Silven Properties v RBS [2004] 1 WLR 997

Written By Nicolas Heyes

Court: Court of Appeal

Basic Facts: The borrower claimed that the receiver appointed by RBS should have maximized the property's value by obtaining planning permission and letting out vacant properties before selling. The receiver chose to sell immediately.

Issue for the Court: What are the obligations of a mortgagee to ensure a fair price is obtained from the sale of the property?

Held: The court found that mortgagees have no obligation to improve the property before exercising their power of sale.

Lightman J:

  • A mortgagee is not obliged to undertake actions like obtaining planning permission or letting properties to increase value before selling.

  • The mortgagor should stipulate such requirements at the time of the mortgage agreement or redeem the mortgage to prevent sale under such terms.

Nicolas Heyes
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