MORTGAGES
Formalities in creating a Rights of Mortgagor
Undue Influence (borrower) Priorities in Land
Mortgage
& Rights of Mortgagee
SUMMARY
Unregistered Registered Overreaching
1. What is the status of the Mortgage?
Land Land Legal or Equity?
If capital money (mortgage
Constructive Trust? money) is paid to 2 owners,
the Bank will overreach any
Protection of 1) Legal 2. Is the Mortgage obtained properly? interest in land owned by
Mortgage Any Undue Influence? the beneficiaries.
Mortgage Surety or Joint benefit situation?
Any advantage obtained by 3P?
2) Equitable
Mortgage 3. Are there any 3P interest that may Rights of mortgagor may be
interfere with Bank’s right over the postponed
Property?
3) Lack of Bristol West Building Society v
Priorities of Interest
Formalities Henning
Overreaching: Mortgage if paid to 2 trustees
may overreach beneficial interests - Bank paid purchase price to
only 1 party (husband)
4. Will the Bank actually be able to sell - But since wife knew that
property to recover Mortgage loan? most of purchase price was
Rights of Bank vs Borrower by way of Mortgage, her
Bank: Payment, Possession & Sale
potential ‘overriding
Payment: Negative Equity?
Possession: Will courts postpone?
interest’ does not take
Reasonable prospect, period & Bank’s interests priority over the Bank
Sale: Exercisable? Duties fulfilled?
Borrower: Equity of Redemption and
Possession
Collateral advantages:
Free from clogs and fetters?
Independent contractual terms?
Formalities in creating a Rights of Mortgagor
Undue Influence (borrower) Priorities in Land
Mortgage
& Rights of Mortgagee
SUMMARY
Unregistered Registered Overreaching
1. What is the status of the Mortgage?
Land Land Legal or Equity?
If capital money (mortgage
Constructive Trust? money) is paid to 2 owners,
the Bank will overreach any
Protection of 1) Legal 2. Is the Mortgage obtained properly? interest in land owned by
Mortgage Any Undue Influence? the beneficiaries.
Mortgage Surety or Joint benefit situation?
Any advantage obtained by 3P?
2) Equitable
Mortgage 3. Are there any 3P interest that may Rights of mortgagor may be
interfere with Bank’s right over the postponed
Property?
3) Lack of Bristol West Building Society v
Priorities of Interest
Formalities Henning
Overreaching: Mortgage if paid to 2 trustees
may overreach beneficial interests - Bank paid purchase price to
only 1 party (husband)
4. Will the Bank actually be able to sell - But since wife knew that
property to recover Mortgage loan? most of purchase price was
Rights of Bank vs Borrower by way of Mortgage, her
Bank: Payment, Possession & Sale
potential ‘overriding
Payment: Negative Equity?
Possession: Will courts postpone?
interest’ does not take
Reasonable prospect, period & Bank’s interests priority over the Bank
Sale: Exercisable? Duties fulfilled?
Borrower: Equity of Redemption and
Possession
Collateral advantages:
Free from clogs and fetters?
Independent contractual terms?
