Mortgagee’s 'self-help' power of sale

The following Property practice note provides comprehensive and up to date legal information covering:

  • Mortgagee’s 'self-help' power of sale
  • Statutory power of sale
  • When does it arise?
  • Who may exercise the power of sale?
  • When is it exercisable?
  • Variations to the statutory power
  • What does the buyer receive?
  • What duties does the mortgagee have?
  • Sale price
  • Proceeds of sale
  • More...

Mortgagee’s 'self-help' power of sale

So long as the equity of redemption remains vested in the mortgagor, the mortgagee may not sell the property except under an express or implied power of sale, or under a statutory power, or with the mortgagor's concurrence. See Practice Note: The equity of redemption—Postponement or limitation of the right to redeem and collateral advantage and Express, implied and statutory powers of sale: Halsbury's Laws of England [442].

A legal mortgagee has a right to sell the property, free from the mortgagor’s interest. However, this statutory power can be limited by contract, although most modern mortgages often include an express power, which modifies and extends the statutory power. In the absence of the statutory or an express power, a court order is needed for sale. A variation or extension of the statutory power operates as if it were a part of the statutory power.

Statutory power of sale

Sections 101(1)(i) and 101(5) of the Law of Property Act 1925 (LPA 1925) confer the power of sale. In order for the statutory power of sale to apply, the mortgage must be made by deed. The registered proprietor of a registered charge over registered land is entitled to exercise owners' powers including the power to make any disposition permitted by general law. Note however that a person may not exercise all an owner’s powers where it

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