Land Law Flashcards
What does a secured loan (over a property) give a lender ?
A proprietary right over the property, which can be used to take possession and sell if the borrower defaults
lender is secured and so takes priority over unsecured creditors on an insolvency or bankruptcy
what is a mortgage?
A charge by way of legal mortgage is the proprietary right granted over the property. Borrower retains legal title , but lender gets bundle of rights. charge by way of legal mortgage must be documented and registered
Mortgages can also be equitable- this arises out of a failed legal mortgage (not registered/ not in a deed) - must be made by written contract
What is the equitable right to redeem?
the right to pay off the mortgage so that the land is free of security
How is the equitable right to redeem protected ?
There a number of rules which protect the right for the borrower to repay the mortgage and take the property free of the debt.
what is the effect of undue influence on a mortgage?
The mortgage is voidable and cannot be enforced
What kinds of undue influence are there?
Actual /presumed
Actual = clear evidence of undue influence on the fact
Presumed undue influence - where the UI is presumed because there is a relationship of trust or confidence, eg trustee-beneficiary, solicitor-client
what notice can the bank have of the undue influence?
The bank can have the actual or constructive notice
Actual notice= the bank actually knows about the UI
Constructive notice= the bank ought to have known.
what should the bank do?
take reasonable steps to ensure the person being influenced gets independent legal advice
they should get written confirmation from the solicitor providing that advice that such advice has given and that the nature and consequences of the transaction
the advice should be given away from and separately to the other party to mortgage
The bank should also provide the solicitor with any evidence of the undue influence and other financial information they have on the spouse being unduly influenced.
what restrictions are there on the right to take possession?
- Possession can be postponed by the court if the borrower can prove they can pay arrears by the end of the mortgage term
- Lender must comply with the protocol for taking possession
- Protection for spouses /CPs under the family law act 1996
- the lender must act with honest intention and good faith
- Protection for spouses/CPs under the family law act 1996
what enforcements rights does the mortgagee have if the borrower defaults?
- sue
right to take possession
power of sale
foreclosure
right to possess title deeds
appointment of receiver
When does the power of sale arise and become exercisable under LPA 1925
arises as soon as the mortgage money becomes do- contractual date of redemption
becomes exercisable when:
1. fails to repay capital for 3 months after notice
2. Interest has not been paid for 2 months;
3. The borrower has breached some other term of the mortgage deed
what is the priority between legal mortgages over the same property for registered land
Priority between legal mortgages is governed by the date of registration. not date of creation. if a mortgage is not registered, it will be an equitable mortgage only
what is the priority between a legal mortgage and an equitable mortgage for registered land
Because a legal mortgage is a registrable disposition, it will take priority over any unregistered interests, unless they are overriding interests
what is the order of priority between equitable mortgages?
The priority between equitable mortgages is determined by date of creation.
for registered land, this is subject to the rules on registered dispositions
what are the rules on priority for a legal mortgage over unregistered land?
the mortgage would be subject to any pre-existing mortgage registered on the LC registry
