Mortgages

A charge by way of deed expressed by way of legal mortgage s 87

Either

A demise subject to provision for cessor on redemption, which under s 85(2) means there is no transfer of land, but a lease for 3000 years from the start of the mortgage

Either

A legal mortgage under a sub-lease at least 10 days shorter than the unexpired lease with provision for cessor

Or

A charge by way of deed expressed to be by way of legal mortgage

Freehold

Mortgages

Leasehold

Equitable mortgages

The rights of the mortgagor ie the equity of redemption which is the total bundle of rights and not just the equitable right to redeem

At common law

At the date given in the contract, neither earlier nor later

In equity

To redeem on reasonable terms, even if this is not the date in the contract

Creation

Redemption of a mortgage

the equitable right to redeem

the right to be free of any unconscionable or oppressive terms

the right to be free of collateral agreements favouring the mortgagee

the right to be free of undue influence

A contract to create a mortgage which must be in writing since s 2 LP (MP) A (1989)

An equitable charge

A mortgage by deposit of title deeds but this must be accompanied by a written contract satisfying s 2 LP (MP) A 1989United Bank of Kuwait v Sahib (1994)

An equitable mortgage of an equitable interest

The equity of redemption

This maxim means a mortgage can never be anything else, so anything which makes redemption illusory will be void. This means there can be:

Compare

No clogs or fetters impeding redemption

Clogs and fetters cases

No attempt to postpone redemption

and

Reeve v Lisle (1902)

Two agreements, a mortgage deed and an agreement giving the mortgagee an option to purchase

Held: Both agreements were valid

In Reeve the agreements were made 10 days apart so no clog on the equity of redemption

In Samuel the two agreements were made together so the mortgagor could have felt he would not have the mortgage if he did not accept the option agreement

Samuel v Jarrah Timber & Woodpaving Corp (1904)

Option to purchase stock at given price within 12 months. The loan payable with interest at 30 days notice on either side. The mortgagors gave notice to pay before 12 months up, so mortgagor sought to exercise the option

Held: Option void as a clog preventing redemption

The difference

The right to be free of oppressive or unconscionable terms Unconscionable does not mean unreasonable but morally reprehensible. A high interest rate is not necessarily oppressive. As the following cases illustrate it depends on the circumstances.