Palk v Mortgage Services [1993] Ch 330

Court of Appeal

Basic Facts: Palk sought to sell his house at negative equity, but M, the mortgagee, wanted to wait for a better price.

Held: The court held that a mortgagor could force the sale of a property, even if the proceeds would not fully satisfy the debt, to prevent further losses from accruing.

Nicholas VC held:

• M could wait for a better price but must not do so at P’s expense.

• The mortgagee must act reasonably, not prejudicing the mortgagor, and should not sell for a knock-down price.