YoungVIP

Law School students, can a bank sell a mortgaged property before its power of sale becomes exercisable and still pass a valid title to the purchaser? 🤔 DAY 15/15: YoungVIP Bar Finals Challenge PROPERTY LAW PRACTICE Mrs. Adebayo owns a residential property in Ibadan, Oyo State. She obtained a loan from Meridian Bank Plc and created a legal mortgage over the property by deed. The mortgage money became due on 1 September 2026, but Mrs. Adebayo failed to repay it. The mortgage deed contains no provision excluding or varying the statutory power of sale or the conditions governing its exercise. On 3 September 2026, Meridian Bank served her with a written notice demanding repayment of the principal sum. Six weeks later, the bank sold the property to Mr. Okonkwo, who purchased it for value, in good faith, and without notice of any irregularity. The sale was completed by a deed of conveyance. At the time of the sale, no mortgage interest had been in arrears for two months, and there had been no breach of any other covenant in the mortgage deed. Mrs. Adebayo challenges the sale, arguing that the bank had no right to sell the property before the expiration of three months. Which statement most accurately represents the legal position? A. The sale is invalid because a mortgagee cannot pass a valid title until its power of sale has become exercisable. B. The sale is valid because the mortgage money had become due, making the mortgagee's statutory power of sale immediately exercisable. C. The sale is invalid because Meridian Bank failed to obtain a court order authorising the sale, notwithstanding Mrs. Adebayo's default. D. The sale is valid against the innocent purchaser because the bank's power of sale had arisen, although it was not yet exercisable. Mrs. Adebayo may, however, sue Meridian Bank for damages. Drop your answer below. If you want, tell us why you chose it! 😊