Kevin Moran (Longford-Westmeath, Independent) | Oireachtas source

The Government is opposing this amendment. The basic objective of the Bill is to provide adequate protections for people in mortgage arrears in respect of their principal private residences. This amendment will not help such people in any way for the simple reason that receivers are not appointed to principal private residences. In this case, as there is no rental income from principal private residences the appointment of the receiver would be of no benefit to the lender. The rationale behind the proposed amendment appears to be an intention to assist certain borrowers who, for whatever reason, rent their principal private residences with the view of servicing their mortgages. I should point out that such action may, in itself, be a breach of the mortgage contract entered into by the borrower and the lender. Such contracts may preclude the renting out of the principal private residences.

Having said that, I have to add that it is not clear to me how often such a situation arises. It is clear, however, that the proposed amendment would cover all instances of lenders appointing a receiver and that would include all buy-to-let mortgages. That would cause difficulties to the Courts Service regarding the demands on the courts' time and the cost of processing applications for court orders. Requiring lenders to apply for a court order prior to the appointment of the receiver would lead to increased demands on time and costs for the Courts Service. It should be added that, apart from any statutory powers to appoint a receiver, mortgages usually reserve the contractual rights of the mortgagee to appoint a receiver with the conditions in section 108(1) satisfied. This amendment seeks to set out the terms that may be contained in the mortgage arrears contract. It could, if enacted, lead to legal challenge. If the amendment is passed the Minister has indicated that it will be necessary to obtain legal advice on the matter prior to the Bill returning to the Seanad. That would, without doubt, delay the passage of this Bill. I am opposing the amendment for those reasons.

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