On 8th April 2010, the Mortgage Repossessions (Protection of Tenants etc) Act 2010 received Royal Assent. The Act is designed to offer some protection to tenants from immediate eviction when a mortgagee repossesses a property.

Currently the tenant is faced with eviction at very short notice and with insufficient time to raise his situation with the lender because he had no knowledge of the proceedings.

The introduction of the Act follows lobbying by a number of organisations including Shelter, Citizens Advice, CIH and RICS over recent months as this has become an increasing problem due to the recession and economic downturn.

When does the Act apply?

  • When owners have let their property without the consent of the mortgage lender – an 'unauthorised tenancy'.
  • The owner defaults on their mortgage payments and the lender takes possession of the property.

What happens?

A copy of the Act (which is very short) is available at: http://www.opsi.gov.uk/acts/acts2010/ukpga_20100019_en_1

  • The tenant has to make an application to the Court – the Court will not automatically delay a possession order.
  • The Court may stay or suspend the possession order for a maximum of 2 months either when it makes the order or afterwards.
  • The tenant must have first asked the mortgage company for an undertaking from it that it will not enforce the order for 2 months and the mortgage company must have refused to give that undertaking.
  • The Court will consider any breaches of tenancy when reviewing the tenant's application.
  • The Court may make an order conditional on the tenant making payments to the mortgage company during the delayed period.

What are the benefits?

If an order is made, it gives tenants extra time to find alternative accommodation. It is only a temporary measure and is time limited, but offers greater protection than is currently on the statute books.

We expect the Act to come into force shortly: the exact date is not known at the moment.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.