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The possession case

This content applies to England & Wales

The steps the lender will take to bring possession action, and the court's power.

The information on this page applies to all residential mortgages, except where otherwise stated.  Mortgages that were regulated by the Consumer Credit Act 1974 when they were executed may have additional requirements before a lender can take possession action. See Legal background for more information about how mortgages are regulated.

Claim

When taking possession action in the courts, the lender must follow the procedure contained in Part 55 of the Civil Procedure Rules. This requires that the claim is brought in the county court, unless there are complicated disputes of fact or points of law of general importance, or the claim is against trespassers and there is a substantial risk of public disturbance or of serious and immediate harm to persons or property, in which case it may be brought in the High Court.[1]

A claim form N5 will be issued by the county court advising the borrower of the place, date and time of the possession hearing.

The claim form must be accompanied by the particulars of claim on form N120 and must contain details of:[2]

  • size of the loan
  • amount of outstanding arrears
  • mortgage balance
  • any other outstanding payments (eg interest and insurance)
  • any information the lender has about the borrower's circumstances (eg details of welfare benefits claimed).

The claim may be started online,[3] as long as certain conditions are met,[4] using the possession claims online service (PCOL). Where the possession claim is started online, the lender need not include a full history of the arrears with the claim, as long as all particulars of the claim are provided in full to the borrower within seven days of the claim being issued.[5]

Response

On receipt of the claim form, the borrower is not required to file an acknowledgment of service or defence, but her/his failure to do so may be taken into account when liability for costs is considered.[6]

Where the possession claim was started using PCOL, a defence or counterclaim may be filed using the service (a username and password will be issued to the borrower with the claim form).[7]

Witness statements (if any) should be filed and served at least two days before the hearing.[8]

Court hearing

The possession hearing takes place not less than 28 days and not more than eight weeks after issue, usually before a district judge.

At the hearing, the court will check if the parties have complied with the Pre-action Protocol for Possession Claims based on Mortgage Arrears and the Civil Procedure Rules and may:

Notices

Within five days of receiving notification of the hearing date from the court, the lender must send a notice stating that a possession claim has been started to:[9]

  • the property addressed ‘the tenant or the occupier’,and
  • the housing department of the local authority within which the property is located
  • any registered proprietor of a charge over the property (other than the lender claimant).

The lender must produce a copy of the above notices and evidence that they have been sent at the hearing.[10]

The lender is also required to give notice to any person who has registered their interest in the property under the Matrimonial Homes Acts 1967 or 1983 or the Family Law Act 1996.[11]

Court’s powers

The court's powers can be summarised as follows:

  • dismissal - if the arrears have been paid or for serious procedural errors
  • a procedural adjournment - where, for example, the lender has failed to provide all required information or give notice to occupiers
  • an adjournment under the Administration of Justice Acts (see Legal background for details) for the borrower to pay the arrears over a reasonable period[12]
  • case management directions - where the borrower has produced a substantive defence (see Possible defences for details). The court will instruct the lender and the borrower to file documents and will set a date for a trial. A defence may be established by someone other than the borrower but who has an interest in the property that is effective against the lender. It may be necessary for the court to add any such person as a party to the action. This will not include tenants of the borrower unless their tenancy is binding on the lender
  • a possession order - this may be outright or suspended on terms. The terms may, for example, require payment of the arrears by instalments or the sale of the property by the borrower within a certain time period. Even when making an outright order, the judge may stay enforcement under the Administration of Justice Acts (see the page on Legal background)
  • a time order - particularly if the loan was regulated by the Consumer Credit Act 1974 when it was executed and potentially in other cases (see Time orders for details).
  • a money judgment - if the lender ask for judgment for the arrears at the same time as the possession order. In some cases the lender may prefer simply to take what is due against the arrears from the proceeds of sale
  • postpone the date for delivery of possession for up to two months - where there are unauthorised tenants in the property, whose tenancy is not binding on the lender (see Tenants of mortgagors for details).[13]

A mortgage possession case may return to court for further hearings, for example to resolve procedural difficulties, or upon's the lender application where the borrower has failed to keep to the terms of an adjournment, suspension or stay.

Enforcement

If possession is given outright, or the terms of a suspended possession order are not complied with, the lender can apply:

[1] Civil Procedure Rules SI 1998/3132 (as amended), Practice Direction 55.1.1 - 55.1.4 and 55.1.6.

[2] Civil Procedure Rules SI 1998/3132 (as amended). Practice Direction 55.2.1, 55.2.5, 55.5.1 and 55.5.2.

[3] Rule 55.10A Civil Procedure Rules SI 1998/3132 (as amended).

[4] See Civil Procedure Rules SI 1998/3132 (as amended), Practice Direction 55b.5.1 - 55b.5.2.

[5] Civil Procedure Rules SI 1998/3132 (as amended). Practice Direction 55b.6.3A - 55b.6.3C.

[6] Rule 55.7 Civil Procedure Rules SI 1998/3132 (as amended).

[7] Civil Procedure Rules SI 1998/3132 (as amended), Practice Direction 55b.7.1.

[8] Rule 55.8(4) Civil Procedure Rules SI 1998/3132 (as amended).

[9] Rule 55.10(2) Civil Procedure Rules SI 1998/3132 (as amended).

[10] Rule 55.10(4) Civil Procedure Rules SI 1998/3132 (as amended).

[11] Civil Procedure Rules SI 1998/3132 (as amended), Practice Direction 55.2.5(1).

[12] s.36(1) Administration of Justice Act 1970.

[13] s.1 Mortgage Repossessions (Protection of Tenants etc) Act 2010 and Civil Procedure Rules, rule 55.10(4A).

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