A lender can repossess your home if you fail to make your mortgage repayments. However, before asking the court for an order to repossess your house, there is a process the lender must follow. This includes complying with a pre-action protocol setting out the procedures you and your lender must follow before any court action is taken against you.
Your lender should give you a reasonable opportunity to pay off your arrears before starting a possession claim. The lender must also provide specific information under the pre-action protocol, including advising you to contact your local housing authority, and considering any reasonable request from you to change when or how you pay your mortgage arrears.
What is the repossession process?
If it is left with no alternative, your mortgage lender must make a formal possession claim to court to obtain:
- An order to repossess the property, and
- A warrant allowing court-appointed bailiffs to evict you
If possession action is taken, the County Court will send you a claim for possession of the property. This will include full details of the case against you, and the date of a court hearing at which the claim will be heard. You should attend the hearing, otherwise a possession order may well be made in your absence.
What happens at the court hearing?
The decision whether to grant your mortgage lender an order for possession of the property may be taken at the court hearing. However, if you are able to make an acceptable offer to pay off the arrears, the court will grant a suspended possession order. This means that you may remain in your home for as long as you stick to the agreement reached.
If the judge decides you cannot make an acceptable offer for repayment, it may then make a possession order. This is an order stating that your lender can take possession of your property and you will have to leave by a certain date.
What happens if I don’t leave the property?
Your lender will need to apply to the court for a warrant of possession before you can be evicted by the bailiffs. However, you could still have time before the grant of a warrant of possession to take action to allow you to stay in your home. You can ask the court to:
- Set aside the possession order. You should take legal advice if you believe there is a good reason why the possession order should be set aside. For example, the order was made when you were unable to attend the hearing, but you do have a good defence
- Suspend the possession order, for example, if you are now able to pay off the arrears. If successful, a suspended possession order will be made
You can also appeal the possession order to a higher court. An appeal must be made within 21 days, and can only be made if you believe the law was not applied correctly or due procedure was not followed. You will need expert legal advice to appeal the order.
What is the eviction process?
Once a warrant has been issued, you will be sent an eviction notice stating the date by which you must leave. If eviction becomes a reality, the court appointed bailiffs must act reasonably in the exercise of their duties. They must not use unreasonable force to enter your home, and they can remove you and anyone else present from your home. However, if you are not at home they can break in, and will probably change the locks to stop you re-entering.
Usually, the lender will send a representative when the eviction takes place (eg. an estate agent appointed to sell the house), and the bailiffs will give them the keys. The police may also be there to ensure a breach of the peace does not occur.
You must remove all your belongings from the property, otherwise the lender can obtain a court order requiring you to remove your possessions.
What if the sale proceeds do not cover the mortgage?
Any shortfall between the mortgage balance and the sale proceeds will be your responsibility to pay. Your lender will tell you what the shortfall is. If you refuse or are unable to pay, the lender can go back to court and obtain an order against you requiring you to pay the debt. If the amount is significant and you have other debts, you may decide to go down the bankruptcy route.
How do I find somewhere else to live?
Following eviction by a lender, you may get help from your local authority if you are homeless. However, if your authority decides you are ‘intentionally homeless’ it may not agree to rehouse you. This means that if you are facing repossession, you must consider your options seriously because of the serious consequences for you and your family.