In this practice area
Enforcing registered mortgages over NSW land for private and commercial lenders, from default notices and possession proceedings to mortgagee sale, and acting in disputes over the enforcement process.
When mortgage enforcement arises
When a borrower defaults under a loan secured by a mortgage over land, the lender can enforce its security by taking possession of the property and selling it. Enforcement often follows missed repayments, the expiry of a loan term without repayment, or another event of default such as the borrower's insolvency.
We act mainly for private and commercial lenders enforcing securities, and in disputes about the enforcement process, including claims about default notices and the price obtained on sale.
The legal framework
For Torrens title land in NSW, section 57 of the Real Property Act 1900 (NSW) requires a mortgagee, before exercising its power of sale, to serve a notice on the mortgagor requiring the default to be remedied within a period of not less than one month, unless the mortgage or an exception removes that requirement. The mortgagee may then sell. Under section 111A of the Conveyancing Act 1919 (NSW), a mortgagee exercising a power of sale must take reasonable care to ensure the land is sold at market value, or at the best price reasonably obtainable if there is no market value.
Where the loan is regulated by the National Credit Code, generally credit provided to individuals wholly or predominantly for personal, domestic or household purposes or residential investment, further rules apply. A default notice under section 88 must give the borrower at least 30 days to remedy the default before enforcement, and borrowers may make a hardship notice seeking a variation of their obligations. Business-purpose loans are generally outside the Code, which makes the correct characterisation of the loan an early and important question.
How these matters typically run
The usual sequence is a default notice, then a section 57 notice, then proceedings in the Supreme Court of NSW for possession if the borrower remains in occupation. The Supreme Court has a dedicated Possession List. If no defence is filed, the lender can seek judgment for possession and a writ of possession executed by the Sheriff. Borrowers sometimes seek urgent stays, allege unconscionable lending or dispute the amount owing. After possession, the property is marketed and sold, and any shortfall may be pursued against the borrower and guarantors.
How GopherWood Lawyers acts
We review the loan, the mortgage and any guarantees at the start, confirm whether the National Credit Code applies, and prepare notices that comply with the statute and the security documents. We run possession proceedings, respond to stay applications and defences, and advise on the sale process so the lender can show it met its statutory duty on price. We also pursue shortfall claims against borrowers and guarantors.