Last updated 14 January 2019
The legal process is as follows:
- If the borrower does not pay within the default notice period (30 days after the Section 88 Notice), the lender can commence legal action. A claim must be served on the borrower, and the borrower has 28 days to defend the action.
- If no defence is filed, then the lender can seek a default judgment.
- If the lender is successful, they need to serve a copy of the default judgment on the borrower.
- If, within seven days of service, the vacant possession is not obtained (the borrower does not leave), the lender will need to apply for an enforcement warrant.
- The enforcement warrant will be served on the borrower by the bailiff, who will tell the borrower the latest date they must leave the property. This is the date that is ordered by the court on the enforcement warrant.
- If the borrower still refuses to vacate the property by the advised date, the bailiff will return with the police to evict the borrower, the locks will be changed and the lender will have obtained vacant possession.
If the borrower has not taken all of their belongings when they are evicted, the lender will organise for a removalist to collect and store the goods. The borrower must pay the removalist and storage costs before they can collect their belongings. These costs are substantial. If they do not collect the belongings, the storage company will sell the goods to recoup their costs.
The lender must sell the property within a reasonable amount of time and for the market value of the property. Any surplus after the debt is repaid and the costs of selling are deducted is returned to the borrower. The borrower is responsible for any shortfall if the sale of the property does not satisfy the debt.