Repossession property rules
New rules
Coronavirus: repossessions are on hold
The Financial Conduct Authority (FCA) has said that mortgage lenders must not start or continue court action for repossession until at least 31 October.
The government says landlords must follow strict procedures if they want to gain possession of their property, depending on the type of tenancy agreement in place and the terms of it.
The new rules mean:
- Landlords seeking possession of their property to set out in their claim any relevant information about a tenant’s circumstances, including information on the effect of the COVID-19 pandemic on a tenant’s vulnerability or social security position. These rules will apply to all possession proceedings either new or existing, including accelerated possession proceedings. Where this information is not provided, judges will have the ability to adjourn proceedings. These changes will be in place until the end of March 2021 but could be extended.
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- Landlords will need to notify the Court and their tenant of their continued desire to seek repossession before the case will proceed using a reactivation notice. This rule includes accelerated possession cases and the government says it will ensure that the Court’s time is spent on the right cases. However a reactivation notice will NOT be needed for any claim where a possession order has been granted, suggesting landlords can move to execute the warrant via bailiff services.
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- The court will have flexibility on setting the date for the court hearing to allow it to fix a date either on or after the claim form is issued to the landlord. Currently, a hearing date is set at the same time as the claim form is issued. The requirement to fix a hearing eight weeks after the claim form is issued to landlords will be suspended.
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Landlords will need to provide a rent arrears history in advance of the hearing, rather than providing at the hearing itself.
- High Court bailiffs will be required to provide notice of the eviction date to the tenant, in the same way, that notice is provided by county court bailiffs. The notice will include information on how the tenant can apply to suspend the eviction and where to go to for advice.
Your responsibilities as a tenant
Government has stressed it is keen to encourage landlords wherever possible, NOT to pursue non-priority cases through the courts.
It considers priority cases to be those involving anti-social behaviour, extreme rent arrears, domestic abuse, cases involving squatters, fraud or unlawful subletting.
It is also encouraging landlords and tenants to consider mediation, in which an independent third-party helps both parties reach a mutually acceptable agreement to resolve their dispute, without the matter needing to go to court.
Alternatives to repossession
With your agreement the lender should consider whether to:
- delay interest payments
- extend your mortgage term
- change the type of mortgage you have
- add the arrears onto your total mortgage debt
They should allow you time to sell your home if you can’t come to a repayment arrangement.
They must keep records of their contact with you including phone calls where arrears or charges are discussed.
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What they must do before starting court action
The lender must provide you with the following information:
- a list of missed payments
- outstanding mortgage debt
- total amount of arrears and charges
They must inform you that they are starting repossession action and tell you to contact the council for homeless help.
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Repossession rules mortgage lenders must follow
Coronavirus: repossessions are on hold
The Financial Conduct Authority (FCA) has said that mortgage lenders must not start or continue court action for repossession until at least 31 October.
How your lender should deal with you
All mortgage lenders are regulated by the Financial Conduct Authority (FCA).
The FCA has rules about how lenders deal with their customers. These are the Mortgage Conduct of Business (MCOB) rules.
Your lender must treat you fairly. They must consider any suggestions you make to deal with payment problems and arrears.
Your lender should not repossess your home unless all reasonable attempts to resolve the situation have failed.
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Alternatives to repossession
With your agreement the lender should consider whether to:
- delay interest payments
- extend your mortgage term
- change the type of mortgage you have
- add the arrears onto your total mortgage debt
They should allow you time to sell your home if you can’t come to a repayment arrangement.
They must keep records of their contact with you including phone calls where arrears or charges are discussed.
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What they must do before starting court action
The lender must provide you with the following information:
- a list of missed payments
- outstanding mortgage debt
- total amount of arrears and charges
They must inform you that they are starting repossession action and tell you to contact the council for homeless help.
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If your lender doesn’t follow these rules
Make a formal written complaint to your lender if they don’t follow the MCOB rules.
Complain to the Financial Ombudsman Service (FOS) if you’re unhappy with the response or you don’t hear from the lender within 8 weeks of your complaint.
The FOS can look at the way the lender has dealt with your case. Sometimes the FOS will tell the lender to stop court action and come to a reasonable repayment arrangement out of court.
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Court rules about repossession
The court has rules about what a lender should do before starting court action.
We know the rules as the pre-action protocol for mortgage arrears.
The lender will have to show the court that they’ve followed the protocol if there’s a repossession hearing.
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Information from the lender
The lender must give you details of:
- the amount of your arrears
- payments over the past 2 years
- interest or charges that will be added
- monthly instalments and total mortgage debt
Please contact Pelin Martin to book a 30-minute complimentary property consultation on +0208 994 7327 – pm@bluecrystallondon.co.uk