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Legal issues affecting repossessions

If your home is being repossessed:

Stopping the foreclosure: The Video

Ben Lowrey

If you have exhausted all the options open to you, the lender can repossess your home in order to recover the amount you owe.

If you do not agree to the repossession, the lender may take you to court.

Legal issues affecting repossessions

In 2011, a High Court decision was made which established that there are legal difficulties with getting orders for possession of certain properties. This decision was made in a number of cases where mortgage providers were applying to repossess mortgaged property.

Put simply, the decision means that, in the case of mortgages created before 1 December 2009, it is very difficult for a mortgage provider to get an order for possession unless the court proceedings were started before that date.

There are no such difficulties in the case of mortgages created after 1 December 2009.

This situation has arisen because the law was changed on 1 December 2009. An existing law governing repossessions was repealed and, therefore, can only apply to cases which, arose before its repeal. The new law (the Land and Conveyancing Law Reform Act 2009) provides for repossessions but applies only to mortgages created after it came into effect.

The Land and Conveyancing Law Reform Bill 2013 aims to remedy the legal difficulties described. It also provides for a court to adjourn repossession proceedings for up to 2 months in certain situations, to allow the possibility of a Personal Insolvency Arrangement (PIA) to be explored as an alternative to repossession. A PIA is one of the new personal insolvency options being introduced later in 2013.

You can read the text of the new Bill (PDF) and the Explanatory Memorandum (PDF).

The legal processes involved in repossession

If you agree to have your home repossessed

You can consent to have your home repossessed. You may agree terms with your lender for the sale of the house, if you are unable to pay your mortgage.

For mortgages taken out on or after 1 December 2009, when the Land and Conveyancing Law Reform Act 2009 came into effect, the lending institution must get a court order to repossess or sell your house unless you consent in writing 7 days before the repossession or sale.

If the issue has to go to court, you are generally liable for the costs of the court action.

In some cases, the lending institution may have difficulty in finding a buyer who would be willing to buy the house unless there is what is known as a well-charging order in place. This is a court order which among other things allows for the sale of the property.

If you don’t agree to have your home repossessed:

If you haven’t agreed a repayment plan with the lender or you have been unable to meet the payment arranged by a repayment plan the lender may take you to court to repossess your home. You must engage in the legal process if you don’t want your home repossessed.

The lending institution may start the proceedings for repossession in either the Circuit Court or the High Court. However, if the mortgage was taken out on or after 1 December 2009, then a case for the repossession of the home arising from default on a housing mortgage loan must be first taken in the Circuit Court. A housing loan mortgage is the usual kind of mortgage that individuals take out in order to build, buy or improve a house. (Cases involving repossession for default on other kinds of mortgages may continue to be taken in either the Circuit or the High Court.)

The usual procedure is that the lending institution applies to the court for one or more orders – a possession order and/or a well-charging order. These orders may be granted in the same proceedings. Generally, it is the practice of the courts to allow you some time to make arrangements to repay the money owed before making any final orders.

Circuit Court procedure:

The procedure in the Circuit Court is governed by the Rules of the Circuit Court as set out in the Circuit Court Rules (Actions for Possession and Wellcharging Relief See it here ) 2009: SI 264/2009 (PDF).

The Circuit Court process starts when the mortgage provider issues you with a civil bill. This is usually accompanied by an affidavit setting out the claim that is being made against you. The civil bill has a return date – that is the date on which the matter will come before the County Registrar. The civil bill must be served on you at least 21 days before the return date.

If you intend to fight the action taken by the mortgage provider to repossess your home, you must enter an appearance (there is a specific form for doing this HERE ) within 10 days of being served the civil bill. You must then file an Affidavit replying to the mortgage provider’s claim and serve that on the mortgage provider at least four days before the return date.

When your case comes before the County Registrar (courts)it will be decided on the basis of what is in the affidavits. Neither side has the right to give oral evidence except in specific circumstances. However, you do have the right to cross examine the person who swore the affidavit. In order to do this, you must have given notice that you require this person to be present.

The County Registrar has the power to make a number of orders including adjournments, notice to third parties and more time to file affidavits. Have a look at this Site

Decisions by the County Registrar

The County Registrar may make an order for possession and/or a well-charging order if you have not entered an appearance.

The County Registrar can also make an order for possession, if you have entered an appearance and filed a replying affidavit, but your affidavit does not disclose a prima facie defence (this means that the affidavit does not show any obvious defence).

If you have entered an appearance and filed a replying affidavit which does disclose a prima facie defence, the case must be sent by the County Registrar for hearing by a judge.

Judge’s decision

The judge may grant or refuse the order requested.

High Court

The procedures for getting well-charging and possession orders in the High Court are similar. The Master of the High Court has a similar (but not exactly the same) role as the County Registrar in the Circuit Court. The procedure is set out in Order 38 of the Rules of the Superior Courts.

The lender may apply to the High Court for a possession order and, if necessary, a well-charging order.

The process involves the lender issuing a special summons. This is first dealt with by the Master of the High Court. He sets a return date which may not be less than 7 days after the issuing of the summons. The summons must then be served on you at least four days before the return date. The lender must file an affidavit setting out the facts of the claim in the Central Office of the High Court. The hearing may be on affidavit only or oral evidence may be given.

The Master may grant or refuse the orders requested or may forward the case for hearing by a High Court judge.