Mortgages Flashcards
(13 cards)
Palmer v Mortgage Service Fund plc
The mortgagee can take possession of the property but must act fairly towards the borrower
How does one create a mortgage?
By deed
s52(1) LPA 1925
s1 LPMPA 1989
Expressed by “way of legal mortgage” - s23(1) LRA 2002
How do you register a mortgage?
Section 27(1) and (2)(f) LRA 2002
This registration triggers section 29 LRA 2002
Mortgagee will usually enter a restriction into the register (section 40) which requires their consent to any disposition of the land during the lifetime of the mortgage
Mortgagee’s right to possession
Four-Maids Ltd v Dudley Marshall Properties
Immediate right to possession
Harman J “mortgagee may go into possession before the ink is dry on the mortgage”
Common law right to repossession
Ropaigealach v Barclays Bank
Common law right to take possession by peaceable entry without seeking a possession order from the court
Not applicable for a residential occupier but people not protected are trespassers, bare licensees etc
What are the protections against common law repossession?
Protection from Eviction Act 1977 section 1 - protects the residential occupier from being unlawfully removed
Criminal Law Act 1977 section 6 - cannot secure entry into a premises violently when there is a residential occupier
Pre-Action Protocol for Possession Claims based on Mortgage in respect of Residential Property - Paragraph 3.1
Needs to be used before a court
The aims of the protocol are to
a. Ensure lender and borrower act fairly and reasonably
b. encourage greater pre-action contact
c. encourage lenders to check who is in occupation of the property
Pre-Action Protocol for Possession Claims based on Mortgage in respect of Residential Property - paragraph 7.1
Needs to be used before a court
Starting a possession claim should be a last resort and must not normally be started unless all other reasonable attempts to resolve the situation have failed
Section 36 Administration of Justice Act 1970
“If a mortgage is charged on a dwelling-house, the court may adjourn the case, or stay or suspend execution of the judgment… if it appears to the court that… the mortgagor is likely to be able within a reasonable period to pay any sums due”
‘dwelling house’
protects residential borrowers but also includes mixed use properties
Bank of Scotland v Miller - nightclub and a flat
Action for possession
Must go to court
Cannot be through common law repossession
Ropaigealach v Barclays Bank
Pay any sums due
Does not include accelerated payments due to default
Only sums expected to fall due
Halifax Building Society v Clark
Calculating a reasonable period
Starts with the remaining term
Evans LJ relevant factors
- How much can a borrower reasonably afford to pay now and in the future?
- How long are the temporary difficulties likely to last?
- Reason for arrears?
- How much of the original term remains?
- What is the relevant contractual term? What type of mortgage is it?
- Should the court exercise its power to disregard accelerated payment provisions under section 8 AJA?
- Are there any reasons affecting the security?
