Home rights defeated by commercial mortgage

Matrimonial homes have always had a degree of protection from commercial creditors. This means that where loans have been made to a business, it has been very difficult for commercial lenders to pursue a family home to pay back the debt. 

However, in an unreported High Court case last month, an order for sale was made despite the property being the family home. Even more surprisingly, the family home had been specifically purchased so that the defendants' children could attend specialist schools in the area. 

A commercial creditor obtained an order for sale of the defendant's home, despite the defendant's wife having registered a home rights notice. The couple occupied the property with their two children and it was classed as a matrimonial home.

The order was deferred for only twelve months, which gave the occupants of the matrimonial home very little time in which to relocate.

This case should remind solicitors of the advice which should be given to clients in these circumstances, where a family home is being offered as security for a commercial loan.

Solicitors acting for a client when a commercial mortgage is being secured against a property, should now always tell clients that registration of home rights (which had always provided a very high degree of protection) is unlikely to defeat the interests of a commercial creditor. If a solicitor fails to provide this advice, there is a risk that they could be sued for professional negligence.

It is therefore incredibly important to take advice from an experienced professional, if you are considering taking out a commercial loan against your family home. 

If your home is subject to a commercial mortgage and you are concerned that your matrimonial home could be at risk, you should take legal advice as quickly as possible. 

If there is a commercial mortgage over your home, and your solicitor did not properly advise you about the risks of losing your home, you could have a claim against them for compensation. If you are in this position, we will be happy to discuss you case in a no obligation initial phone call. 

If you need advice about a commercial loan over your family home, or if you have been poorly advised about taking out a commercial loan by a solicitor, contact us for expert advice and assistance.