SQE1 Land Law: Mortgages

Comprehensive vocabulary flashcards covering the key definitions, statutes, cases, and rules of mortgages under English Land Law for SQE1 preparation.

Mortgage

An interest over land (or charge) granted as security for a loan, enabling the lender to enforce its security if the borrower fails to repay.

Mortgagor

The borrower and owner of the estate in land who borrows money and grants a mortgage to the lender as security for the loan.

Mortgagee

The lender who holds the benefit of the mortgage, allowing them to enforce the security against the borrower upon default.

Charge by Way of Legal Mortgage

A legal interest in land capable of being legal under Section 1(2)(c) of the Law of Property Act 1925.

Legal Mortgage Formalities

The requirement that a mortgage over a legal estate must be created by deed under Section 52(1) LPA 1925 and satisfy the deed execution formalities in Section 1 LPMPA 1989.

Equitable Mortgage

A mortgage recognised in equity under Walsh v Lonsdale when formalities for a deed fail, or created over an equitable interest in writing and signed under Section 53(1) LPA 1925.

Four Maids Ltd v Dudley Marshall (Properties) Ltd

The authority confirming that a mortgagee has an inherent legal right to take possession 'before the ink is dry on the mortgage', without needing borrower default.

Section 6 Criminal Law Act 1977

Statutory rule establishing that a lender cannot use or threaten violence towards anyone known to be present on the property to obtain possession.

Ropaigealach v Barclays Bank Plc

Case deciding that a court order for possession is not legally required if the lender can peaceably take possession without breaching Section 6 of the Criminal Law Act 1977.

Residential Pre-action Protocol

A procedural requirement for residential mortgages compelling lenders and borrowers to communicate and attempt to resolve arrears before commencing court proceedings for possession.

Section 36 Administration of Justice Act 1970

Statutory provision allowing the court discretion to adjourn, suspend, or postpone possession of a dwelling-house if the mortgagor is likely to clear arrears within a reasonable period.

Cheltenham and Gloucester Building Society v Norgan

Authority establishing that a 'reasonable period' under Section 36 AJA 1970 can encompass the entire remaining term of the mortgage.

Strict Duty to Account

The equitable duty of a lender who takes physical possession of income-producing property to account for received sums and any income that should have been received with due diligence.

Arising of the Power of Sale

Under Section 101 LPA 1925, the power of sale arises once the mortgage money has become due, such as when the legal date for redemption has passed or an instalment is due.

Exercisability of the Power of Sale (s 103 LPA 1925)

The conditions required to exercise sale: 3 months unpaid following notice to repay, interest in arrears for 2 months, or breach of another non-payment mortgage term.

Section 104 Law of Property Act 1925

Statutory protection providing that a purchaser from a mortgagee only needs to verify that the power of sale exists and has arisen, not whether it has become exercisable.

Cuckmere Brick Co Ltd v Mutual Finance Co Ltd

Case confirming that a lender exercising a power of sale must act in good faith and take reasonable care to obtain the true market value of the property at the date of sale.

Equity of Redemption

The mortgagor's equitable right to recover property free of the mortgage upon full repayment, representing the balance of property value above the secured debt.

Section 105 Law of Property Act 1925

Statutory order of sale proceeds distribution: prior mortgages, sale expenses, the seller's mortgage debt, and surplus to those entitled to the equity of redemption.

Debt Action (Mortgages)

An action on the borrower's personal covenant to pay, limited under the Limitation Act 1980 to 6 years for recovery of interest and 12 years for recovery of capital.

Receiver (s 109 LPA 1925)

An individual appointed in writing by a mortgagee to demand and collect income from the mortgaged property and apply it to designated statutory outgoings.

Receiver as Agent of the Mortgagor

The rule under Section 109(2) LPA 1925 stating the receiver is deemed the borrower's agent, making the borrower solely responsible for their acts and insulating the lender from liability.

Foreclosure

A two-stage court remedy (Foreclosure Nisi, then Foreclosure Absolute) that extinguishes the equity of redemption and vests full title to the mortgaged property in the lender.

Section 91(2) Law of Property Act 1925

Statutory power allowing a court, upon application by any person interested in the mortgage money or equity of redemption, to order a judicial sale instead of foreclosure.