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Housing laws vary between Scotland and England. Get advice relating to England

You may be at court because you applied for a section 2 order to delay the repossession process  or because your lender is applying for the right to repossess and sell your property. This page explains the decisions the sheriff can make in both these situations.

Changes to the law

From the 3rd October 2010 the procedures that mortgage lenders have to follow to repossess your home were changed. Unless mentioned the content on this page reflect these changes.

I applied for a section 2 order after I received a notice of default (when your lender started proceedings before 30th September 2010)

If you received a notice of default and made an application for a section 2 order within one month of the notice expiring, but before your lender applied to the court for the right to repossess your home (and sent you a section 24 notice and initial writ), the court must decide whether to grant you the order.

The court grants a section 2 order

The court can grant you a section 2 order setting aside the notice of default if you can demonstrate that you can make payments towards your mortgage arrears. As long as you keep to any conditions of the section 2 order, your lender will not be able to take any further action to repossess the property.

If a section 2 order is granted then it will be registered by the sheriff court in the Register of Inhibitions and Adjudications to ensure that the property is not inadvertently or mistakenly sold by the lender while the order is in force.

The court doesn't grant a section 2 order

If the court does not grant you a section 2 order, your lender will still have to get a court order to force you to move out of the property (called a warrant of ejection) before it can be sold. However, you should start looking for alternative accommodation.

If your lender applies to the court for the right to sell your property or for an order to force you to move out you will have the opportunity to apply again for a section 2 order.

I applied for a section 2 order after I received a calling up notice

If you received a calling up notice and you applied for a section 2 order within two months of being sent this notice, but before your lender applied to the court for the right to repossess your home (and sent you a section 24 notice and initial writ), the court must decide whether to grant you the order.

The court grants a section 2 order

The court can grant you a section 2 order suspending the calling up notice. This means that you will not have to pay back the entire loan immediately, but can arrange to pay your arrears and continue to make your usual payments towards the loan. As long as you keep to any conditions of the section 2 order, your lender will not be able to take any further action to repossess the property.

The court doesn't grant a section 2 order

If the court does not grant you a section 2 order, your lender will still have to get a warrant of ejection from the court to force you to move out of the property before it can be sold. However, you should start looking for alternative accommodation.

If your lender applies to the court for the right to sell your property or for an order to force you to move out, you will have the opportunity to apply again for a section 2 order.

My lender has applied to the court for the right to repossess and sell my home

If your lender has applied to the court for the right to repossess your home and sent you a section 24 notice and initial writ and you have applied for a section 2 order, the court may be able to make the following decisions:

Dismiss the case

If the court thinks that your lender has not followed the correct procedure or does not have the right to repossess the property, the case can be thrown out of court. If your lender still wants to repossess the property, they will have to start proceedings from the beginning again.

Continue the case

The court can set another date for your case to come back to court. This could be to:

• allow time for you or your lender to provide more information
• monitor payments towards your arrears.

Grant a repossession order and refuse your application for a section 2 order

This is the worst case scenario. The court could grant your lender the right to repossess your home. An order must be included stating that you have to move out, as the property cannot be sold be with you in it.

If a repossession order is granted, you should get advice immediately. You can get advice from Shelter's Advice Service or Citizens Advice, your local council or other advice centre. Use the Advice Services Directory to find agencies in your area. An adviser may be able to help you look at your housing options or make a homeless application.

You can still try to negotiate with your lender, but you will need to be able to:

• pay a lump sum, and
• make an offer to pay the balance of the arrears, and
• pay your lender's legal costs, and
• show that you will be able to meet monthly payments too.

Grant a repossession order but with a section 2 order attached

The court can grant a repossession order but include a section 2 order stating that you should be given time to find alternative accommodation. The court could attach conditions to the section 2 order, for example:

• stating the length of time you should be allowed to stay in the home, or
• telling you to make a homeless application to the council.

Refuse the lender's application for the right to repossess and grant a section 2 order

The court can refuse the lender's application for a repossession order and grant you a section 2 order. The section 2 order will have conditions attached, which may include:

• how much you must pay to your arrears on a regular basis
• when you must have your arrears cleared by
• an instruction to contact a money adviser about debt advice.

Can a section 2 order be changed?

If you do not keep to the conditions of the section 2 order, your lender can take you back to court to have the order revoked.

If a change in your circumstances prevents you from keeping to the conditions of your section 2 order, you can go back to court to ask to have the section 2 order altered so that you can stick to its conditions. For example, if you can no longer afford to keep to your repayment arrangement, you may be able to get the section 2 order altered so that you can make smaller payments.