When letting out a residential property on which there is a mortgage, a landlord should first obtain the consent of their mortgage lender. Tenants of landlords who have obtained this consent are authorised tenants. However, if the Landlord has not obtained the consent of their lender, then the tenant will be an unauthorised tenant.
Before 1st October 2010, if a Landlord had fallen into arrears with mortgage re-payments and the lender had started repossession proceedings, unauthorised tenants could be evicted at very short notice.
The Mortgage Repossessions (Protection of Tenants etc) Act 2010:
However, on the 1st October 2010 the Mortgage Repossessions (Protection of Tenants etc) Act 2010 and its supporting regulations came into effect, bringing the rights of unauthorised tenants in line with those who are authorised.
Under this new legislation, if a lender seeks an order for the delivery of possession of the premises, unauthorised tenants can now make an application to the Court, requesting that the eviction date be postponed for a period of up to two months.
Furthermore, if a possession order has already been obtained, but has not yet been executed, an unauthorised tenant will now also be able to ask the mortgage lender to provide an undertaking in writing that the possession order will not be enforced for a period of 2 months, beginning from the date of the undertaking. If this undertaking is not provided, the unauthorised tenant can apply to the Court, requesting that the order is stayed or suspended for a maximum period of 2 months.
The legislation also states that where a lender has obtained an order for possession, the lender must give notice at the property of any step taken for the purposes of executing the order. The prescribed form of notice is set out in The Dwelling Houses (Execution of Possessions Orders by Mortgagees) Regulations 2010.
At the Court’s discretion
However, although the new legislation is a step in the right direction to increasing the rights of unauthorised tenants, these rights are not automatic. The decision to postpone the delivery of possession is at the discretion of the Court, which will take into consideration the tenant’s circumstances and any outstanding breach of the unauthorised tenancy by the tenant.
The Court also has the power to make any postponement, stay or suspension of possession proceedings conditional on payments being made to the lender in respect of occupation during the extended period.
Who does the legislation NOT apply to?
The legislation and its supporting regulations do not apply to Tenants living in any form of social housing, owner-occupiers and lodgers or other occupiers under licence.
This article has been written for general knowledge purposes only and is not intended to be used as any form of advice. If you wish to make further enquiries regarding this article or seek independent advice, please contact us.