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Mortgages.

The editor of this section of the site is Nigel Clayton of Kings Chambers, Leeds and Manchester. Nigel also maintains the specialist website dealing with mortgages at www.legalmortgage.co.uk

There are 4 cases this month:

  • The first concerns the exemption of a consumer credit agreement.
  • The second is about equity of exoneration.
  • In the third, a legal charge was set aside. Non-compliance with the Etridge guidelines was not sufficient but the bank had not taken extra steps to ensure that a surety was giving independent advice.
  • In the fourth, a notice to complete served by LPA Receivers on behalf of the vendor company was valid, notwithstanding changes in the identity of the LPA Receivers and errors in the notice.

Regulated consumer credit agreement

Business exemption

Wood v Capital Bridging Finance Limited
[2015] EWCA Civ 451

Summary

A lender failed to discharge the burden of proving that a consumer credit agreement was exempt from regulation by reason of the business exemption. Given that the agreement was defective in form and content, the trial judge had erred in law in failing to consider whether and on what terms he should make an enforcement order.

Section 16B of the Consumer Credit Act 1974

This section excludes from regulation consumer credit agreements for the provision of credit exceeding £25,000 if entered into by the debtor for the purposes of a business carried on by him. The burden of proving that the business exception in s 16B applies is on the creditor. Under s16B(2) there is a presumption to this effect where the creditor obtains a declaration in the prescribed form. However, under s16B(3) the burden falls back on the creditor where the presumption is displaced by evidence that the creditor knows the agreement is not entered into by the debtor for the purposes of a business carried on by him.

Facts

J arranged for his mother-in-law (W) (a 75-year old lady) to borrow £64,000 from CBF by way of a short-term bridging loan secured on W’s house. The facility was set up as an unregulated busine ... THIS IS AN EXTRACT OF THE FULL TEXT. TO GET THE FULL TEXT, SEE BELOW

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