Lecture 5: Easements & Mortgages Flashcards
Explain the definition and types of Easements.
It is a privilege acquired by one landowner for the benefit of his land, over the land of another, who is bound to submit to the enjoyment of this privilege.
Types of Easements:
- Positive: permits holder to do something on the other’s land (intangible right) (Right of Way eg)
- Negative: allows the holder to restain the other landowner from exercising one of his rights (Right to light)
The contract has an agreement that A will use the shortcut cutting over to B’s land, whereby A has paid consideration to B to use that right
Explain the creation of Easements.
- Expressly: generally needs to be in writing
- Implied:
- Necessity for land-locked parcels
- Statues
Characteristics of Easements
Landmark Case: ReEllenborough Park (1956)
Issue: Whether the same right to use the park amounted to an easement even though no contractual relationship between original landowner and subsequent owners
Pre-requisites for an easement:
- Must be DT and ST
- The right must enhance the value of ownership DT and not for the personal benefit of DT
- DT and ST must be in separate ownership
- The right must be capable of forming the subject matter of a grant and must not be vague –> set boundaries
Limitations of easements
- It must not impose an obligation for the ST to expend money nor do any positive act.
- It must not oust the ST –> must not give exclusive & unrestricted use of a piece of land to DT
If any of the 4 prerequisites are not met and 2 limitations are met, the right will be counted as a licence, and not an easement.
Extinguishment of an Easement
- Unity of ownership of DT and ST
- Alteration of DT
- Release (express/implied in an agreement)
- Abandonment
Explain the Natural Right of Support
Natural rights arise automatically and independently from the ownership of land –> not expressed or implied
Definition of Mortgages
A mortgage is a form of security whereby the debtor conveys the title of the property to the creditor, but with a proviso for the reconveyance of title, on payment of the sum sent together with interest –> title will be given back to the borrower when borrower finished paying with interest
Parties / formality / terms to a mortgage
Mortgagor (borrower) vs Mortgagee (lender)
The formality of creation of Mortgage: by completing the prescribed/approved form under Land Titles Act –> based on contract (all the rules of contract apply)
Terms:
- Parties
- Property
- Loan amount with an interest rate
- Penalties for late payment
Mortgagor’s (Borrower’s) Rights
Most common problem: delay in payment/arrears
Nature of Mortgagor’s Interest: Equity of Redemption
- No clogs on the equity of redemption
- In a contract, there is an imbalance of bargaining power between the mortgagor and mortgagee. Mortgagor will often be in a weaker bargaining position as he is a party seeking money. The mortgagee will often be in a strong bargaining position, thus he will impose harsh terms and conditions on the borrower.
- Hence, the court of equity introduces equity of redemption to safeguard the rights and interests to enhance the bundle of rights of the mortgagor who will be in a weaker bargaining position.
Equity of Redemption:
- Postponement of contractual right to redeem (duration was too short for the mortgagor to enjoy the property)
- Restraint of trade
- Unconscionable and unfair terms
Mortgagee’s (Lender’s) Rights
- Right to insure property –> borrower has to pay the insurance premiums
- Foreclosure and right to transfer
- Borrower unable to pay arrears and the grace period given has already past
- Bank will exercise the power of sale to sell the property to pay off any installment arrears
- A continuing duty imposed by the court of the lender to obtain the best price possible through fire/auction sales in that circumstances due to the borrower’s equity of redemption
- Court has to follow the fair balancing act between the rights of lender and borrower
