MORTGAGE REPOSSESSION

Question 1

WHEN CAN REPOSSESSION HAPPEN

Answer 1

• s87 LPA 25
• inherent right four maids Ltd v Dudley Marshall properties 1957 ‘mortgagee May go into possession before ink is dry…unless something in contract express or implied where they have contracted them self out of that right. Has right because of legal term of years or statutory equivalent,
• likely the mortgage agreement will exclude the right to possession until there is some default by the mortgagor ( Birmingham citizens permanent building society v caunt v 1962)

Question 2

IMMEDIATE POSSESSION

Answer 2

• incentive to go into possession not necessarily beneficial
• must account to the mortgagor for rents and profits (lord trimelston v hamill 1810)
• mortgagee May not derive any profit for them self
• other duties inc reasonable care of the property

Question 3

COURT ORDERS FOR POSSESSION

Answer 3

• a court order is not necessary for a mortgagee to take possession
• it’s an inherent right
• if bank society or lender it’s preferable (residential and commercial) s6 criminal law act 1977
• protection from eviction act only applies if house is on lease
• ropaigealach v Barclays Bank 1999 bank didn’t apply for court order and still took possession. They sent letters but owners didn’t live at the address
• lender of uk finance will most likely seek possession with court order as they may expose themselves to criminal liability

Question 4

PRE-ACTION PROTOCOL

Answer 4

• full title: pre action protocol for possession claims based on mortgage or home purchase plan arrears in respect of residential property
• happens when court order for possession is sought
• defines how a mortgagee should act towards mortgagor (cleat and structured approach)
• mortgagor must be informed of debt and given every opportunity to avoid repossession by rescheduling debt

Question 5

DEFENCE FROM MORTGAGOR

Answer 5

• can only use defence s36 AJA 1970 if the mortgagee has issued possession proceedings

Question 6

MORTGAGOR WANTS TO HOLD OF REPOSSESSION

Answer 6

• can only do so by defending already issued proceedings
• s36 AJA
• must be dwelling house
• mortgagor can pay back sums due within reasonable time limit
• court can adjourn stay suspend or postpone proceedings
• courts power to postpone limited to max 28 days Birmingham v caunt 62
• interpretation of s36 depends on whether Mortgagor wants to pay off arrears or want to sell them self

Question 7

1) PAYING OFF ARREARS

Answer 7

• is it dwelling house or holy ?
• s36 AJA only applies where house is a dwelling house

Next part of test

• must pay any sums due
• Halifax v Clarke 73
• only has to be the arrears s8 of justice Act not the whole mortgage sum
• Reasonable time can mean whole term of mortgage cheltenham and Gloucester building society v norgan 96 has a list off factors see PowerPoint slides
• such conditions as court thinks fit
• court able to attach conditions to sums
• bank of Scotland v Zinda 2012
• if conditions are harsh can use AJA S36 (4)

Question 8

2) MORTGAGOR WANT TO SELL THEMSELVES

Answer 8

• this is second option
• is this a viable option and why?
• think amount timing and control
• they may achieve better price as house will be heated and furnished
• more involved so know when they will have to move out
• more control
• so reapply test from s36 AJA
• they must may any sums due meaning whole mortgage and interest ( national & provincial building society v Lloyd 96)
• must be in full (Cheltenham v Gloucester v Krausz 97)
• can not sell if proceeds do not cover debt

Question 9

2) MORTGAGOR WANT TO SELL THEMSELVES II

Answer 9

• certain terms to sell them self
• must be within reasonable period eg short term
• evidence of likelihood of sale to discharge debt (Bristol + West building society v Ellis 96)
• clear and specific evidence of proposed sale (national + provincial building society v Lloyd 96)
• clear steps toward an actual sale at price (Bristol v Ellis 96)
• evidence that an offer has been received (target homes v clothier 94)