Since July 2011, lenders have lived with great uncertainty as to their statutory rights, particularly their right to obtain possession of a secured property by way of summary proceedings. This uncertainty arose as a result of the 2011 High Court decision in Start Mortgages Limited & Ors v Gunn and Ors (the “Start Mortgages Case”).
The Land and Conveyancing Law Reform Act 2013 (the “Act”) was signed into law by the President last week. It rectifies the problems created by the 2011 Start Mortgages Case and provides welcome certainty for lending institutions. As detailed in our earlier update, the Act was introduced to address the unintended consequences of the Land and Conveyancing Law Reform Act 2009.
The Act makes clear that certain statutory provisions, including the mortgagee’s right to obtain possession by way of summary proceedings, to overreach junior encumbrances, to appoint a receiver and to sell as mortgagee in possession continue to apply to mortgages created before 1 December 2009. These provisions are now operative. Any proceedings seeking possession by way of summary proceedings which were initiated before the Act came into effect should be recommenced if a lender wishes to have the benefit of the provisions set out in the Act.
The Act also introduces provisions relating to cases where a lender is seeking possession of the principal private residence (“PPR”) of a mortgagor, or his or her spouse or civil partner. Where the secured property is a PPR, the Act provides that the Court may adjourn proceedings seeking possession by way of summary procedure for a period of up to two months to allow the mortgagor time to consult with a personal insolvency practitioner with a view to making a personal insolvency arrangement (“PIA”) under the Personal Insolvency Act 2012. When considering a mortgagor’s application for adjournment, the Court will take into account such matters as it thinks appropriate, including particular matters listed in the Act. Once the two month period has expired, the Court may grant a further adjournment if it believes that significant progress has been made toward a proposal for a PIA. These provisions are not yet operative; they will require a ministerial commencement order.
The Act also includes certain transitional procedural provisions concerning the limitation period in relation to proceedings for possession issued against the estate of a deceased person, which should be considered in detail where applicable.
The Act is a long-awaited and a very welcome development. It will, at last, address the difficulties experienced by lenders in seeking summary possession of registered land in the wake of the Start Mortgages Case.
The Act as passed is now available for viewing here.