Exam Revision - Land Law - Mortgages (Graduate Diploma in Law/ LLB Law)
35 views 0 purchase
Course
Land Law (GRADUATEDIPLOMAINLAW)
Institution
University Of Central Lancashire
Notes drafted by GDL Graduate with Distinction. Also suitable for LLB Law.
8 page document on Land Law topic of Mortgages.
Includes definition of puisne mortgage by Santley v Wilde, Formalities of a mortgage including legal and equitable, Rights of the mortgagor at law and in equity, clogs ...
LAND:
MORTGAGES
Introduction
Borrower = mortgagor, lender = mortgagee
Mortgage = a charge by deed by way of legal mortgage (s.85 and 87 LPA 1925)
Proprietary interest in land given by the mortgagor (land owner) as security for a
loan.
Land can be mortgaged several times = second mortgage: Puisne mortgage
“a conveyance of land… as security for the payment of a debt or the
discharge of some other obligation” (Santley v Wilde)
FORMALITIES
Legal Mortgages
Capable of being legal after 1st January 1926 under s.1(2)(c) LPA 1925
Must be created by deed (s.52(1) LPA 1925) i.e. signed, witnessed, dated and
headed a deed (s.1 LP(MP)A 1989)
S.4 LRA 2002 if its mortgage in relation for unregistered land (triggering event,
triggers the land to be registered)
Two ways to create a legal mortgage s.85 LPA 1925:
1. By demise (lease)
o For term of years absolute subject to a cessor on redemption (usually 3,000
years). Legal right to redeem expires on contractual ‘date for redemption’.
o S.23(1)(a) LRA 2002 now prohibits the creation of mortgages by demise for
land with registered title
2. A charge over the property = security right, meaning if the mortgagor goes
bankrupt and can’t repay mortgagee gets priority in bankruptcy by having to
resort to the property subject to the charge (i.e. the right to sell it) and use the
proceed towards repayment.
1
, o Not a legal estate but s.87(1) LPA 1925 “the mortgage shall have the
same protection, powers and remedies as if a mortgage term of 3,000
years… had been thereby created in favour of the mortgagee”
Legal mortgage must be entered on the charges register of the table in order to be
protected against a purchaser for valuable consideration (s.27(2)(f) LRA 2002)
If not registered = equitable mortgage
Equitable Mortgages
Created when:
1. Mortgage is being granted over a mere equitable interest e.g. a beneficial
interest under a trust of land. Must be in writing and satisfy s.53(1)(c) LPA
United1925
Bank of Kuwait v Sahib – Equitable mortgages of a legal estate. Contract must be in
writing, signed by both parties and record all the agreed terms in order to create a valid
equitable mortgage
De Serville v Argee Ltd – Exchange of letters does not satisfy s.2 LP(MP)A 1989 for contract
2. Formalities for creating a legal mortgage not been met, failed attempt amounts
to a contract: s.2 LP(MP)A 1989
1. In writing
2. Signed by both parties Equitable mortgage
3. Containing all agreed terms
3. Where the land is registered and the mortgage created has not been registered
as a charge at the Land Registry: s.27(2)(f) LRA 2002
4. The parties expressly create an equitable mortgage. Must be compliance with
s.53(1)(a) LPA 1925
RIGHTS OF THE MORTGAGOR
Mortgagor’s rights at law
Mortgagor has contractual right to redeem the mortgage on the date stated in the
mortgage contract; known as ‘legal date of redemption’
Little protection for mortgagor, if he failed to repay the loan on the date,
mortgagee entitled to keep the mortgagor’s land
2
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Handoeslaw. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $5.84. You're not tied to anything after your purchase.
