Section 91 of the Law of Property Act 1925 gives the court the power to intervene on the sale of a repossessed property.
But when will that power be exercised? That was the question for the Court of Appeal in November 2025.
The case concerned a large industrial unit on the outskirts of Milton Keynes. The freeholder had charged the property to a lender but had failed to repay the loan. The lender then appointed receivers to market and sell the property so its loan could be repaid.
The receivers marketed the property for offers in the region of £4.75 million. However the freeholder had previously had discussions with potential purchasers for a sale in excess of £6 million.
The freeholder therefore applied to the court for an order under section 91 that the power to sell the property be removed from the receivers and given back to the freeholder so that the property would not be sold at an undervalue.
The court looked at the wider context. The freeholder had signed a mortgage deed which allowed the lender to take control and sell the property if the freeholder defaulted. If the lender was simply exercising its rights under the mortgage deed then a high bar was required before the court would intervene and give the sale of the property back to the freeholder as the defaulting mortgagor.
The freeholder’s concern that the property may be sold at an undervalue was not sufficient. As the threshold for intervention had not been met, the freeholder’s claim was dismissed.
Fairmont Property Developers UK Ltd v Venus Bridging Ltd and others [2025] EWCA Civ 1513
