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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 six cases this month:
1. The Supreme Court held a lender was entitled to be subrogated to a seller’s lien when agreeing to substitute the security over one property for that over another.
2. Receivers appointed by a bank did not owe a duty to a bankrupt mortgagor arising out of their management of the mortgaged property.
3. Although solicitors had failed to disclose information about the purchase price to a lender they were not liable due to a failure to prove causation.
4. A charging order could be made even though the extent of the interest of the judgment debtor in a property could not be quantified at that time.
5. A deed which purported to vest the beneficial interest in the mortgaged property in a third party was set aside.
6. It was an abuse of process for a borrower to raise an argument that his mortgage was unenforceable in subsequent proceedings after the court had already made an order for possession.

Subrogation

Unpaid vendor’s lien

Bank of Cyprus UK Limited v Menelaou
[2015] UKSC 66

Summary

A bank that had released security over one property in the expectation of taking a replacement security over another property was entitled to a remedy of subrogation in order to reverse unjust enrichment. This gave it an equitable interest in the replacement property and an entitlement to enforce it by way of an order for sale.

Facts

A bank held a charge over a property, owned by the Ps. There was negative equity. The Ps agreed to sell the property and purchase a smaller property in their daughter’s name, M, using part of the sale proceeds, subject to an agreement with the bank to release the charge on the Ps’ property and take a charge on the smaller property.

The transaction completed but M did not sign the replacement charge on the smaller property. She sought a declaration that the charge was void. The bank counterclaimed for ... THIS IS AN EXTRACT OF THE FULL TEXT. TO GET THE FULL TEXT, SEE BELOW

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