortgaged residential premises)
Name of court Claim No.
Name of Claimant
Name of Defendant
Date of hearing
Personal details
Please give your:
Title Mr Mrs Miss Ms Other
First name(s) in full
Last name
Date of birth
Address (if different from the address on the claim form)
Postcode
1.
D D M M Y Y Y Y
Disputing the claim
Do you agree with what is said about the property and the
mortgage agreement in the particulars of claim?
If No, set out your reasons below:
Do you agree that there are arrears of mortgage repayments as
stated in the particulars of claim?
If No, state how much the arrears are:
Yes No
Yes No
£ None
2.
3.
N11M Defence form (mortgaged residential premises) (04.06) HMCS
Click here to print form
Click here to reset form
If the particulars of claim give any reasons for possession
other than arrears of mortgage repayments, do you agree with
what is said?
If No, give details below:
(Only answer these questions if the loan secured by the mortgage (or part
of it) is a regulated consumer credit agreement)
Do you want the court to consider whether or not the terms of
your original loan agreement are fair?
Do you intend to apply to the court for an order changing the
terms of your loan agreement (a time order)?
Arrears
Have you paid any money to your mortgage lender since the
claim was issued?
If Yes, state how much you have paid and when:
Have you come to any agreement with your mortgage lender
about repaying the arrears since the claim was issued?
I have agreed to pay £ each (week)(month).
If you have not reached an agreement with your mortgage
lender, do you want the court to consider allowing you to pay
the arrears by instalments?
How much can you afford to pay in addition to the current
instalments?
£ per (week)(month)
Yes No
Yes No
Yes No
Yes No
Yes No
Yes No
4.
5.
6.
7.
8.
9.
10.
£ date
About yourself
State benefits
Are you receiving Income Support?
Have you applied for Income Support?
If Yes, when did you apply?
Does the Department of Social Security pay your mortgage
interest?
Dependants (people you look after financially)
Have you any dependant children?
If Yes, give the number in each age group below:
under 1
1 11-15 16-17 18 and over
Other dependants
Give details of any other dependants for whom you are
financially responsible:
Other residents
Give details of any other people living at the premises for
whom you are not financially responsible:
Yes No
Yes No
Yes No
Yes No
11.
12.
13.
14.
15.
16.
17.
Money you receive
Usual take-home pay or income if self-employed £
including overtime, commission, bonuses
Job Seekers allowance £
Pension £
Child benefit £
Other benefits and allowances £
Others living in my home give me £
I am paid maintenance for myself (or children) of £
Other income £
Total income £
Weekly Monthly
Bank accounts and savings
Do you have a current bank or building society account?
If Yes, is it
in credit? If so, by how much? £
overdrawn? If so, by how much? £
Do you have a savings or deposit account?
If Yes,what is the balance? £
Money you pay out
Do you have to pay any court orders or fines?
Give details if you are in arrears with any of the court
payments or fines:
Do you have any loan or credit debts?
Loan/credit Balance Instalments
from owing paid
Give details if you are in arrears with any loan / credit
repayments:
Yes No
Yes No
Yes No
Yes No
Court Claim/Case Balance Instalments
number owing paid
18.
19.
20.
21.
22.
23.
Total instalments paid £ per month
Total instalments paid £ per month
Regular expenses
(Do not include any payments made by other
members of the household out of their own income)
What regular expenses do you have?
(List below)
Council tax £
Gas £
Electricity £
Water charges £
TV rental & licence £
Telephone £
Credit repayments £
Mail order £
Housekeeping, food, £
school meals
T
ravelling expenses £
Clothing £
Maintenance payments £
Other mortgages £
Other £
Total expenses £
Priority debts
This section is for arrears only. Do not
include regular expenses listed at Question 24.
Council tax arrears £
W
ater charges arrears £
Gas account £
Electricity account £
Maintenance arrears £
Others
(give details below)
£
£
£
24.
25.
Weekly Monthly
Weekly Monthly
Statement of Truth
*
(I believe)(The defendant believes) that the facts stated in this defence form are true.
*
I am duly authorised by the defendant to sign this statement.
signed
*
(Defendant)(Litigation friend(where defendant is a child or a patient))(Defendant’s solicitor)
*
delete as appropriate
(if signing on behalf of firm or company)
Full name
Name of defendant’s solicitors firm
position or office held
date
Give details of any events or circumstances which have led to your being in arrears with your mortgage (for
example divorce, separation, redundancy, bereavement, illness, bankruptcy). If you believe you would suffer
exceptional hardship by being ordered to leave the property immediately, say why.
27.
If an order for possession were to be made, would you have
somewhere else to live?
If Yes, say when you would be able to move in:
Yes No
26.
Click here to print form
Request for Warrant of Possession of Land
To be completed and signed by the claimant or his solicitor and sent to the court with the appropriate fee
You should provide a contact number so that the baili can speak to you if he/she needs to:
Daytime phone number: Evening phone number (if possible):
Contact name (where appropriate):
Defendant’s phone number (if known):
If you have any other information which may help the baili or if you have reason to believe that the baili may encounter
any diculties you should write it below.
1. Claimant’s
name and
address
2. Name and
address for
service and
payment
(if dierent
from above)
Ref/Tel No.
3. Defendant’s
name and
address
4. Warrant details
(A) Balance due at the date of this request
(B) Amount for which warrant to issue
Issue fee
Solicitors costs
Land Registry fee
TOTAL
If the amount of the warrant at (B) is less
than the balance at (A), the sum due
after the warrant is paid will be
5. Property/land details
Date of judgment/order
Date of possession
Describe the land (as set out in the particulars of claim)
In the
County Court
Claim No.
For court use only
Warrant No.
Issue date:
Warrant applied for at oclock
Foreign court code/name (execution only):
I certify that
(1) the defendant has not vacated the land as
ordered (*and that the whole or part of any
instalments due under the judgment or
order have not been paid) (
and the
balance now due is as shown)
(2) notice has been given in accordance
with The Dwelling Houses (Execution
of Possession Orders by Mortgagees)
Regulations 2010.
Signed
Claimant (Claimant’s solicitor)
Dated
* delete unless defendant is in arrears with the suspended
possession order or judgment
delete unless warrant is to issue for execution also
IMPORTANT
You must inform the court immediately of any
payments you receive after you have sent this
request to the court
If there is more than one defendant and you are
not proceeding against all of them, enter here
the name(s) of the defendant(s) you wish to
proceed against
N325 – Request for warrant for possession of land (10.10) © Crown copyright 2010
N325_1010.indd 1 24/08/2010 15:48:20
Annex E: Lenders step-by-step checklist
1. Compliance with Mortgage Pre Action Protocol
Possession proceedings:
2. Completion of claim form N5: Claim for Possession of Property.
3. Service of documents on mortgage-holder (landlord) (including defence form).
4. Defendant should complete and return defence form to the court within 14 days.)
5. Notice of commencement of possession proceedings sent to tenant/occupier
(within five days of the lender receiving hearing date).
6. Notice of commencement of possession proceedings served on the Head of
Housing (Homelessness) Service of the local authority within which the property is
located.
(This notice must contain the same information in the notice to the tenant/occupier
and must state the full address of the property).
[Possession hearing takes place].
Enforcement proceedings:
7. Completion of claim form N325: Request for Warrant of Possession of land form.
8. Notice of Execution of Possession Order sent to tenant/occupier allowing 14
days between service of the notice and the date of execution of the warrant of
possession. (NB: if the online request form is used the lender can certify the notice
of Execution has been served, if a paper request the lender will need to file a
certificate of service (the legal requirement to send the notice is applicable to all
properties whether owner occupied, containing authorised or unauthorised
tenants.)
43
Annex F: Contact details (implementation partners and
advice agencies)
Council of Mortgage Lenders
The Council of Mortgage Lenders is the trade association for the mortgage lending
industry, and their members account for around 94 per cent of UK residential
mortgage lending. CML are not able to answer consumer or non-member
enquiries.
For information on mortgages and the home buying process, please see:
http://www.cml.org.uk/cml/consumers
For other advice please see:
http://www.cml.org.uk/cml/consumers/conslinks where you can find contact details
for organisations that may be able to help.
The Building Societies Association
The Building Societies Association (BSA) is a trade association, representing
mutual lenders and deposit takers in the UK including all 49 UK building societies.
http://www.bsa.org.uk/consumer/index.htm
Community Legal Advice
Community Legal Advice is a free and confidential advice service paid for by legal
aid. Telephone: 0845 345 4 345.
Community Legal Advice centres and networks are opening through England and
Wales. See:
http://www.communitylegaladvice.org.uk/en/directory/directorysearch.jsp
Community Legal Advice is also available on digital interactive television.
http://www.communitylegaladvice.org.uk/en/about/website.jsp
Citizen’s Advice Bureaux
Citizens Advice provides free, confidential and independent advice from over 3,000
locations including bureaux, GP surgeries, hospitals, colleges, prisons and courts.
Advice is available face-to-face and by telephone; and some also provide email
advice.
http://www.citizensadvice.org.uk/index/getadvice.htm
Shelter
Shelter has a free housing advice helpline available on 0808 800 4444 (calls are
free from UK landlines and main mobile networks).
http://england.shelter.org.uk/
44
DirectGov
http://www.direct.gov.uk/en/HomeAndCommunity/index.htm
Communities and Local Government – for policy background to the
legislation
Andrew Gough: 0303 444 3772 andrew.gough@communities.gsi.gov.uk
Kirstin Blagden: 0303 444 3761 kirstin.blagden@communities.gsi.gov.uk
45
Department for Communities and Local Government
© Crown Copyright, October 2010
ISBN: 978 1 4098 2574 6
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