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Third-party mortgage repayments After Roisin's above articles on matrimonial property rights and in particular the handling of mortgage payment by the non-owner' spouse, we are often asked to discuss the acceptability of payment from third persons other than the mortgagee and the associated risk of accepting it. Although this is a complicated area and always advices should be obtained, it is reasonable to say that if an overwhelming interest is created or asserted arising from the real employment prior to the mortgage, the assumption of mortgage payment from the claimant of such interest, whether consciously or not, will hardly affect the policy.

The reason for this is that it is a legal interest rate resulting from the employment and not from the payment of the mortgage and/or rental. Our stance towards borrower lessees is less clear and we already debated some issues of authorized and unauthorized lease in On The Money Issue in January 2011.

A non-registered rental agreement may, however, be a prior interest in itself that differs from a right stemming from real employment (although any well counselled person would have both). Here, too, the interest demanded in this way has already accrued at the point in the granting of the credit and the assumption of installment payment cannot change this without further ado.

However, it will certainly not support the creditor's stance if it could be shown that the lease payment was offered, especially for a pre-credit period (and keep in mind that it is the principal's privilege how and for what length of time payment should be allocated). With regard to unauthorized leases, the item has generally been given welcome security by the recent ruling in Paratus AMC Ltd v Persons Unknown.

This case involved the assumption by the creditor that payment would be made by a third person on condition that it was made on account of the debtor. Coming tenure period, the owner/payer alleged that he had occupied under a five-year lease which, because his payments d had been assumed, became obligatory on the lender, even though this was not a purchase to leave loans.

The Court, in a welcome appeals judgment, found that there was no proof that the creditor was informed of a lease and therefore there was no acceptability of its conditions or even its continued existence, either explicit or implicit. He was not tied accordingly and was eligible for ownership.

It is a judgement of the Court of Common Ground, but it could have gone so readily in the other direction if the lessee had been able to put forward a case that the creditor knew or should have known was a lessee. In these cases, our suggestion is that the risk-free line is never to take payments from anyone other than the creditor.

Economically, however, we appreciate the attractiveness of maintaining mortgage rates that do not otherwise exist.

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