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Dealing with a possession case

This content applies to England & Wales

Steps that can be taken in the court proceedings, including the possession hearing.

Before action

In most circumstances, court proceedings for possession of property where there are mortgage arrears are begun after the exchange of informal or formal letters between the lender and the borrower, and often where an informal arrangement to clear the arrears has broken down. If proceedings have not been brought, or even if proceedings have been started, the adviser may be able to negotiate a settlement – see the page Tactics in dealing with lenders for more information about negotiating with the lender and ensuring compliance with pre-action conduct and rules.

The possession case

Possession proceedings must be brought in the county court, unless there are exceptional circumstances, such as complex factual or legal issues, in which case the High Court may be the appropriate court.[1] Where the loan is regulated by the Consumer Credit Act 1974, proceedings must be brought in the county court.[2] If they are wrongly brought in the High Court, proceedings will be transferred to the county court.[3] Proceedings generally have to be issued in the county court district where the property is located. For more information about the mortgage possession procedure see the page The possession case .

In practice, most mortgage possession proceedings are brought in the county court and the information in these pages apply to county court proceedings, unless otherwise stated.

Completing the defence form

Following receipt of the letter from the lender's solicitors (or the default notice for loans regulated by the Consumer Credit Act 1974), if the borrower does nothing or is unsuccessful in negotiating with the lender, within a few weeks s/he will receive a claim form from the local county court giving a date for the possession hearing. The borrower should complete the defence form (N11M). The form does not ask the borrower specifically to give the reasons for the arrears, although the borrower may state on the form what the reasons are. The form asks for details of income and expenditure. The most important element in the defence form is likely to be the borrower's proposals for repayment of the arrears. The form asks the borrower to make an offer. If there is not enough space for all the borrower needs to say on the defence form, s/he should draft a supplementary document and file that as well.

The borrower should return the defence form to the court within 14 days. If that is not possible, the borrower should try to return it as soon as possible. If the defence is sent in late, a copy should be sent directly to the lender or its representative so that it is not prejudiced (or not greatly prejudiced) by the delay. The reason for getting the defence into court well in advance of the hearing is so that the judge and lender know what the defence is and what the borrower's circumstances are before s/he hears the case. If the lender is taken by surprise (because the borrower has not returned the defence to the court within 14 days) then the borrower may have to pay any extra legal costs incurred by the lender. This may happen if an adjournment is needed.

In a case where a substantive defence, such as undue influence or misrepresentation, is alleged, professional advice should be sought so that the court receives a properly drafted defence. If that is not possible, then at the hearing the borrower should explain to the judge the gist of the defence and explain that s/he needs a short adjournment to get legal advice. The borrower should be prepared to explain what steps s/he has taken to get advice and whether s/he has booked an appointment with a solicitor and if not, why not.

For more information see the page Possible defences.

Going to the hearing

Within five days of receiving notification of the hearing date from the court, the lender must send a notice to the property addressed to 'the tenant or the occupier' advising whoever is residing in the property of the date of the hearing.[4]

It is essential for the borrower to attend the court hearing. The borrower should take to the court:

  • any correspondence, wage slips or estate agent's sale particulars that support the proposals concerning the arrears
  • details of any lump sum payment s/he is due to receive such as a tax rebate, insurance pay out or arrears of benefits; s/he should try to obtain written confirmation of these prior to the hearing
  • an up-to-date valuation of the property
  • details of, and receipts or other evidence for, any payments s/he has made since the possession summons was issued to help establish the exact level of the arrears.

Before the hearing, the borrower should consider whether or not it is realistic to remain in the home or whether s/he should sell it. If it is better to sell, the borrower will need to ask the court to allow sufficient time to arrange the sale (see Borrower's sale of the property). If the borrower can make a proposal to repay the arrears, it will be necessary to calculate how much s/he can afford to pay. In the case of loans covered by the Administration of Justice Acts, s/he will be expected to clear the arrears within a reasonable period, which could be the lifetime of the mortgage.

Hearing procedure

Possession hearings for mortgage arrears take place in the district judge's chambers, which is less formal and intimidating than the open court and not open to the public. The following people will usually be at the hearing:

  • the district judge hearing the case
  • a representative from the lender
  • the borrower
  • solicitors for the lender and the borrower.

Practice will vary from court to court, but usually the lender's solicitor will begin by outlining the history of the case. The borrower (or her/his representative) will then be asked to comment on the lender's case and justify any request, eg why the court should exercise its powers to postpone the lender taking possession. It is important that the court has all the information it needs to assess the case.

Generally, the hearing will only last for about 10 minutes. If there are complex legal or factual issues or the lender has not complied with the Pre-action protocol for mortgage arrears then the court should be asked to adjourn and to give directions for a further hearing. The court may, for example, order that relevant documents (and/or lists of them) be exchanged and that witness statements be filed with the court and exchanged.

[1] Civil Procedure Rules, SI 1998/3132 (as amended), Practice Direction 55.1.3.

[2] s.189 Consumer Credit Act 1974.

[3] s.141(2) Consumer Credit Act 1974.

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

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