Mortgagee’s power of sale: Courts reaffirm lenders’ discretion despite borrower objections

The recent case of Fairmont Property Developers UK v Venus Bridging Ltd and others [2025] 2 WLUK 453 has highlighted the wide scope of a lender’s power of sale and the courts’ reluctance to interfere, even when a borrower claims the property is being sold at undervalue.

A borrower’s attempt to halt sale

The Fairmont case involved a borrower in default seeking to stop the mortgage company’s sale of the secured property. The borrower argued that the marketing process was inadequate and that the property risked being sold below market value.

Despite the borrower presenting an independent valuation supporting a higher price, the court refused to stop the sale.

Good faith, not maximum value

The court reaffirmed that a lender is not a trustee for the borrower. Its duty is limited to acting in good faith and taking reasonable care to achieve market value, and not necessarily the best possible price.

Provided a reputable agent is used and a standard sales process followed, the courts will not second-guess the lender’s commercial judgment. Allegations of undervaluation must be supported by clear evidence of misconduct, not just valuation differences.

Practical takeaways

For lenders:

• Maintain transparency by taking steps such as engaging qualified agents and properly documenting the process
• Courts give mortgage companies commercial latitude when acting in good faith.

For borrowers:

• Courts rarely intervene in a lender’s sale unless there’s proof of bad faith or recklessness
• Legal advice should be sought early in any enforcement dispute.

Conclusion

This decision is a timely reminder of the courts’ consistent support for the enforceability of a lender’s rights. While borrowers may feel aggrieved by timing or price, they face a high threshold in resisting a valid sale by a mortgage company.

For lenders, the message is clear: so long as process and care are observed, the courts will support your right to enforce.

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