Topic 4 - Principles of Mortgage and Property Law Flashcards
Freehold -
Estate in fee simple absolute in possession
Leasehold -
Estate for a term of years absolute
Cuius est solum, eius est usque ad coelum et ad inferos
Whoever owns the soil owns everything up to the heavens and down to the deposits of the earth
The priority of charges is determined by…
…the data order of registration.
Second charges present the lender with higher risk so are likely to be…
…offered at higher rates of interest or with higher tariffs of charges and fees.
Joint tenancy -
Most common type of ownership.
Tenants in common -
The joint legal owners are one single owner, as trustees of the land, but each is also the beneficial owner of a defined interest in the property as agreed between them.
A restriction is placed on the title at the Land Registry, preventing either party selling the property without agreement from the co-owner.
It can be useful when a someone wants to leave their share to someone else rather than the joint owner.
Ground rent:
Paid by the leaseholder to the freeholder. It is typically low, between £50 and £200 a year.
Qualifying tenants, who have held a lease for longer than 2 years have the right to buy a new lease, increasing the lease by 90 years. No ground rent is paid during this term.
Leases may caryr out constraints such as on:
- Specific conditions relating to maintenance and repairs
- Use of the property
- Alterations or enlargement
- In respect of common areas
A typical requirement for a mortgage for a leasehold property is:
30-40 years more than the mortgage term.
Enfranchisement:
The right of owners of leasehold properties in a building to joint together to buy the freehold.
The qualifying criteria are:
-Building must contain two or more flats
- At least 2/3 must be held on a long lease
- No more than 25% of the building can be used for non-residence purposes
- At least 50% of the leaseholders must agree to participate
