Overview I Strictly speaking, a mortgage relates to unregistered title. Security over registered title and all post-2009 Act real property security must be by way of a “legal charge” over the borrower’s interest in the property concerned. However, the expression “mortgage” is more commonly used and it is used interchangeably and predominantly below, for convenience. A mortgage or charge creates […]
General The loan agreement and the mortgage deed together set out the legal rights and obligations of the lender and borrower. It is possible in principle, to have all matters comprised in the mortgage deed. However, convenience and practical considerations make a separate loan agreement and mortgage deed preferable. The loan agreement contains the key commercial terms of the loan. […]
Enforcement The mortgage or other security document generally provides that it is enforceable when the secured monies fall due. This will often be expressed to be on demand. Sometimes, a certain a number of days’ notice is required for the demand. More commonly, the sums due are immediately payable on demand. The restrictions set out in the Conveyancing Act, and […]
Overview The bulk of the Land Law and Conveyancing Reform Act came into force on 1st December 2009. It applies to mortgages / charges executed on and after that date. The Act represented the most significant change in property and mortgage law in over 125 years. It was not linked to the financial crisis. A number of late amendments were […]
Overview Priority issues arise where a property is mortgaged to more than one mortgagee. The earlier mortgagee usually has prior entitlement to the proceeds of sale of the security in the event of enforcement. The earlier mortgagee has primary rights to enforce the security. Generally, a lending institution will expect to have a first legal mortgage or charge pursuant to […]
Rights to Protect Security I A mortgagee has rights under the general law to protect its security. A court application may or may not be necessary or appropriate. There may be a number of options. In some cases, it will be possible to exercise rights without the assistance of the court. In other instances, court assistance will be necessary. Generally, […]
General There are various grounds on which a mortgage or charge may be invalidated or impaired. In some cases, the risk may arise as a result of certain matters which are covered by the legal due diligence or under the borrower’s solicitor’s certificate of title. In this case, there may be a right of compensation for professional negligence or breach […]