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Monday 20 November 2017

Hundreds of repossessions in doubt due to legal loophole

Dearbhail McDonald Legal Editor

More than 100 home repossessions ordered by the courts could be legally challenged after a landmark ruling issued yesterday.

And hundreds more repossession cases have been left in legal limbo after the High Court identified a loophole in laws introduced in 2009 to streamline repossessions where borrowers are in default.

The legal status of court-ordered evictions and eviction proceedings were plunged into doubt after High Court judge Ms Justice Elizabeth Dunne yesterday identified a loophole created by the 2009 Land Law and Conveyancing Act.

Home repossessions had ground to a virtual halt in recent months as banks and borrowers awaited the outcome of a series of test cases challenging the new law, which came into effect on December 1, 2009.

In her ruling yesterday, Judge Dunne said lenders who took legal action after December 1, 2009 were not entitled to rely on a law dating back to 1964 which granted lenders a right to apply for repossession once the mortgage had fallen into arrears and final demand letters had been sent to borrowers. That law was cancelled as a result of the 2009 legislation.

Lenders, including subprime mortgage operations, that began repossession proceedings before December 1, 2009 are unaffected by the ruling.

But if banks failed to issue final letters of demand before then, they are not entitled to rely on the now-cancelled law.


Banks who failed to issue demands before the December 1, 2009 deadline may now have their cases struck out of court and will have to start new proceedings against homeowners.

"It is not for the court to supply that which is not contained in the 2009 Act," said Judge Dunne in her 30-page ruling.

New Beginnings, the voluntary group of lawyers and businesspeople who organise legal representation for distressed homeowners, said last night that it would pursue injunction proceedings on behalf of people set to lose their homes because of orders grounded on the flawed process.

"We will endeavour to operate within the law to create as much difficulty as is humanly possible to force a political solution," said spokesman David Hall, who claimed up to 700 homeowners may be directly affected by the ruling.

"The ruling is welcome but this is not just a legal problem. The issue of mortgage arrears and repossessions is, and always has been, a political problem.

"The best brains in the legal world missed this problem. How can people go into court unrepresented?" he said.

Solicitor Jonathan Finan, who represented one couple facing eviction, said homeowners facing repossession should review their documents and seek legal advice to see if they are affected by the ruling.

"It may well be that their case will be struck out," said Mr Finan.

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