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Land Law – Mortgage – The right of Possession
The right to possession
Similar to the right to payment, the right to possession typically occurs when the mortgagor defaults on the mortgage.
payments.
To make sure the property is empty before it is sold, the mortgagee might want to request possession before requesting an order of sale. In order to manage the property and bring in money to pay off the mortgagor's debts, they might also try to take ownership of it. In residential real estate, the latter is improbable because the mortgagee typically has no desire to own the property.
The mortgagee is subject to several significant obligations or restrictions if they want to pursue possession. These include:
adhering to section 6(1) of the Criminal Law Act of 1977, which states that land possession cannot be started without a court's permission and the limitations of section 36 of the Administration of Justice Act of 1970; this could offer the mortgagor a lifeline if they can convince the judge that they have a reasonable chance of repaying the debts. If so, the court can postpone the possession procedures for a fair amount of time (see Practice example). 8.6. The court's inherent authority to defer possession; although Section 36 AJA permits courts to do so, they also possess the broad equitable jurisdiction to provide a mortgagor who is behind on payments with temporary relief. However, this would typically only last for a few weeks at most. If the property is in negative equity, this inherent authority to postpone would not be applicable.
restrictions of the Family Law Act of 1996 in protecting spousal rights; once more, this gives the court the authority to delay possession if a related party ought to be included in the proceedings. This is more likely to occur in situations where one partner has registered their occupational rights under the Matrimonial Homes Act 1983 or where a cohabitee has made mortgage contributions. By doing this, the linked party will be able to participate more actively in the proceedings and, if they can show they have the financial means to pay the bills, perhaps convince the court to delay taking control.
Key term: connected person
A related person is defined as a spouse, former spouse, civil partner, former civil partner, cohabitant, or former cohabitant under S. 54(5) of the Family Law Act of 1996. By doing this, such people would be able to join the proceedings as parties and request a postponement.
Example
Bob’s monthly installments to the Tyne and Wear Building Society have become overdue. The mortgagee has filed a lawsuit to obtain a power of sale and to begin possession proceedings. Bob argues this by saying he can pay back the debt in full within a fair amount of time. He presents documentation to support his claim that he was not eligible for assistance since he is self-employed and that his job injury prevented him from working, hence he accumulated the arrears. He resumed making payments on the arrears when he just went back to work. In six months, he hopes to have all arrears settled.
Will the courts likely postpone possession using their authority under s. 36 AJA?
Based on the facts of the case of Cheltenham & Gloucester Building Society v. Norgan [1996], the court made certain recommendations that should be taken into account while deciding whether to exercise discretion to postpone proceedings. These include the amount that the mortgagor can afford to repay, the timeliness with which any short-term challenges with repayment will be remedied, the causes behind the arrears, and the pertinent conditions of the contract.
The right to possession
Similar to the right to payment, the right to possession typically occurs when the mortgagor defaults on the mortgage.
payments.
To make sure the property is empty before it is sold, the mortgagee might want to request possession before requesting an order of sale. In order to manage the property and bring in money to pay off the mortgagor's debts, they might also try to take ownership of it. In residential real estate, the latter is improbable because the mortgagee typically has no desire to own the property.
The mortgagee is subject to several significant obligations or restrictions if they want to pursue possession. These include:
adhering to section 6(1) of the Criminal Law Act of 1977, which states that land possession cannot be started without a court's permission and the limitations of section 36 of the Administration of Justice Act of 1970; this could offer the mortgagor a lifeline if they can convince the judge that they have a reasonable chance of repaying the debts. If so, the court can postpone the possession procedures for a fair amount of time (see Practice example). 8.6. The court's inherent authority to defer possession; although Section 36 AJA permits courts to do so, they also possess the broad equitable jurisdiction to provide a mortgagor who is behind on payments with temporary relief. However, this would typically only last for a few weeks at most. If the property is in negative equity, this inherent authority to postpone would not be applicable.
restrictions of the Family Law Act of 1996 in protecting spousal rights; once more, this gives the court the authority to delay possession if a related party ought to be included in the proceedings. This is more likely to occur in situations where one partner has registered their occupational rights under the Matrimonial Homes Act 1983 or where a cohabitee has made mortgage contributions. By doing this, the linked party will be able to participate more actively in the proceedings and, if they can show they have the financial means to pay the bills, perhaps convince the court to delay taking control.
Key term: connected person
A related person is defined as a spouse, former spouse, civil partner, former civil partner, cohabitant, or former cohabitant under S. 54(5) of the Family Law Act of 1996. By doing this, such people would be able to join the proceedings as parties and request a postponement.
Example
Bob’s monthly installments to the Tyne and Wear Building Society have become overdue. The mortgagee has filed a lawsuit to obtain a power of sale and to begin possession proceedings. Bob argues this by saying he can pay back the debt in full within a fair amount of time. He presents documentation to support his claim that he was not eligible for assistance since he is self-employed and that his job injury prevented him from working, hence he accumulated the arrears. He resumed making payments on the arrears when he just went back to work. In six months, he hopes to have all arrears settled.
Will the courts likely postpone possession using their authority under s. 36 AJA?
Based on the facts of the case of Cheltenham & Gloucester Building Society v. Norgan [1996], the court made certain recommendations that should be taken into account while deciding whether to exercise discretion to postpone proceedings. These include the amount that the mortgagor can afford to repay, the timeliness with which any short-term challenges with repayment will be remedied, the causes behind the arrears, and the pertinent conditions of the contract.
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