89

House of Commons

Notices of Amendments

given on

Tuesday 4th November 2008

For other Amendment(s) see the following page(s):

Banking Bill Committee 70-87

Public Bill Committee

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Banking Bill

Court’s discretion in mortgage possession proceedings brought by a bank

Ms Sally Keeble

Mr Mark Todd

NC15

To move the following Clause:—

‘In the Housing Act 1980 (c. 51), after section 89 insert—

“89A	Court’s discretion in mortgage possession proceedings brought by a

bank

(1)	This section applies where, in possession proceedings brought by a

mortgagee under a mortgage agreement (whether or not regulated by any

enactment)—

(a)	it appears to the court that the property is occupied by a person

or persons whose occupation derives from an interest or licence

created by the mortgagor under that agreement (whether or not

such interest or licence was created in breach of the terms of that

agreement), and

(b)	the mortgagee is a bank within the meaning of section 2 of the

Banking Act 2008.

(2)	Where subsection (1) applies, the court may postpone the date of

possession, or stay or suspend execution of the order, for such period or

periods as the court thinks just, not exceeding three months in total.

(3)	On any such postponement, stay or suspension as is referred to in

subsection (1), the court may, unless it considers that to do so would

cause hardship to the occupier or would otherwise be unreasonable,

impose such conditions as it thinks fit with regard to the payment by the

occupier of sums for the use and occupation of the premises (not

Notices of Amendments: 4th November 2008

90

Banking Bill, continued

exceeding the amount of the rent or other contractual payment which the

occupier was liable to pay under his agreement with the mortgagor).

(4)	Rules of court shall provide for appropriate notices to be served on the

residential occupier of any premises prior to the commencement and in

the course of possession proceedings brought by a mortgagee of those

premises; and shall provide for the occupier to be heard by the court,

whether by being joined as a party to the proceedings or otherwise.

(5)	In fixing the period of any such postponement, stay or suspension as is

referred to in subsection (2) and in deciding whether to impose conditions

under subsection (3), the court shall have regard to all the circumstances,

including—

(a)	the terms, and in particular the duration, of the agreement

between the occupier and mortgagor;

(b)	the interests of any children or other vulnerable members of the

occupier’s household;

(c)	the fact (if applicable) that the occupier’s agreement with the

mortgagor has been terminated prematurely;

(d)	the availability of suitable alternative accommodation;

(e)	whether the tenancy or licence between the mortgagor and the

occupier was created in breach of the terms of the mortgage

agreement, and whether the occupier was aware that his

occupation constituted such a breach;

(f)	whether the mortgagee knew, or ought to have known, that the

premises were to be let or licensed by the mortgagor, in the

course of business or otherwise;

(g)	any prejudice which would be caused to the mortgagee by the

deferment of possession or execution; and

(h)	any hardship which would be caused to the occupier by a

decision not to defer possession or execution.

(6)	For the avoidance of doubt, nothing in this section affects the right of a

person whose interest in the property pre-dates, or otherwise ranks in

preference to, the interests of the mortgagee.”’.

Mortgage possession proceedings brought by a bank

Dr John Pugh

Mr Colin Breed

NC16

To move the following Clause:—

‘At the beginning of Part 4 of the Administration of Justice Act 1970 insert—

“35A	Mortgage possession proceedings

(1)	Section 35B applies in the case of any mortgage possession proceedings

brought by a bank (within the meaning of section 2 of the Banking Act

2008).

(2)	Section 36 applies in the case of any other such proceedings.

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Banking Bill, continued

35B	Mortgage possession proceedings brought by a bank

(1)	All mortgages securing a loan of money or other form of credit on

residential premises shall be enforceable only upon the mortgagee

obtaining an order of the court.

(2)	A power of sale which becomes exercisable by a mortgagee of residential

premises, whether under the mortgage agreement or by virtue of sections

101 to 103 of the Law of Property Act 1925, shall be exercised only

following an order for possession granted by the court.

(3)	Where a mortgagee under a mortgage of residential premises brings an

action in which he claims possession, the court may exercise any of the

powers in subsection (4) if it appears to the court that it is reasonable in

all the circumstances to do so.

(4)	In a possession claim of the kind specified in subsection (3) the court

may, if it considers it just to do so—

(a)	adjourn the proceedings;

(b)	make the operation of any term of the order conditional on the

doing of specified acts by any party to the proceedings;

(c)	suspend the operation of any term of the order; or

(d)	at any time before execution of a judgment or order, postpone the

date of possession, or stay or suspend execution of the judgment

or order, for such period or periods as the court thinks reasonable

or until such time as the court subsequently directs.

(5)	For the avoidance of doubt, the court’s powers under subsection (4) exist

in relation to any mortgage or charge under which a loan of any kind is

secured upon residential property, irrespective of the purpose for which

the loan was taken out or of the relative priority of the loan or of

regulation by any other enactment.

(6)	On making an order under subsection (4), the court shall impose such

conditions with regard to payment by the mortgagor of any sum secured

by the mortgage or the remedying of any default as the court thinks fit.

(7)	Notwithstanding the terms of any agreement, a mortgagee of residential

premises shall be entitled to charge to the mortgagor the costs of and

ancillary to proceedings for possession or for recovery of any sums due

under the mortgage only if, and to the extent that, the court makes an

order for costs in his favour.

(8)	The remedy of foreclosure shall no longer apply to mortgages of

residential premises.

(9)	In this section “residential premises” mean any premises comprising or

containing a dwelling.

(10)	Nothing in this section affects the power of the court to make a time order

or other orders under sections 129 to 140B of the Consumer Credit Act

1974 in relation to agreements regulated by that Act.”’.

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Revised 5 November 2008