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Larry buys a property on a mortgage and then lets it to Tim on a AST. Larry then defaults on his mortgage and the bank proceeds to repossess the property that is housing Tim. What is the process and timeframes for this? Is there any reason why the bank would or could not repossess the property with Tim residing as a sitting tenant? In short, what happens to Tim’s AST?

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See Brindley Twist Tafft & James LLP, "Focus on the Mortgage Repossession (Protection of Tenants Act etc.) 2010 [sic]".

If the tenancy was an authorized tenancy under the terms of the mortgage:

The Bank may still take possession of the property but they may have to do so subject to your occupation. The practical effect of this is that you would be allowed to remain living in the property subject to the terms of your tenancy agreement but you would see a change in the identity of the Landlord. It is possible for the tenancy to be brought to an end but in accordance with the terms of the tenancy agreement.

If the tenancy was not authorized:

Under the Mortgage Repossession (Protection of Tenants Act etc) 2010 [sic] (the “Act”) an unauthorised residential tenant is however entitled to request that possession be delayed for up to two months during which time they should try to find alternative accommodation.

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