Category: Enforcement

Personal Loan Obligation A mortgage necessarily implies a loan. There must be some underlying actual or contingent liability to pay or repay money. If at any time, there is no actual or contingent debt, the mortgage may be redeemed and released. Claims for payment of money may be brought separate from or in addition to […]

General The mortgagee is entitled to protect the value of its security. It may take action against a mortgagor by exercising rights under the mortgage or by court injunction to prevent damage to the property. It may take possession or appoint a receiver for a period to protect the security, provided as is likely, that […]

Enforcement of the Mortgage The mortgagee can enforce a mortgage against the mortgagor personally and /or by way of enforcement of the security. Security can be enforced by any of the following means; appointment of a receiver; taking possession peacefully and sale out of court, court order for possession and sale out of court, court […]

General The general rule is that a mortgagee is entitled to possession of the mortgaged property at any time after the mortgage or charge is signed. Unlike the position in Ireland, a legal charge carries the same rights to possession as a mortgage. The legal charge is not fully effective until registered in the Land […]

Nature Where a mortgagee obtains possession of a property by surrender, peaceable possession (where possible) or a court order, it will become a mortgagee in possession. This carries certain duties and rights. In the case of a mortgage or debenture  by a company, the bank as mortgagee in possession or a receiver may be able […]

Tenant’s Rights can Bind Mortgagee Where a lease or tenancy has been granted before the mortgage was entered or if the mortgagee has consented to the lease or letting, it binds the mortgagee. This means that the mortgagee can only take possession of the property, subject to the lease. The mortgagee in possession takes possession […]

The Power of Sale The Law of Property Act 1925 provides a statutory power of sale for the mortgagee  under  a mortgage by deed. This power applies unless the contrary is stated or implied. This would be most unlikely in the case of a bank mortgage. Accordingly,  a mortgagee can usually sell a mortgaged property […]

Overview Once the power of sale under a mortgage has arisen, legal action may be taken to recover possession, if the property is not surrendered or possession cannot be obtained peaceably. The Civil Procedure Rules set out the court procedures and requirements for a claim for possession of property under a mortgage. The claim must […]

Mortgage Pre- Action Protocol The England and Wales Civil Procedure Rules set out the procedures in relation to the conduct of court actions. For some types of claim, there is a pre-action protocol, which must generally be followed before legal proceedings are initiated. A new mortgage arrears pre- action protocol was introduced in November 2008. […]

Scope of the Act Unlike the case in Ireland, there is a statutory power in England and Wales for a court to adjourn a claim for possession or to grant an order which is suspended subject to conditions.  Outside of this legislation, there is generally no power for courts to adjourn  a claim unless there […]

General A court order for sale will not generally be required. Usually, it will be possible to exercise the power of sale “out of court” with tenants in place or with vacant possession secured by surrender, peaceful possession or by court order. There are some circumstances in which a court order for sale is necessary […]

General A court appointed receiver is a flexible means of enforcing security. Court receivers perform a wide range of functions. A court receiver will only generally be necessary where the mortgagee does not have a power to appoint a receiver under its mortgage or by statute or where the nature of the security requires it. […]

Overview The method of enforcement of security will depend on the type of asset and on whether there is a written document setting out the terms of the security and dealing with enforcement. A court order may be required to sell and realise certain types of asset and in certain circumstances where the security has […]