Land Law Assignment Example | Topics and Well Written Essays - 3000 words

Land Law - Assignment Example In order to acquire Valiant Villa, Ben and Ali agreed to approach Cantander bank to negotiate for a mortgage worth ? 125,000. Notably, Ben and Ali are freehold owners of the property. As such, this form of mortgage is an equitable mortgage since it is created after the legal owners of the property negotiated an instrument with Cantander bank that demonstrates a binding intention to create a security in favor of the mortgagee as opposed to legal mortgage where the mortgagee remains the legal owner of the property. However, Ali who is a model scout and agent was later on entered into a contractual agreement with Cait Miss- a high profile model where Ali agreed to fund her travel commitments, provide her with personal assistants and manage her portfolio work. The entire cost for this work was worth ? 110,000. Ali unduly influenced Ben to signed mortgage forms that lead to release of some security in Valiant Villa to cover the costs. Ideally, not all mortgages are utilized to buy propert y. As in this case, it is apparent that Ali who also worked as a model scout and agent committed himself to fund Cait. ... held that the mortgagee has unqualified right to repossession in the event that the mortgagor defaults in mortgage repayment.2 Cantander bank has the right to repossesses the villa and either uses it to generate income or sell it to recover unpaid mortgage amounts. The mortgagee has the right to decide when to sell the property since one a property is repossessed; the bank will not be holding it in fiduciary capacity. In China and South Sea Bank Ltd v Tan Soon Gin (1989), the court held that the mortgagee was not obliged to sell the property at any particular time and was as such entitled to act in its own interest.3 Surprisingly, Ben was not fully aware of the whole deal as he thought the second mortgage was a form of mortgage repackaging. Unluckily, Cait Miss was embroiled in a drug scandal which dented her image making it difficult to continue working in the model industry. Indeed Ali’s reputation as her agent was also shattered and could no longer earn revenues to cover mo rtgage repayments. Cantander bank is now seeking repossession of Valiant Villa which has indeed caught Ben unaware. Ben should understand that mortgage as a contact is primarily based on contract law in regard to formation, terms and termination. As such, a mortgage differs from an ordinary loan since the mortgagee has equal rights to the property as the mortgagor. A mortgage has a proprietary interest since a mortgagee has rights over the property and can therefore take possession of that property in the event of non compliance to the repayment schedule agreed. Ben should be aware that Cantander bank has right to repossess Valiant Villa as governed by section 85 of the Law of Property Act (LPA) 1925 and in common law and rights of sale under statute.4 In addition, it is clear that Ben signed