In Wales a mortgagee in possession is a landlord and therefore has to be registered or licensed before serving a notice seeking possession.
In Kensington Mortgage Company Ltd v Price & Ors (with Shelter Cymru as Intervenor) [2026] EWHC 1577 (Ch) the claimant mortgagee sought declarations to establish that a mortgagee in possession is a landlord under the Renting Homes (Wales) Act 2016 (the 2016 Act) (and so entitled in principle to give notice and take proceedings) but is not a landlord under the Housing (Wales) Act 2014 (the 2014 Act) and so did not have to be registered or licensed before serving relevant notices.
The claimant provided a buy-to-let mortgage to the first and second defendants (the owners), which loan was used to purchase the ground floor 1 Cwrt Naomi, Pentre Doc y Gogledd Llanelli (the property). Mortgage arrears arose and possession proceedings were commenced.
Although an order was obtained the claimant had not appreciated that the owners had sub-let the property and the warrant was withdrawn. The claimant accepted that it was bound by the sub-letting as the loan advanced was on the shared understanding of a buy-to-let transaction. In 2023 the claimant’s solicitors served a s8 notice seeking possession under Housing Act 1988 on the occupiers and then commenced fresh possession proceedings.
Those proceedings were withdrawn following a defence that the notice was invalid as a result of the 2016 Act. The claimant took no other action in respect of the property, had not communicated further with the occupiers and had not asked for rent from the occupiers or carried out or been asked to carry out repairs or any other function of a landlord. On 10 November 2025 the claimant commenced the proceedings before the court.
The 2014 Act regulates private rented housing in Wales. The letting and management of certain tenancies is regulated through a system of registration and licensing. S44 provides that various notices may not be given if the landlord is not registered or the landlord is unregistered and has not appointed a person who is licensed to carry out the property management works for the dwelling on the landlord’s behalf.
The 2016 Act introduced “occupation contracts”. The property was sub-let under a standard occupation contract. S244 defines landlord in relation to an occupation contract as being the person that is (or purports to be) entitled to confer on an individual a right to occupy the dwelling. The court held that this would be the mortgagor until the mortgagee exercises its right to possession and from that time the landlord would be the mortgagee in possession.
Accordingly, when s173 provides that periodic standard contracts may be terminated by a landlord serving a notice, only when a mortgagee becomes a mortgagee in possession will the mortgagee be entitled to serve such a notice. 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 of the 2014 Act.
This requirement of registration does not unlawfully interfere with a mortgagee’s rights under Article 1 of the First Protocol to the European Convention on Human Rights. However, in the present case the claimant had not yet become the mortgagee in possession because it had not demanded that the occupiers pay rent directly to it. There had been no control or management of the property by the claimant.
Elizabeth Haggerty is a barrister