Mortgages Flashcards
How does a mortgage behave, where is this found
For freehold, like a 3000 year lease. For leasehold like alease of 1 day less. S87(1) LPA 1925
Formalities for creation of a legal mortgage
S85 for freehold, S86 for leasehold. Charge by deed expressed by way of legal mortgage PLUS registration S27(2)(f) LRA 2002
Creation of an equitable mortgage
Specifically enforceable contract to create a mortgage OR mortgage of an equitable interest S53 LPA 1925
Rights of the borrower
Redemption (normally 6 months). Enforceable under S91 LPA 1925
Case that says an option to purchase is a fetter
Samuel v Jarrah - effect of the option was to deprive the mortgagor of the right to redeem
Where an option to purchase is a seperate transaction to the mortgage, not a glog
Reeve v Lisle
A case where redemption was not allowed until only 6 weeks prior to trhe end of the term: Clog
Fairclough v Swan Brewery
A case where mere postponement (by 40 years!) of redemption was acceptable
Knightsbridge Estates v Byrne - was at a good rate on interest - they knew what they were doing - no oppressive bargain
Case where court struck out a mortgage term for unconscionability (NOT a bad bargain)
Cirtland Property v Dabrah (57% interest rate - inexperienced buyer)
Case that shows collateral advantage must be truly seperate to the mortgage
Biggs v Hoddinot - Lender was a brewery. Borrower had to buy all booze for 5 years even if they redeemed early.
Case where it truly was a collateral advantage
New Patagonia Meat Co - First refusal on animal skins unrelated
Rights of the mortgagelender
Proprietary: All rights of a 3000 year lasehold. Contractual: Right to sue for recovery of debt
Lender can go into possession “as soon as the ink is dry”
Four maids
Mortgagee’s right to possession can be limited in the contract
Ashley Guarantee v Zaccaria
Court has discretion only to briefly postpone possession
Birmingham Midshires v Grant
Where does it says that if the land contains a dwelling house, the court can postpone, stay, suspend the judgement or postpone possession
S36 Administration of Justice Act 1970
A case where possession was postponed
Cheltenham & Gloucester v Norgan (equity in the house was massaive, no way that they would lose their money. Arrears repayable over remaining life of the mortgage)
Self help (repossession) is available to tghe lender
Ropaigealach v Barclays (peacable possession taken)
Lender can sell the property without possession
Horsham Properties v Clarke - rendered the occupiers trespassers
Common law requirements for lender to be able to sell
Mortgage by deed and legal date of redemption passed (S101 LPA - power to sell)
Statutory requirements to sell
Common law req’s met PLUS: Three months notice requiring repayment of full sum OR an installment overdue for 2 months OR breach of terms (S103 LPA)
Lender can give good title in the land
S104 LPA 1925
Duties of the lender when selling
Not to sell to self, act in good faith
Mortgatgee’s duty to act in good faith is “not a duty of care but a sui generis equitable duty arising from the relationship”
Parker-Tweedale v Dunbar Bank
The mortgagee must obtain the best price REASONABLY obtainable, not best price - no need to go out of its way
Cuckmere Brick Co
Case where mortgagee sold in bad faith
Tse Kwong Lam
Once a case is befoire them for ANY reason, the court can order sale on terms it sees fit
S91(2) LPA 1925
Case where court ordered sale so borrower coudl manage his debt (against wishes of lender)
Palk v Mortgage Services Funding
Case that says when a lender is put on notice of undue influence
Barclays Bank v O’Brien - Where bank knows of a cohabitee and the transaction is not to their advantage
Case which shows how a bank can discharge their duty of care to a potential victim of undue influence
RBS v Etridge - basically make sure they know what they’re committing to
Case which says acquisition mortgages have special status
Abbey National v Cann
No need to hold off for the market to recover
China & South Sea Bank
