Reposession after death

T

Thirsty

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On another thread, someone posted that bank holding mortgage had 2 years from mortgagees date of death to pursue repayment of their debt otherwise they were statute-barred.

Does anyone have a reference to the actual legislation on this? (Act & section number if you can).

And also what constitues starting proceedings? A pro-forma letter that says 'you owe us arrears' or a formal declaration that the full amount of the mortgage is now due & we are taking you to court?
 
You would need legal advice in this matter as the wording of any special and general conditions attached to the mortgage offer would have to be considered.

The relevant legislation is:

The Civil Liberty Act 1961 s 9; and

The Statue of Limitations 1957 s 37
 
thanks for that, so this is section 37 of the Statute of Limitations...but it says six years and it seems to refer to interest rather than repossession?

What would be the important elements in the offer of mortgage document?


 
Thirsty I am operating on the Bank side of this issue in respect of a deceased client" Yes the bank would need to progress action against the estate within 2 years of death. However in the event of a mortgaged property the issue is not quite so simple. In the event of a failure by the Bank to progress action within the stated time period the Bank can go to Court to seek a belated possession order. Generally this will be approved unless the bank acted in some way to defeat its own case. I.e. by ignoring correspondence from the Estate of the deceased party or other. In any case the mortgage on the property will still stand and while it would be difficult to re-possess it would also be impossible to sell on the property without the mortgage being vacated. In such a scenario it would be best to get the solicitor to reach a settlement agreement with the bank in return for a mortgage vacate!
 
Thirsty,

There are several sections that could apply depending on individual circumstances.

The 2-year time limit applies unless proceedings:
  • were pending at the date of death; and
  • those proceedings commenced with the relevant period prescribed by the Statute of Limitations or any other limitation enactment.
Other complicating factors affecting time limits could be the Land and Conveyancing Law Reform Act 2013.

This is a complex area and you really do need to seek legal advice.
 
Just information gathering at this point, folks - I know your advice is well meant, but don't panic, nothing drastic is going to happen to the world we live in.

On the question of proceedings ... is a pro-forma letter from the bank sufficient to establish that 'proceedings' were commenced or does it have to be a specific 'we are taking you to court' letter?
 
"On the question of proceedings ... is a pro-forma letter from the bank sufficient to establish that 'proceedings' were commenced or does it have to be a specific 'we are taking you to court' letter?"

Actual proceedings with a court record number. Those letters don't constitute proceedings - just the threat of proceedings

mf
 
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