Chapter 26 Self-test questions

. The lender's inherent right of foreclosure explains the ease with which banks have been taking possession of and selling residential property in the recent recession.

True

False

. A legal chargee must go to court to obtain possession of the mortgaged property if the borrower defaults.

True

False

. A mortgagee will be restrained from getting possession except when it is sought _________ and reasonably for the purpose of enforcing the security and then only subject to such conditions as the court thinks fit to impose.

. Clearly, a lender can take possession of land, on default of payment, if it obtains a court order. Under what circumstances will a lender be entitled to take possession without such an order?
Please select all that apply.

The lender has written to the borrower, via registered mail, more than five times within five weeks but has received no response.

Where entry is refused, to remove the entry doorway.

The property is empty.

The borrower has no hope of paying the arrears and agrees to move out.

. In which of the following situations would the borrower be entitled to seek an adjournment to proceedings from the court, under s.36 of the Administration of Justice Act 1970?

A commercial premises which had a flat at the top at the time the mortgage was granted but which is now incorporated into the whole and used as an office. The lender is now seeking possession.

A commercial premises which had an office at the top at the time of the grant but which has since been used as a flat for the janitor. The lender is now seeking foreclosure.

A house used for housing students during the academic year but the lender seeks possession from the absentee landlord when the students are absent over the summer vacation. The lender sells the property.

A 30 hectare plot of ancient woodland, in one corner of which is a single roomed wooden hut, leased to a resident, ornithologist, research student. The lender seeks possession.

. Match the statutory section to the appropriate description.

LPA 1925, s.91

.

AJA 1970, s.36

.

AJA 1973, s.8

. AJA 1970, s.36, is not the sole restraint upon a legal charges right to possession.

False

True

. The sale by the lender vests title in the purchaser by ____________ the borrower's equity of redemption.

. Which of the following duties and liabilities accrue to the mortgagee when they exercise their power of sale?
Please select all that apply.

Duty to take reasonable care to obtain the true market value and act bona fide.

The lender is liable for the lack of care committed by its agents.

To sell as expeditiously as possible in order to repay the debt due before it incurs additional interest and charges.

To improve the property to obtain the best possible price.

. A lender must sell when market conditions are most favourable.

False

True

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