Response to Duty of care

I disagree that a lender is entitled to let a property out in a bad market whilst waiting for it to improve. The relevant case is Palk v. Mortgage Services Funding Plc [1993] Ch 330, where the mortgagee wanted to do precisely that. The Court of Appeal decided that it was "oppressive" to expect the mortgagee to become an "unwilling risk- taker" where she was bound to lose out financially barring a miracle upturn. It held that a court had the power to order sale (s.91(2) Law of Property Act 1925) on the application of a mortgagee who wants to cut their losses, although a strong case would need to be made out for this.

[ Previous | Next ]