LIMITATION OF ACTIONS ACT 1974 - SECT 26 Actions to recover money secured by mortgage or charge or to recover proceeds of the sale of land

LIMITATION OF ACTIONS ACT 1974 - SECT 26

26 Actions to recover money secured by mortgage or charge or to recover proceeds of the sale of land

(1) An action shall not be brought to recover a principal sum of money secured by a mortgage or other charge on property whether real or personal nor to recover proceeds of the sale of land after the expiration of 12 years from the date on which the right to receive the money accrued.

(2) A foreclosure action in respect of mortgaged personal property shall not be brought after the expiration of 12 years from the date on which the right to foreclose accrued, but if after that date the mortgagee was in possession of the mortgaged property, the right to foreclose on the property that was in the mortgagee’s possession shall, for the purposes of this subsection, be deemed not to have accrued until the date on which the mortgagee’s possession discontinued.

(3) The right to receive a principal sum of money secured by the mortgage or other charge and the right to foreclose on the property subject to the mortgage or charge shall be deemed not to accrue so long as that property comprises a future interest or a life assurance policy that has not matured or been determined.

(4) The provisions of this section do not apply to a foreclosure action in respect of mortgaged land, but the provisions of this Act with respect to an action to recover land apply to such an action.

(5) An action to recover arrears of interest payable in respect of a sum of money secured by a mortgage or other charge or payable in respect of proceeds of the sale of land or to recover damages in respect of such arrears shall not be brought after the expiration of 6 years from the date on which the interest became due.

(5A) Notwithstanding subsection (5) —

(a) where a prior mortgagee or encumbrancee has been in possession of the property charged and an action is brought within 1 year of the discontinuance of such possession by the subsequent encumbrancee—the subsequent encumbrancee may recover by that action all the arrears of interest that fell due during the period of possession by the prior encumbrancee or damages in respect thereof, although the period exceeded 6 years; or

(b) where the property subject to the mortgage or charge comprises a future interest or life assurance policy and it is a term of the mortgage or charge that arrears of interest be treated as part of the principal sum of money secured by the mortgage or charge—interest shall be deemed not to become due before the right to receive the principal sum of money has accrued or is deemed to have accrued.

(6) This section does not apply to a mortgage or charge on a ship.