Repossession actions to be lodged in Circuit Court

MINISTER FOR Justice Dermot Ahern has changed the law to make it mandatory that home repossession actions have to be first lodged in the Circuit rather than the High Court.

He also introduced a provision to allow for downward rent reviews on new property leases, but refused a Labour amendment to make it retrospective for existing leases.

Mr Ahern said everyone had sympathy for current leaseholders but “there is a real Constitutional difficulty with changes that affect property rights retrospectively”. He introduced the amendments in the Land and Conveyancing Law Reform Bill, which passed all stages in the Dáil last night.

Referring to home repossessions, he said “homeowners have been less likely to be present or represented at the High Court, which, effectively, places them at a major disadvantage”. A judge had only so much discretion in deciding on the merits of an action and his or her hands were often tied if there was only one party represented before the court. “I hope this move will encourage homeowners facing repossession orders to make their case in the Circuit Court.” Mr Ahern said that several mortgage lenders were seeking home repossessions in the High Court, which currently was their right.

“But I believe they are placing homeowners who want to make genuine efforts to save their homes at a major disadvantage,” he added.

“Accessing the High Court for many is not as easy as the Circuit Court, and there is also the fear of significant legal costs.” The Minister said substantial numbers of people were taken to the High Court for repossessions, particularly by sub-prime lenders.

There was an agreement, he said, among most of the major lending institutions on repossessions and that was why the vast majority of substantial home loan lenders did not have many repossessions, despite the adverse publicity about banks.

“It has been the practice, however, for sub-prime lenders generally, even when people default on very small sums, to immediately run to the courts,” the Minister added.

“The question must be asked why and how these lenders were allowed to give such loans to people who could not secure them from the major institutions.”