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“In 1999 Lawrence purchased a dwelling, Bleak House. On the purchase price of 80,000 a sum of 35,000 was raised as a loan from Maugham and secured by a legal charge upon the property. In 2002 Lawrence granted a monthly tenancy to Tomlin, a student at Sodcaster University, who knew nothing of the mortgage to Maugham. Tomlin spent the long vacation of 2003 away from Sodcaster as a musician on a cruise liner. He returned to find that Lawrence had defaulted on the mortgage repayments to Maugham and that, under the mortgagees power of sale, Bleak House had been transferred to Romer for 40,000. The sale had been conducted through Maughams agents Astbury and Buckmaster, who had contacted Romer, as one of their favoured private clients, making him an offer you cannot refuse. Accordingly Romer agreed to purchase bleak House for 40,000 and to put the sale price beyond all challenge, Astbury and Buckmaster advertised the property for sale at 45,000 in the bric-a-brac section of the Sodcaster courier and found no takers. Advise Lawrence and Tomlin as to their rights and remedies if any.”

Posted on July 6, 2016 by admin

Tomlin is in a hard position; he has been effectively evicted in his absence from his lodgings. Lawrence, in defaulting on the mortgage has prompted Maugham to apply for possession and ultimately sell the house. A mortgagor, like Lawrence, whilst in possession has a statutory power that if appropriately used can grant certain leases in respect of the mortgaged land. It is customary for this leasing power to be modified or excluded in the lease. Here we lack clarification as to whether Maugham had agreed to the monthly tenancy or not. I believe it is safe to assume Maugham has not received notice of it or agreed to the terms of the tenancy because Tomlin was not in turn made aware of the mortgage as would be expected in the circumstance….(short extract)