Mortgages Flashcards
Santley v Wilde
A conveyance of land as security for the payment of a debt to the discharge of some other obligation for which it is given
Davys
Transfer of land as a security for a loan
Historically?
Been around since Anglo-Saxon times, but used to be that the borrower would have to repay on a specific time. If they did then they would be returned their land, if not then lender could sue and keep land
Equity’s role?
Began to step in and change unfairness of the mortgages as lender could use unconscionable advantages. Allowed borrower to recover land after date, equity of redemption. Legal date still important though due to lender remedies
Creating a mortgages
LPA 1925 S85-87
LRA 2002 s23 (1)(A)
LP(MP)A 1989 S1,2
Equitable mortgages created?
1) Via equitable interest
2) Via trying to create legal mortgage but forgery
3) 1989 Act, or via estoppel.
Discharge of mortgages
Registered land - Electronically or form to land registry
Unregistered land - Signed receipt of mortgage document and title deeds returned
Position of Borrower - Equity of Redemption
Equity will allow for the repayment date to not be enforced when it is fair to do so. This means that when the money is given to the lender at a later date then they will have to accept the money.
Once a mortgage, always a mortgage
a) No irredeemabilty - Equity doesn’t allow a lender to enforce a promise that would prevent the borrower from ever redeeming the mortgage. Samuel v Jarrah Timber & Wood Paving Co Ltd
Jones v Morgan - Criticise doctrine of clogs
Fairclough v Swan Brewery Co Ltd - Postponing the equitable right to redeem indefinitely not allowed
Knightsbridge Estates Trust Ltd v Byrne - Different when it companies
b) Post redemption conditions - Void if lender attempts to prevent borrower from freely enjoying his land after repaid all money. Noakes & Co Ltd v Rice
c) Other terms - If unconscionable or oppressive. Multiservice Bookbinding Ltd v Marsden.
Position of Borrower - Statute unfair Agreements
Most first mortgages of residential property will fall under Financial Services and Markets Act 2000. Imposes Mortgage Conduct of Business rules upon lender. Ensures that charges are not extortionate and promotes transparency. If breached then Financial conduct Authority investigate but doesn’t void the mortgage.
Other fell within 137-140 of Consumer Credit Act 1974 before April 2008, now under Consumer Credit Act 2006 S19-22. Unfair relationships
Position of Borrower - S91(2)
Hurst v Hurst - Court can give unfettered discretion to order if doing so is necessary in order to prevent manifest unfairness.
Position of Borrower - Avoiding Undue influence or misrepresentation
When one borrower has misled another due to their relationship. Royal Bank of Scotland v Chandra - Can be two doctrines: Undue influence or misrepresentation
In both it is about whether the party acted unconscionably or in breach of trust, and if the lender did not take steps to ensure that it was not the case then the mortgage is void.
Barclays Bank plc v O’brien - Lied about amount of mortgage
Royal Bank of Scotland v Etridge - Must take steps to ensure, such as importance of taking legal advice from solicitor, necessary info to solicitor
Hewett v First Plus Financial Group plc
Position of legal lender - Take possession of Property
Historically it was an estate in land so could move in straight away, now they don’t do this unless payments aren’t being made. A court order isn’t needed but usually is sought out. Cheltenham & Glouchester Buliding Soc v Norgan. S36 What is a reasonable period.. Should detail how they will pay it back, sufficient equity and court should be cautious about granting further postponement.
Position of legal lender - Sell
Not under common law, but statute allows S101 arisen but exercisable by S103. Must get best price obtainable
Position of legal lender - Appoint a receiver
Manage the land in same circumstances of sale, but must be in the deed. Usually commercial context.
Position of legal lender - Sue for personal covenant
If the amount sold for is less than what is owed can sue for the rest, but only within 12 years.
