Q&As

A mortgagee seeks possession of a residential property owned and occupied by the borrower. However the loan facility letter is based on a commercial or business loan. Accordingly the legal charge secured against the property is also substantially commercial in nature. Does this affect issuing possession proceedings? Is the mortgagee bound by the Housing Protocol and the Administration of Justice Act 1970 or can it proceed by way of a lasting power of attorney?

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Published on LexisPSL on 08/03/2016

The following Property Q&A provides comprehensive and up to date legal information covering:

  • A mortgagee seeks possession of a residential property owned and occupied by the borrower. However the loan facility letter is based on a commercial or business loan. Accordingly the legal charge secured against the property is also substantially commercial in nature. Does this affect issuing possession proceedings? Is the mortgagee bound by the Housing Protocol and the Administration of Justice Act 1970 or can it proceed by way of a lasting power of attorney?
  • Enforcement options for a residential mortgage
  • Possession proceedings
  • Section 36 of the Administration of Justice Act 1970
  • Lasting power of attorney receiver

Enforcement options for a residential mortgage

In order to establish whether the security document has created a valid residential mortgage, and what the enforcement options available are, it will be necessary to check the terms of the security document that has been entered into. This document should clearly set out how security can be enforced and the steps that need to be taken. For these purposes, it will be the security document rather than the loan agreement which is relevant.

Property Types of security—overview for content on mortgages contains information on this subject generally, in particular Practice Notes: Legal mortgages and legal charges and Mortgages.

For information on how a lender can satisfy itself that it has valid, enforceable security, see the section entitled ‘validity of security’ in Practice Note: Enforcement—security over land. This section confirms that this will usually entail instructing lawyers to review the security to check, inter alia, that the security has attached to the borrower's property and has been properly perfected by registration at HM Land Registry. For information on security reviews in a general context, see Practice Note: Security reviews—an introduction.

For further information on remedies for a mortgagee; see the following extracts from Lexis®Library:

  1. Possession: Paget's Law of Banking [17.62]

  2. Realisation of mortgages: Encyclopaedia of Banking Law [349]

Possession proceedings

See Practice Note: Mortgagee in possession for informati

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