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Debt Advice Handbook 15th edition

2. Recovering property

• Negotiating before the hearing

Alert: In England, regulations prohibiting evictions from being carried out until 31 May 2021 have expired and have not been extended. Similarly, in Wales the ban on evictions (which was extended until 30 June 2021) has not been extended further. However, enforcement agents are now required to to give 14 days’ notice of evictions and, from 7 August 2021, if an eviction does not take place on the date specified in the notice, a further notice of eviction must be delivered to the premises at least seven days before the new eviction date.1r83.8A(2) CPR

You must make the court aware of any impact that circumstances relating to the coronavirus outbreak has had on the client’s financial situation. You should also ensure you check with clients what communications (if any) they have had with creditors during the pandemic regarding their financial situation due to the impact of the pandemic as well as any communications from you or other advisers. Any such communications should be drawn to the court’s attention as well as being raised with the creditor or its solicitor/s during any pre-hearing negotiations.

Housing Possession Court Duty Schemes are available which provide free, non-means-tested advice to clients at the court hearing. Each court has its own arrangements for access. A list of schemes is available at

gov.uk/government/publications/housing-possession-court-duty-schemes-hpcds.

Note: this chapter only covers the action taken when there are unpaid payments due under a mortgage (or other secured loan) or unpaid rent due under a tenancy. It does not cover the details of all the law in these areas and you should therefore refer to specialist books (see Appendix 2) and to a housing specialist where necessary.2For a summary of recent developments in mortgage arrears cases, see M Robinson, ‘Mortgage Possession Update’, Adviser 147

A landlord or a mortgage lender can start action in the county court for possession of a tenant’s or owner-occupier’s home by completing a claim form (Form N5) and particulars of the claim (Form N119 for tenants and N120 for mortgages). The creditor cannot request a default judgment (see here) or apply for summary judgment (see here) in this type of action. If the client does not respond, the hearing must still go ahead.

There must be a hearing to consider the merits of the claim. The procedure is contained in Part 55 of the Civil Procedure Rules. Possession claims are normally brought in the county court hearing centre for the area in which the property is situated. A claim may only be brought in the High Court in ’exceptional circumstances’. If you encounter a possession claim or order made in the High Court, you should obtain specialist advice.

Note: a client cannot be forced to leave her/his home against her/his will unless a court order and warrant have been obtained.

 

1     r83.8A(2) CPR »

2     For a summary of recent developments in mortgage arrears cases, see M Robinson, ‘Mortgage Possession Update’, Adviser 147 »

Negotiating before the hearing

You should always try to negotiate with a creditor and reach a satisfactory agreement before going to court. This is preferable to relying on the decision of a district judge and avoids the possibility of things ’going wrong’ at the hearing. In addition, the following apply.

•If an order is made for possession of the property and/or payment of rent arrears, the court usually orders the client to pay the landlord’s costs.
•Most mortgages allow the creditor to charge all her/his costs to the client in connection with default and repossession without needing a specific order for costs made by the court.
•It is important to avoid unnecessary court hearings or delays.
•Ideally, both parties should apply for the matter to be adjourned generally (ie, without a future hearing date) on the agreed terms (see below).

Often landlords and lenders insist on a suspended possession order (see here) being made rather than agreeing to the case being adjourned on the basis of the agreed terms. This puts the client’s home at risk, but it may result in a better order for her/him than if the matter had been left to the discretion of the district judge. If the creditor agrees to a suspended possession order, check that any solicitor representing the landlord or lender has been informed and obtain written confirmation of the terms of the proposed suspended order so this can be produced at the hearing if there is any dispute. See Chapter 8 for possible strategies.

If the agreement to clear the arrears was made before the landlord or lender issued court proceedings and the client has not defaulted under the agreement, ask the court to adjourn the matter and not allow the landlord’s or lender’s costs. This is because the Civil Procedure Rules and paragraph 6 of the pre-action conduct practice direction (see here) require people to act reasonably in trying to avoid the need for court proceedings (see here).

In addition, a lender that issued proceedings in these circumstances would be in breach of the spirit of the mortgage arrears pre-action protocol (see here). In the case of social landlords, if the payment agreement is made before the issue of proceedings, under paragraph 10 of the rent arrears pre-action protocol, the landlord should agree to postpone proceedings, provided the client keeps to the agreement. If the payment arrangement was made after proceedings were issued, the landlord should agree to an adjournment (see here and here).