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    Hey guys, could anyone help me by providing a summary of the enforcement of third party rights against the mortgagee.

    If the mortgagor has defaulted on the mortgage, the mortgagee will usually seek to recover the money through sale of the property. It will be hard for him to do so however, if other people have rights and are occupying the land.

    When will the other people who have rights/occupying the land bind the mortgagee and not allow the mortgagee to possess/sell the land?

    Thanks
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    (Original post by jaydeejade)
    Hey guys, could anyone help me by providing a summary of the enforcement of third party rights against the mortgagee.

    If the mortgagor has defaulted on the mortgage, the mortgagee will usually seek to recover the money through sale of the property. It will be hard for him to do so however, if other people have rights and are occupying the land.

    When will the other people who have rights/occupying the land bind the mortgagee and not allow the mortgagee to possess/sell the land?

    Thanks
    It depends on the rights. Generally, we would be talking about equitable interests? If so, the mortgagee is entitled to repossess and will appoint a trustee to overreach that interest.


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    Well, to be honest, the best place to find this kind of thing is in a book.

    I wouldn't usually bother doing this, but, since typing some stuff out kinda counts as revision for me, I'll have a go at a summary:

    (Original post by LexiswasmyNexis)
    It depends on the rights. Generally, we would be talking about equitable interests? If so, the mortgagee is entitled to repossess and will appoint a trustee to overreach that interest.


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    If the beneficiary has a right to possession as part of his trust of land -- as will more or less any beneficiary in the domestic context -- then, if the beneficiary has priority over the mortgagee, the mortgagee will not be able to take advantage of its right to possession (unless it wants to sell without possession, which normally it won't). It will have to apply for a sale under s14 TOLATA. Broadly speaking, it will get the sale: see e.g. Bank of Ireland Home Mortgages v Bell, and First National Bank v Achampong; for commentary see e.g. Dixon, [2011] CLJ 579. There has been the odd decision in which the application has been refused, Mortgage Corporation v Shaire being the foremost example, but even there the only other solutions offered were ones in which the creditor was not in any way prejudiced.

    Should the creditor fail in its application for sale, its security might be useless, but it can always claim on its personal right against the debtor. It is not an abuse of process for the mortgagee to bankrupt the mortgagor, having failed in its application for sale, and to bring another application under s14 (see Alliance and Leicester v Slayford applying the clearly creditor favouring criteria in s335A Insolvency Act 1986, under which, after one year, the creditor will have its sale except in 'exceptional circumstances'. For definition of 'exceptional circumstances' see Re Citro. For ECHR compatibility, Barca v Mears and Ford v Alexander. For the criteria applying before the year of grace has elapsed, Everitt v Budhram.

    The mortgagee can seek possession and sale by the normal means if it has priority over the third party beneficiary. This will depend in some cases on overreaching rules, on which see the Boland line of cases (and, usefully, Congalen, "mortgagee powers rhetoric" [2006] MLR 583. Note that, wherever the legal title is acquired using the mortgage funds, the beneficiary, unless his or her right existed before the purchase, will not take priority: Abbey National v Cann. The reasoning here is that since the legal title is acquired with the mortgage funds, speaking realistically the mortgagor never has and is never intended to have title except for title subject to the mortgage. There is no scintilla temporis within which he has an unencumbered title. Therefore, no beneficial interest deriving from that title can take priority over the mortgagee's interest.

    Where a couple owns a house, and both consent to a mortgage (let's say they jointly own the legal title, and are holding for themselves as joint tenant beneficiaries), the mortgage will take effect against both their interests. (On replacement loans without consent see Equity and Law Home Loans v Prestidge.) Say, however, that the wife's consent was obtained by undue influence. The bank (unless they take steps mentioned below) has not obtained the wife's consent: the husband's attempt to mortgage will therefore take effect as an equitable charge against his interest: First National Securities Ltd v Hegerty. (On whether that will sever H's interest, see [2001] Conv 462.) In this case the mortgagee will have to go through the steps above. The mortgagee will not be affected by voidability of W's consent if it follows the steps in Royal Bank of Scotland v Etridge, which I'm not going to bother detailing.

    I might have gone a bit off track, but I hope that helps.
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    (Original post by TimmonaPortella)
    Well, to be honest, the best place to find this kind of thing is in a book.

    I wouldn't usually bother doing this, but, since typing some stuff out kinda counts as revision for me, I'll have a go at a summary:



    If the beneficiary has a right to possession as part of his trust of land -- as will more or less any beneficiary in the domestic context -- then, if the beneficiary has priority over the mortgagee, the mortgagee will not be able to take advantage of its right to possession (unless it wants to sell without possession, which normally it won't). It will have to apply for a sale under s14 TOLATA. Broadly speaking, it will get the sale: see e.g. Bank of Ireland Home Mortgages v Bell, and First National Bank v Achampong; for commentary see e.g. Dixon, [2011] CLJ 579. There has been the odd decision in which the application has been refused, Mortgage Corporation v Shaire being the foremost example, but even there the only other solutions offered were ones in which the creditor was not in any way prejudiced.

    Should the creditor fail in its application for sale, its security might be useless, but it can always claim on its personal right against the debtor. It is not an abuse of process for the mortgagee to bankrupt the mortgagor, having failed in its application for sale, and to bring another application under s14 (see Alliance and Leicester v Slayford applying the clearly creditor favouring criteria in s335A Insolvency Act 1986, under which, after one year, the creditor will have its sale except in 'exceptional circumstances'. For definition of 'exceptional circumstances' see Re Citro. For ECHR compatibility, Barca v Mears and Ford v Alexander. For the criteria applying before the year of grace has elapsed, Everitt v Budhram.

    The mortgagee can seek possession and sale by the normal means if it has priority over the third party beneficiary. This will depend in some cases on overreaching rules, on which see the Boland line of cases (and, usefully, Congalen, "mortgagee powers rhetoric" [2006] MLR 583. Note that, wherever the legal title is acquired using the mortgage funds, the beneficiary, unless his or her right existed before the purchase, will not take priority: Abbey National v Cann. The reasoning here is that since the legal title is acquired with the mortgage funds, speaking realistically the mortgagor never has and is never intended to have title except for title subject to the mortgage. There is no scintilla temporis within which he has an unencumbered title. Therefore, no beneficial interest deriving from that title can take priority over the mortgagee's interest.

    Where a couple owns a house, and both consent to a mortgage (let's say they jointly own the legal title, and are holding for themselves as joint tenant beneficiaries), the mortgage will take effect against both their interests. (On replacement loans without consent see Equity and Law Home Loans v Prestidge.) Say, however, that the wife's consent was obtained by undue influence. The bank (unless they take steps mentioned below) has not obtained the wife's consent: the husband's attempt to mortgage will therefore take effect as an equitable charge against his interest: First National Securities Ltd v Hegerty. (On whether that will sever H's interest, see [2001] Conv 462.) In this case the mortgagee will have to go through the steps above. The mortgagee will not be affected by voidability of W's consent if it follows the steps in Royal Bank of Scotland v Etridge, which I'm not going to bother detailing.

    I might have gone a bit off track, but I hope that helps.
    Think you quoted the wrong person. But well done for going into the kind of detail I could not be bothered to express .


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    (Original post by LexiswasmyNexis)
    Think you quoted the wrong person. But well done for going into the kind of detail I could not be bothered to express .


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    Actually, I quoted you because I was contradicting you. But thank you .
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    (Original post by TimmonaPortella)
    Actually, I quoted you because I was contradicting you. But thank you .
    True. Thanks again for correcting my laziness.


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    (Original post by TimmonaPortella)
    Well, to be honest, the best place to find this kind of thing is in a book.

    I wouldn't usually bother doing this, but, since typing some stuff out kinda counts as revision for me, I'll have a go at a summary:



    If the beneficiary has a right to possession as part of his trust of land -- as will more or less any beneficiary in the domestic context -- then, if the beneficiary has priority over the mortgagee, the mortgagee will not be able to take advantage of its right to possession (unless it wants to sell without possession, which normally it won't). It will have to apply for a sale under s14 TOLATA. Broadly speaking, it will get the sale: see e.g. Bank of Ireland Home Mortgages v Bell, and First National Bank v Achampong; for commentary see e.g. Dixon, [2011] CLJ 579. There has been the odd decision in which the application has been refused, Mortgage Corporation v Shaire being the foremost example, but even there the only other solutions offered were ones in which the creditor was not in any way prejudiced.

    Should the creditor fail in its application for sale, its security might be useless, but it can always claim on its personal right against the debtor. It is not an abuse of process for the mortgagee to bankrupt the mortgagor, having failed in its application for sale, and to bring another application under s14 (see Alliance and Leicester v Slayford applying the clearly creditor favouring criteria in s335A Insolvency Act 1986, under which, after one year, the creditor will have its sale except in 'exceptional circumstances'. For definition of 'exceptional circumstances' see Re Citro. For ECHR compatibility, Barca v Mears and Ford v Alexander. For the criteria applying before the year of grace has elapsed, Everitt v Budhram.

    The mortgagee can seek possession and sale by the normal means if it has priority over the third party beneficiary. This will depend in some cases on overreaching rules, on which see the Boland line of cases (and, usefully, Congalen, "mortgagee powers rhetoric" [2006] MLR 583. Note that, wherever the legal title is acquired using the mortgage funds, the beneficiary, unless his or her right existed before the purchase, will not take priority: Abbey National v Cann. The reasoning here is that since the legal title is acquired with the mortgage funds, speaking realistically the mortgagor never has and is never intended to have title except for title subject to the mortgage. There is no scintilla temporis within which he has an unencumbered title. Therefore, no beneficial interest deriving from that title can take priority over the mortgagee's interest.

    Where a couple owns a house, and both consent to a mortgage (let's say they jointly own the legal title, and are holding for themselves as joint tenant beneficiaries), the mortgage will take effect against both their interests. (On replacement loans without consent see Equity and Law Home Loans v Prestidge.) Say, however, that the wife's consent was obtained by undue influence. The bank (unless they take steps mentioned below) has not obtained the wife's consent: the husband's attempt to mortgage will therefore take effect as an equitable charge against his interest: First National Securities Ltd v Hegerty. (On whether that will sever H's interest, see [2001] Conv 462.) In this case the mortgagee will have to go through the steps above. The mortgagee will not be affected by voidability of W's consent if it follows the steps in Royal Bank of Scotland v Etridge, which I'm not going to bother detailing.

    I might have gone a bit off track, but I hope that helps.
    THANK YOU! So useful my textbook is very vague on this point.
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    (Original post by jaydeejade)
    THANK YOU! So useful my textbook is very vague on this point.
    No problem

    Which textbook are you using?
 
 
 
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