If there is a mortgage or secured loan on the property you are renting, your landlord needs to make regular payments to his or her lenders. If your landlord stops making these payments, the lender could decide to start possession action, which could put your home at risk.
Legal rights to stay in the property
Your rights to stay in the property if it is repossessed depend on two issues:
- Did your landlord have permission from the mortgage lender to let out the property?
- Do you have a current tenancy agreement?
In order to rent out a property, the owner should first obtain permission from any lenders who have mortgages or loans secured on that property. If the lender allows the landlord to rent out the property, it can set certain conditions on the tenancy. The lender could insist that the landlord doesn't let to tenants who are on benefits or could insist that the landlord onlge gives out 12 month tenancies.
If the landlord has permission to rent out the house and your tenancy complies with all the lender's legal requirements you are an “authorised tenant”. Authorised tenants should be notified if the property is going through repossession. You may receive a letter, addressed to “the occupier” or “the tenant” of the property, informing you of the lender’s intention to seek possession of the property from the landlord.
If your landlord did not have the lender’s permission to let the property, you are an “unauthorised tenant”. An unauthorised tenant might not hear anything about any possession action until the property is actually repossessed. If the lender is granted a possession order, it is unlikely that you will have a right to remain in the property. You could be viewed as an illegal occupant.
If you are an authorised tenant and have a current tenancy agreement, the lender will have to allow you to remain in the property until that tenancy agreement lapses. However, if you are a periodic tenant and do not have an existing contract with your landlord, the lender can issue you with a Notice to Quit and begin eviction proceedings against you.
If you are an unauthorised tenant, the lender does not have to let you remain in the house, even if there is a valid tenancy agreement in place.
The lender can apply to the Enforcement of Judgement’s Office to have you removed from the property or may pursue you as an illegal occupant. If, however, the lender accepts rent from you, you may be able to argue that there is now a rental agreement between yourself and the lender. This could give you greater rights to stay in the property on a short term basis.
Attending the court hearing
All private possession hearings in Northern Ireland take place in the Chancery Division of the Royal Courts of Justice in Belfast. If you know that a hearing is scheduled to take place between your landlord and his or her lender, you can contact the Chancery Office and ask to be added to the hearing as an interested party.
If you attend the court hearing, you won't necessarily have to speak. However, by attending the hearing you will be making the judge aware that there are tenants in the property. The judge may then allow you more time to vacate the property if he intends to grant a possession order.
Until possession of the property passes back to the lender, you should continue to pay rent to your landlord. You cannot be held liable for his mortgage arrears by the lender.
If possession reverts to the lender and you are allowed to stay on in the property the lender may do one of two things:
- ask you to pay rent directly to them, or
- appoint a receiver to manage the property on its behalf.
The lender should write to you to explain how you should pay your rent in future and who you should contact with any concerns relating to repairs or maintenance.
Getting your deposit back
The deposit agreement is between yourself and your landlord. This does not change if the property is repossessed. If your deposit was paid on or after 1 April 2013 you should contact the tenancy deposit protection scheme that your landlord used to protect your deposit. If your deposit wasn't protected you need to contact your landlord to ask for your deposit back.
In some cases, where a receiver has been appointed or the property has been purchased by someone who is happy for you to remain as the tenant, the deposit may have been transferred to the new owner. If this has happened, ask that a receipt is provided to you, showing who currently holds your deposit.
If your landlord is in serious financial difficulties, you may not get the deposit back even after securing a court order. You may have to join a list of creditors to whom the landlord owes money.
Notice to Quit and eviction
The process which a lender must take to remove you from the property depends on whether you are an authorised or unauthorised tenant.
If you are an authorised tenant the length of notice period which you will receive depends on how long you have been living in the property. The lender must follow due process in order to remove you from the property. If you have not left by the end of the notice period, the lender will have to go to court to obtain a possession order. The lender cannot forcibly evict you or change the locks. Only officers of the Enforcement of Judgements Office can carry out an eviction. If you do not leave until the court order is enforced, you will be liable for rent until the date on which you are evicted and may be ordered to pay the court costs of the lender.
Unauthorised tenants may be treated by the lender as illegal occupants. As an illegal occupant, you have very few rights. If you are an unauthorised tenant, you should talk to an adviser at Housing Rights to find out more about your housing options.