Cheltenham & Gloucester Plc v Krausz 
- A mortgagor defaulted on his mortgage loan payments
- He was in negative equity – his security (property) was worth less than the amount owed, the extent to which disagreed upon
- Could the mortgagee’s possession be delayed to allow the mortgagor to make an application for sale under s 91(2) of the Law of Property Act 1925?
- At common law, a mortgagee’s right to possession myst be strictly observed
- Section 36, which allows for postponement where it can be shown that a mortgage loan would be paid off within a reasonable period, does not apply where a mortgagor is in negative equity, so could not postpone possession to allow the mortgagor to make an application for sale
- This may not be case where a mortgagor could show that he has personal funds to meet any shortfall caused by negative equity
Posted in Land Law Revision Notes.
This page was last updated on 29th April 2015