If your home is being repossessed by a landlord’s lender
Your landlord’s lender may try to repossess the property you are renting if your landlord does not keep up with their mortgage payments. Contract-holders who do not have an occupation contract which is binding on their landlord’s lender (see below) are in a weak position in this situation, although most private contract-holders can apply for the eviction to be postponed for up to two months.
To repossess the property from the landlord, the lender first has to arrange a court hearing and then get a court order.
In every case, lenders must send a notice to the property before the repossession hearing, addressed to ‘the tenant or the occupier’. They have to do this within five days of starting the court proceedings. Always make sure you open post addressed to ‘the occupiers’ – do not assume that it is junk mail!
In many cases, even if the court has already made a possession order, the lender must also send a second notice to the property to inform you that they are going to ask the bailiffs to carry out an eviction.
How can an adviser help?
A housing adviser may be able to help you work out:
- what stage of the repossession procedure has been reached
- whether there is any possibility of stopping or delaying the eviction (see below)
- whether your occupation contract is binding on the landlord’s lender (see below)
- whether you are entitled to help from the council’s homelessness team if you lose your home
- what your alternative housing options are.
If you know that repossession proceedings have been started, get help urgently. You will need to act very quickly to have any chance of keeping your home.
The Government has produced guidance (which can be downloaded here) to inform lenders, landlords and tenants (called ‘contract-holders’ in Wales) of their rights and responsibilities.
Can people with mortgages legally grant an occupation contract?
Yes. But only if only their mortgage deed says it is allowed and/or they have their lender’s permission. Most mortgage agreements do not allow a tenancy (called an ‘occupation contract’ in Wales) to be granted without permission, and many lenders will try to repossess the property if they find out that this has happened.
What about Buy-to-Let mortgages?
If your landlord bought the property through a Buy-to-Let mortgage, you should have been given written notice explaining this at the start of your occupation contract. If this is the case, you probably have no right to stay in the property after it is repossessed by the lender.
Is my contract binding on the landlord’s lender?
In very limited circumstances, your occupation contract may be binding on the landlord’s lender. This means the lender will become your landlord after the repossession and will need a separate court order to evict you. Most occupation contracts are not binding on the lender, but there are exceptions.
You may have a binding contract if:
- you were already living in the property as a contract-holder at the time the mortgage was granted (or when the landlord took out a second mortgage), or
- the lender specifically agreed to the occupation contract, or
- the landlord’s lender has recognised the occupation contract in some way (e.g. by asking you to pay rent direct to them or by accepting rent from you). Most lenders will avoid doing this or will call the payment something other than ‘rent’.
If you are unsure about when the landlord’s mortgage started, ask your landlord, or get help to find out whether the occupation contract is binding. An adviser may be able to confirm this via the court, the lender, and/or the Land Registry.
How does a binding occupation contract affect my rights?
If your occupation contract is binding, the lender will become your new landlord. You would continue to have the same type of contract that you had before, so your rights would remain unchanged. In most cases, this means that you at least have the right to a written notice and court order before the lender can evict you. As your new landlord, the lender is required to follow the correct eviction procedures. Please see our advice about eviction by a private landlord.
What should I do if I have a binding occupation contract?
If you have a binding occupation contract, you should:
- get help immediately on how to present your argument, and
- try to provide written proof of the date the contract began, such as a written occupation contract, and
- write to the lender to confirm that the contract is binding as soon as you find out that repossession is a possibility. Send photocopies of any proof you have.
If the lender refuses to confirm your status, or says that your contract is not binding and court action has started, you may be able to ask the court for an adjournment to give you more time to get help.
Get help immediately to check your rights and find out how to present your argument.
When deciding whether to take action, remember that the court may order you to pay legal costs, which can be expensive. It is probably worth trying to use the rights a binding contract gives you if:
- you have a standard contract that was an assured tenancy before 1 December 2022, secure contract (this is rare in private rented accommodation) or a regulated tenancy, as these give you stronger housing rights that are worth protecting, or
- you need more time to find alternative accommodation.
But if your occupation contract gives you little protection from eviction (e.g. an most types of standard contracts with a private landlord) you will only be able to delay the eviction (rather than stop it) as the lender will not need to prove a legal reason in order to evict you. In this situation, you may not feel that taking action to stay on is worthwhile.
What if my occupation contract is not binding?
Lenders are often unaware that a property has been rented out to contract-holders, so in the past it was common for the lender to instruct the court bailiffs to repossess the property before the contract-holders were even aware that there was a problem, giving them very little time to find alternative accommodation.
However, most contract-holders should now become aware of the problem much earlier as lenders must send a notice to the ‘occupier/tenant’ to let them know they have started a claim for possession, and again when they apply to the court for the bailiff to carry out an eviction (see below). If your occupation contract is unauthorised, ie not legally binding on the lender, you can apply for the eviction to be postponed for up to two months if you need more time to find somewhere else to live.
Get help urgently if you are in this situation.
Am I protected by the changes to the law?
Most private contract-holders with contracts that are not binding on the landlord’s lender will be protected by the law requiring lenders to notify “the tenant/occupier” and allowing the occupier to apply to delay the eviction. However, if you do not have an occupation contract, you don’t have this protection. To find out what types of renting agreements are not occupation contracts, visout our advice page here.
What notice does the lender have to give me?
- Send a notice to the property before the repossession hearing informing ‘the tenant or occupier’ (i.e. everyone living there) of the date of the hearing. They have to do this within five days of the hearing date being confirmed by the court. Never assume that post addressed to ‘the tenant or occupier’ is junk mail.
- Send a second notice to the property by first class post, recorded delivery or by hand, to inform you that the lender is going to ask the bailiffs to carry out an eviction. This will only happen if the court has already made a possession order. A special form must be used for this notice. The bailiffs cannot evict you for at least 14 days after the landlord has given this notice.
You can ask for the repossession to be delayed for up to two months at any one of these points in the process:
- at the repossession hearing
- after the court has made an order for possession
- at the warrant stage.
It is important to be aware that in some cases the court hearing may have already taken place before your occupation contract started. If this is the case you will only receive one notice (the second one). It is therefore advisable to take action to delay the eviction as soon as you receive anything in writing. If you cannot work out what stage of the repossession procedure has been reached, get help.
What should I do if I receive a notice from the lender?
As soon as you become aware that repossession is a possibility, you should contact your landlord’s lender and ask them to delay repossession for up to two months to give you more time to find somewhere to live.
If the lender does not agree to give you more time, you should then contact the court to request that they order the lender to delay possession to give you time to find alternative accommodation.
You must have asked your landlord’s lender first (and your request been refused, or not received any response) before you ask the court to make an order.
How do I apply to the court to request a postponement?
If you want to ask the court to delay the date you have to leave the property, you will need to complete form N244, which you can download here. You should send the form to the county court where the hearing will be/has been held – their contact details should be on any notices you’ve received.
You should try to provide any relevant documents and information that will help the court to understand your situation, including:
- a copy of your occupation contract (if you have one)
- any proof that you have of rent payments (e.g. a rent book or details of payments)
For some households, it may be particularly difficult to find somewhere else suitable – e.g. if you need wheelchair access or a large property. If you are in this situation, you should explain your circumstances and confirm any steps you have already taken to find somewhere (e.g. signing up with letting agencies or applying as homeless to your local council).
The court will also consider:
- your personal circumstances (e.g. if anyone in your household is vulnerable and/or if the type of accommodation you need is difficult to find quickly)
- whether you have broken any of the terms and conditions of your contract (e.g. if you have rent arrears, have behaved anti-socially or have caused damage to the property)
- whether the lender will suffer hardship as a result of delaying the eviction.
The court may decide to delay the eviction but impose conditions. For example, you may have to pay rent directly to the lender as a condition of delaying the repossession. This does not mean that your occupation contract becomes binding on the lender.
What other options do I have?
In addition to seeking a 2 months’ delay in the lender obtaining a date for eviction, you may be able to:
- persuade the lender to take over as landlord and/or give you more time to find another place to live. For example, if you have a fixed term standard contract, they may be willing to allow you to stay until the end of the fixed term, although they are not legally required to do so.
- use publicity – local and national media may be interested to hear about contract-holders who are the innocent victims of repossession. Publicity may encourage the lender to allow you to stay on.
Can I get compensation from the landlord?
You can seek compensation from the landlord but should bear in mind that this may involve paying some legal costs, although the landlord may be ordered to pay these for you if you are successful. However, as the landlord may not have much money left after the mortgage has been repaid, it may be difficult to enforce any order the court makes.
If you do decide to seek compensation, the court can award damages for loss of your home and/or for storage and emergency accommodation costs. The court cannot order that you should be allowed to move back into the property.
Where can I get more help and advice?
If you are a contract-holder and you know that repossession proceedings have been started, get help as soon as you can.