Mortgage non-payer can keep home

The house is valued at about £200,000

A man who did not pay his mortgage for 15 years has been told by a judge he can keep the house and will never have to repay the debt.

Djabar Babai took out a loan on the house in Heaton Mersey, Stockport, in 1989, but has not repaid anything since January 1993 - a £40 payment.

But because NatWest Bank took more than 12 years to take action, judges ruled that Mr Babai had squatters rights.

The bank lost its Court of Appeal bid to overturn the decision.

In a statement, NatWest said it was disappointed by the decision and was considering a further appeal to the House of Lords.

Lord Justice Mummery said the bank had delayed so long in taking repossession action against Mr Babai's home that it was too late.

He rejected arguments by the bank's lawyers that the decision would force other lenders to get tougher on defaulters and start proceedings at an earlier stage.

I think the case is highly unusual William O'Neill, Manchester lawyer

William O'Neill, of Manchester-based law firm Rowlands, agreed with the judge's decision.

He told BBC News: "As things stand lenders have ample time within which to take action to recover their money.

"What was unusual about this case was that NatWest took in excess of 12 years to take steps to recover money due to them. I think the case is highly unusual."

Mr Babai was made bankrupt shortly after making the last payment in 1993 and has not paid anything since. By 2006, the debt had spiralled to £165,000.

Legal proceedings

Although NatWest issued a formal demand in 1992 after Mr Babai struggled to make payments it took no steps to launch proceedings to repossess the house.

In 1993, it made another demand for payment but again failed to launch legal proceedings.

In March 2007, the High Court ruled that Mr Babai had squatters rights over his home and earlier this week the bank failed in an appeal.

Lord Justice Mummery ruled the bank had no right to enforce the mortgage under the terms of the 1980 Limitation Act because more than 12 years had passed without legal action being taken.

Mr Babai now legally owns the property, which is valued at about £200,000.