Q&As

What is the procedure for a mortgagee in possession to seek permission to pay surplus monies into court, having exercised its power of sale following repossession proceedings?

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Published on LexisPSL on 27/01/2017

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

  • What is the procedure for a mortgagee in possession to seek permission to pay surplus monies into court, having exercised its power of sale following repossession proceedings?
  • Surplus proceeds
  • Procedure

Surplus proceeds

A mortgagee is not a trustee of his power of sale for the mortgagor. If the mortgagee sells the mortgaged property under his power of sale and there is any surplus after his claims have been satisfied, he becomes a trustee of the surplus for unbarred second or subsequent mortgagees of whose claims he has notice and, subject to those claims, for the mortgagor if the mortgagor's title is not barred (see section 105 of the Law of Property Act 1925 (LPA 1925) and Young v Clarey).

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