Hi and Lender Issue

[Miclou]

Hi - Following a property repossession the lender attempted to sell said property and apparently the lender is unable to do so, as there is a title issue. It appears the solicitor completing the original mortgage transaction (I assume Lender's solicitor as it was a remortgage at the time) failed to register a charge against the property at Land Registry on behalf of the lender.

Lender has requested I rectify said issue by completing form ID1 and completing a mortgage deed doc, and has threatended court action if I do not comply.

I'm unsure about what form such Court action may take (and likelihood of success for Lender), given I did not cause said issue? I'm wondering why the lender doesn't pursue the solicitor?

[efpom]

My knowledge of land law can be comfortably written on the back of my business card.

I set out the fact, as I understand them:
You are the mortgagor - I assume that.
The mortgagee is in possession.
The mortgagee now wishes to exercise his right to sell the property, to recover the money he lent to the mortgagor.
The mortgagee discovered that there is no charge on the property, to secure the lending.
The mortgagee now wishes to rectify that by inserting that charge on the Land Registry.

He has asked you to complete ID1 - your identity form. You are entitled to be paid your costs in doing that.
You are also entitled to be paid the cost of obtaining independent advice from a solicitor on the mortgage deed itself.
As I assume you are not in funds to do that, you will be looking for the money to do this up front.

One further point, did the request come from the receiver appointed by the mortgagee, or directly from the mortgagee in possession.

It may turn out, that because no charge was registered, the mortgagee was not lawfully entitled to possession of the premises - other wiser people may be able to give an opinion in that.

[des8]

Whilst agreeing with efpom to seek legal advice there is case law concerning the failure of a lender to register a charge which enables the lender to rely on subrogation and be registered as proprietor of, a pre-existing legal land charge.

This case, Anfield (UK) Ltd v Bank of Scotland plc & ors, [2010] EWHC 2374 (24 September 2010) gives comfort to lenders who have failed to register charges in circumstances where they have made advances to discharge a secured debt owed to another financier. In such instances, the court may be prepared to invoke the equitable remedy of subrogation so as to allow the lender to step into the shoes of the other financier, so far as the security is concerned, thereby gaining priority over intermediate lenders holding security over the same property.

[Miclou]

My knowledge of land law can be comfortably written on the back of my business card.

I set out the fact, as I understand them:
You are the mortgagor - I assume that.
The mortgagee is in possession.
The mortgagee now wishes to exercise his right to sell the property, to recover the money he lent to the mortgagor.
The mortgagee discovered that there is no charge on the property, to secure the lending.
The mortgagee now wishes to rectify that by inserting that charge on the Land Registry.

He has asked you to complete ID1 - your identity form. You are entitled to be paid your costs in doing that.
You are also entitled to be paid the cost of obtaining independent advice from a solicitor on the mortgage deed itself.
As I assume you are not in funds to do that, you will be looking for the money to do this up front.

One further point, did the request come from the receiver appointed by the mortgagee, or directly from the mortgagee in possession.

It may turn out, that because no charge was registered, the mortgagee was not lawfully entitled to possession of the premises - other wiser people may be able to give an opinion in that.

Thanks for the response. Said request came via the Receiver's 'solicitor.

[Miclou]

Whilst agreeing with efpom to seek legal advice there is case law concerning the failure of a lender to register a charge which enables the lender to rely on subrogation and be registered as proprietor of, a pre-existing legal land charge.

This case, Anfield (UK) Ltd v Bank of Scotland plc & ors, [2010] EWHC 2374 (24 September 2010) gives comfort to lenders who have failed to register charges in circumstances where they have made advances to discharge a secured debt owed to another financier. In such instances, the court may be prepared to invoke the equitable remedy of subrogation so as to allow the lender to step into the shoes of the other financier, so far as the security is concerned, thereby gaining priority over intermediate lenders holding security over the same property.

Thanks for the response. It would appear case law re subrogation may apply in this case, in the event I failed to rectify the title issue on behalf of the lender. I'm unsure about the reference to 'gaining priority over intermediate lenders', although this may refer to previous lenders (financiers).

[des8]

The intermediate lenders were a company who made a loan secured by a charge on the property after the first mortgage was discharged.
Allowing the new company to rely on the pre existing charge puts the intermediate lender in the position of a second mortgagee.

Hope that makes sense!