In a cautionary tale for anyone considering entering into an equity release scheme, a woman who sold her home at a fraction of its true value, on the understanding that she could stay there for life, is facing eviction following a Supreme Court ruling.

The woman had sold her home at a substantial undervalue to a nominee purchaser appointed by a company which specialised in equity release. She was promised that she could remain in the property indefinitely at a discounted rent and was further tempted by the prospect of being able to obtain additional capital sums after ten years.

She was granted a two-year tenancy of her home. However, the purchaser mortgaged the property to a lender who was unaware of the tenancy. The woman only discovered three years later that a possession order had been granted in respect of her home due to the purchaser’s defaults on the mortgage.

In those circumstances, an issue arose as to whether she had any right to remain in the property. A judge’s ruling that she had no such right was subsequently upheld by the Court of Appeal. In dismissing her challenge to the latter decision, the Supreme Court found that the purchaser could not have conferred any proprietary rights of occupation upon her prior to the completion of the sale. The lender’s rights were not subject to the woman’s personal right of occupation and the possession order was thus enforceable against her.


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