LAND LAW

LAND LAW



LAND LAW

Q1 Bill bought a warehouse with registered freehold title. Part of the initial purchase money was lent by ABC Ltd secured by a mortgage over the warehouse.

Ans. Referring to the scenario what has to be taken in account is that Section 29 of the LRA 2002 states that the buyer of a freehold estate is able to buy the land free from all encumbrances except for registered charges, interests protected by notices on the register of the estate and interests under Schedule 3 of the act that override the disposition but are not registered. A mortgage is a property right which gives the mortgagee an interest in the mortgagor's property as security for the repayment of a debt. Land, by its nature, offers good security. It is permanent and generally holds or increases its value, subject to temporary falls in the property market. Financial institutions and other investors are prepared to make substantial loans at relatively low rates of interest to fund the purchase of houses, flats and commercial property precisely because the mortgage they get in return is good security for the loan. The mortgagee (the lender) is granted a mortgage in the land which the mortgagor (the borrower) is buying or already owns. That mortgage is an interest in the land which gives the lender the right to step in and enforce its security (usually by taking possession of the land and selling it) if the borrower cannot maintain the agreed terms for repayment and the loan is at risk.

Megabux cannot simply retake possession by force since this would almost inevitably involve the commission of a criminal offence such as those contrary to ss.5 and 6 of the Criminal Law Act 1977. Since the land in inquiry is a dwelling-house, s.36 of the Administration of Justice Act 1970 will supply an opportunity to get away an direct order for ownership if the circumstances are regarded to support it. The power of the mortgagee to deal the land will generally originate under an express term in the mortgage deed but in any event it is inferred into every mortgage made by deed by virtue of s.101(1)(i) of the Law of house proceed 1925. The power arises when the mortgage cash becomes due but it does not become exercisable until one of the conditions prescribed by s.103 of that Act has been contacted which are: The service of a notice requiring payment on the mortgagor and continuing default for three months thereafter; Some of the interest payable is at least two months in arrears; or there has been a breach of a covenant in the mortgage deed other than one relating to the payment of money. So far as preventing an order for possession is concerned, as in the decision of the Court of the court of appeal in Cheltenham & Gloucester Building Society v Norgan. 1996 This concerned a mortgage containing the standard terms that if any monthly installment should be in arrear ...