Time orders duty adviser guide

Time Orders to prevent mortgage repossession: a quick reference guide for duty advisers acting for defendants.  

This guide provides fast answers to common questions that might come up for advisers and solicitors giving advice on the housing possession duty scheme.

When might it be appropriate to ask the court to make a time order?

If your client cannot make a 'Norgan' type offer to clear the arrears over a reasonable period but can make payments now or in the future.

A time order can also be appropriate where an interest-only mortgage is at the end of the term, in which case the court has no power to make a 'Norgan' type order.

When does the court have the power to make a time order?

The court has the power to make a time order in relation to regulated mortgage contracts (RMCs).

The vast majority of mortgages and secured loans deal with on a County Court duty desk will be RMCs.

Second mortgages entered into before 21 March 2016 that were not regulated by the Consumer Credit Act 1974 and first mortgages entered into before 31 October 2004 do not meet the criteria for an RMC.

The court can only make a time order if it is just to do so. It must consider the borrower's and the lender's position.

What can a time order do?

A time order can provide for payments at a rate the borrower can afford. It can also alter other terms of the agreement. For example in relation to interest charges.

Any order for possession should be suspended as long as the terms of the time order are met.

Can the court only make a time order to deal with temporary difficulties?

A time order should normally only be made to deal with temporary payment difficulties. It is possible for monthly payments to be reduced and the term extended where it is just to do so.

The Court of Appeal made a time order that lasted 18 years in Equity Home Loans v Lewis.

What is the process for making a time order?

A time order can be made in 'an action brought by a creditor...to recover possession of any...land to which a regulated agreement relates'.

This means the court can make a time order of its own volition. In practice, it is likely the court will require a defence and counterclaim for a time order to be filed and served.

Representatives will normally have to ask for an adjournment to file the defence and counterclaim.

Does the defendant have to pay a fee?

There is no fee to file a defence to a possession claim.

What legislation provides for time orders?

The Consumer Credit Act 1974 covers time orders.

  • Section 129 allows the court to make a time order in response to a claim by a mortgage lender.

  • Section 136 allows the court to 'amend the agreement in consequence of the order'.

  • Section 126(2) was amended on 1 April 2014 to include regulated mortgage contracts in Part 9 (judicial control).

What are the key cases that deal with time orders?

Southern and District Finance v Barnes and another (1995) 27 HLR 691 is the leading case about time orders. It was three appeals heard together. The court of appeal developed the test for making a time order.

The case held that the court must consider:

  • whether it is just to make a time order

  • what instalments would be reasonable, having regard to the borrower's means

  • whether to amend the original agreement (rate of interest, amount of instalments etc)

  • the consequences for the mortgage term and the rate of interest

Read more about time orders in mortgage possession cases on Shelter Legal