Lyons Solicitors frequently act for Banks selling as Mortgagee in Possession.  What this means is that the Bank are selling under the terms of the mortgage deed in circumstances where there has been an act of default.  In order to sell as a mortgagee in possession, there must first of all be an act of default.  In the current climate this is typically but not exclusively, an inability to pay the mortgage, thereby allowing the account to go into arrears.

In order for the Bank to realise its loss it will be necessary for the Bank to take back possession of the property before selling.   Typically there are two ways in which such property can be taken into possession, namely the borrower/mortgagor abandons the property or proceedings are initiated in either the Circuit or the High Court and an order for possession is granted by the court.  The office of the sheriff is often required so as to physically take the property on foot of the court order.   Sale by auction is the preferred method of sale however, Lyons Solicitors have found over the last 5 years that sale by private treaty is the currently the most common method of sale. 

There has been much new jurisprudence in this area of law since the landmark decision of Judge Dunne in the case of Start v. Gunn 2011, which in essence confirmed the existence of a lacuna in the law, concerning certain sections of the Conveyancing Act 1881.  That lacuna has been filled with the introduction of the new Land and Conveyance Reform Act 2013. 

The Land and Conveyance Reform Act 2013 states that the Circuit Court shall have jurisdiction to hear such cases, in circumstances where the secured property is the principal private residence of the mortgagor or a spouse or cohabitant of the mortgagor.  The Act sets out the criteria that the Court must have regard to before granting an adjournment and for the first time in law sets the period of any adjournment as  not exceeding 2 months.  The Act also allows for a further adjournment where the court considers that significant progress has been made by the mortgagor.  The Act is to be welcomed and brings clarity and certainty to banks and other financial institutions.