Section 97 of the Land Act 2012 requires banks to exercise duty of care on reposed properties and empowers defaulters to sue if their assets are sold off cheaply.
Chargee’s power of sale
The Act already provided that where a chargee exercises the power of sale by private contract, the sale must be at the market value and where the power is exercised by public auction, it must be at the best price possible which is determined by reference to the market price.
It has now been clarified that for purposes of ascertaining the market value, the chargee is entitled to rely on a valuation carried out by a registered valuer provided the valuation was carried out in the six months immediately preceding the sale.
Where charges rank pari passu with each other, the charged land cannot be transferred upon exercise of the power of sale of one of the charges unless the other chargee gives written consent to the transfer.
It has now been expressly provided that a sale by public auction crystallizes upon acceptance of the winning bid. The chargor’s equity of redemption is extinguished at that point.
The Act now provides for instances where a chargee cannot be found by allowing the chargor to pay the entire amount due into court upon which the registration of the charge will be cancelled.
Read the whole Act here Land Act 2012