Court of Appeal confirms that a Receiver does not require a Court Order for taking Possession of a Mortgaged Property

What You Need to Know

 a)  A recent decision of the Court of Appeal has clarified that receivers, in contrast to mortgagees, are not required to obtain court orders prior to possessing mortgaged properties in Ireland.

 b)  This decision is a welcome confirmation for lenders, receivers, and practitioners following the prior High Court decision that had created uncertainty in respect of the established legal requirements.

Background

The Court of Appeal heard the appeal of the High Court decision in the case of Bank of Ireland Mortgage Bank UC v Hade & Anor (the “Hade Case”) on 7 December 2023. The earlier decision of the High Court in December 2022 had created confusion in the area of receiver sales of mortgaged property as the trial judge in the High Court had interpreted Section 97 of the Land and Conveyancing Law Reform Act 2009 (the “LCLRA 2009”) as applying to both receivers and mortgagees.

Section 97 of the LCLRA 2009 (“Section 97”) sets out the statutory criteria for taking possession of mortgaged property. The High Court decision had created uncertainty in respect of the established legal requirements applicable to a receiver when possessing mortgaged property. This then had a knock-on effect on the sale of mortgaged properties by receivers as well as for the subsequent application for the registration of title to these properties by Tailte Éireann. The decision of the Court of Appeal has now clarified the uncertainty created by the High Court decision in the Hade Case.