North East Property Buyers – Sale and leaseback test case (Court of Appeal)

The Court of Appeal gave its judgment in Cook v The Mortgage Business Plc [2012] EWCA Civ 17 on 24th January 2012, dismissing the appeal against the earlier High Court decision (HHJ Behrens) in these test cases on sale and rent back.

The proceedings concern whether sale and leaseback arrangements between tenants who had previously owned their homes and an organisation known as North East Property Buyers bind the mortgage lenders to North East Property Buyers as overriding interests under the Land Registration Act 2002. By the time of the appeal there were four test cases extant and around 90 cases stayed. There were also cases stayed in other parts of the country in relation to similar schemes where mortgagees are attempting to recover possession from tenants after the borrowers have defaulted.

For an analysis of this latest decision and its relevance to equity release schemes and the existing caselaw of Abbey National BS v Cann [1991] 1 AC 56, see commentary on Nearly Legal.

James Stark of Garden Court North Chambers, instructed by David Gray & Co Solicitors and Clark Willis Solicitors, led by Jonathan Small QC of Falcon Court Chambers, London, represented all of the test case tenants for the appeal.