What is land and mortgages I Flashcards
What do interests in land give the holder?
The right to do something on the land or restrict what can be done on the land
Interests do not grant possession like an estate does.
How can interests in land be enforced?
‘In rem’
This means the right can be recovered if the holder is deprived of it.
What are the two natures of interests in land?
Personal or proprietary
Proprietary interests are outlined in LPA 1925, s 1.
What are legal interests in land required to be disposed of by?
Deed which meets the requirements of LP(MP)A 1989
List 4 legal interests
- mortgage
- easements for a term equivalent to a freehold or leasehold estate
- rights of entry
- rentcharge
What is a right of entry?
A right for a landlord to re-enter leased premises under specific conditions.
What is a rentcharge?
Paid by landowner of a freehold estate to a third party with no other interest in the property.
List 4 equitable interests
- freehold covenants
- estate contracts
- interests in a trust of land
- easements for uncertain term
What is the benefit of having a legal interest rather than an equitable interest?
Legal interests have a wider range of remedies available to them if their right is infringed, including damages
What is an estate contract?
A contractual right to a legal estate, whether freehold or leasehold.
When will there be a constructive trust of land?
Where one party contributes substantially to the repayment of the mortgage but is not a legal owner.
When will there be a resulting trust of land?
If one party has contributed to the purchase price but is not a legal owner
What does proprietary estoppel achieve?
To prevent one party from going back on a promise relating to land
What does the term ‘land’ include according to LPA 1925, s 62?
- surface, buildings, or parts of building on the land
- plants on the land
- dead animals (not alive animals)
- corporeal (fixtures) and incorporeal (easements) hereditaments.
What does land ownership exclude?
Water flowing through land
What is the owner’s right regarding the air above the land?
An owner’s rights in the airspace above his land are restricted to such height as is necessary for the ordinary use and enjoyment of the land and the structures upon it - therefore they have ownership over lower airspace but not higher airspace
What is the owner’s right regarding the space beneath the land?
Land includes all the ground beneath the serfice except:
- there is no entitlement to minerals below the surface, treausre and coal
- no trespass below 300m
What is the legal test for a fixture?
Degree of Annexation Test and Purpose of Annexation Test (Botham v TSB Bank plc [1996])
Which test for fixtures takes priority?
Purpose of annexation takes priority over degree of annexation test
What must legal mortgages comply with?
Formalities set out in LP(MP)A 1989, s 1.
When can a mortgage be legal?
if a mortgage is being granted over a legal estate by the legal owner
What is an equitable mortgage?
Either:
- Mortgages of equitable interests created informally and in writing (in writing, signed by grantor)
- defective legal mortgages that must comply with s2 LP(MP)A
What is the equity of redemption?
Allows the borrower to repay the loan at any time after the legal redemption date.
What does equity not allow regarding redemption and why?
Postponement or prevention of redemption.
Equity recognises the borrower as the true owner of the property and therefore protects them.
What are collateral advantages in mortgages?
Additional value extracted from the borrower that may be struck down.
What clauses will the court not permit regarding equity of redemption?
- clauses that prevent redemption altogether
- clauses the do not allow postponement to such a degree that the right to redeem becomes illusory
- often does not allow postponement of redemption on leasehold estates (depreciating assets)
What are unconscionable terms in mortgage agreements?
Particularly high interest rates that may be declared void.
When may the court strike out clauses regarding mortgages?
- if they go against the right to redeem
- if they are options to purchase
- if they provide for collateral advantages
- if they are unconscionable terms
what is an option to purchase?
these are clauses that enable a lender to purchase mortgaged property
When are options to purchase viewed more favourably by the courts?
If they are not granted at the same time as the mortgage or are viewed as being entirely separate transactions
What is an example of a collateral advantage
Solus ties
When are collateral advantages usually struck out?
If they exceed the mortgage term
