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Types of orders

This content applies to England & Wales

Orders the judge can make following a court hearing.

The information on this page applies to regulated mortgage contracts (RMC), including consumer credit back book agreements. For more information about their governing law and regulatory regimes, see Legal background.

Dismissal

If the claim should not have been issued, for example because the mortgage contract states a minimum level of arrears before a claim can be issued and this was not met, the borrower can ask the court to dismiss the claim and order that the lender pays the costs and does not rely on an indemnity clause to add them to the mortgage debt.

Adjournment

The court may adjourn the case as follows:

  • a procedural adjournment - for example if the lender has failed to provide all required information, or where the borrower needs time to obtain legal advice or to file a properly pleaded defence
  • an adjournment under the Administration of Justice Acts for the borrower to pay the arrears over a reasonable period.

The court can adjourn the hearing for however long it considers reasonable. The court may attach terms to the adjournment, for example, that the current instalments are paid. The court will send out a written notice giving the date and time of the next hearing.

If the arrears are low and/or the borrower is maintaining a payment arrangement with the lender the borrower can ask for an adjournment on terms, sometimes called a general adjournment. This means the case is adjourned as long as the borrower keeps to the monthly payments specified by the court. This has the advantage of requiring the lender to apply for another hearing if the payments are not made, but the borrower is likely to be liable for the additional costs of that hearing. When the terms of a suspended possession order are breached, the lender can normally apply immediately for a warrant for possession without a further hearing.

Where the lender has a contractual right to possession, for example because the arrears have reached an amount specified in the agreement, the court is unlikely to adjourn on terms. If this is the case the borrower should ask the court to suspend possession.

Case management directions

If the borrower (or another specified party, such as a person with rights of occupation) can demonstrate they may have a defence to the possession claim, it will usually be appropriate to make an order giving case management directions. These will usually include allocation to a track, having regard to the general factors governing allocation [1] and those specific to possession cases:

  • the level of arrears
  • the importance of vacant possession to the claimant[2]
  • the financial value of the property will not necessarily be the most important factor.[3]

Other directions may include:

  • the service of a full defence, if not already served
  • service of a reply
  • disclosure and inspection
  • exchange of witness statements
  • expert evidence, if required (such as expert valuation evidence)
  • directions for trial including possible trial dates.

The borrower or their representative should be prepared to explain any particular reasons why longer periods than usual should be allotted, for example, the time required before service of a defence because of obtaining public funding and/or the involvement of counsel. The borrower should tell the court if certain dates are not suitable.

Suspended possession order

Where the court is satisfied with the borrower's proposals for payment, a suspended possession order will usually be made. If the borrower is relying on the court's power to suspend possession in the Administration of Justice Acts, they will need to show that they can meet future mortgage payments and clear the arrears within a reasonable period.[4]

The court should consider the starting point for determining a reasonable period as the remaining term of the mortgage.[5] By dividing the amount of the arrears by the months remaining on the term it is possible to arrive at the minimum offer the court is likely to accept. The court has discretion to refuse to suspend the order, so if the borrower should offer a higher amount if it is affordable. Any offer should be supported by a statement of income and expenditure where possible.

Terms of the order

The order will state how the arrears and future instalments should be paid, for example, by equal instalments, steadily increasing instalments, or by a combination of these over an agreed period. If the borrower is able to pay a lump sum towards the arrears, this can be included in the order. If the borrower cannot make payments immediately but this will change in the foreseeable future the court can make a ‘stepped order’.

In one case the Court of Appeal commented that the power under the Administration of Justice Acts to impose terms on how the arrears are discharged applies equally to the future instalments for the remaining term of the loan.[6] This provides the court with a wider discretion to schedule payment terms than previously thought. The suspended order is not discharged if the arrears are repaid and will remain enforceable if the arrears are repaid but further arrears accrue in the future. This is also the case if the lender later agrees to consolidate the borrower's arrears with the outstanding balance. The Court of Appeal also held that although the effect of the consolidation is to temporarily wipe off the arrears, if the borrower falls into further arrears, s/he will breach the order and the lender will be able to apply for a warrant of execution.

Time to sell

The court can also suspend the possession order for a reasonable period to allow the borrower time to sell the property.[7] However, the court must be satisfied that the proceeds of the sale will be sufficient to discharge the mortgage debt. If the borrower is in negative equity the court can only suspend the order if the borrower has other funds sufficient to meet the shortfall.[8] The court has the power to extend any period of suspension.[9]

Possession warrant

If a suspended possession order is made, the lender is not entitled to evict the borrower unless they fail to keep to the terms of the order even if the breach is remedied later. If the borrower cannot comply with the terms of the order they can apply to go back to court to have the terms varied (see Court hearings after initial order). The borrower can request that the order states that a possession warrant should not be issued without a further hearing first taking place, but this is at the judge's discretion. The judge is more likely to agree to such a request where the terms of the suspended order are not straightforward, for example if there is a lump sum to be paid in several months' time, or if the payments depend on a pending job offer.

Money judgment 

In addition to a suspended possession order, the lender is also entitled to apply for a money judgment. In most cases, the money judgment will be suspended on the same terms as the order for possession[10] under the court's discretionary powers.[11] In cases where a suspended order is also obtained, the money judgment does not appear on the register as a county court judgment unless and until the terms of the suspended order are breached and the lender starts to enforce the order for possession.[12]

Time Orders

Borrowers in difficulties can ask the court for a 'time order' to reschedule a loan over a longer period. A time order allows the court to reschedule the payments due in order to give the borrower more time to make repayments. The time order provisions grant the court more flexibility in setting terms for repayment as it may interfere with the terms of the agreement. Where a time order is made, the court should suspend any possession order that it also makes, so long as the terms of the time order are complied with.[13] See Time orders for more information.

Order for outright possession

If the borrower does not go to the hearing or if there is no prospect of the arrears being cleared within a reasonable period or a time order is not requested or is refused, the district judge will usually make an order for outright possession. These orders will normally take effect 28 days after the hearing. If there is a good reason the court may postpone the date for possession for a longer period, for example where the borrower is ill or a new home is not yet available. Once the date for possession has passed the lender can apply to the court for a warrant of possession to be executed by the court bailiffs. The court has the jurisdiction to postpone execution of the warrant for possession for a reasonable period.[14]

If the property is rented out and not occupied by the borrower then the tenant may be able to take action to delay eviction (see Tenants of mortgagors).

Order for sale

The purpose of obtaining possession is so that, after repossession, the lender can evict the borrower and sell with vacant possession. , In some cases the lender cannot use the procedure in CPR 55 because the mortgage agreement or deed is defective. This may be the case if there has been fraud or undue influence. In these instances the lender may apply for an order for sale as an alternative in possession proceedings.

Costs

It is common practice for a mortgage agreement to contain an indemnity clause stating that costs relating to possession action can be added to the outstanding loan. This applies regardless of whether the court order mentions an order for costs. If the costs are considered unreasonable or improperly incurred,[15] the borrower may be able to have them reduced by applying separately to court for an order to that effect. In one case, the court disallowed the mortgage lender from recovering its costs by adding them to the security, as the possession action had been futile in the first place.[16]

[1] rule 26.8 Civil Procedure Rules SI 1998/3132 (as amended).

[2] rule 55.9 Civil Procedure Rules SI 1998/3132 (as amended).

[3] Civil Procedure Rules SI 1998/3132 (as amended), Practice Direction 55.6.1.

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

[5] Cheltenham and Gloucester Building Society v Norgan [1996] 1 All ER 449, CA.

[6] Zinda v Bank of Scotland Plc [2011] EWCA Civ 706.

[7] Bristol & West Building Socity v Ellis (1997) 29 HLR 282, CA.

[8] Cheltenham and Gloucester Building Society v Krausz (1997) 29 HLR 597, CA.

[9] LBI HF v Stanford & Anor [2015] EWHC 3130 (Ch).

[10] Cheltenham and Gloucester Building Society v Grattidge (1993) 25 HLR 454, CA.

[11] s.71(2) County Courts Act 1984.

[12] Regulation 9(d) Register of Judgments, Orders and Fines Regulations 2005/3595.

[13] Southern and District Finance plc v Barnes (1995) 27 HLR 691, CA. 

[14] s.36 Administration of Justice Act 1970.

[15] Gomba Holdings (UK) Ltd v Minories Finance Ltd (No.2) [1993] Ch.171.

[16] Co-operative Bank v Phillips [2014] EWHC 2862 (Ch).

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