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Rule changes increase tenant protection

publication date: May 8, 2009
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Kevin Lee, property litigation partner at Halliwells who acts for mortgage lenders says of the changes, “An increased notice period for court repossession hearings came in on 6 April. Previously, a mortgage lender had to notify the tenant of a repossession court hearing at least 14 days before it took place. But from 6 April the lender has to give this notice much sooner; within five days of receiving details of when and where the hearing will take place. This illustrates how the Government is already responding to the problems of notification in repossession orders.

“The way in which tenants are informed about actual evictions also changes.
A mortgage lender must tell the court that the property has not been vacated before they can ask for a date for bailiffs to seize it. This will mean at least one visit.”

These changes have been on the cards for a while but the expected rise in repossessions for 2009 (predicted by the Council of Mortgage Lenders to be up to 75,000 repossessions this year – and around 10,000 of these are thought to involve properties with tenants) has seen the Conservative Party recently demand that the Government increase their offer of protection for the private tenant through five key measures:

• Increased notice period for any court repossession hearing;
• Investigate how tenants can be addressed directly with information; about repossessions, rather than being sent a letter to ‘the occupier’;
• Encourage courts and lenders to allow tenants to be heard at repossession hearings.;
• Ask lenders to extend the notice period between a repossession order being granted and eviction;
• Work with lenders to allow tenants to stay in repossessed properties until they are sold.

Kevin claims the Government has been striving to better the position of tenants through legislation before these demands were vocalised by the Opposition:

“Over the last year or so the Government has been stressing the point that repossession is to be strictly a last resort for lenders. The recent pre-action protocol issued by the Government is another move to ensure that repossession of a landlord’s property, and the subsequent eviction of anyone living at the property, including tenants, is the last available option. The idea was to encourage contact between the lender and the borrower and to try and reach an agreement instead of proceeding to court.”

Geraint Wheatley, a barrister specialising in property law at Kings Chambers in Manchester agrees that such measures are already having an impact on the actual practice of repossession hearings: “The courts are already very well aware of the plight of tenants in these situations, they are always prepared to listen to their case, and often give them a good deal of leeway. Lenders have no choice but to allow tenants to be heard. Indeed, I have never known of a lender trying to prevent this.

“The law in this area is very technical. There will often be a duty solicitor on hand at court on days when repossessions are being heard, so it is always worth tenants attending court to seek his or her free advice, even if they do not think they will be assisted by the basic rules mentioned.”

Those tenants who are concerned that these amendments do not go far enough to protect their interests should find out whether their tenancy is authorised by the mortgage lender, according to property partner at Weightmans law firm Anne Dobie, “If you are living in a privately-rented property, you should confirm with your landlord that your tenancy has been authorised by the mortgage lender. That way, you can protect yourself. If you believe that you may hold additional rights, such as those contained in a regulated tenancy or assured tenancy, then you should take legal advice immediately as such rights will afford you better protection.

However, Anne warns that offering a higher level of protection for the private tenant will not necessarily benefit the whole housing market. “I am concerned that any means of giving tenants who are unfortunate enough to have rented a house from a defaulting landlord better protection would run the risk that banks and building societies may be even more reluctant to lend money to buy residential property, further depressing the housing market. For instance, if a bank enters into possession and then finds it has to go about giving long notice to a tenant that the bank knew nothing about, it is going to make the banks even more wary about lending money to people to buy houses.”