Mortgages Flashcards
What is a mortgage ?
A mortgage is a bundle of proprietary rights granted to the lender ( mortgagee) as a security for a loan.
To be recognised as a legal interest what are the formalities to give a legal interest over registered land?
LPA 1925 s.1(2)(c)
- Deed + 2. Registration.
What are the requirements of a deed?
LP (MP) A 1989 s.1
- Intended to be a deed.
- Validly executed.
- Delivered.
The mortgage deed must then be registered at the Land Registry.
What happens if the mortgage deed is not registered at the Land Registry?
Then the mortgage will not take effect as a legal mortgage in the land ( s.27(1) but it could still be an equitable interest.
What are the reasons an equitable mortgage can arise?
- Mortgage of an equitable interest.
- Defective legal mortgage
If the mortgage is being granted over a legal estate by a legal owner - is it capable of being a legal interest ?
yes
A mortgage was granted over a legal estate by the legal owner. The mortgage is capable of being a legal interest.
What other steps must be taken to ensure it is a VALID legal mortgage ?
If the mortgage has been granted by deed and properly registered.
What is a defective legal mortgage ?
It does not comply with the requirements of a deed
OR
It has not been registered
How is a mortgage of an equitable interest created ?
Very informally.
- In writing
- Signed by the grantor
To be validly created
How does equity recognise a defective legal mortgage ?
Equity will recognise it as a contract to grant a legal mortgage - providing it is in writing / contains ALL the agreed terms / signed by both the mortgagor and mortgagee
Give an example of why someone would mortgage an equitable interest ?
Beneficiary of a trust of land. Borrower holds an equitable interest in the land ( not the owner )
When is a mortgage considered to be fully discharged ?
When all reference to it has been removed from the charges register at the land registry
How is discharge of a mortgage done ?
DS1 Form - over the whole of the land in title.
DS3 Form - If only part of the land in title is being released from the mortgage ( only part of land being sold to a buyer )
An estate contract is created which is recognised as an equitable mortgage. What does this mean ?
It means that we would describe this as being a contract to grant a legal mortgage.
If two people own a freehold estate. One of the co-owners grants a mortgage over their share. Can this be legal or equitable as a mortgage ?
Their equitable interest in the land is only capable of creating an equitable mortgage.
It must be created in writing and signed by the grantor.
