The Ministry of Justice has issued a consultation document on a proposal to require mortgage lenders to obtain a court order or the consent of the borrower before repossessing and selling residential owner-occupied homes. (The consultation document is here).
This is being touted as bringing to an end the Horsham Properties v Clark & Beech [2008] EWHC 2327 (Ch) (our report here) exception to the Adminsitration of Justice 1970 (and 1973) loophole. See, for example the Inside Housing report or the report in yesterday’s (29/12/09) Guardian – not online. However, the proposals only apply to residential properties with residential mortgages.
As readers will recall, Horsham concerned possession of a property occupied by the owners but where the mortgage was buy to let and the occupation was in breach of the mortgage conditions. The proposals wouldn’t affect that situation.
I don’t know if there have been comparable cases involving residential properties, but we haven’t heard of any and neither have the MoJ. So the proposals appear to be to stop something that isn’t happening in response to a case that the proposals wouldn’t stop happening again anyway.
Still, the certainty would be a good thing for residential mortgagors. The consultation closes on 28 March 2010.
Another slightly bizarre consultation from the MoJ. They identify a problem that does not really exist and then produce a consultation that does not affect their primary example. They would be better to look more closely at the procedure for LPA receivers and tidying that up as it is a trap that buy to let landlord all too easily fall into and cannot easily get back out of.