Sell and remain

Scott v Southern Pacific Mortgages Ltd and others [2014] UKSC 52, [2014] All ER (D) 251 (Oct) NLJ, 5 December

The present appeal was one of 10 test cases in which the defendant home owners (the vendors) were persuaded to sell their properties to purchasers who promised the vendors the right to remain in their homes after the sale. The purchasers bought the home with the assistance of mortgages from lenders, who were not given notice of the promises to the vendors. The purchasers defaulted on the loans and the lenders sought possession of the homes. The Supreme Court held that the vendors had acquired no more than personal rights against the purchasers when they agreed to sell their properties on the basis of the purchasers’ promises that they would be entitled to remain in occupation. Accordingly, the vendors did not have interests whose priority was protected by virtue of s29(2)(a)(ii) of, and Sch 3, para 2, to the Land Registration Act 2002.