Enforcing security – settlement for the lender

19th July 2023

Kuits Dispute Resolution team acted for a lender in its claim for:

  1. possession of a property that was valued at circa £2 million with vacant possession (‘Possession Claim’) and
  2. repayment of the loan which was secured on the property (‘Money Claim’).

The Second and Third Defendants (D2 and D3) were in occupation of the property without any legal right and the lender had a right to possession.  Therefore, the Possession Claim proceeded against D2 and D3 only and the Money Claim was against the First Defendant (D1).

D1 was the registered owner of the property and mortgagor but was not in physical possession and did not oppose the lender taking possession of the property. D2 and D3 claimed a beneficial interest in the property and to have occupied it since shortly after completion of the mortgage in favour of the lender. D2 and D3 were unwilling to voluntarily give up possession to the lender, so it was forced to issue a claim.

Kuits were successful in obtaining a possession order in the Possession Claim and the lender was awarded its costs. Further enforcement proceedings were brought against D2 and D3 which resulted in a very favourable settlement and significant payment to the lender.

This claim was of huge importance to the lender and its business model. If D2 and D3 had been successful in the Possession Claim or if the appeal had been granted, D2 and D3 would have been able to stay in the property and would have claimed an entitlement to profits from the sale of the property.

The Money Claim then continued against D1. The Money Claim was settled early on in the claim, following a mediation between the remaining parties, and resulted in a very favourable outcome for the lender.

If you’re a lender or financial company and wish to discuss your options regarding enforcement of security, please call Kuits Litigation and Dispute Resolution Team.

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