The Land and Conveyancing Law Reform Act 2013 (“the Act”) has been enacted. The Act addresses the unintended consequences arising from the Land and Conveyancing Law Reform Act 2009 (“the 2009 Act”).
The interpretation of the 2009 Act had created much uncertainty around enforcement of security over real property in certain instances. The 2009 Act repealed certain statutory provisions which contained powers for lenders who held mortgages. Specifically, the problems affected mortgages created prior to 1 December 2009 as highlighted in the case of Start Mortgages Limited v Gunn. The Start decision gave rise to much uncertainty and media coverage. The Act clearly provides that the statutory provisions which had been repealed can still be invoked and exercised, as if they had not been repealed. The Act also introduces certain procedural changes to proceedings seeking possession of principal private residences.
The Act was signed into law by the President on 24 July 2013. However, a ministerial commencement order will be required before certain sections will become effective.
The repeal of certain statutory provisions by the 2009 Act had removed the procedural right for a lender to seek an order for possession of registered land by way of summary proceedings in certain instances where the mortgage was created prior to 1 December 2009. Though an alternative remedy remained available to such lenders, it was both a more costly and lengthy remedy.
The Act also removes uncertainties that certain commentators suggested could exist, regarding the availability of statutory rights such as a mortgagee’s statutory power of sale and the power of a mortgagee to “overreach” (ie, to sell a mortgaged property free from subsequent interests like judgment mortgages).
Any proceedings currently in train seeking possession of registered land will need to be recommenced if the lender wishes to avail of the provisions set out in the Act. The Act provides that in respect of proceedings issued within 6 months from the coming into operation of the Act, such proceedings will be deemed to have been brought within the statutory time limits for bringing such proceedings provided a number of conditions are met. In summary, these conditions are that the lender had commenced proceedings seeking possession of the property, those proceedings were brought within the relevant statutory time limits, the proceedings were not determined before the coming into operation of the Act, the mortgage was created prior to 1 December 2009 and the proceedings relate to the same property.
The Act also introduces a number of changes to the procedural right to seek an order for possession of a principal private residence of a mortgagor or that of his/her spouse/partner. Unlike the provisions referred to above, these provisions will only come into force once the Minister for Justice and Equality signs a commencement order at a time of his choosing following enactment.
The first of these changes is that all applications for possession of such properties will have to be brought in the Circuit Court, which will bring mortgages created prior to 1 December 2009 into line with mortgages created on or after that date.
The Act also provides that in respect of all mortgages (regardless of their date of creation and whether they relate to registered or unregistered land) affecting the principal private residence of the mortgagor or that of his/her spouse/ partner, the court may adjourn proceedings for a maximum of two months to enable the mortgagor (who meets the relevant eligibility criteria) to consider a personal insolvency arrangement under the Personal Insolvency Act 2012. The court in considering a mortgagor's application to adjourn must have regard to appropriate matters, including certain listed matters. In summary, these matters are whether a mortgagor has participated in a mortgage arrears process, whether he has made any repayments within the previous 12 months (and if so, how much relative to the scheduled repayments and how often), previous adjournments requested by the mortgagor, the conduct of both parties to arrears resolution and whether the application by the mortgagor is an attempt to delay progress of the proceedings. If significant progress has been made on a proposal for a personal insolvency arrangement under the Personal Insolvency Act 2012 at the end of the two months, the proceedings may be adjourned further.