Chapter 13 Self-test questions

. In which case did Lindley MR famously deliver the classic definition of a mortgage as 'a conveyance of land . . . as security for the payment of a debt or the discharge of some other obligation for which it is given'? Select one of the following.

Street v Mountford (1985)

Santley v Wilde (1899)

Royal Bank of Scotland v Etridge (No. 2) (2001)

Stack v Dowden (2007)

. It is important to understand the key terminology in the law of mortgages. Which one of the following is correct?

The mortgagor is the party borrowing money; the mortgagee the party lending money.

The mortgagor is the party lending the money; the mortgagor the part borrowing money.

The mortgagor is the charge.

The mortgagee is the charger.

. The mortgagor—also known as the chargor or borrower—is the party granting the mortgage to the lender and not the other way round. True or false?

True

False

. The mortgage is actually the interest granted by the mortgagor to the mortgagee and not the money advanced. True or false?

True

False

. Which statutes are central to the regulation of the law of mortgages today? Select one of the following.

LPA 1925 and TOLATA 1996

LPA 1925 and LRA 2002

TOLATA 1996 and LRA 2002

LPA 1925 and Housing Act 1985

. Mortgages can be legal or equitable in nature. True or false?

True

False

. Today, in unregistered and registered land, what are the key statutory provisions governing the creation of a charge by way of legal mortgage? Select one of the following.

Section 65 of the LPA 1925 and s. 23 of the LRA 2002

Section 87 of the LPA 1925 and s. 23 of the LRA 2002

Section 86 of the LPA 1925 and s. 26 of the LRA 2002

Section 87 of the LPA 1925 and s. 26 of the LRA 2002

. Legal mortgages amount to conveyances of land and therefore must be created by deed but what is the relevant statutory provision here? Select one of the following.

Section 52 LPA 1925

Section 53 LPA 1925

Section 28 LRA 2002

Section 29 LRA 2002

. Mortgages can also be equitable in nature. Which one of the following does not describe a scenario in which an equitable mortgage can arise?

Mortgages of equitable interests.

Informal or defective legal mortgages.

Mortgages in circumstances of forgery.

Mortgages where there is no writing at all.

. An equitable charge is another form of equitable security but is much more formal and requires greater formality requirements for its creation. True or false?

True

False

. What is the equitable right to redeem? Select one of the following.

The equitable right to redeem refers to the contractual right to redeem the mortgage and is contained within the mortgage deed.

The equitable right to redeem no longer exists as regards mortgages today and is only of historical interest.

The equitable right to redeem refers to the right to repay the mortgage loan and get the property back unencumbered by any rights of the mortgagee.

The equitable right to redeem only applies to equitable charges and not to mortgages more broadly.

. Which one of the following is an example when a term of a mortgage may be void?

When a term of a mortgage purports to exclude or restrict the mortgagor's right to redeem.

When a term of a mortgage is, in the view of the mortgagor, onerous.

When a term of a mortgage has become difficult to perform.

When a term of a mortgage is, in the view of the court, unreasonable,

. Which one of the following statements accurately reflects the court's approach to terms in mortgages which confer collateral advantages on mortgagees?

Such terms will never be void.

Such terms will always be void.

Such terms will only be void having regard to the substance, the true character of the transaction, and the bargaining position of the parties.

Such terms can no longer be included in mortgage agreements.

. What is, today, the leading authority on the effect of undue influence on mortgages? Select one of the following.

Allcard v Skinner (1887)

BCCI v Aboody (1991)

Bank plc v O'Brien (1994)

Royal Bank of Scotland v Etridge (No. 2) (2001)

. In which important case did the court hold that where a joint legal mortgage is set aside on the grounds of undue influence, an equitable mortgage may arise which is binding on the wrongdoing party? Select one of the following.

TSB Bank v Camfield (1995)

Barclays Bank v Caplan (1998)

Dunbar Bank v Nadeem (1998)

First National Bank plc v Achampong (2003)

. Which one of the following is not a right enjoyed by a legal mortgagee?

The right to payment under the mortgage agreement.

The right to possession.

The right to unilaterally terminate the mortgage.

The power of sale.

. In which case did Harman J famously note that 'the mortgagee may go into possession before the ink is dry on the mortgage'? Select one of the following.

Four-Maids Ltd v Dudley Marshall (Properties) Ltd (1957)

Quennell v Maltby (1979)

Royal Bank of Scotland v Etridge (No. 2) (2001)

Cukurova Finance International Ltd v Alfa Telecom Turkey Ltd (2013)

. Which one of the following is not a duty placed on mortgagees?

A mortgagee seeking possession must do so bona fides.

A mortgagee seeking possession must do so reasonably to protect is rights.

A mortgagee taking possession is under a duty to account for any income received.

A mortgagee taking possession must do all it can to maximize income generation

. The court has a statutory jurisdiction to postpone orders for possession and possession proceedings where there is a mortgage of residential property but under which statutory provision? Select one of the following.

Section 8 of the Administration of Justice Act 1970

Section 36 of the Administration of Justice Act 1970

Section 8 of the Administration of Justice Act 1973

Section 36 of the Administration of Justice Act 1973

. Which one of the following is not a duty owed by a mortgagee in conducting the sale of mortgaged land?

A duty to pursue planning permission for the land.

A duty to obtain a fair and proper price.

A duty to act in good faith.

A duty to keep the property on the open market for a reasonable period.

. In registered land, which statutory provision governs the priority of legal registered charges? Select one of the following.

Section 2 LPA 1925

Section 27 LPA 1925

Section 48 of LRA 2002

Schedule 3 of the LRA 2002

. In registered land, under s. 29 of the LRA 2002, when will a registered legal charge take priority over any pre-existing interests burdening the land in question? Select one of the following.

When those pre-existing interests are not protected by way of entry of a notice and nor do they constitute overriding interests under Sch. 3.

In no circumstances as legal charges are subject to all pre-existing interest.

In every case as legal charges always have priority.

Only when a successful proprietary estoppel claim is made out.

. In registered land, how is the priority of an equitable mortgage over pre-existing interests burdening the land determined? Select one of the following.

By reference to s. 48 of the LRA 2002.

By reference to ss. 28 and 29 of the LRA 2002.

By reference to Sch. 3 of the LRA 2002.

By reference to the LCA 1972.

. In certain circumstances, the court is prepared to modify the priority rules of the LRA 2002 including where the court is satisfied that there has been implied or imputed consent to postpone a pre-existing interest to the mortgage. Which one of the following is not a case discussing implied or imputed consent to postpone?

Williams & Glyn's Bank v Boland (1981)

Bristol & West Building Society v Henning (1985)

Abbey National Building Society v Cann (1991)

Equity and Law Home Loans Ltd v Prestidge (1992)

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