{"id":402,"date":"2026-07-10T05:10:12","date_gmt":"2026-07-10T04:10:12","guid":{"rendered":"https:\/\/blogs.cardiff.ac.uk\/housing-law-wales\/?p=402"},"modified":"2026-07-06T18:12:48","modified_gmt":"2026-07-06T17:12:48","slug":"a-tangled-web-mortgage-lenders-occupiers-registration-licensing","status":"publish","type":"post","link":"https:\/\/blogs.cardiff.ac.uk\/housing-law-wales\/a-tangled-web-mortgage-lenders-occupiers-registration-licensing\/","title":{"rendered":"A tangled web: Mortgage lenders, occupiers, registration\/licensing"},"content":{"rendered":"

In Kensington Mortgage Company Ltd v Price<\/em><\/a> with Shelter Cymru intervening [2026] EWHC 1577, HHJ Keyser KC, sitting as a Deputy High Court Judge, had to deal with a knotty but really important problem where a mortgagee seeks to get possession against occupiers granted an occupation contract by the mortgagor. Does the lender have to be registered\/licensed under the Housing (Wales) Act 2014 before it can do so?\u00a0 The issues came about in this way:<\/p>\n

In 2007, the Claimant made a secured loan to the first and second Defendants to buy a property.\u00a0 A district judge made a possession order in the Claimant’s favour on 3rd October 2022, and a warrant of eviction issued on 24th January 2023.\u00a0 Shelter sought suspension of the warrant on behalf of the third and fourth Defendants who were living in the property under an occupation contract.\u00a0 The mortgage precluded this letting, even though it was a buy-to-let mortgage.\u00a0 The Claimant then brought possession proceedings on 6th June 2023 – they did so amazingly (and fortunately, I think) on the basis of English law and, when they found out that was wrong, they discontinued those proceedings.\u00a0 The Claimant had taken no other action against the occupiers, and had not received or requested payment of rent.\u00a0 The issues for the court revolved around whether the Claimant was a landlord for the purposes of the Housing (Wales) Act 2014 (“2014 Act).\u00a0 If it was it needed to be registered in order to issue a landlord’s notice under Renting Homes (Wales) Act 2016 (“2016 Act): s. 44, 2014 Act.\u00a0 The Claimant was not registered or licensed under the 2014 Act and did not employ an agent who was registered\/licensed.<\/p>\n

The Claimant sought a range of declarations:<\/p>\n

1) That a mortgagee in possession is a “landlord” within the meaning of section 244 of the 2016 Act – that section says that a landlord is “the person that is (or purports to be) entitled to confer on an individual a right to occupy the dwelling as a home”<\/p><\/blockquote>\n

2) That a mortgagee in possession is not a “landlord” within the meaning of section 2 of the 2014 Act, and that accordingly the licensing and registration regime in the 2014 Act does not apply to it – section 2 says that a landlord of a domestic tenancy is “the immediate landlord or, in relation to a statutory tenant, the person who, apart from the statutory tenancy, would be entitled to possession of the dwelling subject to the tenancy”;,<\/p><\/blockquote>\n

3) That the restriction on giving notice set out in section 44 of the 2014 Act does not apply to a landlord who falls within an exception to the requirement to be licensed and\/or registered in sections 5 and 8 of the 2014 Act, so that a notice given by such a landlord is valid.<\/p><\/blockquote>\n

HHJ Keyser began his analysis from the relatively simple and uncontroversial proposition that a mortgagee in possession in principle can seek possession from a tenant.\u00a0 He then went on to say, again uncontroversially, that the landlord can end the contract by a section 173 notice and an occupier cannot dispute the right of the grantor of the occupation contract to grant that right.\u00a0 He then said that the Act is a “self-contained code” “only in a limited sense”.\u00a0 He went on:<\/p>\n

“Of course, the Act creates a new scheme for private housing rental in Wales and has its own definitions. But it does not exist in the abstract. In particular, section 244(2) does not answer the question, “Who is the person that is entitled to confer on an individual a right to occupy the dwelling as a home?” The answer to that question is to be found in the general law and is relatively simple. At its most basic, the person so entitled is the (freehold or leasehold) owner of the dwelling. Where the dwelling is mortgaged on terms that allow the owner as mortgagor to let the dwelling (a buy-to-let mortgage), the owner will be the person with the entitlement mentioned in section 244(2) until\u00a0<\/i>the mortgagee goes into possession; and from that point on the mortgagee in possession will be the person with the relevant entitlement.”<\/p><\/blockquote>\n

Although he regarded the s 244 definition of landlord as being inelegantly drafted, he said that it was easy enough to understand.<\/p>\n

A mortgagee has a right to possession under the general law but, again uncontroversially, that entitlement “is not the same as the exercise of that entitlement”, ie mortgagees don’t go into possession until they exercise the right.\u00a0 So, if a mortgagee “has not gone into possession, the owners remain the landlords, both in accordance with normal common-law usage and for the purposes of the 2016 Act” .<\/p>\n

So, the real question here was whether the Claimant was in possession or not.\u00a0 They had the order for possession against the mortgagors, but not the occupiers and so the order was “irregular”.\u00a0 Merely obtaining a possession order, he said, is not equivalent to obtaining possession; “one may obtain a possession order and not enforce it”.\u00a0 The Claimant did not do so here.<\/p>\n

The method of obtaining possession against against occupiers is to receive the rent, or at least by directing the occupiers to pay their rent to them (ie the mortgagee).\u00a0 That is not enough for the mortgagee to be in possession, however.\u00a0 They must also “act in such a manner as to substitute himself for the mortgagor in the control and management of the estate”: Mexborough Urban District Council v Harrison\u00a0<\/i>[1964] 1 WLR 733, at 736-7, Pennycuick J.<\/p>\n

Just because the mortgagee had wrongly served a notice under section 8, Housing Act 1988 on Ground 2 of Schedule 2 to that Act did not establish that the Claimant had substituted itself for the mortgagor in the control and management of the property.<\/p>\n

Therefore also, the Claimant was not the landlord for the purposes of the section 2, Housing (Wales) Act 2014 because they were not the mortgagee in possession.\u00a0 If they had been the mortgagee in possession, they would have been the landlord for the purposes of s .2.\u00a0 In a foreboding passage, HHJ Keyser said:<\/p>\n

“Where a mortgagee in possession is bound by a domestic tenancy granted by the mortgagor, it will be subject to the requirements of registration and licensing in the 2014 Act, because it will be the immediate landlord of a dwelling subject to a domestic tenancy. The exceptions in section 5(1)(a) and section 8(1)(a) will apply; however, they are more in the nature of a period of grace than true exemptions from the requirements. In my judgment, the exceptions in section 5(1) (b) and (c) and section 8(1) (b) and (c) will not apply, because the landlord’s interest has not been assigned to the mortgagee but is an incident of its rights under the mortgage. I reach a corresponding conclusion in respect of section 44(2) of the 2014 Act: as the landlord’s interest has not been assigned to the mortgagee in possession, the disapplication for 28 days of section 44(1) does not apply.”<\/p><\/blockquote>\n

A separate argument about Article 1, First Protocol to Schedule 1, Human Rights Act 1998 was not successful<\/p>\n

Observations<\/strong><\/p>\n

This is a very important judgment indeed, and HHJ Keyser is, I think, right on the scheme of the 2014 and 2016 Acts.\u00a0 If the Claimant had properly sought possession against the occupiers under Welsh law and been granted an order for possession, which included payment of rents and profits from the date the order took effect, that might have produced a different result.\u00a0 They were, as I said, fortunate that they pursued the occupiers under the wrong law (saving the lawyer’s blushes).\u00a0 And HHJ Keyser is really clear: a mortgagee in possession must be registered\/licensed to obtain a possession order under the landlord’s notice provisions of Renting Homes (Wales) Act.\u00a0 This will be one for duty advisors to watch out for, and it may be that quite tricky questions will arise on whether a mortgagee is “in possession or not”.\u00a0 For myself, I cannot think that a direction by a mortgagee that an occupier should pay their rent directly to the mortgagee is much other than substituting themselves for the mortgagor in the control and management of the estate.<\/p>\n","protected":false},"excerpt":{"rendered":"In Kensington Mortgage Company Ltd v Price with Shelter Cymru intervening EWHC 1577, HHJ Keyser KC, sitting as a Deputy High Court Judge, had to deal with a knotty but […]","protected":false},"author":7123,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[1],"tags":[],"class_list":["post-402","post","type-post","status-publish","format-standard","hentry","category-uncategorised"],"jetpack_sharing_enabled":true,"meta_box":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blogs.cardiff.ac.uk\/housing-law-wales\/wp-json\/wp\/v2\/posts\/402","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.cardiff.ac.uk\/housing-law-wales\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.cardiff.ac.uk\/housing-law-wales\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.cardiff.ac.uk\/housing-law-wales\/wp-json\/wp\/v2\/users\/7123"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.cardiff.ac.uk\/housing-law-wales\/wp-json\/wp\/v2\/comments?post=402"}],"version-history":[{"count":1,"href":"https:\/\/blogs.cardiff.ac.uk\/housing-law-wales\/wp-json\/wp\/v2\/posts\/402\/revisions"}],"predecessor-version":[{"id":403,"href":"https:\/\/blogs.cardiff.ac.uk\/housing-law-wales\/wp-json\/wp\/v2\/posts\/402\/revisions\/403"}],"wp:attachment":[{"href":"https:\/\/blogs.cardiff.ac.uk\/housing-law-wales\/wp-json\/wp\/v2\/media?parent=402"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.cardiff.ac.uk\/housing-law-wales\/wp-json\/wp\/v2\/categories?post=402"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.cardiff.ac.uk\/housing-law-wales\/wp-json\/wp\/v2\/tags?post=402"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}