Eviction of tenants of mortgage borrowers

A mortgage lender can bring possession proceedings in the County Court against a borrower who breaches their mortgage agreement. Most possession claims are for non-payment of the mortgage.

If the mortgaged property is rented out, the lender can step into the shoes of the landlord and collect rent from the tenant, or it might decide to evict the tenant.

Unauthorised tenants

If the tenancy is unauthorised, the lender can evict the tenants using the possession order and warrant it obtains against the borrower. The tenants can ask the court for up to two months of extra time to move out if they need it.

Read more about authorised and unauthorised tenancies in tenant's rights when a landlord is repossessed on Shelter Legal.

Pre-action protocol for mortgage possession claims

The pre-action protocol for mortgage possession applies to most mortgage lenders who issue a claim against a borrower for non-payment. It does not apply to buy-to-let mortgages.

Read more about the pre-action protocol for mortgage possession on Shelter Legal.

How the tenant is notified of the possession claim

A lender that has issued a claim for possession against a borrower must serve a notice on the property addressed to the occupiers. It must do this within five days of receiving notification of the hearing date from the court.[1]

Lenders must demonstrate compliance with this rule by producing a copy of the notice and evidence of service at the court hearing.[2]

An authorised tenant has a tenancy that is binding on the mortgage lender. They have more rights than an unauthorised tenant because the lender must bring separate court proceedings to evict them.

How a tenancy is authorised

There are three ways a tenancy can be authorised by the mortgage lender. For the tenancy to be authorised, one of the following must apply:

• the tenancy was granted before the mortgage agreement

• the lender consented to the tenancy

• the lender accepted the tenancy as its own

For more information about when a tenancy is authorised, see tenant's rights when a landlord is repossessed on Shelter Legal.

How the lender can evict the tenants

The lender can use any grounds that would have been available to the landlord. If the tenant has breached the tenancy terms, the landlord can use the breach to bring possession action.

Most private tenants have an assured shorthold tenancy. Assured shorthold tenants can be evicted using the section 21 process whether they have breached the tenancy or not. It can be difficult for lenders to use section 21, as it requires the lender to supply documents such as gas safety certificates, which it might not have.

Read more about section 21 notices on Shelter Legal.

Ground 2 Housing Act 1988

A lender that has consented to a tenancy might be able to issue a possession claim against the tenant using ground 2 of Schedule 2 of the Housing Act 1988.

For ground 2 to apply, the landlord must have given the tenants notice in writing before the start of the tenancy stating that this ground might later be relied upon. The court can dispense with the requirement for this prior notice if it is just and equitable to do so.

See Assured tenancy mandatory grounds for possession on Shelter Legal for more information about ground 2.

A similar ground applies to tenancies protected under the Rent Act 1977, but only where the property was the landlord's own home at some time before the tenancy began.[3]

To evict an unauthorised tenant, the lender does not have to do anything other than follow the process for evicting the owner-occupier. That means it must obtain a possession order, apply for a warrant, and instruct certified enforcement agents to evict the occupiers.

The lender does not have to issue separate court proceedings against the tenant. The warrant allows bailiffs to evict anyone from the property.

Government Guidance to the Mortgage Repossessions (Protection of Tenants etc) Act 2010 informs lenders, landlords, and tenants of their rights and responsibilities.

Application to join the proceedings

An unauthorised tenant is not a defendant in the court proceedings, but they are permitted to attend the possession hearing. There is normally no reason for the tenant to apply to join the court proceedings, as they cannot offer a defence.

Tenants who apply to join court proceedings are at risk of having a costs order made against them.

Offers of payment

Claims for possession for mortgage arrears normally fall under the Administration of Justice Acts 1970 and 1973. Under these Acts, only the borrower can offer to pay the mortgage instalments and an amount off the arrears. The tenant cannot make a payment offer to prevent the court from making a possession order.[4]

The court will likely reject a borrower's offer to pay the instalments and an amount off the arrears funded by the rent from a tenancy that was created in breach of the mortgage agreement. This is because the payment offer could only be met by continuing the breach of the mortgage agreement.

Read more about when a tenancy is unauthorised in tenant's rights when a landlord is repossessed on Shelter Legal.

Requesting an extension from the lender

The tenant can ask the lender or its solicitor to agree to delay possession. The lender or its solicitor can give an undertaking that states it will allow up to two months (or another agreed period).

The tenant can ask the lender over the phone, but they should ensure the agreement is given in writing.

If the lender does not agree, the tenant can attend the court hearing or write to the court ahead of the hearing to ask for a postponement of up to two months.

Requesting an extension from the court

There is no specific form to ask the court to postpone possession for up to two months. The tenant can write to the court ahead of time.

Tenants who do not write to the court in advance can still attend the possession hearing. They should arrive in plenty of time and notify the court usher that they want to attend. Otherwise, the hearing might proceed without them.

The tenant should take evidence of the tenancy, and proof that they have made rent payments, if available. Evidence of the tenancy could include a tenancy agreement, rent statements, bank statements, tenancy deposit information, or anything else that shows that there is a tenancy.

Tenants who request an extension from the court at the possession hearing stage cannot make another application for an extension when the warrant is issued.

The lender must serve a 'Notice of execution of possession order' at the property when it applies for the warrant or writ of execution. The notice can be given once the lender has applied for the warrant, or when they know they intend to apply.

The eviction date on the notice must be at least 14 days away.

Content of the notice

The notice must be in the prescribed form set out in the regulations.[5] It explains that the tenants have the right to ask the lender for a two-month delay before eviction.

The notice gives details of the lender's solicitor and the court that issued the warrant. It contains a list of advice agencies that might be able to help the tenant.

How the notice is given

The notice must be personally served on any person who appears to be resident at the property or addressed to 'the tenant or occupier'. The lender must send the notice by first class or registered post or fix it to the property in a prominent place.[6]

Legislation allows unauthorised tenants to ask the court for up to two months additional time to move out.[7]

The right to ask for a delay applies to all private tenancies that are not authorised by the mortgage lender, including tenants who succeeded to their tenancy.

Tenants who requested an extension to the date for possession at the original hearing cannot apply to delay possession for a second time.

Tenant's request to the lender

The tenant should ask the lender or its solicitor to agree to delay possession before making an application to court. The lender or its solicitor can give an undertaking that states it will allow the two months (or another agreed period).

The tenant can ask the lender over the phone, but they should ensure the agreement is given in writing. The tenant might be asked for proof they asked the lender for an undertaking, and a copy of a letter can be given to the court as evidence.

When the tenant can apply to court

The tenant can ask for the two-month delay when they receive the notice of eviction from the lender, or when the warrant is issued. It is too late to apply once the eviction has taken place.

Tenants can apply to court once. If they were granted a two-month delay at the possession hearing or by the lender granting an undertaking, they cannot request another delay at the warrant stage.

Tenants who apply to court at the warrant stage will only get extra time if they have asked the lender to give a written undertaking not to enforce the order for two months and the lender has not agreed to it.[8]

How the tenant makes the application

The tenant must apply to court on form N244.

The court address to send the form to is included in the notice the tenant received.

The tenant must pay a fee to apply unless they qualify for a remission. Read more about court and tribunal fees on Shelter Legal.

What to include in the application

The form N244 should set out what the tenant is asking the court to do.

The tenant can attach copies of other documents like proof of the tenancy agreement, and proof of rent payments. The tenant must have requested agreement from the lender and been refused before making the application. They should include proof of the request and the refusal.

The court will consider whether the tenant should pay rent to the lender. It could help the tenant's case if they can show they can pay some rent, even if it is not the full amount. Tenants who cannot pay full rent can include a financial statement with their application, to show the court it is not affordable.

The tenant can set out the facts of the case in a witness statement if they need more space than is available on the form. Read more about witness statements on Shelter Legal.

The court has a wide power to grant or refuse the two months.

What the court must consider

The court must consider the circumstances of the tenant and whether there have been any breaches of the tenancy agreement.

The court can apply terms that say the tenant must pay rent to the lender during the period of the postponement. This does not create a tenancy or other additional rights to occupy the property.

The court can take into account the conduct of the tenant. If the tenant's failure to keep up with rent payments has caused the mortgage problems, the court could be less likely to agree to postpone.

Proof of the tenancy

The court is likely to ask for proof that the tenancy exists. If there is no written tenancy agreement, the tenant could instead supply:

• copies of bank statements showing rent payments

• housing benefit or universal credit housing costs documentation

• documents from a tenancy deposit scheme

• landlord gas safety checks that name the tenant

• anything else that confirms a landlord and tenant relationship, including letters or emails

If the tenancy began after the possession order was granted to the lender, the court is likely to investigate whether it is genuine. The court can refuse to grant a delay if the tenancy has been devised as a way of delaying the eviction.