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Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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What would be my grounds of defence against a court possession

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What would be my grounds of defence against a court possession claim brought against me by my mortgage lender where their grounds is that I have violated the clause in the buy-to-let mortgage which states that I am not to reside in the property.
BACKGROUND: I have had this buy-to-let property since 2007 and have been letting out the property since then. However I moved into the property in March 2015 as my tenancy in the rented property I was living in since 2004 expired after 11 years and would not be renewed by the owner. I have a dispute with the lender which is being investigated by the Banking Ombudsman over excess charges of over £10,000 which they put in my account since 2011. Between August 2014 and February 2015 I did not make payments on the mortgage having asked the lender in July 2014 to credit the excess charges to my account for those months as over payments. They denied excess charges existed and issued me a Formal Demand in February 2015 to repay the mortgage balance in full. In March 2015 I paid the money I had withheld between August 2014 and February 2015 and took the matter to the Banking Ombudsman. The Ombudsman is still investigating the matter. However the possession claim I have received states that the measure they have taken is that I had been issued with a Formal Demand and did not pay the outstanding balance demanded in the Formal Demand hence the possession claim. But the fact is that the only stated grounds for the Formal Demand was the non-payment of the mortgages as I stated above and not that I had begun to reside in the property. In addition, I began to physically reside in the property in March 2015 and the said Formal Demand was issued on and dated 11 February 2015. Hence the Formal Demand could not have been issued in connection with my residing in the property with effect from March 2015 and that is besides the fact that it does not state that the reason for the demand is that I now reside in the property. What would be my grounds of defence against this possession claim?
Thank you
Hello my name is ***** ***** I will help you.
Is the basis for arrears or sub letting?
Customer: replied 2 years ago.

They acknowledge that there is no arrears owed and we are not subletting the property.

The basis i.e. the ground for the claim for possession is that we breached the buy-to-let condition states that we should not live in the property.

Thanks. How long did you leave in for?
Customer: replied 2 years ago.

We re-mortgaged the property with the lender in 2007 and let it out until March 2015 when we moved in to live there. So we have lived here since March 2015.

OK - did you inform your lender and if not why not? Did they ask you to stop breaching the loan or just went straight for possession?
Customer: replied 2 years ago.

We did not inform them before we moved in.

We informed them afterwards but in the same month.

They did not ask us to stop the breach.

The court summons is the first we knew that they felt that way about it because we had been communicating on other matters and they have been writing us at the address since we informed them that we lived there.

Have you asked them to withdraw it? If they wont have they said why? What is the value of property and equity in it?
Customer: replied 2 years ago.

No I have not asked them to withdraw it. But I do not know the reason to give them for that.

The value of the property is about £500,000 and the equity is about £200,000.

Would you move back out?
Customer: replied 2 years ago.

No I don't intend to move out.

Then you are in breach and sadly you have no defence. It is a term of your mortgage that you do not live there, so you either need to move out or change mortgage.
If you can change mortgage (or indeed mortgage provider) before the Court date then you would be ok. The problem is you have a contract where you agree not to live there, but you are and as such in breach of the agreement.
If you move out then potentially you can have a defence and ask the Court to suspend any possession order on the basis you comply with the terms. As you are in breach of the terms a Court is not going to do that at present, which is why you either need to change mortgage/lender or move out.
Can I clarify anything for you about this today please?
Customer: replied 2 years ago.

I already told them I would repay the mortgage by selling other properties which I mortgage with them putting the equity towards this property. They have verified and received confirmation from my conveyancer that I am doing that already with the sale of one of the properties being at an advanced stage with contracts to be exchanged as soon as vacant possession is obtained. I was in discussion with them on the timing of the redemption of the mortgage when I suddenly received the court summons. I would be able to redeem the mortgage within two to four months and I have shown them that. So I don't know what exactly the purpose of the possession claim is.

I agree, there is no point if you are paying. But you may be able to ask for an adjournment of the possession claim if there is a firm offer of your other property. But as it stands sadly you dont have a defence as you have breached the terms.
I am sorry. Can I clarify anything else for you?
Customer: replied 2 years ago.

I am unable to do a re-mortgage for now and the cost of renting in the area is almost four times the cost of the current mortgage hence above my current means. All my children are in the local schools including one in a special school. The lender is Mortgage Express and do not do any more new loans not even a switch from buy-to-let to residential.

If they do not accept to drop the court claim and allow me time to redeem the mortgage, is my best bet then to seek a suspended possession order in court to allow me time to redeem the mortgage?

Yes the Court may allow time for you to do that.
Does that help?
Customer: replied 2 years ago.

Well we were always going to redeem the mortgage by July 2016 and the lender was aware of this and has been shown how we intend to do it. I am also concerned about litigation costs. So if in the defence I show that I have proposed a redemption plan which they have seen to be fool proof or at least have not said is not satisfactory, and then ask for one year to redeem the mortgage, is the court likely to grant that?

One year, no. If you have an offer on another property then you will be ok, but the Court is not going to want to give you months and months. 3 months at the most.
Does that clarify?
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