Yuri purchased a property in 2004, raising 60% of the purchase price by way of a mortgage secured on the property. In 2006, Yuri’s business failed and he was no longer able to service the repayments due to the bank.The property was neglected and has fallen into disrepair. It is also situated in an undesirable location. Attempts by the lender to sell the property at public auction failed. Faced with the possibility of making a loss on the contract, the lender is considering two alternative courses of action. Firstly, it will consider selling the property by private agreement to an individual who is willing to pay a sum adequate to cover the outstanding debt and accumulated costs. Secondly, it is prepared to pay Yuri 80% of the guide price originally set by the court, with the intention of carrying out repairs and then selling it at a future date.Required:
(a) Explain the legal obligations of the lender in respect of the disposal of the property. (5 marks)
