‘All sums due’ mortgages and partnerships and other co-owning entities
‘All sums due’ mortgages and partnerships and other co-owning entities
The Conveyancing Committee wishes to remind the profession about the dangers inherent in the use of ‘all sums due’ mortgage documents in cases where loans are made to partnerships, joint ventures, syndicates and other forms of co-ownership. Such ‘all sums due’ mortgage deeds usually provide that each partner/borrower is jointly and severally liable for all debts due to the lender by the other partners/borrowers unless there are appropriate limited recourse provisions written into the text of the relevant loan documentation. Solicitors reviewing such loan documentation should advise the parties of the necessity to negotiate with the lending institution the insertion of appropriate non-recourse or limited recourse provisions into the loan documentation. It is best practice that any limitation on recourse is carried through to the mortgage deed.