Property Law Second Term - MORTGAGES Flashcards
What is s.101 LPA regulated by?
S.103 LPA
Cukurova Finance v Alfa Telecom
Telephone shares; right is for security, so can’t insist on it even if delayed
BoS v Miller
S.36 AJA applies even if the dwelling is not D’s home and only part of the property
Palk v Mortgage Services on s.91 order of sale
Maybe even if mortgagee seeks possession and proceeds will not pay off mortgage
What does Law Com No.204 suggest about taking possession?
Statute should recognise creditor can only take possession with a court order
Where is the meaning of ‘sums due’ for s.36 AJA?
S.8
What Law Com report suggested abolition of foreclosure for land?
No. 204
Samuel v Jarrah Timber
Provision in mortgage contract for purchase is void
What is the problem with foreclosure?
Contracts basic rule that right is only to secure performance
S.98 powers of mortgagor
Claim possession
when is the only time a debtor can assert their equity of redemption against the mortgagee?
when they sell without power of sale (s.52 LRA only arises under s.101 LPA)
Horsham Properties v Clark
Rejected possibility of unjustified interference with property rights through s.87(1) under Art. 1 Protocol 1
What case shows that s.36 may occasionally consider personal circumstances increasing effect of eviction?
Manchester CC v Pinnock
In what case did Lord B-W highlight that C obtains rights ‘in order to enforce the discharge of D’s obligations’?
Bristol Airport v Powdrill
TSB v Camfield
If no proper advice given, despite solicitor’s certificate, mortgagee would be liable
What does s.51 LRA do?
Once registered, a mortgage charge takes effect as a charge by deed by way of legal mortgage, regardless of if it was made by payment of money or by deed
Jones v Morgans
‘No clogs or fetters’ on EoR
What section of the LPA, before LRA, gave two ways to make a legal mortgage?
S.85
What section covers the court’s discretion to order a sale for mortgages?
S.91 LPA
What two cases show a bank must take reasonable care to achieve a reasonable price?
Silven Properties v RBS; Cuckmere Brick v Mutual Finance
What does the CCA 1974 allow courts to do?
grant a time order to extend lender’s enforcement of right to possession and amend/vary mortgage terms
Wood v UK
ECtHR accepted s.87(1) is proportionate so no Art.1 or 8
What case shows a limitation of s.36 AJA?
Ropaigealach v Barclays Bank
Clough Mill v Martin
Retention of title; not a security right as not a new right
Midland Bank v Kidwai
No liability for undue influence if C ignored advice
CLBS v Flegg
Legal charge for value overreaches if capital sum paid to 2 trustees
S.91 LPA powers of mortgagor
Redemption, order of sale
How can a creditor appoint a receiver?
Express power in agreement or through s.101 LPA
What section of the LPA allows a mortgage of land to be made by mortgage or long lease?
S.85(1) and s.87
What are the powers of a mortgagor?
Redemption, lease property, claim possession and apply for an order of sale
What case shows a power of sale and good faith means to discharge the debt?
Downsview Nominees v First City Corp
Can act in self-interest for power of sale but need to take obvious steps
Cuckmere Brick v Mutual Finance
How did leasehold estate mortgages differ from freehold prior to LRA?
Long lease under s.85 LPA would be for 10 days less than borrower’s own lease usually
From what case is the proportionality test that should be applied to s.87(1) LRA by virtue of s.3 HRA?
De Freitas v Permanent Secretary
Telephone shares; right is for security, so can’t insist on it even if delayed
Cukurova Finance v Alfa Telecom
What section shows the application of proceeds from a sale with a mortgage?
S.105
Corbett v Halifax BS
S.104 does not include mere undervalue
What is the legal maxim which bases all mortgage security?
‘Once a mortgage, always a mortgage’
What case shows s.36 AJA applies even if dwelling is not D’s home and only part of the property?
BoS v Miller
What case shows a receiver can act in self-interest even if this conflicts with the mortgagor?
Silven Properties v RBC
‘No clogs or fetters’ on EoR
Jones v Morgans
What two cases conflict on the appropriate steps for undue influence in regard to independent advice?
TSB v Camfield; Midland Bank v Kidwai
Re North East Property Buyers’ Litigation
Argue right arose before any others when used to purchase a house (s.28 LRA)
What case shows powers under s.101 LPA arise even without registration?
Swift 1st v Colin
Need to exercise power of sale in good faith, i.e. to discharge a debt
Downsview Nominees v First City Corp
What is an equity of redemption?
Equitable property rights of value of land, less amount owed
Ropaigealach v Barclays Bank
Vacant possession so no court order needed and no s.36
Multiservice Bookbinding v Marden, Lord B-W
‘shock the conscience of the court’
Kregliner v New Patagonia Meat Co
May allow advantages to continue past redemption if don’t attach to land
What case made it clear that C’s rights are only to discharge D’s obligations in mortgages?
Bristol Airport v Powdrill
What case shows that knowledge of impropriety under s.104 LPA does not include selling at a mere undervalue?
Corbett v Halifax BS
What appears to diminish s.8 AJA somewhat?
‘Reasonable period’ in s.8(2) appears to show the courts having regard to the whole mortgage and whether D will pay everything owed by the end
Bristol & West BS v Ellis
If there is only a small gap between what is owed and value of security, possession is likely to be given and application of future sale rejected (under s.36 AJA)
How can a charge by way of legal mortgage be registered?
S.23 and s.51 LRA
What were the two legal mortgages prior to LRA?
Long lease and charge by deed
Cuckmere Brick v Mutual Finance
Can act in self-interest for sale but need to take obvious steps
Quennell v Maltby
Remove tenants; can only seek possession ‘bona fide and reasonably’
What case shows a creditor has a basic right to possession?
Four Maid Ltd v Dudley Marshall
What sections of the LPA cover foreclosure?
S.88(2) and s.89(2) LPA
What four things protect the equity of redemption?
Rule against irredeemability, mortgagee attempts to purchase are void, unfettered redemption and unconscionable terms/unreasonable interest rates
Swift 1st v Colin
Power under s.101 with a deed but no registration
What case showed that courts will only exceptionally require the creditor to permit the debtor to retain possession?
Cheltenham & Gloucester v Booker
Palk v Mortgage Services
sit on property; bank cannot act at mortgagor’s expenses
Downsview Nominees v First City Corp
Exercise power of sale in good faith (i.e. to discharge the debt)
What happens if FCA sourcebook rules are not followed for mortgages?
Revoke licence
Why is foreclosure essentially obsolete?
Court order needed, and court will usually order sale under s.91 LPA
What does s.36 AJA allow?
Court to adjourn proceedings or grant a suspended possession order
Consumer Credit Act 1974 regulates what?
Some mortgages
What section gives implied powers into a mortgage made by deed?
S.101 LPA
Collateral advantages allowed to mortgage is reasonable and not a fetter on redemption
Santley v Wilde
What case shows collateral advantages may be allowed to continue past redemption if they don’t attach to the land?
Kregliner v New Patagonia Meat Co
What are mortgage terms subject to?
UTCCR: ‘plain and intelligible’, and if not then contra proferentum through Reg.7
Why were the court persuaded to grant s.91 LPA in Palk v Mortgage Services?
debtor in negative equity and bank’s actions ‘unfairly prejudices’ them
What are the acquisition requirements for a charge by way of legal mortgage?
S.27(2)(f) LRA and s.52 LPA with s.1 LP(MP)A
What is an equitable right to redeem?
Right to pay after legal date of redemption
Santley v Wilde
Collateral advantages allowed to mortgage is reasonable and not a fetter on redemption
Silven Properties v Royal BoS
No obligation to improve property for sale
Machester CC v Pinnock
Personal circumstances increasing effect of eviction may be considered exceptionally
Four Maid v Dudley Marshall
‘Mortgagee may go into possession before the ink is dry’ (Harman J)
Can’t sit on the property
Palk v Mortgage Services
What section shows a receiver is an ‘agent’ of the mortgage?
S.109 LPA
Cheltenham & Gloucester v Norgan
Courts appear to take into account the whole mortgage when deciding ‘reasonable period’ for s.8 AJA
Can act in self-interest, even if against those of mortgagor, for receiver
Silven Properties v RBC
What section of LRA shows a legal charge for value is taken free of any interest not overriding or registered?
S.30 LRA
Abbey National v Cann
Unencumbered fee simple
Silven Properties v RBC
Self-interest, even if conflicts with mortgagor, for appointment of a receiver
Unencumbered fee simple
Abbey National v Cann; Re North East Property Buyers’ Litigation
What section of LPA protects the purchaser even when creditor has breached equitable duties?
S.104
In what case did the court require a ‘detailed budget’ for s.36 AJA and s.8?
Cheltenham & Gloucester v Norgan
No need to improve the property for power of sale
Silven Properties v RBC
What section shows mortgagee has a basic right to possession?
s.87 LRA
Name three sources of regulation for mortgages
FCA Sourcebook on Mortgage and Home Finance; Financial Services and Market Act 2000; CCA 1974
What does s.3 HRA require of s.87(1) LRA basic right to possession?
Interpreted in a human rights compatible manner
Ree v Lisle
Allow purchase of estate if wholly separate to mortgage
What two cases show the issue of a ‘scintilla temporis’ in priorities of a mortgage?
Abbey National v Cann; Re North East Property Buyers’ Litigation
What case shows a ‘type’ of right that does not need to be registered, but still functions as a type of mortgage
Retention of title in Clough Mill v Martin
S.99 LPA powers of mortgagor
Lease property
When does s.36 AJA apply?
Period to make payments over, dwelling part of the property and even if not D’s home and requires bank to have gone to court
What case shows how s.36 AJA may never come to be considered in an order for possession?
Ropaigealach v Barclays Bank
What does the FSMA 2000 regulate?
First legal mortgages secured against individual borrower’s home
What statute applies to taking possession?
Administration of Justice Act 1970, s.36
What is the way mortgages are usually adopted?
Charge by way of legal mortgage through s.23 and s.51 LRA
How are proceeds applied after a power of sale?
To meet sale costs, then to discharge amount owed, then balance remaining is paid to other mortgages/borrower
What section of the LRA shows the two ways to make a legal mortgage of registered land?
S.23(1)
