Q&As

What happens if a default notice is not served on a borrower?

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Published by a LexisNexis Financial Services expert
Published on: 29 August 2014
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What is a default notice?

A default notice is a notice that must be served on a borrower under a regulated agreement, where that borrower is in breach of the agreement (for example by missing repayments), before the lender is entitled to take certain action against the borrower.

When is a notice of default required?

A notice is required whenever (as a result of breach of agreement by the borrower) the lender wishes to terminate the agreement, accelerate payment, recover Possession of Goods or land, enforce any security or to treat any of the borrower's rights under the agreement as terminated, restricted or deferred.

What are the Requirements for a valid notice?

The full requirements are set out in the

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Jurisdiction(s):
United Kingdom
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Key definition:
Possession definition
What does Possession mean?

Possession in a construction context refers to having responsibility for/bearing the risk in the works. The contractor will usually have exclusive possession whilst it is carrying out the works—then at completion'>practical completion the employer takes back possession (and therefore takes on responsibility for insurance).

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