HM Insights

Enforcement of a residential standard security

Accord Mortgages Limited ("AML") sought to enforce their rights under a standard security granted by the now deceased debtor, by means of a calling-up notice. The property had been used for residential purposes during the debtor's lifetime; however after her death the property remained vacant, and was as such at the date of enforcement.

Facts of the case

As a preliminary issue, the court was required to consider whether AML was entitled to simply seek a declarator, or whether they were required to proceed under section 24 of the 1970 Act and provide evidence to the effect that they had complied with the pre-action requirements under section 24A.

The crux of the issue was one of time, with regards to the phrase "used to any extent for residential purposes", under section 20(2A).

The judgement

Essentially, it was held that the relevant period for the enforcement of a creditor's rights by means of a calling-up notice, is the time of enforcement. Therefore it was inconsequential that the property had, at one point in time, been used for residential purposes, or that it may be used for the same purpose in the future. At the time of enforcement the property was not being occupied by anyone, therefore it could not be classified as "residential".


Consequently, in seeking to enforce their rights under a standard security by means of a calling-up notice, a creditor must first consider the use to which the subjects of the standard security are being put at the time he wishes to exercise his available remedies.