The position is that the sale of property which is subject to a mortgage normally requires the consent of the lending institution concerned. Where the proceeds of such a sale exceed the outstanding balance of the mortgage, consent is normally given by the lending institution concerned without undue delay. In such cases, it is usual for the vendor to obtain the required consent prior to the contract stage. The mortgage is usually discharged before completion and evidence of release must be provided on closing the sale.
Where, on the other hand, it is clear that the proceeds of sale will not cover the outstanding balance of the mortgage, or may not do so, an intending vendor should make contact with the lending institution in advance of sale. In the case of certain commercial properties, the agreement of the National Asset Management Agency may be required. Such contact will provide the parties with an opportunity to discuss sale of the property and arrangements for discharging the mortgage, and thereby avoid the undesirable delays which frequently arise where no such advance contact has been made between them. While I am in principle well disposed to the introduction of improved arrangements to facilitate vendor sales of mortgaged property, such as the possible introduction of pre-approved consent to sale certificates as suggested by the Deputy, this is a matter which would, in the first instance, benefit from discussions between the Law Society and the lending institutions. I have therefore asked my Department to draw the attention of both the Law Society and the lending institutions to the Deputy's suggestion.