Q&As

A house has been repossessed and the bank has possession. The mortgagor has now borrowed funds from a family member. Can the mortgagor now redeem the mortgage and 'dispose of the bank having possession of the property'? If so, how is this done—by application to the court?

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Produced in partnership with Desmond Kilcoyne
Published on LexisPSL on 28/06/2016

The following Property Disputes Q&A Produced in partnership with Desmond Kilcoyne provides comprehensive and up to date legal information covering:

  • A house has been repossessed and the bank has possession. The mortgagor has now borrowed funds from a family member. Can the mortgagor now redeem the mortgage and 'dispose of the bank having possession of the property'? If so, how is this done—by application to the court?

The mortgagor has two types of right to redeem the mortgage. First, the legal right to redeem: the contractual right recognised at law to redeem the mortgage (ie pay back the mortgagee and bring the mortgage to an end) on a certain date. Secondly, the equitable right to redeem: the important right conferred by equity on the mortgagor to redeem the mortgage at any time after the stipulated contractual date (this right is part of the mortgagor’s composite equity of redemption which arises as soon as the mortgage is made. See Practice Note: The equity of redemption).

Given its importance, the questions therefore arise: when can the equitable right to redeem be exercised? And, when is it extinguished?

Generally, as stated, there is no right to redeem until the contractual date for redemption has passed. However, at any time when the mortgagee has lawfully demanded repayment in full or taken possession in a way that is tantamount to seeking repayment in full (Bovill v Endle) or otherwise sou

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