Ministry of Housing, Communities & Local Government
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New rights for tenants facing eviction when landlords are repossessed
Housing Minister John Healey today set out plans to give new legal protection to tenants vulnerable to being thrown out on the street with little or no notice if their private landlord is repossessed.
When mortgage borrowers have let their properties without the knowledge or consent of lenders, tenants currently have very limited rights if the property is repossessed - which means they could face eviction at very short notice. Advice centres are seeing an increase in requests for help on this issue and CLG estimate between 2,000-3,000 households could be affected this year.
Mr Healey said that it is wrong that these tenants face eviction in a matter of days through no fault of their own and is today consulting on proposals to change the law. The Minister wants tenants in this position to receive two months' notice to vacate the property - giving them time to find suitable alternative accommodation.
The Minister is also calling on lenders to use alternatives to repossession, such as appointing Receivers of Rent to collect rent and manage occupied properties.
Government has already extended the notice given to tenants that a possession hearing will take place - giving them up to seven weeks' warning. But today's proposed measures will give tenants an extra layer of legal protection.
Hundreds of thousands of families are benefiting from the comprehensive support available for people facing the threat of repossession. Help is available at all stages including free face to face debt advice, greater tolerance and understanding from lenders for those in mortgage arrears, free on-the-day advice and representation in court and targeted schemes to help families with mortgage interest or deal with a sudden cut in income.
John Healey said:
"It is wrong that through no fault of their own these families can find themselves out on the street with little prior warning. That's why I want to change the law to give new protection to those tenants who have no rights when the property they live in is repossessed.
"This will give them much needed breathing space to find another home. But I also want to see more lenders use alternatives to repossession, such as appointing Receivers of Rent to collect rent.
"This is on top of unprecedented help we have put in place for those facing the threat of repossession. Hundreds of thousands of families are making use of support available at every stage from free face to face debt advice, greater tolerance from lenders to free representation in court. And for those with more severe problems our schemes are there to stop the immediate threat of repossessions."
Charities and other advice centres have reported a rise in requests for help from tenants facing eviction because their privately rented home is being repossessed. Recent cases include:
- A lone parent with two children who had been renting a property for 10 months. She came back from a holiday to find the locks had been changed and there was a notice announcing that a possession order had been made.
- A single male pensioner had had no rent arrears during the four years of his assured shorthold tenancy. He was aware that the landlord had mortgage arrears problems and had recently received a letter from the lender's solicitor informing him of a possession hearing in approximately two weeks time. He could not find any alternative private rented properties and was considering a homelessness application.
- A man suffering from cancer first heard of his landlady's repossession when he received a Notice of Eviction from the bailiffs. He was assured by his landlady not to worry as it was all being sorted out. But bailiffs then came in, evicted the client and changed the locks before he could remove his possessions and essential medication.
Early and concerted Government action has been taken to help as many people as possible facing the threat of repossession to stay in their homes.
The Government has provided help at all stages for people worried about losing their homes.
- Action on advice: We are investing £130million in providing free face-to-face debt advice services between 2006 and 2011, and over the past year over 100,000 families have received information and advice about their mortgages from councils and citizens advice bureaux
- Action on lenders: we have taken action so homeowners are treated fairly with greater tolerance and understanding for those in mortgage arrears - 116,000 families are now benefiting from this
- Action in the courts: We have taken action so lenders must prove they have exhausted every possible option before applying for a repossession order. And CLG have doubled funding for 76 court desks across the country offering free on-the-day advice and representations for those threatened with repossession. Even at this late stage around 4 in 5 repossessions can still be stopped if the households attend court and access free advice available on the day.
- Financial action: Through special Government schemes like Support for Mortgage Interest and Homeowner Mortgage Support over 200,000 families are now getting help with their mortgage interest payments - with another 88,000 expected to benefit over the next two years.
- But for those in the greatest need and facing the immediate threat of repossession, we have introduced the safety net of the mortgage rescue scheme. Because of the action we are taking to offer help at all stages, few families have had to fall back on to this option of last resort, but it is now in place and working to allow people to stay in their homes.
John Healey has also taken steps today to strengthen the protection available for homeowners who lose their home through a genuine inability to pay the mortgage because they have lost their job or had their income cut. The Minister published new supplementary statutory guidance for local housing authorities that makes clear families in this situation should not be considered intentionally homeless if they seek housing assistance from their local council.
Notes for editors
1. Today's consultation, Lender Repossession of Residential Property: Protection of Tenants is published today and can be found at: www.communities.gov.uk/publications/housing/lenderrepossessionconsult
2. The new guidance, Homelessness Code of Guidance for Local Authorities: Supplementary Guidance on Intentional Homelessness can be found at: www.communities.gov.uk/publications/housing/intentionalhomelessnessguide
3. The deadline for responses is 14 October, 2009
4. The recent cases quoted can be found in A Private Matter?, published by Shelter, Crisis, Citizens Advice and the Chartered Institute of Housing on 25 March 2009.
5. When a borrower lets a property without the knowledge or 'consent to let' of the lender and in contravention of his mortgage agreement, the resulting tenancy agreements are not enforceable against the lender. Therefore if, following mortgage arrears, the lender repossesses the property from the landlord these tenants are not entitled to remain in the property. These tenants may first be made aware of a problem by the bailiffs presenting a warrant for eviction, requiring them to leave at short notice.
6. Mr Healey is today consulting on proposals to enable tenants in this position to receive two months' notice that they need to vacate the property, while causing the minimum of delay to lenders and borrowers. We are also encouraging lenders to keep the number of short-notice evictions to a minimum by for example appointing receivers of rent to manage occupied properties rather than take vacant possession.
7. We are consulting on proposals to give unauthorised tenants the right to be heard at the possession hearing, and give courts the power to postpone possession to allow unauthorised tenants who have proved their claim time to move. These tenants would therefore have up to two months from the date of the possession hearing to vacate the property. Rental income may contribute to the mortgage arrears in this interim period, minus any related costs.
8. This approach would protect tenants in some circumstances, but not in all. We are therefore considering additional measures that might also be put in place in order to achieve a reasonable level of security for all tenants in this position. Our preferred option is also to require lenders to notify their intention to enforce possession, and provide a mechanism for unauthorised tenants to request a two-month delay before the possession is enforced.