Seán Sherlock (Cork East, Labour) | Oireachtas source

I wish to speak in support of the amendment. I acknowledge the work of FLAC on this and its submission on the Bill. With the permission of the Leas-Cheann Comhairle, I will refer to its submission. It states the issue of the appointment of receivers to properties that are the principal private residence of the borrower has become contentious in recent months, particularly in light of the increasing number of loans that have been sold by the pillar banks to investment and vulture funds. FLAC has noted this particularly where the borrower has, at some point following the occurrence of arrears, moved out of the property and rented it to a tenant in order to stem the arrears problem and-or attempt to resolve it. Typically, the borrower will move back to his or her original family home or try to source cheaper accommodation with friends and relatives. In the cases FLAC has seen, the borrower subsequently pays the full amount of the rent directly to the lender and therefore the appointment of the receiver is arguably unnecessary. Indeed, as the receiver is deemed to be the agent of the mortgagor or borrower under section 108(2) of the Land and Conveyancing Law Reform Act 2009, though appointed by the mortgagee or lender, the appointment of the receiver may lead to less money being paid to the lender as the costs of the receiver would be deducted from the rent paid by the tenant to the landlord or borrower. FLAC believes that in some of these cases the appointment of a receiver is a prelude to evicting the relevant tenants, obtaining vacant possession of the property and then selling it without having to bring legal proceedings to the Circuit Court to repossess it in the normal manner envisaged by the Act of 2009. This strategy robs a borrower who has acted in good faith, has attempted to deal with the arrears problem and has credible proposals to solve that problem of the opportunity to convince a court that the possession order should not be granted, and it effectively undermines the role of the courts to administer justice. It also undermines the intention of this Bill, which is to empower the Circuit Court to make the decision as to whether such an order is granted, according to a specific statutory criterion. The mortgage deed, according to FLAC, will generally provide for the power of the lender to appoint a receiver on the occurrence of specific events, including a default in the payment of instalments. This is currently backed up by section 108(1) of the Act of 2009, which allows the lender to appoint a receiver in the event of arrears or other breaches of the agreement. No other conditions are imposed on the exercise of this right. Subsection (3) allows the receiver to "exercise any powers delegated by the mortgagee or other person".

In essence, we are supporting the amendment on the basis of the grounds set out, where there is an intervention whereby the mortgagee may not appoint a receiver without the permission of the Circuit Court. We believe this complements the Bill and speaks to the spirit of the Bill proposed originally by the Minister of State, Deputy Moran. It is on that basis that we support the amendment.

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