suspended repossession order to be reinstated

[ke2dge]

My landlord has a normal mortgage instead of buy to let on the property I've now been in for 4yrs. Basically in May'08 the court suspended a repossession order from mortgage co. due to some arrears,with the outcome being he was to pay an extra £100 per month to clear the arrears. They have applied to the court to have this original order reinstated. The landlord has paid nothing since Aug'10 (not even the actual mortgage payment),and previous payments since Dec'09 have been hit and miss basically.His arrears are just over £5000. I want to know whether the courts are likely to suspend again if he proves he'll start paying again or will they just give the go ahead for the repossession warrant?

 

This leaves me sticky because if the lenders get the property,they're obliged to give me just days to vacate...they don't know I exist because I'm sure the landlord has told them he's living here!

[Killerschick]

Hi Ke2dge,

 

What a nasty piece of work your landlord must be! Fortunately legislation has been enacted to deal with these sorts of rip off merchants who take cash from their tenants but neglect to pay their mortgage and defraud their mortgage companies by trying to conceal that the property is let.

 

The legislation in question is the Mortgage Repossessions (Protection of Tenants etc) Act 2010 which is available here:-

 

http://www.legislation.gov.uk/ukpga/2010/19

 

This enables the tenant to ask the mortgage company for an undertaking not to enforce an order for a period of up to two months and if the mortgage company refuses it gives the tenant the right to apply to the court for an order to this effect.

 

Firstly I would recommend that you contact the mortgage lender and put them in the picture, don't be concerned about loyalty to your landlord, it's not as though he/she's shown any concern for your welfare! Ask for time as you are entitled to do under the Act and then if they refuse you can make an application to court if the lender tries to enforce the suspended order giving you a bit more security and time. If the lender was aware the property was let they might even want to put managers in place to collect the rent direct rather than repossess which would give you longer term security.

 

There's a chance that your landlord might get a suspension if the lender was to apply for a warrant (eviction) but how can you even trust them even to bother to make the application if they aren't paying the mortgage? Presumably they lied to the court when the original suspended order was granted and claimed to live at the property, given that the lender is unaware of the tenancy? Would they by lying again and sticking to their story or admitting to the tenancy and revealing that they previously mislead the court? Perhaps you can see how the landlord might not appear that sympathetic to a judge, at least if any of the truth were to become known to the court? A suspension at an initial possession hearing is common but if someone applies for a suspension when a warrant has been granted the basis for that suspension will be scrutinised more closely given that they have breached a previous order. As to whether the suspension is granted will depend on the amount of equity (lots of equity goes in owners favour, little or no equity in lenders as they are at greater risk of loss), how long it will take to clear the arrears (judge has discretion of up to the remaining term) and how well evidenced the proposal for clearing the arrears is (backed up by income and expenditure to prove affordability etc). If your landlord needs to lie about their circumstances to make a proposal it may be more difficult to evidence affordability and therefore make a suspension of a warrant less likely.

 

All in all, in your position I would suggest going direct to the lender to have the best opportunity of staying in the property for the longest time possible. But, if you have more than a purely professional relationship with your landlord or you have not been paying the rent give it some thought before you do so. By informing the lender of the tenancy you may leave the landlord open to further action such as an increased interest rate or, in extreme cases, liability for mortgage fraud. And when it comes to your conduct, the Act states the court must have regard to 'an outstanding breach by the tenant' so it you've not been paying you may not be treated sympathetically.

 

Sorry for the long post but hope this helps.

 

KC

 

KC

Edited February 21, 2011 by Killerschick
Accidentally posted before I'd finished

[ke2dge]

Thank-you for your response!

 

I'm not sure where I would stand now because in feb '09 the landlord served me notice wanting the property back (due to the very high interest rate at the time,then turned round & said he didn't want it back when the rates dropped!) & my local council said because it was not my fault I was being made homeless,they would help me & rehouse me & my kids. But with this new legislation,this option is maybe not going to be actioned then? They may turn round & say I have to pay the lender! I recieve housing benefit & work part-time until the kids are older & am on a very low income which were the factors why the housing office said they would help me originally.

It just cheeses me off because I pay £650 per month rent...his mortgage here is £300...& he can't pay it??? I don't think he's any equity because I think he has an interest only mortgage which doesn't seem to have decreased since I've been here...his statements come to my address...so do the solicitors & court paperwork..which makes me think he's said that he lives here!

[Killerschick]

Hi again ke2dge,

 

That's a difficult situation to be in, on the one hand you obviously don't want to be evicted but on the other you cannot get your local authority to re-house you unless you are being made involuntarily homeless.

It may be worth discussing with someone from your local authority to see if you would be able to find equivalent accommodation in the private rented sector and transfer over your housing benefit claim. That might enable you to move without having to start from scratch or wait to be evicted and then apply for local authority housing. Some local authorities are quite helpful in this situation because it is cheaper and more efficient for them to transfer a housing benefit claim than to process a homelessness application and then deal with another claim further down the line but it varies on a very local level and there are no guarantees.

Alternatively, if you receive notice of an eviction date that should be sufficient to evidence to the council that you are being made homeless regardless of the fact that you can apply to the court or lender for more time. Those are added protections are for tenants who need them but it shouldn't alter your position as regards being made involuntarily homeless if you don't use them. After all, the most the court can grant is up to two months and that is not guaranteed but at the judge's discretion. It is also at the discretion of the lender to decide whether they want to take over managing a property and by no means certain, it would depend on the lender and whether they were set up to deal with it.

If you don't want to exercise your right to ask the lender for more time to move (and you are likely to get a couple of weeks notice if they apply for a warrant thinking they are evicting your landlord – usually a letter is sent to The Occupier but sometimes it is sent recorded delivery so if you miss anything ensure you collect it from the Post Office as this will be what you need to show your local authority to confirm you are being evicted) it may not be the best idea to let them know the property is let as they may decide of their own accord to take it into management regardless of your wishes. Particularly given that there is a substantial excess between the mortgage interest and the rent paid and little equity so they may be better off managing the property than taking possession.

On the other hand if you are happy where you are and wouldn't mind staying it might still be worth contacting the lender. If they don't take the property into management that is not your fault and you would still be classed as unintentionally homeless. Another benefit would be that if they were aware of your tenancy they would need to ensure you were made aware of any eviction so you would get as much notice as possible.

KC

[ke2dge]

Hi well it went to court this afternoon, so am hoping to hear something pretty soon! I think personally he may have come to another kind of deal with the court by prob coming up with the £5000 arrears from somewhere. I just can't see a court taking the property from him for the sake of £5000. Turns out he purchased it for £136k and the mortgage with arrears stands at around £129k, so maybe he does have a little equity and maybe a repayment mortgage? I'll keep you posted as to what happens as last time the court sent paperwork here and I assume also to his dad's address which is the address I have for him....He knew he was going to court because he texted me asking if any mail had come here for him...he never really asks that unless its important. This guy is a nightmare...he's even been to court for securing a loan on the property and not sticking to the repayment terms and conditions of that!! Thats why I really would be glad if the opportunity arose to be rehoused.

[ke2dge]

Rang lender & courts but neither would tell me anything because I'm not the mortgage holder. Heard nothing at all from anyone so am assuming the landlord managed to sort things during the hearing last week.

[Killerschick]

It does sound like it because they would be obliged to tell you if there was an eviction. At least you've got a bit of peace for the moment, maybe worth letting the lender know formally that you are there so you can be certain to be notified of any eviction date.

[ke2dge]

update...this morning a court letter came saying the case was struck out. Both parties failed to turn up. So am guessing maybe the arrears have been paid & the lenders no longer want the property back?

[Killerschick]

Sounds like a reasonable assumption, it would be a pretty negligent mortgage lender that didn't bother sending a representative to a repo hearing, it's more likely (particularly if the payment was last minute) they would have neglected to adjourn the hearing when it became clear they didn't need to go ahead.

[ke2dge]

I'm just wondering what happens next though if this isn't the case. I take it another application to the court would be made. I know of a repossession case that no body turned up to and it was rescheduled where the lender appeared ,no landlord & the house was repossessed in his absence.

[ke2dge]

a statement arrived showing NO payment has been made during feb,therefore adding another £300+ to the arrears! Just do not know what is going on!!!

[ke2dge]

Court threw out the case because no parties showed...but landlord paid £4000 off arrears end of march..but has missed mortgage payments for april & may, so solicitors have requested another hearing as arrears are now back up to around £2400. It annoys me because I don't know if I'm coming or going,whether the house will be repossessed or not...this is the 3rd time I've been in this position since the original court order made back in May 2008!