As someone acting for mortgagees in possession selling properties, the above is the most common question I come across.
Some just cannot understand this concept. A first mortgagee can sell a property free of any subsequent charges registered against a title.
The relevant legislative provisions for this are Section 104 Law of Property Act 1925 and Section 52 Land Registration Act 2002.
Some solicitors acting for a purchaser know this but still ask us to confirm the fact. Some however, whether solicitors or subsequent lenders, just do not comprehend it.
I recently had a conversation with a fellow solicitor on this point. She just could not understand the fact that as my client sold the property as first mortgagee, her client's second charge was overreached and automatically removed by the land registry upon production of the executed Transfer.
She kept insisting that we needed consent from her client or a DS1 to remove its charge. No matter how many times I informed her that she was incorrect, she just could not understand it.
I think I finally made her understand when I asked her what the point of having a first legal charge was if the lender could not sell free of subsequent charges. Why would a first mortgagee be bound by subsequent mortgages? She had no answer for this question.
I have not heard from her since. I suspect she researched the point and discovered I was correct.
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