Facts
- A £300,000 mortgage loan was taken out by the claimants, secured against their jointly owned house
- The first claimant’s (husband’s) business became insolvent, and payments on the mortgage loan ceased
- The property was only worth £283,000, whilst mortgage redemption would cost £358,587, to increase at £43,000 per year, and with a likely property rental income of £14,000 per year
Issue
- Could the mortgagors (husband and wife) have a sale of the property ordered?
Decision
- Yes
Reasoning
- Under section 91(2) of the Law of Property Act, a court’s jurisdiction to order sale is very wide, but limited to exceptional circumstances
- As it would be unjust and inequitable not to order a sale, a sale was ordered
- Whenever a mortgagee acts under its rights under a mortgage, it must do so fairly. This will include taking reasonable care of a property when in possession – this is a factor to consider under the jurisdiction granted by s 91(2)
