Traditionally, there are three sets of factors that have to be taken into account by a court when dealing with an Order for Sale application: firstly, CPR 70.10; secondly, TLTA 1996; and thirdly, Article 8 of ECHR. 


Applications to enforce a charging order are made under CPR 73.10. The White Book notes at 73.10.1 contain a useful summary of the key factors to be considered by the court when exercising its discretion: an Order for Sale is an extreme sanction; all the circumstances must be considered; an order is likely in the case of a debtor’s contumelious neglect or refusal to pay, or if without a sale the debt will not be paid off. 


Various company security discharge forms were due to be amended in January.

The case of Horsham [2009] highlighted the fact that a mortgagee’s power of sale is exercisable without a possession order. Thus, a borrower will not have the normal protection that applies when a mortgagee seeks an order for possession.

In the past few years there have been many part-completed residential developments. In these situations, lenders face the problem of deciding whether to advance more money to enable the development to be completed, or alternatively to sell the site at a significantly reduced price. But, if there are other secured lenders, then there may be problems in trying to advance further funds to complete the development.

The difficulties in the buy-to-let market are inevitably leading to a large number of negligence claims against surveyors, for having wrongly valued such properties. But, should surveyors be treated as if they are valuing on behalf of residential buyers, or on behalf of sophisticated commercial investors who know the risks involved?

It seems that mortgagees are increasingly reluctant to disclose the balance due to them when asked to do so by a judgment creditor who is seeking an order for sale following a final charging order. A note in the NLJ asks what is the most efficient means of procuring this information (which should be supplied in the supporting evidence)?

There has been considerable confusion about the extent to which the LR identification rules apply to those executing documents under powers of attorney. The starting point is the confusing Practice Guide (PG67) issued by the LR which says ‘confirmation of identity is also required for any attorney who is not represented and who is acting on behalf of one of the parties’.

These days, equity release schemes are regulated by the FSA. The trade body is SHIP (Safe Home Income Plans), which represents over 90% of the market, and whose members must abide by a Code of Conduct.

Generally, equity release is an expensive way of raising capital. Certainly, it will not normally be the first resort and alternative ways of raising the money should always be considered. Plus, of course, money received through equity release may reduce eligibility for means-tested benefit, or increase tax liabilities.

A few miscellaneous points to note:

Land agreements are currently outside the scope of competition law. But, that will change as from April 2011. What this means is that the parties to any transaction will have to self-assess whether any provision in the agreement is anti-competitive (ie does it have the object or effect of preventing, restricting or distorting competition in all or part of the UK?). Although many will automatically think of supermarkets in this context, it could apply to large estates, and also transactions that are significant within a local area.

Under CA 1985, if an overseas company granted security over English property then that was registrable at Companies House if the overseas company had an English ‘place of business’. In Slavenburg [1980] that phrase was widely interpreted, and that led to it becoming standard practice to present for registration at Companies House any security created by an overseas company over property in England and Wales. The registrar would then enter the documents on the so-called Slavenburg register, with the documents then being returned with a standard letter as proof of delivery. This then ensured that the security was not invalid.

A reminder that the limitation period in a mortgagee claim can be extended if the borrower ‘acknowledges’ the claim.

In a recent case, the borrower bought a property, with a mortgage, in 1990. He made no payments and the property was subsequently sold by the building society in 1992, with a shortfall of £30,000 owed. Three years later, the building society wrote to the borrower asking how he proposed to pay back the £30,000 and he responded with ‘indignation at the time it had taken the building society to make the demand’. However, in 2002, at the suggestion of the building society, he agreed to make payments of £10pm.

Claims farmers have been very active in promoting the ‘missing agreement’ defence for credit agreement defaulters. Section 78 of the Consumer Credit Act 1974 requires the credit company to produce a photocopy of the original agreement or a copy directly derived from it.

A mortgagee can obtain possession either by court order or by peaceable re-entry. Once in possession, the mortgagee can choose whether or not it wants to sell the property, and there is no obligation to consult with the mortgagor. Subject to an overriding duty to maintain the property and keep it in good repair, the mortgagee can therefore hold onto the property for as long as it wishes (eg until the property market recovers). In short, there is no obligation on the mortgagee to sell within a reasonable time.