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Return to Complete Land Law Text, Cases, and Materials 6e Resources
Chapter 22 Self-test Questions
The creation of mortgages
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What was the normal method of creating a legal mortgage of a legal freehold estate prior to 1926?
The freehold estate was conveyed to the mortgagee, subject to a proviso for redemption, ie a provision that if the debt is repaid on a named date, the mortgagee will reconvey the land to the mortgagor.
correct
incorrect
The grant of a very long lease (e.g. 3,000 years) subject to a proviso for 'cesser on redemption', ie if the debt is repaid on a named date, the lease automatically terminates.
correct
incorrect
A charge by way of legal mortgage.
correct
incorrect
By the mortgagor executing a deed, saying something like 'I, Charles Farns-Burns, create a mortgage in favour of Bloggs' Bank over my farm, Highacres'.
correct
incorrect
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What was the normal method of creating a legal mortgage of a legal lease prior to 1926?
The leasehold estate was assigned to the mortgagee, subject to a proviso for re-assignment on redemption.
correct
incorrect
The grant of a sub-lease one day shorter than the lease being mortgaged, with a provision for 'cesser on redemption' if the debt is repaid on an agreed named date.
correct
incorrect
A charge by way of legal mortgage.
correct
incorrect
By the mortgagor executing a deed saying something like 'I, Algernon Postlethwaite, mortgage my 99-year lease of my home, High Mansion, to Brown's Bank Ltd.'
correct
incorrect
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What is the normal method of creating a legal mortgage of a legal freehold estate,
unregistered title
, after 1925?
The leasehold estate is conveyed to the mortgagee, subject to a proviso for redemption if the debt is repaid on a named date.
correct
incorrect
The grant of a very long lease (usually 3,000 years) subject to a proviso for 'cesser on redemption', ie if the debt is repaid on a named date the lease automatically terminates.
correct
incorrect
A charge by way of legal mortgage.
correct
incorrect
By the mortgagor executing a deed saying something like 'I, Sunil Patel, mortgage my house, 77 Threefountains Way, to the Southern Rock Bank'.
correct
incorrect
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John Smith is registered freehold proprietor of 37 Acacia Drive. He wants to create a legal mortgage in favour of National Eastminster Bank. What form should that mortgage take?
John creates a 3,000 year lease in favour of Eastminster Bank, with a proviso for cesser on redemption.
correct
incorrect
John transfers the freehold to Eastminster Bank, who become registered proprietor. They agree to re-transfer when the debt is repaid.
correct
incorrect
John executes a deed in which he says 'I, John Smith, create a mortgage in favour of National Eastminster Bank over my home, 37 Acacia Drive'.
correct
incorrect
John executes a mortgage by registered charge, using the current Land Registry form.
correct
incorrect
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In legal terms, what is meant by the phrase 'equity of redemption'?
The right to redeem the mortgage after the legal redemption date.
correct
incorrect
The sum total of all the mortgagor's rights with respect to the mortgaged land.
correct
incorrect
The right of the mortgagor to retain possession of the mortgaged land despite the existence of the mortgagee.
correct
incorrect
The right of the mortgagor to insist that if the mortgagee takes possession of the land, the mortgagor gets a good return from the land.
correct
incorrect
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In 1985, Stanley needed an overdraft. He went to see his bank manager with the title deeds to his fish-and-chip shop. He handed over the deeds 'as security', and the manager immediately authorised a £50,000 overdraft facility.
At the meeting between Stanley and the manager, nothing was put into writing. What was the (legal) result of this meeting?
There was no valid mortgage of any kind. The overdraft will be an unsecured debt, owed to the bank.
correct
incorrect
There is an immediately-valid equitable mortgage.
correct
incorrect
The mortgage is 'unenforceable', but will become enforceable (in effect validated) when Stanley signs a memorandum setting out the terms and conditions of the mortgage loan.
correct
incorrect
The mortgage is 'unenforceable', but will become enforceable (in effect validated) when the bank manager signs a memorandum setting out the terms and conditions of the mortgage loan.
correct
incorrect
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not completed
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Same facts as in the previous question (Question 7), except that the meeting between Stanley and the manager took place in 1994. What was the (legal) result of the 1994 meeting?
There was no valid mortgage of any kind. The overdraft will be an unsecured debt, owed to the bank.
correct
incorrect
There is an immediately valid equitable mortgage.
correct
incorrect
The mortgage is 'unenforceable', but will become enforceable (in effect validated) when Stanley signs a memorandum setting out the terms and conditions of the mortgage loan.
correct
incorrect
The mortgage is 'unenforceable', but will become enforceable (in effect validated) when the bank manager signs a memorandum setting out the terms and conditions of the mortgage loan.
correct
incorrect
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not completed
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Same facts as in Question 6 (a valid equitable mortgage by deposit of title deeds created in 1985). Is there anything the bank should do to ensure that its mortgage has priority over other transactions?
Hang on to the title deeds until the overdraft is paid off.
correct
incorrect
Register its mortgage as a general equitable charge on the computer at Plymouth.
correct
incorrect
Register its mortgage as an estate contract on the computer at Plymouth.
correct
incorrect
Protect its mortgage by entering a notice on the register of title.
correct
incorrect
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The Duke of Hertfordshire has a life interest under a trust of land of the vast Scratchworth Estate. Tim and Tom are the trustees and registered proprietors. The Duke is an enterprising young man who wants to mortgage his life interest to finance a business venture. Can he do this and, if so, how?
He cannot mortgage his interest.
correct
incorrect
He can mortgage his interest by assigning it to the mortgagee (lender), with a provision for re-assignment on redemption.
correct
incorrect
He can create a mortgage by registered charge.
correct
incorrect
He can create a mortgage by deposit of the land certificate.
correct
incorrect
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