What is a Possession Order?
A Guide to Evictions for Mortgage Arrears
For any homeowner, who might be having difficulty, keeping up on their mortgage repayments, the very thought of a Possession Order is something that can create a great deal of anxiety.
And to some degree, with good reason – a possession order is serious and could be the first step, in a process, that could end with the house being repossessed by the mortgage lender.
But - if this is you or if someone you know has recently received a repossession order, there are steps and things that can be done, so don’t panic but take it seriously and make a plan to proceed.
- How To Respond to a Possession Order
- Why You Received a Possession Order
- Taking Possession Action
- I'm Worried I Might Get a Possession Order
- The Possession Hearing
- Legal Aid
- Orders for Possession: 3 Different Types
- Other Scenarios
- Lenders' Duties (Before Court Action)
- Changing the Court's Mind
- The Warrant of Possession
- Selling the House Yourself
How To Respond to a Possession Order
Being in receipt of a possession order, in-and-of-itself does not mean that you are about to be thrown out of your home or that your house is about to be taken from you.
It means that a process has started, at the end of which and in the worst-case scenario, your home could be repossessed.
But this scenario can - potentially - be avoided.
If you take action and engage properly with this process, the worst can be avoided and to this end, it is important not to get overwhelmed - and to approach the situation, pragmatically and with diligence.
Because if you know the facts and know how the process works, it will be much less daunting and much easier to confront in an effective manner.
So, if this is you or someone you know, then read on...
Once you have a thorough grasp on what is happening and what the likely outcomes could be, you might find yourself to be calmer, more rational and, ultimately, a lot more able to do what needs to be done.
NB: Please don't take anything you read here as legal or financial advice.
We are property investors and not experts in these fields.
And as such, we strongly recommend you speak to the right people for your specific situation. There are links on this page to charity and government organisations who can help you and if you decide that selling up is your preferred route of action, we can put you in touch with the right people.
Why You Received a Possession Order
You will have received a possession order because you are in arrears with your mortgage repayments and haven't managed to come to an agreement with your mortgage lender about how the situation can be addressed.
Once a lender feels that the opportunity to address a client's arrears has lapsed, that is when they move the situation towards a repossession and apply for an order in the courts.
A hearing occurs and the court issues a possession order. There are different types of order, however, which we will cover shortly.
And, to restate, what we said above, receiving a possession order does not mean that it is certain that your house will be repossessed.
Taking Possession Action
A lender can only repossess a property, through the courts. This process is called taking possession action.
The lender can only take possession action once they have given you a reasonable chance to arrange repayment of the arrears.
If your lender starts a possession action then you will receive a 'Claim For Possession' of the property from the court. This document will give you the details of the case against you and the date of the forthcoming hearing.
If the lender's case is successful in court then you will be issued with a 'Possession Order'. This order will either give you a list of conditions you must keep, in order to stay in the property or it will be an order to vacate the property, in a certain period of time.
Should you not vacate the property in that time period then the court will order a 'Warrant of Possession' which is when bailiffs will be authorised to remove you from the property.
But there are plenty of opportunities, during this process to avoid the worst and either sell-up or remain in your home.
I'm Worried I Might Get a Possession Order
If this is you, then chances are, you still have time to work something out with your lender.
If your case has not yet gone to court then you should be talking to your lender as soon as you can and making arrangements for repayment of the arrears.
If it has already been to court then should you receive an Order of Possession, you still have the opportunity to come to an arrangement with your lender.
For more information about what you can do to negotiate repayment plans and slow the repossession process before it gets to the courts, please refer to our article on mortgage arrears.
The Possession Hearing
The process of having your house repossessed is long and there are plenty of opportunities along the way to stop it from happening.
A Possession Order is not something that will have come out the blue. Your lender should inform you that, from their perspective, an arrangement to recoup mortgage arrears from you have failed and that they will be seeking an order from a county court.
And being a court order, you have the right to be informed that the case is being taken to court, be told of the date and be invited to attend the hearing to contest the order, should you wish to do so.
You should note that for a mortgage lender to take it this far, they will be confident that they have allowed you reasonable opportunity to come to an agreement with them over the outstanding amount.
This is the lender's legal duty and something the court will take into account, during the hearing.
How the Possession Hearing Breaks Down
- Your lender has to go to court – at what is known as a possession hearing – and ask the court to issue an order for possession; giving their reasons for needing it.
- You’re entitled to go to court and give your reasons why the order shouldn’t be issued – if you think it shouldn’t be.
- You’ll be given plenty of notice of the court hearing date. During this time you can and should take advice on the best thing to do or find somebody to help you in court.
These sites and organisations all provide very useful advice on the repossession process and if you have a case, coming up, we strongly advise that you do your research and seek help:
- Shelter (Avoiding Repossession)
- Citizens Advice (Mortgage Problems)
- The StepChange Debt Charity
- Government Advice on Repossession
Legal Aid is a minefield and it is certainly not for us to offer any advice on this subject. All we can say is that depending on your circumstances, you might qualify for aid to help you with your case at court.
It is essential, that you know that because the court grants your lender an Order For Possession, it does not automatically mean you will lose your home.
There is still time to sort things out.
For example, you could still come to a repayment plan with your lender or request for time to sell your house yourself and pay back your debt from the proceeds.
Suggestions like this will be taken very seriously, even after the order for possession has been already issued.
So, if you have ignored all appeals to negotiate a repayment plan, did not respond to letters regarding your hearing and have just received an order, all is still not lost - and repossession is not inevitable if you take action now.
But there isn't just one type of order at play, here. Orders of Possession can take different forms and rest assured there will be avenues, still open to you, the nature-of-which, determined by the form the order has taken.
Orders for Possession: 3 Different Types
There are three different types of orders for possession and each can have a different outcome.
And, if the court decides to grant an order, it is possible to request that they grant an order, of a type, to best suits you.
The different types of order are An Outright Possession Order, a Suspended Possession Order or a Time Order.
1/ An Outright Possession Order
An Outright Possession Order means that the lender will have a legal right to take possession of the property after a set period of time; normally, 28 days.
Without any changes, this means you will have to leave the house within this timeframe or face an eviction notice.
If you have been served an Outright Possession Order, you can request the timeframe, be extended to 56 days.
However, extensions will be granted, based on your circumstances. So, for instance, you are more likely to be accepted should you be ill or have young children.
In this timeframe, you are still in a position to negotiate with your lender, regarding repayments of your arrears, which, if accepted, will mean you can continue to live in your property.
But after the time has lapsed and if you have neither renegotiated your repayments nor left the property, then your lender can then apply to to the courts for an eviction notice, meaning that you will be removed from the house, by bailiffs.
2/ A Suspended Possession Order
Suspended Possessions Orders are quite common. What this means is that you can stay in your home, as long as you meet certain requirements. For example, if you can agree on a repayment plan and start to pay off the arrears then, as long as you keep to this, you can stay in your home and your lender will not repossess.
You can also request a suspended possession order if you want to sell your home yourself and pay off your debt that way. You can ask the court for a reasonable period of time to allow you to do this. If this is a route you wish to take then there are options of companies that can offer quick purchases of your property.
3/ A Time Order
Time orders are less usual but are still worth knowing about. A Time Order is when the court gives the debtor time and opportunity to put things right.
Options can include changing the monthly repayment or reducing the interest rate on the mortgage debt. They can even order that the length of the mortgage be increased to give you more time to repay it.
It is very important to know that going to a possession hearing does not necessarily mean an Order for Possession will be issued. You can ask the court to adjourn the case until a future date if, for example, you need more time to prepare your case.
You can also ask them to dismiss, ‘throw out’ or postpone the case if you think your lender is wrong or if you’ve repaid your arrears since the date was set. You can even appeal against the court’s decision.
Because there are so many different personal situations and so many possible outcomes of a repossession hearing it’s very important to take proper advice on what’s best for you – see the links earlier in this article for citizens advice and other support networks.
Typically, the court might adjourn the hearing if:
- There is a dispute over the amount that you owe.
- You will have money to pay off (all or some of) the arrears soon. For instance, if you are waiting on benefit payments to come through.
- You have decided to sell the property to clear the debt but need time to do this.
The court can also postpone its decision if the lender can be shown to not have followed the correct protocol.
Lenders' Duties (Before Court Action)
The lender has a duty to follow certain procedures before they take you to court. If these duties have not been met, then the court may postpone its decision to issue the Order for Possession.
These duties include:
- Treating repossession as a last resort and properly considering any reasonable suggestion for paying down the arrears.
- If they reject any suggestion that the borrower makes for repayment then they need to inform the borrower why the suggestion was rejected, in writing, within 10 days.
- Communicating with you in a way that is easy to understand.
They must also supply you with:
- All details concerning your outstanding debt including overall mortgage amount, arrears, interest and payments from the last two years.
And must issue the following documents:
- National Homelessness Advice Service (NHAS) booklet on mortgage arrears
- Financial Conduct Authority (FCA) information sheet on arrears
- FCA information sheet on default
If the lender doesn't follow the above then the court could order:
- A delay to the repossession court hearing to allow for more time for the two parties to negotiate repayments.
- An order for the lender to pay your legal costs.
- An order to the lender, that they have forfeited their right to add their costs on to what is already owed to them.
Changing the Court's Mind
Should an order of possession have been issued by the court, you are not powerless to change it.
A few routes that may still be open to you include, asking the courts to set the order aside, appealing the decision and in the case of an Outright Possession Order asking for a suspension (ie a conversion to a Suspended Possession Order).
Please note, if you are considering negotiating with the court it is essential that you get expert legal advice.
If you think that the judge was wrong to issue a Possession Order because either you believe that the law was not correctly applied or because some of the facts of the case were wrong then you can appeal for the case be taken to a higher court.
Setting the Order Aside
This can only happen when a court has made a decision but was not in receipt of all the facts. So, if you were unable to attend the hearing (with a good reason) and have a defence then you can ask the court to set their judgement aside.
Suspending the Order
If the court has issued an Outright Possession Order and you believe that you are able to make repayments on the arrears you can ask the court to change the order to a Suspended Possession Order.
Source: Citizens Advice
The Warrant of Possession
An Order For _ossession is very different from a Warrant Of Possession and yet, many people confuse the two.
The Order For Possession is the first part of that process, where you are requested that you leave your home by the stated date. It can’t be used to forcibly evict you in itself.
Many people decide to leave of their own accord by the deadline date. But, if you don’t, your lender can then ask the court to grant them a Warrant Of Possession. It is the Warrant Of Possession that can be used to send in the bailiffs and forcibly evict you.
It could take your lender several weeks to obtain a Warrant Of Possession and send in the bailiffs.
You can also ask the court not to issue the warrant if you have good reasons.
Selling your House Yourself
If the decision has been made that selling your property is the route you wish to take, then this can be one way to avoid the full repossession process.
The next step to this is to seek out the best way to sell your home among the multitude of options, based on the scenario, selling your property quickly is likely to be a priority, therefore direct property buyers are likely one route to consider.