Q. The bank recently evicted me and they have now sold my house. In addition to the mortgage they are also claiming an early repayment charge included in my mortgage terms. Can they do this?
A. A lender primarily takes possession in order to preserve or enforce its security, and is entitled to recover all costs and expenses reasonably and properly incurred in recovering the mortgage debt. This is based on the principle that the lender should be indemnified to the extent to which it acts reasonably.
You could argue that it is unreasonable for the lender to claim the early repayment charge on the basis that the lender has already preserved its security by getting a possession order. Whether or not you will succeed will depend on the actual terms of the mortgage and what exactly is repayable. Essentially, you would be arguing that the term "early repayment" should not be interpreted so as to include a "repossession".
"Payment" is a term of art with two components: a tender from the debtor, and the acceptance of that tender by the creditor. In an enforcement scenario, there is no tender of payment by you. Instead, the lender relies upon its proprietary right in the property to take possession and sell it. Therefore, I believe that you should be able to successfully resist the lenders claim and if you would like us to assist please advise asap.
Repossessions are on the increase and they can be complex with much depending upon the circumstances of each individual case. For specialist advice contact Keith Swan of Patterson, Glenton & Stracey Solicitors by email at ks@pgslaw.co.uk or by telephone on 0808 231 7043. Patterson, Glenton & Stracey Solicitors have provided legal advice to the people of South Tyneside for over 125 years. For details of their full range of services and to view previous Gazette articles please log on to www.pgslaw.co.uk . Be Guided by the Experts.
