Topic 4: Principles of mortgage and property law Flashcards
What is a Conveyance?
The transfer of rights in a property from one person to another. Conveyancing is the process of carrying out the transfer.
What is a Mortgagor?
The term for the person who borrows. They promise the property in return for the mortgage.
What is the Mortgagee?
The technical term for the lender. They receive the borrower’s promise in return for the mortgage.
What is a Legal Charge?
An agreement between the lender and borrower, contained in a deed, which gives the lender proprietary rights over the property while the charge is in force. If the borrower fails to pay the mortgage the lender can take action to seek possession of the property. The charge is terminated once the mortgage is settled.
What is the Legal Owner?
In property terms, the person or body registered as owner at the Land Registry (for registered land) or on the conveyance documents (for unregistered land). There can be a maximum of four legal owners.
What is Equitable?
The easiest way to think of the term ‘equitable’ in property matters is to equate it to ‘fairness’.
What is the Equitable owner?
Also known as a ‘beneficial’ owner, someone with a right to a share in the property but not registered as a legal owner or shown as a legal owner on the conveyance documents. This would include owners who are not among the maximum of four who can be legal owners, or the beneficiary of a trust (the trust would be the legal owner).
What is Trust of Land?
Created automatically when there is more than one legal owner of a property, and the legal owners are the trustees. The trustees hold the land on behalf of the legal and equitable owners.
What is Joint Tenancy?
Each owner owns 100% of the property: there is no division. On the death of a joint tenant, legal and beneficial ownership of the property transfers automatically to the survivor(s), regardless of the deceased’s will or wishes.
What is Tenancy In Common?
A form of joint ownership where each owner has a distinct beneficial interest (or share) of the property, which they can leave to anybody they choose. On the death of one owner, legal ownership passes to the survivor(s) but, as trustee(s), they must look after the deceased’s share for their beneficiaries.
What is Freehold?
The property is owned outright and there are no restrictions on the owner or the property, other than any covenants or easements imposed by previous owners, and restrictions imposed by national and local authority laws and regulations.
estate in fee simple absolute in possession – more commonly known as
‘freehold’
What is Leasehold?
The owner buys the right to use the property for a defined period, with certain conditions, restrictions and requirements for the leaseholder and the property set out in a lease. The leaseholder pays an annual ‘ground rent’ to the freeholder, who owns the property. At the end of the lease term, the property reverts to the freeholder.
estate for a term of years absolute – more commonly known as ‘leasehold’.
What is Commonhold?
A type of tenure for flats (multi-unit properties). Each flat is called a ‘unit’ and each unit owner owns their flat on a freehold basis. The common areas of the building are owned by a commonhold association, which is responsible for the maintenance of the common areas and the exterior of the building. The commonhold association is owned by the unit owners, with each owner owning a share in the commonhold association.
What is Lessee?
A person who holds the lease of a property, giving them the right to occupy that property for a specified period of time.
What is Lessor?
A person who leases or lets a property to another, the lessee, for a specified period of time.
