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17 January 2017
The urgent need to consider a moratorium on family home repossessions in light of the High Court decision in AIB v Counihan of 21st December 2016 so that County Registrars can be fully informed of their obligations under EU Law to apply the terms of the Unfair Contract Terms Directive in repossession proceedings for family homes, and to address the urgent State liability thereto
REVISED TEXT - Application of the unfair terms directive in repossessions of family homes
Catherine Martin TD
Response by Minister of State Dara Murphy TD on behalf of the Tánaiste and Minister for Justice and Equality, Frances Fitzgerald TD
On behalf of the Tánaiste and Minister for Justice and Equality, I wish to thank the Deputy for raising the matter and the Tánaiste appreciates the Deputy’s interest in the current developments. The Tánaiste is aware of the High Court decision referenced and wishes to reassure the Deputy that this is currently being examined by the Department of Justice & Equality and the matter will be kept under review in terms of any definitive additional obligations which may arise and how they will be dealt with.
I would like to start by reiterating the Programme for Government commitment to “keep families in their homes and avoid repossessions insofar as possible”. In October the Government launched the new national mortgage arrears resolution service, Abhaile and further aspects of the handling of repossession cases in the Courts are being considered based on the Programme for Government.
As the Deputy will be aware, the courts are, subject only to the constitution and the law, independent in the exercise of their judicial functions and in the management and conduct of cases which come before them and the Tánaiste has no role in the matter.
County Registrars are officers of the court and are independent in the exercise of their functions and duties under statute and rules of court and, as matter of law, may only make an order for possession of any land in cases where no defence to an action for possession has been delivered by the defendant or no appearance has been entered by the defendant. Therefore, the power of a County Registrar as regards making possession orders is extremely limited and where any defence is raised by the defendant, including any defence in relation to the nature or terms of the mortgage contract between the borrower and lender, the matter must, when it is in order for hearing, be transferred by the County Registrar to the judge’s list at the first opportunity. At that point it would be a matter for the judge to consider any such issues raised, including, if applicable, issues in relation to the EU Directive on Unfair Terms in Consumer Contracts which was given effect to in Ireland by Regulations in 1995 and amending Regulations in 2000 and in 2013. In addition, all orders of a County Registrar are subject to appeal to the Circuit Court.
The Directive and Regulations are a matter for the Minister for Jobs, Enterprise and Innovation, and it is understood that the Competition and Consumer Protection Commission has supervisory powers to ensure compliance with the legislation.
The raising of this issue, in relation to the matters for consideration by the Court in a possession case, underlines the critical importance of people who are in mortgage arrears on their homes and who have been issued with legal proceedings, engaging with their lender and with the court processes and entering a defence for the consideration of the court where they believe that they have a defence.
If they engage with the court processes they will be afforded the various forms of statutory and non-statutory protection provided for in the Land and Conveyancing Law Reform Act 2013 and the Personal Insolvency (Amendment) Act 2015. In addition, they will also have the possibility of availing of the free legal and financial advice services provided for under the Government’s Abhaile service launched in October 2016.
This new initiative ensures that people who are in danger of losing their home have access to free professional advice, including advice from a Personal Insolvency Practitioner. Under this Scheme, home owners who are in arrears on their home mortgage and at risk of losing their homes are provided with access to free independent expert financial and legal advice and assistance, so that a solution can be put in place that will deal with their debt and keep them in their home, where that is a sustainable option.
The Abhaile service is in addition to the help already available from MABS to homeowners in mortgage arrears. This includes the presence of MABS court mentors at all Circuit Court repossession hearings across the country to provide information and assistance to unrepresented borrowers; and providing in-house dedicated Mortgage Arrears advisers (DMA advisers) in MABS offices across the country, specifically to assist and negotiate on behalf of borrowers in mortgage arrears.