What is repossession of a property? Repossession occurs when a lender takes legal action to repossess a property which was once used as collateral or rented.
REPOSSESSIONS UK: This guide explains the legal process of house or home repossession.
Find out what your mortgage lender must do and what happens at a court repossession hearing.
There is further advice and information about possession orders and how to get help with your legal costs.
Your mortgage lender is a financial institution looking for full return on their investment. So what happens if you fall behind on the payments and develop mortgage arrears?
In this case your mortgage lender, likely to be a banking system or building society, will want you to clear the debts. If you fail to do this, the lender can start court action to repossess the property and then resell it.
In some cases you can postpone or stop your home getting repossessed. That is why you need to get expert advice about house repossession laws. You can get free advice from a Citizens Advice office, Shelter, or your local council.
Note: You can search for a solicitor online and check if you can get legal aid to help with your legal costs. Those who are eligible may get advice from Civil Legal Advice. The legal process for repossession of a house is different in Scotland.
There is a legal course of action your mortgage lender must perform before the house repossession goes to court. So, before any mortgage lender can legally repossess your property they must:
In some cases you can find a solution to avoid house repossession. This is possible even if your mortgage lender has already started court proceedings.
But, you must still attend the court to inform the judge about any agreement made. The exception could be if the court informs you the hearing got postponed or cancelled.
What happens first if your mortgage lender starts a repossession action against you? The court sends you a blank defence form and guidance notes on how to fill in the defence form.
The purpose of a defence form is for you to explain why you think your home should not get repossessed by the lender. You must return your defence form to the court within 14 days.
The court will also send you:
Those who are on a low income may qualify to get legal aid support.
What happens if you have not got any legal help before this point?
You may get last-minute legal help under the Housing Possession Court Duty Scheme.
The HCPDS runs in county courts throughout England and Wales. It provides defendants with a specialist adviser on the day of the hearing. The legal adviser can:
Your local council, or the court where your case gets heard, can give you more details about the scheme.
As a rule most repossession hearings take place in a judge's chambers. It is uncommon to have repossession cases heard in a courtroom. Nonetheless, judge's chambers gets treated the same as regular court cases.
Even though you may bring a friend or your adviser to the hearing, the person must be an adult.
What happens if you fail to attend the court repossession hearing? In most cases the judge will grant permission for your mortgage lender to evict you from the property.
You must honour any agreement you make in court to pay off your mortgage arrears. Failing to do so means you may still lose your home.
In most cases you will need to take certain documents with you to the court.
They will usually ask for proof of your finances. Document proof may include:
The mortgage lender can only repossess your home if the court judge grants them permission to do so.
The court judge can decide to:
Terms of an outright possession order mean you have to leave the property before the date given in the order. Often the date is 28 days after your court hearing.
The lender has a legal right to own your home on the date given in the order. This is also called an 'order for possession'.
What happens if you fail to leave your home by the date given? Your landlord can then ask the court for a 'warrant for possession' to get you evicted. An eviction notice gives you a date when you must leave your home.
Note: Failing to leave means your landlord can use bailiffs to evict you from the property.
A suspended order for possession means you might be able to stay in your home. But, you must make the payments or obey any specific conditions set out in the order. Your landlord can ask the court to evict you if you fail to make the payments.
Court money orders mean you must pay the amount set out in the order to your mortgage lender. If you fail to make the payments the courts can take action to recover the money. Court action can include:
Note: Your landlord can go back court and ask for a possession order if you get into rent arrears again.
A judge has legal power to add a money judgment to any of the different types of possession orders. This would mean that you owe a specific amount of money and is usually made up of:
A money judgment does not apply if:
But, a money judgment applies if you fail to pay the amount set out in the suspended possession order linked to a judgment. The landlord can also ask the court to carry out the instructions in the order and the judgment if you fail to pay.
A court time order means the judge changes the amount you pay on your mortgage for a set time by:
Failing to make the payments in a court time order means your lender can ask the court to evict you. As a rule, a time order gets made on some types of loan such as a second mortgage.
In some cases you can ask the court judge to 'suspend the warrant for possession'. This could delay the eviction or allow you to stay in your home providing you are able to make the payments again.
It is not an automatic decision for the judge to agree and suspend the possession warrant. The outcome depends on what happens in the court hearing. But, if he agrees you will get a new hearing. You should get legal advice without delay if you want to get a warrant suspended.
You must fill out the application notice if you want to apply for a suspension. Send or hand deliver the application form to the same court as your hearing.
You must inform the court that you need a hearing at short notice and it should be before your eviction date. In most cases you will need to pay a court fee for this service.
Note: Those who are claiming rightful benefits or on low income may not have to pay the fee.
What happens if you think the judge made some mistakes about the law or the facts of your original case hearing? You may have right to appeal the judge's decision.
Note: As a rule your appeal gets heard by a more senior judge at the court.
Ask the judge at the end of your original possession hearing for permission to appeal. You can ask a senior judge instead if the judge refuses to give you permission to appeal.
Make your application without delay after your original possession hearing if you get permission. In most cases you will need to pay a court fee.
Note: Those who are claiming rightful benefits or on low income may not have to pay the fee.
If you get granted an appeal the judge can then make several decisions which could include:
Note: The court judge can also determine who must pay the legal costs of the appeal.
The council must offer some practical advice and help you to find a new home. In some cases, they can provide emergency accommodation or a more permanent home.
You must inform any new mortgage lender if a previous home of yours got repossessed. This often makes it quite difficult to get a new mortgage.
Note: A previous lender may be able to claim some of the proceeds of a new home. This would still apply if you owe them money when you sell the property.
Housing and Local Services: Information on local government housing rules and regional services.
Emergency Council Housing: How the homeless can get emergency shelter in the United Kingdom.
Accelerated Possession Procedure: Find out what it is and how to get an accelerated possession order.
Housing Association Eviction: The eviction procedures of council or housing association tenants.
Court Hearing for Tenant Eviction: How does a court possession hearing proceed in England?
Squatting and the Law: What is squatters' rights and how to remove squatters from youR property.
House Repossession Process in the United Kingdom