Q&As

A judgment creditor has a charging order over a property that was protected by a unilateral notice. A mortgagee in possession has sold the property and the Land Registry has served a B160 notice of an application for registration of a transfer made under a power of sale. What are the mortgagee in possession’s duties in relation to other creditors of registered entries on the title when it enters into possession and exercises its power of sale?

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Produced in partnership with Chris Bryden of 4 King’s Bench Walk
Published on LexisPSL on 14/02/2020

The following Property Q&A Produced in partnership with Chris Bryden of 4 King’s Bench Walk provides comprehensive and up to date legal information covering:

  • A judgment creditor has a charging order over a property that was protected by a unilateral notice. A mortgagee in possession has sold the property and the Land Registry has served a B160 notice of an application for registration of a transfer made under a power of sale. What are the mortgagee in possession’s duties in relation to other creditors of registered entries on the title when it enters into possession and exercises its power of sale?

A mortgagee in possession has the power pursuant to sections 101 and 103 of the Law of Property Act 1925 (LPA 1925) to sell a property, ordinarily after taking possession, though this statutory power can be excluded by agreement by the parties. Upon exercising the power of sale, the equitable right of the mortgagor to redeem is extinguished but the mortgagee becomes a trustee of the surplus proceeds of sale for the mortgagor and any other interested parties. If the statutory power of sale is exercised, LPA 1925, s 105 provides that the sale proceeds are to be applied: (a) to discharge any prior encumbrancers, if the s

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