Mortgages: Legal and Equitable Mortgages

Question 1

To be a valid legal mortgage what formalities must be complied with?

Answer 1

Deed + Registration

Question 2

What are the requirements for a valid deed?

Answer 2

1. A deed must be clear on the face of the document that it is intended to be a deed.
2. The deed must be validly executed.
3. The deed must be delivered.

Question 3

What are examples of equitable mortgages?

Answer 3

Mortgage of an equitable interest: where the borrower holds an equitable interest in the land (i.e. they are not a legal owner e.g. a beneficiary in a trust of land). Such mortgage need only be in writing and signed by the mortgagor.

Defective legal mortgage: not granted by a valid deed or is not registered as at Land Registry. Equity will recognise it as a `contract to grant a legal mortgage’ providing it is in writing, contains all agreed terms and is signed by both parties.

Question 4

How are mortgages discharged?

Answer 4

Once a mortgage has been repaid in full, the mortgage entries at the Land Registry must be cancelled. A mortgage is only considered to be fully discharged when all reference to it has been removed from the Charges Register at the Land Registry.