Clogging the Equity of Redemption and Right of Redemption Question

Purdia

Good morning,

May I pose a question based on the following scenario.

Mrs A decides to sell a part of her land which has a mortgage on it in favour of Bank X.

Mr B makes an offer for the full asking price of part of the land, which is accepted by Mrs A.

After the offer has been accepted but prior to contracts being signed etc Mrs A advises Mr B that Bank X has now called her into a meeting because they are not happy with the sale price of part of her land. They want her the part in question to be sold for a much higher consideration.

Can the Bank enforce this and if they do, will be considered clogging the equity of redemption and right of redemption?

Many thanks for all who have time to reply

Maximilian

It's usually the other way around - the owner/borrower has much higher expectations of what the market value is and the Bank looks for the property to be sold at what the owner considers to be too low a price.

So, this sounds somewhat suspect to me. If in this case the Bank aren't happy, then I would guess the price is at an undervalue. The terms of the mortgage will give the Bank the right to block the sale. Else, a borrower could technically sell property to a friend for a euro.

It's not a clog on the equity of redemption by the way since the secured obligations under the mortgage will, I assume, not be fully discharged by the proposed sale.

johnnyskeleton

If thr purchase price is higher than the outstanding mortgage then the bank cannot really stop the sale as the payment of the purchase price will discharge their mortgage.

If the purchase price is lower than the mortgage then it's not really a redemption.