When you take out a mortgage to buy a property, you offer the property as security for the mortgage debt. If you are unable to pay the mortgage, you may be faced with repossession.
If you are having difficulties paying your mortgage, you should talk to the lending institution as soon as possible. Our overview of mortgage debt describes what you can do if you risk falling into arrears, and we also describe the codes of conduct for mortgage lenders. Your lender must must take certain steps to deal with any problems you have in paying your mortgage. Repossessing your home should be the lender's last resort.
Several organisations, including the Money Advice and Budgeting Service (MABS) offer advice and support to people who are facing repossession – see ‘Getting help’ below. MABS is centrally involved in the Abhaile scheme for people who are in serious mortgage arrears and at risk of losing their home, This scheme provides a range of services to help you to deal with your situation, including financial advice, legal advice and insolvency advice. Read more on mabs.ie.
Other debts and loans
Even if you have no mortgage on your home, it could be in danger of repossession if you have other debts. If you build up other debts and are unable to repay them then the people to whom you owe money may register that debt as a judgment mortgage against your house, flat or apartment and seek to recover their money in that way - see ‘Other debts and loans' below.
If your home is being repossessed
If you have exhausted all the options open to you, the lender can repossess your home in order to recover the amount you owe. If you do not agree to the repossession, the lender may take you to court. The legal processes are described in detail below.
When your home is to be repossessed, you will need to find somewhere else to live. You can apply to the local authority (county or city council) to be housed. There are also a number of voluntary housing associations which provide social housing. If you rent from a private landlord, you may qualify for a Rent Supplement or a Housing Assistance Payment (HAP) to help with the rent. If you cannot find anywhere to live, our document on housing and other supports for homeless people may be useful.
Legal issues affecting repossessions
In 2011, a High Court decision established that there were legal difficulties with getting orders for possession of certain properties. This decision was made in a number of cases where mortgage providers were applying to repossess mortgaged property.
Put simply, the decision meant that, in the case of mortgages created before 1 December 2009, it was very difficult for a mortgage provider to get an order for possession unless the court proceedings were started before that date.
This situation arose because the law was changed on 1 December 2009. An existing law governing repossessions was repealed by the Land and Conveyancing Law Reform Act 2009, which provided for repossessions but applied only to mortgages created after it came into effect.
The Land and Conveyancing Law Reform Act 2013 was introduced to remedy the legal difficulties described above. It also provides for a court to adjourn repossession proceedings for up to 2 months in certain situations, to allow the possibility of a Personal Insolvency Arrangement (PIA) to be explored as an alternative to repossession.
The legal processes involved in repossession
If you agree to have your home repossessed
You can consent to have your home repossessed. You may agree terms with your lender for the sale of the house, if you are unable to pay your mortgage.
The lending institution must get a court order to repossess or sell your house unless you consent in writing 7 days before the repossession or sale.
If the issue has to go to court, you are generally liable for the costs of the court action.
In some cases, the lending institution may have difficulty in finding a buyer who would be willing to buy the house unless there is what is known as a well-charging order in place. This is a court order which, among other things, allows for the sale of the property.
If you don’t agree to have your home repossessed
If you haven’t agreed a repayment plan with the lender, or you have been unable to meet the payment arranged by a repayment plan, the lender may take you to court to repossess your home. You must engage in the legal process if you don’t want your home repossessed.
In general, a lending institution may start the proceedings for repossession in either the Circuit Court or the High Court. However, if the mortgage was taken out on or after 1 December 2009, then a case for the repossession of the home arising from default on a housing mortgage loan must be first taken in the Circuit Court. The Land and Conveyancing Law Reform Act 2013 (described above), has extended this rule to housing loan mortgages taken out before 1 December 2009. A housing loan mortgage is the usual kind of mortgage that individuals take out in order to build, buy or improve a house. (Cases involving repossession for default on other kinds of mortgages may continue to be taken in either the Circuit or the High Court.)
The usual procedure is that the lending institution applies to the court for one or more orders – a possession order and/or a well-charging order. These orders may be granted in the same proceedings. Generally, it is the practice of the courts to allow you some time to make arrangements to repay the money owed before making any final orders.
If an order for possession or a well-charging order is made against you and you do not hand over possession or comply with other terms of the orders, the orders may be enforced by the Sheriff (in Dublin and Cork) or by the County Registrar in other areas.
Circuit Court procedure
The procedure in the Circuit Court is governed by the Rules of the Circuit Court as set out in the Circuit Court Rules (Actions for Possession and Wellcharging Relief) 2009.
The Circuit Court process starts when the mortgage provider issues you with a civil bill. This is usually accompanied by an affidavit setting out the claim that is being made against you. The civil bill has a return date – that is the date on which the matter will come before the County Registrar. The civil bill must be served on you at least 21 days before the return date.
The mortgage provider may apply for a possession order and/or a well-charging order (see below).
If you intend to fight the action taken by the mortgage provider to repossess your home, you must enter an appearance (there is a specific form for doing this) within 10 days of being served the civil bill. You must then file an affidavit replying to the mortgage provider’s claim and serve that on the mortgage provider at least four days before the return date.
When your case comes before the County Registrar it will be decided on the basis of what is in the affidavits. Neither side has the right to give oral evidence except in specific circumstances. However, you do have the right to cross examine the person who swore the affidavit. In order to do this, you must have given notice that you require this person to be present.
The County Registrar has the power to make a number of orders, including adjournments, notice to third parties and more time to file affidavits.
Decisions by the County Registrar
The County Registrar may make an order for possession and/or a well-charging order if you have not entered an appearance.
The County Registrar can also make an order for possession, if you have entered an appearance and filed a replying affidavit, but your affidavit does not disclose a prima facie defence (this means that the affidavit does not show any obvious defence).
If you have entered an appearance and filed a replying affidavit which does disclose a prima facie defence, the case must be sent by the County Registrar for hearing by a judge.
The judge may grant or refuse the order requested.
The procedures for getting well-charging and possession orders in the High Court are similar. The Master of the High Court has a similar (but not exactly the same) role as the County Registrar in the Circuit Court. The procedure is set out in Order 38 of the Rules of the Superior Courts.
The lender may apply to the High Court for a possession order and, if necessary, a well-charging order.
The process involves the lender issuing a special summons. This is first dealt with by the Master of the High Court. He sets a return date which may not be less than 7 days after the issuing of the summons. The summons must then be served on you at least four days before the return date. The lender must file an affidavit setting out the facts of the claim in the Central Office of the High Court. The hearing may be on affidavit only or oral evidence may be given.
The Master may grant or refuse the orders requested or may forward the case for hearing by a High Court judge.
A mortgage suit is a court procedure which is taken by the holder of a security on property (for example, your mortgage lender) to recover a debt by forcing a sale of that property. If a mortgage suit is successful, the court issues a well-charging order. A well-charging order usually includes:
- A declaration by the court that the debt owing to the person or institution (together with any interest and costs) taking the case is “well charged” on the property in question
- A direction that the property be sold (usually the court gives you time to pay the amount due before the order for sale becomes effective)
- A direction that the Examiner’s Office take an account of all encumbrances and make an inquiry into their respective priorities. This can arise, for example, if you have more than one mortgage on a property or there is some arrangement whereby some of the proceeds of sale of the house must be used for other purposes
The arrangements for the sale are also generally agreed through the Examiner’s Office. The sale is usually by public auction. If the sale price is greater than the amount you owe, then the excess is paid over to you. If it is less, you are still liable to repay the shortfall.
If you manage to make a settlement with the lender and agree repayment terms, then the lender may apply to the court to discharge the well-charging order.
Executing the orders
If you do not comply with the terms of the court orders, they may be enforced by the sheriff or the County Registrar.
Other debts and loans
If you owe money for any reason and the creditor is trying to get repayment, one of the options open to the creditor is to create a judgment mortgage on your property (your home or any other property you own). A judgment mortgage has broadly the same effect as a conventional mortgage on your home and can be enforced by way of a mortgage suit - see above.
First the creditor must get a judgment order, and then an execution order (usually a fi fa order) and if the execution order doesn’t result in payment of the debt the creditor may get a judgment mortgage on your property.
The creditor must first get a court to decide that you do owe them money. This is called a judgment order. To get a judgment order, the creditor will take their case (make a motion) to the District Court, the Circuit Court or the High Court – which court depends on the amount of money involved. This motion may, of course, be contested by you (the debtor). A judgment order is made if it is established that you (the debtor) owe the money in question.
When a judgment for the payment of money is obtained from a court, the person in whose favour the judgment is given is called a judgment creditor and the person who has to make the payment is a judgment debtor.
In general, the creditor has 12 years in which to enforce the judgment order.
Enforcing the judgment order
The legal term for enforcing the judgment is execution. Having got a judgment order, the creditor then has to get an order to execute the judgment. The execution order entitles the creditor to enforce the judgment.
A number of different execution orders are available. Generally, execution orders remain in force for a year but may be renewed.
Fi fa order
The execution order most commonly used to enforce a High Court judgment for a specific amount of money is an order of fieri facias (the literal meaning is “that you cause to be done” and the orders are generally called orders of fi fa) These orders are issued by the Central Office of the High Court.
This order entitles the creditor to direct the sheriff or County Registrar (County Registrars fulfil this function in all areas except Dublin and Cork cities and counties) to seize and sell property belonging to the debtor. If this fails because there is no property to seize, then the sheriff or County Registrar reports that no goods could be found to be seized (the legal phrase is to return the writ nulla bona).
A judgment mortgage is frequently created when the order of fi fa fails to deliver any property. The judgment creditor may not look for a fi fa order at all and may create a judgment mortgage instead. Creating a judgment mortgage involves registering the judgment as a mortgage against your property. Effectively, the judgment is converted into a mortgage and this is registered in the Land Registry or Registry of Deeds.
Registration of the judgment mortgage does not have any automatic immediate effect until the judgment creditor decides either to force a sale or to claim entitlement to the proceeds of a sale by the judgment debtor.
A judgment mortgage has broadly the same effect as a conventional mortgage and can be enforced by way of a mortgage suit - see above.
If you have to go to court, the Money Advice and Budgeting Service (MABS) may help you to prepare. They may tell you the type of questions you can expect from the judge and the documentation you need for your case, for example, a statement of income and expenditure.
The role of MABS has been enhanced to include a Dedicated Mortgage Arrears service in over 20 MABS locations and a Court Mentor service to offer advice and options to people facing repossession. These services were launched in December 2015.
The MABS Helpline 0761 07 2000 is open from 9am to 8pm, Monday to Friday. You can also email email@example.com or you can make an appointment to meet a money adviser in person in one of the nationwide network of MABS offices.
If you need legal advice and representation, you may be entitled to civil legal aid, depending on your circumstances. The Abhaile scheme for people in serious mortgage arrears covers a certain amount of free legal aid and advice for eligible borrowers.
You can also contact a Free Legal Advice Centre (FLAC) to get some advice on legal papers or legal issues.
New Beginning is a not-for-profit organisation which aims to represent people in this situation.