The treatment of tenants and borrowers in arrears by registered providers, local councils and lenders has been, and remains, a very hot topic.
If a lender was unaware that a property they were seeking to repossess was tenanted (an unauthorised tenancy), then the tenant had limited legal recourse. However, if the lender was aware of the tenancy, (for instance if the landlord had taken out a buy-to-let mortgage or obtained consent to let), the tenant’s position would usually be more secure and their circumstances may be taken into consideration by the court.
However, the situation relating to ‘unauthorised tenancies’ changed when the Mortgage Repossessions (Protection of Tenants) Bill received Royal Assent in April 2010 and came into force on 1 October 2010. The new Act protects tenants by giving them the right to be heard at possession hearings, gives courts and judges authority to take tenants’ needs into account, and allows possession to be postponed by up to two months so that the tenant can find an alternative home.
There are two substantive clauses in the Act. Clause 1 is primarily concerned with the responsibilities of lenders with regard to the enforcement of possession orders; the application by tenants to delay those orders; the ability for judges to take the tenant’s individual circumstances into account; and the concern of lenders with rent receipts during the two-month notice period. Lenders must serve notice to a tenant or occupier of their intention to enforce a possession order.
A recent impact assessment undertaken by Communities and Local Government estimated that up to 330,000 households in England and Wales were at risk of short notice eviction if their home was repossessed due to their landlord not having lender 'consent to let'.
The Financial Services Authority and the Tenant Services Authority regulate the private mortgage lender and social housing provider respectively, ensuring that customers and tenants are treated fairly. Any action taken must also comply with the relevant Pre-Action Protocol, Civil Procedure Rules and other legislation.
In an attempt to ease the regulatory and legislative burdens imposed on lenders, councils and registered providers, we have a specialised procedure for the recovery of mortgage and rent arrears. We work closely with our clients to maximise the recovery of mortgage arrears from borrowers and rental income from tenants.
How we can help
Our bespoke, fully automated case management system provides a seamless flow of information between each stage in the process of recovering mortgage arrears enabling us to produce customised Management Information at the touch of a button. By having a complete picture of our clients’ borrower’s or tenant’s arrears and account history in one place, with MI available almost instantaneously, they can demonstrate that they are treating their customer or tenant fairly and enhance their own internal forecasting. We have a proven track record and consistently achieve targets with exceptionally high “cure” rates.
We offer early arrears management, from 1 week in arrears, right up to and during the litigation process. We can help clients fulfil their Pre-Action Protocol obligations whilst delivering a quality arrears rehabilitation service to their borrower or tenant.
Our experienced standard litigation and defended teams work in tandem with our trained rehabilitators. They are trained to negotiate within pre-agreed terms set by the client and should the matter proceed to Court they will be able to demonstrate that they have treated the borrower or tenant fairly and given them every opportunity to save their home. We know that Courts take the view that litigation should be a last resort, and that claims should not be issued prematurely when a settlement is still actively being explored – that is why we are passionate about doing all we can to prevent the issue of proceedings.
For an no-obligation chat about how we can help you, please call
Sarah Perry.
