8- Legal Mortgages

Question 1

Creation of mortgage: S85 LPA 1925

Answer 1

2 ways of creating legal mortgage:

• Lease for term of years absolute
• Charge by way of legal mortgage (S87 LPA 1925)

Question 2

Creation of mortgage in registered land: S23 LRA 2002

Answer 2

Only possible method in registered land is charge by way of legal mortgage

Question 3

Creation of mortgage: S52(1) LPA 1925

Answer 3

Legal mortgage must be created by deed

Question 4

Remedies for recovering mortgage arrears:

Possession

Answer 4

Eligible right “before the ink is dry on the mortgage”

Question 5

Remedies for recovering mortgage arrears:

Posession- S6 Criminal Law Act 1977

Answer 5

May need court order to possess to avoid criminal liability

Question 6

Remedies for recovering mortgage arrears:

Possession- S36 Administration of Justice Act 1970 (as amended by S8 AJA 1973)

Answer 6

Court has power to suspend order for possession and adjurn court proceedings for as long as they see reasonable

Question 7

Remedies for recovering mortgage arrears:

Possession- First National Bank v Syed

Answer 7

Borrower protected as court have power to adjurn court proceedings for anything up to the lifetime of mortgage

BUT if no prospect of borrower paying back then bank do have right to repossess

Question 8

Remedies for recovering mortgage arrears:

Appointing a receiver- S101(1)(iii LPA 1925)

Answer 8

The power to appoint must exist

Question 9

Remedies for recovering mortgage arrears:

Appointing a receiver- S103 LPA 1925

Answer 9

Power to appoint receiver must have become exerciseable

Question 10

Remedies for bringing mortgage to end:

Foreclosure

Answer 10

S91(2) LPA 1925- power to order a sale

Question 11

Remedies for bringing mortgage to end:

Sale: S101(1)(i) LPA 1925

Answer 11

Must be existence of power of sale

ie. must have arisen and become exercisable

Question 12

Remedies for bringing mortgage to end:

Sale: S103 LPA 1925

Answer 12

The power must have arisen (legal date of redemption) and become exercisable

Question 13

Remedies for bringing mortgage to end:

Sale: S104 LPA 1925

Answer 13

Protection of purchaser

When buying from mortgagee:

• Purchaser takes property free from all matters which mortgagee has priority over BUT
• Subject to all matters which also bind the mortgagee

Purchasee steps in to the shoes of the selling mortgagee

Question 14

Remedies for bringing mortgage to end:

Sale: S105 LPA 1925

Answer 14

Distribution of proceeds of sale

Question 15

Priority of mortgages when there’s more than one: S48 LRA 2002

Answer 15

Order of entry on the register of title