May 20, 2010
Background
On 8 April 2010 the Mortgage Repossessions (Protection of Tenants etc) Bill received Royal Assent and is now close to becoming law. The proposed Bill seeks to strengthen the rights of ‘unauthorised’ tenants that live in a property which is repossessed by their landlord’s mortgage provider.
An ‘unauthorised tenant’ is the term given to somebody who has been granted a lease after their landlord has taken out a mortgage on the property, and the lease is made without the mortgage provider’s consent.
At present an unauthorised tenant is not entitled to be represented at possession hearings, and the court does not have to consider the fact that a tenant resides in the property when deciding if possession should be given to a mortgage provider.
The problem with this is that from the outset tenants may not be aware that they are classed as ‘unauthorised’. They can be evicted at short notice and so they will have a limited period to find a new home though no fault of their own.
Extensions
If it is passed as law the proposed Bill will allow a tenant to apply to court to postpone the repossession date of the property by up to two months. This is the date that possession of the property is legally transferred to a mortgage provider. If a tenant remains in the property after this date, the mortgage company will need to apply to the court for a bailiff appointment to evict them.
If the court does not grant an extension of the repossession date (or if a tenant does not apply for a postponement in the first place), tenants will instead be in a position to request the postponement of a bailiff appointment by up to two months. In order to make this request they must have first have had a request for a two month postponement rejected by their landlord’s mortgage provider.
Notice
The proposed Bill will also require mortgage companies to give a tenant notice that they will be instructing bailiffs. How much notice they have to provide is yet to be determined.
For further information on this or other related topics please contact our Landlord & Tenant Department or our Commercial Property Department
