Laura Brennan

Our recent Sheriff Appeal Court case of Santander -v- C emphasises the importance of homeowners seeking legal advice should their mortgage lender raise a court action for repossession against them. Unfortunately, some homeowners in these circumstances have proved vulnerable to private individuals or companies seeking to buy properties for well below the market value.

Govan Law Centre (GLC) is calling for greater awareness raising among Scottish homeowners of the consequences of a quick sale to avoid court action. Quick home buy companies operate in an unregulated market in the UK, so there is little or no consumer protection in practice.

We recently assisted Mr C, a client whose mortgage lender had raised court action against him for repossession. Mr C had high arrears and a higher outstanding mortgage balance but as with all cases of repossession, the Court must still consider whether repossession is reasonable.

Mr C suffered from poor health which affected his ability to work and consequently, his ability to pay his mortgage. Mr C was seeking an additional six months in the property during which time he would undertake improvement works to the property so that it could be marketed and sold. Unfortunately, this was not accepted by his lender who raised court action.

Decree was granted against Mr C when his case first called in court, given the level of his arrears. We appealed this decision on the grounds of reasonableness. It was the view of GLC that the Sheriff had not considered Mr C’s poor health or the impact on his daughter who attended school in the local area. It was also Mr C’s position that he had not had a fair and public and hearing, in accordance with his human rights.

After the appeal was raised and before a decision was made, a settlement agreement was reached. The terms of the agreement were that Mr C was allowed an additional four months in the property in order for it to be sold. We were delighted to learn recently that the additional time granted allowed Mr C to sell his property at a price that allowed him to discharge the security in full and Mr C will be left with a very sizeable cash surplus following the sale. By selling the property himself, Mr C was able to achieve the best possible open market value. This would not have been possible if he had not taken legal advice.

In similar circumstances some homeowners have opted for a quick sale of their property. We are aware of companies that offer to purchase the property of homeowners under this type of pressure. Typical offers begin at around 70 per cent of the market value and continue to drop the further things are progressed. The proceeds that are obtained by the sale can also affect entitlement to Universal Credit and other means-tested benefits.

It is therefore of the utmost importance that, when faced with this situation, homeowners take legal advice to increase their awareness of their rights and maximise the proceeds of any sale. A company that will buy your property for a quick cash sale is unlikely to be the answer, and not worth the price you’ll pay.

• Laura Brennan is a trainee solicitor at Govan Law Centre.