Repossession questioned by deeds not being signed

[applecart]

Hi Is It Me...just to explain...

 

Your lender has admitted selling the beneficial interest - the witness statement says - 'not yours'...you can prove...'yes, yours' too.....

 

where the letter makes ref to the Deed...it is making direct reference to the lenders purported 'legal interest'...that the lender purports to hold and relies to take possession of your friends house....any Judge should be able to 'pick-up' that what you are saying is:...

 

The 'legal interest' is 'apt to be set aside'....and the terms that say:'the charge by way of "legal Mortgage" can not simply be 'rectified' to cause the dispositon to be 'legal'....because not only are they void terms but they are included in a deed that itself is void and un-enforceable due to there being no execution by the lender....and your friend had no such statutory power to do so anyway....and should not be found to rubber stamp a possession in your friends case....not on the evidence before him.....if he does there would be justified grounds for an appeal imo.....

 

Apple

[bhall]

I hope the following (I am sorry to say long post) is of help to IS IT ME? and to the other contributors / readers of this thread. I apologise in advance if the posting of the correct legal status of a legal mortgage is considered to be a distraction by anyone

 

Hi UNRAM/WP/Is It Me...

 

I am conscious that you guys have more or less concluded the understanding for yourselves and I would just like to add to your knowledge further, to be sure we are all on the same page...so’s to speak.......by saying:

 

When you sign the deed, you DO grant a mortgage by demise...the words/term used to grant a mortgage by demise are “legal mortgage” (the deed says ‘charge by way of “legal mortgage”)

“legal mortgage” is defined in the LPA 1925 s. (xvi) as: “legal mortgage” means a mortgage by demise or subdemise or a charge by way of legal mortgage

 

Like I said....and I' sure you guys are by now aware...the Borrower has no power to create a 'legal mortgage; because to do so would be to be the same as granting a 'mortgage by demise'

 

Apple

 

From the above -

 

“legal mortgage” is defined in the LPA 1925 s. (xvi) as: “legal mortgage” means a mortgage by demise or subdemise or a charge by way of legal mortgage

 

The word or in the extract highlighted in red, would appear to have been overlooked.

 

http://www.legislation.gov.uk/ukpga/Geo5/15-16/20/section/205

 

s.205 of the LPA 1925 states:

 

“Mortgage” includes any charge or lien on any property for securing money or money’s worth; “legal mortgage” means a mortgage by demise or subdemise or a charge by way of legal mortgage

 

A legal mortgage, if the above is not clear meant

 

1) a mortgage by demise or

2) a mortgage by subdemise or

3) a charge by way of legal mortgage

 

A legal mortgage could have been any one of the three different types of legal mortgage.

 

They are after all different. A deed that grants a mortgage by demise, is worded differently to a deed that grants a charge by legal mortgage (as explained below)

 

The deed in dispute, as I understand clearly confirms that it does not grant either a mortgage by demise or a mortgage by subdemise but it states that it grants a charge by legal mortgage. This in itself confirms that the deed does not grant either a mortgage by demise or a mortgage by subdemise.

 

A borrower could prior to the LRA 2002 grant either a mortgage by demise, a mortgage by subdemise or a charge by way of legal mortgage.

 

The implementation of the LRA 2002 only made one change to the above (as confirmed below)

 

s.23 (1a) made it no longer possible for a borrower to grant a mortgage by either demise or subdemise, meaning it is now only possible (if the land is registered) for the borrower to grant a charge by way of legal mortgage.

 

http://www.legislation.gov.uk/ukpga/2002/9/section/23

 

23 Owner’s powers

 

(1) Owner’s powers in relation to a registered estate consist of—

 

(a) power to make a disposition of any kind permitted by the general law in relation to an interest of that description, other than a mortgage by demise or sub-demise, and

 

The explanatory notes for s.23 of the LRA 2002 state -

 

"This section states the unlimited powers of an owner. It makes one change to the current law. Under the existing law, there is a presumption that a registered charge takes effect as a charge by way of legal mortgage, unless there is clear provision to the contrary, or it is made or takes effect as a mortgage by demise or sub-demise.

 

Mortgages by demise or sub-demise are now in practice obsolete, because of the advantages of a charge (that enables freeholds and leaseholds to be made the subject of a single charge rather than separate demises or sub-demises; the grant of a charge of a lease is not thought to amount to a breach of the common-form covenant against subletting without the landlord’s consent; and the form of legal charge is short and simple). Subsection (1)(a) therefore abolishes them, with prospective effect."

 

Least we not forget s.87 of the LPA 1925 which has not been repealed by the LRA 2002 -

 

http://www.legislation.gov.uk/ukpga/Geo5/15-16/20/section/87

 

87 Charges by way of legal mortgage.

 

(1)Where a legal mortgage of land is created by a charge by deed expressed to be by way of legal mortgage, the mortgagee shall have the same protection, powers and remedies.(including the right to take proceedings to obtain possession from the occupiers and the persons in receipt of rents and profits, or any of them) as if—

 

(a)where the mortgage is a mortgage of an estate in fee simple, a mortgage term for three thousand years without impeachment of waste had been thereby created in favour of the mortgagee; and

 

(b)where the mortgage is a mortgage of a term of years absolute, a sub-term less by one day than the term vested in the mortgagor had been thereby created in favour of the mortgagee.

 

The LRA 2002 only abolished mortgages by demise or by sub demise - It did not abolish a charge by legal mortgage.

 

This may help to explain the difference between a mortgage by demise and a mortgage by legal charge -

 

http://www.101mortgage.co.uk/mortgage-by-legal-charge/

 

Mortgage by legal charge

 

In a mortgage by legal charge, the debtor remains the legal owner of the property, but the creditor gains sufficient rights over it to enable them to enforce their security, for instance by taking possession of the property or selling it......

 

...This type of mortgage has been the usual form of mortgage in England and Wales since 1925 and, under the Land Registration Act 2002, is now the only form permitted by law....

 

Mortgage by demise

 

In a mortgage by demise, the creditor owns the mortgaged property until the loan is repaid in full (“redeemed”). This kind of mortgage takes the form of a conveyance of the property to the creditor, with a condition that the property will be returned on redemption.

 

This older form of legal mortgage has been less common than a mortgage by legal charge in recent years and under the Land Registration Act 2002 is no longer available in the UK.

 

This may also help

 

https://www.lexisnexis.com/uk/lexispsl/property/document/393788/55KG-P261-F18C-4073/Creation%20and%20priority%20of%20mortgages%E2%80%94overview

"The legal charge (also known as a charge by way of legal mortgage) is now the only effective way of mortgaging land."

 

If not, may be something from the Government might help -

 

www.parliament.uk/briefing-papers/SN04837.pdf

 

1. A legal charge is the means by which lenders enforce their rights to a property
   
2. A primary mortgage will normally be secured by a registered first charge against the property
   
3. A charge secured on land (whether a first or second charge) can only be created by deed expressed to be by way of legal mortgage
   

This may also help to confirm the obvious

 

http://2getcredit.com/mortgage.html

 

Mortgage by demise

 

In a mortgage by demise, the mortgagee (the lender) becomes the owner of the mortgaged property until the loan is repaid or other mortgage obligation fulfilled in full, a process known as "redemption". This kind of mortgage takes the form of a conveyance of the property to the creditor, with a condition that the property will be returned on redemption.

 

Mortgages by demise were the original form of mortgage, and continue to be used in many jurisdictions, and in a small minority of states in the United States. Many other common law jurisdictions have either abolished or minimised the use of the mortgage by demise. For example, in England and Wales this type of mortgage is no longer available, by virtue of the Land Registration Act 2002.

 

Mortgage by legal charge

 

In a mortgage by legal charge or technically "a charge by deed expressed to be by way of legal mortgage", the debtor remains the legal owner of the property, but the creditor gains sufficient rights over it to enable them to enforce their security, such as a right to take possession of the property or sell it.

 

To protect the lender, a mortgage by legal charge is usually recorded in a public register. Since mortgage debt is often the largest debt owed by the debtor, banks and other mortgage lenders run title searches of the real estate property to make certain that there are no mortgages already registered on the debtor's property which might have higher priority. Tax liens, in some cases, will come ahead of mortgages. For this reason, if a borrower has delinquent property taxes, the bank will often pay them to prevent the lienholder from foreclosing and wiping out the mortgage.

 

This type of mortgage is most common in the United States and, since the Law of Property Act 1925, it has been the usual form of mortgage in England and Wales (it is now the only form – see above).

 

We must not also forget s.51 of the LRA 2002 -

 

http://www.legislation.gov.uk/ukpga/2002/9/section/51

 

51 Effect of completion by registration

 

On completion of the relevant registration requirements, a charge created by means of a registrable disposition of a registered estate has effect, if it would not otherwise do so, as a charge by deed by way of legal mortgage.

 

http://www.legislation.gov.uk/ukpga/2002/9/section/27

 

27 Dispositions required to be registered

 

(2)In the case of a registered estate, the following are the dispositions which are required to be completed by registration—

 

(f)the grant of a legal charge.

 

s.27 and s.51 of the LRA 2002 confirm that the granting of charge when registered takes effect as a a charge by deed by way of legal mortgage.

 

Any search of Google or even Apple's favorite source wikipedia will prove that a borrower can grant a charge by legal mortgage.

 

The charge by legal mortgage was introduced by the LPA 1925 and following the LRA 2002 making a mortgage by demise obsolete, is now the only (for registered land) type of legal mortgage remaining.

 

 

For the sake of your friends home IS IT ME? please make contact with Ell-en or other members of the site team with real knowledge and experience of possession proceedings.

 

Ben

 

 

 

‎

Edited August 12, 2013 by bhall

[UNRAM]

Apple,

 

Re bhalls presentation of demise/sub demise vs charge by way of legal mortgage.

 

In my case: I signed a deed declaring I charged the property by way of a legal mortgage with payment of all the money I have to pay under the (note: non-compliant, unsigned) mortgage conditions made with full title guarantee.

 

On the face of it, the deed's intention is fairly well defined and straightforward as a charge by way of a legal mortgage and bhall's distinction appears to hold water...

 

Which bit of my deeds declaration to create a charge by way of a legal mortgage created a mortgage by demise, or where/how was this implied if not written? Apologies if you have already been through this but IMO its worth running over it for clarity for myself and for other readers in the context of bhalls most recent post.

 

Note there is a also restriction in terms that no transfer or lease may be granted by the proprietor of the land can be registered without consent of the proprieter for the time being (the lender). Does this restriction imply the lender's ownership/possession?

 

Note also it says SIGNED AS A DEED, not executed, delivered as a deed...

[IS IT ME?]

Apple will be back later Monday and will do the letter then Ben has once again posted a book but again has not given any help at all , so thanks but no thanks Ben

[UNRAM]

bhall may be offering more help than appears at first glance... these points, and objections to apple's assertions will be raised at some point... better now in this thread... bhall is offering opportunities to gain further insight (and simplify/repeat explanations) of how/why a deed stating intention to create a charge by way of legal mortgage becomes a mortgage by demise (as is asserted by this thread).

 

bhall's latest literal interpretation of legislation suggest (s)he has a point and is IMO in need of further defence... i have a deed to create a charge by way of legal mortgage with full title guarantee - with restrictions...

I understand apple's assertion to be that the words on the deed not match the actuality and if this is so, then bhall's quotes are moot to the actual situation. Apple, please can you clarify the situation further.

Edited August 12, 2013 by UNRAM

[IS IT ME?]

I have all along been looking at this as well and must be doing some thing right for this to be there it is now

[bhall]

To support my previous comments in relation to s.23 -

 

http://www.legislation.gov.uk/ukpga/2002/9/section/23

 

23 Owner’s powers

 

(1)Owner’s powers in relation to a registered estate consist of—

(a)power to make a disposition of any kind permitted by the general law in relation to an interest of that description, other than a mortgage by demise or sub-demise, and

(b)power to charge the estate at law with the payment of money.

 

(2)Owner’s powers in relation to a registered charge consist of—

(a)power to make a disposition of any kind permitted by the general law in relation to an interest of that description, other than a legal sub-mortgage, and

(b)power to charge at law with the payment of money indebtedness secured by the registered charge.

 

(3)In subsection (2)(a), “legal sub-mortgage” means—

(a)a transfer by way of mortgage,

(b)a sub-mortgage by sub-demise, and

©a charge by way of legal mortgage.

 

 

http://www.practicalconveyancing.co.uk/content/view/7808/0/

 

Background:

 

A sub-mortgage is a mortgage of a mortgage. For example, A borrows £10,000 from B and mortgages his house to B as security for the loan. B then needs to borrow £1,000. B borrows the money from C and then mortgages the asset he has i.e. the mortgage of A’s house, to C as security for the loan.......

 

........Under the LRA 2002, the owner of a registered estate cannot create a mortgage by demise or sub-demise (section 23(1)(a)). The only way to create a legal mortgage is by a charge by way of legal mortgage (pursuant to sections 85(1) and 86(1) of the LPA 1925) or by charging the estate at law with the payment of money (section 23(1)(b) of the LRA 2002). When registered, a charge has effect, if it would not otherwise do so, as a charge by deed by way of legal mortgage (section 51 - equivalent to section 27(1) of the LRA 1925).

 

The proprietor of a registered charge cannot create a "legal sub-mortgage" i.e. a transfer by way of mortgage, a sub-mortgage by sub-demise or a charge by way of legal mortgage (sections 23(2)(a) and 23(3)). The proprietor does have the power to "charge at law with the payment of money indebtedness secured by the registered charge" (section 23(2)(b)). The registered proprietor of a subcharge has, in relation to the property subject to the principal charge, the same powers as the principal chargee (section 53).

 

If the provisions of the LRA 2002 had applied in this case, it is submitted that the principal mortgagee would still have had the right to take possession of the property because a registered principal charge will continue to operate as if the mortgagee had a term of years (pursuant to section 51 of the LRA 2002 and section 87(1) of the LPA 1925). On the assumption that the sub-charge was created pursuant to section 23(2)(b) of the LRA 2002, the sub-chargee will not be deemed to have a term of years under the LPA 1925. However, the subchargee should nevertheless have a right to possession of the property under section 53 of the LRA 2002.

 

As confirmed by the Charges register the proprietor of the registered charge is the lender and not the borrower.

 

s.23 (1) applies to the powers of the borrower as the owner of the legal estate and

s.23 (2) apples to the powers of the lender as the owner of the charge

 

A borrower can by law grant a charge by legal mortgage

 

If Is It Me? does not appreciate or welcome the clarification provided above, please let me know and as before I will delete my post.

 

To further evidence that s.23 (2) of the LRA 2002, applies to the owner of the registered charge (the lender) - I refer to an extract from Lords Hansard. The following is a record of discussions in the Lords Chamber about amendments to the LRA 2002 before it became law

 

http://www.publications.parliament.uk/pa/ld200102/ldhansrd/vo011030/text/11030-13.htm

 

"Amendment No. 27 deals with a related matter. Clause 23(2) lists the powers that an owner of a registered charge has to deal with that charge, which will no longer include the possibility of creating a mortgage by demise or sub-demise. The appropriate way of securing a mortgage over registered land is to create a charge. The Bill also simplifies the powers of the chargee to deal with his charge. After the Bill comes into force, the appropriate way to do that will be by way of sub-charge. The amendment would allow the chargee to create a charge by way of a legal mortgage over the charge as well by way of a sub-charge. That would add an unnecessary complication."

 

From the above:

 

23(2) lists the powers that an owner of a registered charge has to deal with that charge.

 

The Bill also simplifies the powers of the chargee to deal with his charge.

 

As can be shown by the land registry documentation the owner of the registered charge / the chargee is the lender.

 

 

 

Is It Me? Have you discussed possible defences to the lenders possession claim with Ell-en ? If not, it may be in your best interest too.

Edited August 12, 2013 by bhall

[applecart]

Ben, Ben, Ben……you've been at it again….

 

The owner’s powers belong to the Borrower…..FULL STOP …

 

Section 23 is to do with the Borrower as ‘OWNER’ and his/her powers of disposition…..

 

There is no power within it that asserts or intends that the Borrower has any power to create/grant a disposition by way of ‘demise’; ‘sub-demise’; sub-mortgage’or for the matter any intent of the legislator that ‘EFFECT’ should be given to any such disposition…

 

….. no matter that Ben may be persuading you to think differently….stay focused….you are already aware that Ben’s post are ‘word wrangling’…

 

Ben’s latest posts lead on the premise that the Borrower has a right to grant a ‘legal mortgage’….it is not the case….the Borrower only has power to grant a ‘mortgage’

 

Ben also says that the Owners Powers are to be construed as ‘split’ between the Borrower and the Lender – to say that the Power in relation to the Registered Charge belong to the Lender and the Power in relation to the Estate belongs to the Borrower….simply word play….ignore him

 

Notwithstanding the above; I do Thank Ben for kindly providing for us the definition of a ‘mortgage’ as found at section 205 of the LPA 1925….Keep your focus there and all will be just fine…. : )

 

 

Apple

[applecart]

"Is It Me? Have you discussed possible defences to the lenders possession claim with Ell-en ? If not, it may be in your best interest too"

 

Ben, I think that we all know that Ell-enn does a fantastic job.

 

Non of the issues that Ell-enn currently deals with have anything to do with the issues raised and addressed in this thread...not yet, as far as I know...so, if it's ok with you....we'll keep this thread as it is Thanks.......Separate and Different : )

 

Apple

[applecart]

I have all along been looking at this as well and must be doing some thing right for this to be there it is now

 

Hi Is It Me

 

Your'e on the right track..as youknow, this is your thread, I can't help but humour Ben - afterall, at one stage he led me to beleive that we would get married you know...we even had tea in the sun...two sugars!!!.... LOL

 

Apple

[applecart]

bhall may be offering more help than appears at first glance... these points, and objections to apple's assertions will be raised at some point... better now in this thread... bhall is offering opportunities to gain further insight (and simplify/repeat explanations) of how/why a deed stating intention to create a charge by way of legal mortgage becomes a mortgage by demise (as is asserted by this thread).

 

bhall's latest literal interpretation of legislation suggest (s)he has a point and is IMO in need of further defence... i have a deed to create a charge by way of legal mortgage with full title guarantee - with restrictions...

I understand apple's assertion to be that the words on the deed not match the actuality and if this is so, then bhall's quotes are moot to the actual situation. Apple, please can you clarify the situation further.

 

Of course....happy to oblige : )

 

Full title Guarantee....this means your disposition includes the whole of the legal estate - the restriction is there to ensure that your legal estate remains encumbered.... (LP(MP)Act 1994) until you repay the whole of the debt....in the meantime... your lender has possession of your legal estate and has taken your 'owner' powers as his own....

 

Charge by way of legal mortgage.....the words used have granted a sub-mortgage

 

The combined effect of the words 'full title guarantee' and 'charge by way of legal mortgage'.....has the effect of a disposition by demise

 

This thread contains more detailed info....so, no need for me to repeat it I don't think...

 

Ben's posts are indeed 'moot'.....but bare in mind....the 'moot' leads on the premise that you as a Borrower had power to dispose of your entire legal estate...you don't....it leads on the premise that the Owners Powers are split between you and the Lender...they aren't....so for what it was worth....Ben's attempt at mooting - if that can be said to be the intention - are and is wholly misguided...from first base

 

 

Apple

[applecart]

Apple will be back later Monday and will do the letter then Ben has once again posted a book but again has not given any help at all , so thanks but no thanks Ben

 

Is It Me,

 

You are welcome.....You may want to consider 'tightening' up the section of the letter below which currently states :

 

It is the case that the deed has not been executed by the Claimant, and terms of the charge are void and accordingly the Defendant fully expects that the Deed is apt to be struck out and the charge removed from the register.

 

and amend to say:

It is the case that the deed has not been executed by the Claimant and Schedule 2 Article 10 (2) of the Regulatory Reform (Execution of Deeds and Documents) Order 2005 removed any presumption of delivery on sight of the Defendants signature alone. The Defendant had no power to grant a 'legal mortgage' to give effect to a sub-mortgage within the meaning of the LRA section 23 (2)(a) or to grant a charge with 'full title guarantee' to give effect to a mortgage by demise within the meaning of the LP(MP)Act 1994 section 2 (3)(a) to encumber the Defendant's legal estate by way of the restriction.

 

In the event,it was the legislators intent that the Defendant remain in possession of the estate and all rights to possession of the property throughout the term of the intended security; in this case, the charging terms used are void within the substantiating applicable law and the Deed has not been delivered. Accordingly, the Defendant fully expects that the decision from the Property Chamber will find that the purported legal interest as relied on by the Claimant in a right to possession, will be set aside and accordingly; the charge removed from the register.

 

Try the above instead...or words to the same effect....just to 'tighten' and make it clearer where you are coming from in the court proceedings...the Judge should hopefully 'pick up' the legal position in your friends case easier and as to where you are coming from...I think the amended paragraphs will help avoid any unintended ambiguity...

 

Apple

[UNRAM]

Apple,

"Charge by way of legal mortgage ... the words used have granted a sub-mortgage"

Please can you explain how you have arrived at this association as it is not explicitly stated on the deed.

Edited August 12, 2013 by UNRAM

[UNRAM]

Hi UNRAM/WP/Is It Me...

 

I am conscious that you guys have more or less concluded the understanding for yourselves and I would just like to add to your knowledge further, to be sure we are all on the same page...so’s to speak.......by saying:

 

When you sign the deed, you DO grant a mortgage by demise...the words/term used to grant a mortgage by demise are “legal mortgage” (the deed says ‘charge by way of “legal mortgage”)

“legal mortgage” is defined in the LPA 1925 s. (xvi) as: “legal mortgage” means a mortgage by demise or subdemise or a charge by way of legal mortgage

 

Like I said....and I' sure you guys are by now aware...the Borrower has no power to create a 'legal mortgage; because to do so would be to be the same as granting a 'mortgage by demise'. This statement does not say they are the same thing... Hope this makes sense...

 

Apple

 

LPA1925 sec 205 xvi states that legal mortgage has two possible alternative definitions. The 'or' relationship here does not make the alternatives equivalent it makes them alternatives. Are you basing your assertion of equivalence on this clause?

 

If not I am assuming that the inclusion of the full title guarantee makes the legal mortgage a mortgage demise?

 

I am also still unclear why it is a sub-mortgage?

[applecart]

Apple,

"Charge by way of legal mortgage ... the words used have granted a sub-mortgage"

Please can you explain how you have arrived at this association as it is not explicitly stated on the deed.

 

Sure......

 

I have provided for you the definition of a "legal mortgage" - that's in the same place you will find the definition of a "mortgage" - they are different.....

 

......where Ben tells you that the definition of a mortgage by demise or sub demise defined is 'different' due to the definition at section 205 says: "or" a 'charge by way of legal mortgage.......this is not because it is 'different'........it is stated in that way because ......the definition of a 'charge by way of legal mortgage has the 'same effect' as a mortgage by demise or sub-demise.....so, because the 'charge by way of legal mortgage' has the 'same effect' it's definition is included alongside the definition of a mortgage by demise, or sub-demise....Not because a Borrower is 'allowed' or has power to grant such a disposition as Ben would have you believe....

 

Reference to the "sub-mortgage" is directly related to section 23 (2) (a)

 

(2)Owner’s powers in relation to a registered charge consist of—

(a)power to make a disposition of any kind permitted by the general law in relation to an interest of that description, other than a legal sub-mortgage, and

(b)power to charge at law with the payment of money indebtedness secured by the registered charge.

 

It is sub-section (3) that clearly advises the definition of a "legal sub-mortgage"......

 

(3)In subsection (2)(a), “legal sub-mortgage” means—

(a)a transfer by way of mortgage,

(b)a sub-mortgage by sub-demise, and

©a charge by way of legal mortgage.

 

Your Deed states the words 'a charge by way of legal mortgage.....the use of those words as shown on your deed....are not permitted "by the general Law"....because the section clearly tells you that the 'general permitted law' excludes.....'legal sub-mortgages' in the following way.... ..'.blah de blah...."Other than a Legal Sub-mortgage"

 

The Law then explicitly removes the ambiguity that Ben has tried to infer....so, that you can find for yourself that a "legal sub-mortgage"...is defined at sub-section ©......'a charge by way of legal mortgage' is included within the legal definition of a 'legal sub-mortgage' there......and....therefore is a term that is NOT PERMITTED BY THE GENERAL LAW....

 

so, when I say "Charge by way of legal mortgageicon ... the words used have granted a sub-mortgage".... I know exactly what it means...and now....so do you.... : )

 

Apple

[bhall]

Before being too quick to dismiss the information, I have previously posted may I suggest that you read 'The Law of Real Property By Robert Megarry, Charles Harpum, William Wade' - page 175 from part 3 onwards - more specifically from

"The scope of the owner's powers depends upon whether the owner is the proprietor of the registered proprietor of a registered estate or of a registered charge."

 

I feel the need to again draw attention to the use of the word or - meaning one or the other :-)This book goes on to detail, as I have previously in this thread, the powers of the owner of the estate and the powers of the owner of the charge.

 

If you continue to read the section in the book, you will also see that it states:

 

"(iii) Under the Law Registration Act 2002, the only way in which a legal chargee can create a sub-charge (in other words over the indebtedness secured by the legal charge) is to charge that indebtedness with the payment of the money."

 

As it is the borrower that grants the charge to the lender, the borrower is the chargor and the lender is the chargee.

 

The question of what is a sub-charge is also being overlooked. A sub-charge as previously posted is a mortgage of a mortgage.

 

http://www.practicalconveyancing.co.uk/content/view/7808/0/

 

"A sub-mortgage is a mortgage of a mortgage. For example, A borrows £10,000 from B and mortgages his house to B as security for the loan. B then needs to borrow £1,000. B borrows the money from C and then mortgages the asset he has i.e. the mortgage of A’s house, to C as security for the loan."

A sub mortgage is (or least was) a charge granted by the lender to a 3rd party. How can a borrower, grant a charge on a charge it has already given to the lender ?

 

and as previously posted -

 

The proprietor of a registered charge cannot create a "legal sub-mortgage" i.e. a transfer by way of mortgage, a sub-mortgage by sub-demise or a charge by way of legal mortgage (sections 23(2)(a) and 23(3)). The proprietor does have the power to "charge at law with the payment of money indebtedness secured by the registered charge" (section 23(2)(b)). The registered proprietor of a subcharge has, in relation to the property subject to the principal charge, the same powers as the principal chargee (section 53).

 

If the provisions of the LRA 2002 had applied in this case, it is submitted that the principal mortgagee would still have had the right to take possession of the property because a registered principal charge will continue to operate as if the mortgagee had a term of years (pursuant to section 51 of the LRA 2002 and section 87(1) of the LPA 1925). On the assumption that the sub-charge was created pursuant to section 23(2)(b) of the LRA 2002, the sub-chargee will not be deemed to have a term of years under the LPA 1925. However, the subchargee should nevertheless have a right to possession of the property under section 53 of the LRA 2002.

 

I have posted 3rd party sources that both evidence, support and prove the points I am making in relation to a charge by legal mortgage etc. Therefore, it would be misleading to imply that it is just bhall telling anyone anything, when I have provided independent 3rd party sources.

Edited August 12, 2013 by bhall

[bhall]

so, when I say "Charge by way of legal mortgageicon ... the words used have granted a sub-mortgage".... I know exactly what it means...and now....so do you.... : )

 

Apple

 

Then you must be fully aware that a sub mortgage is a mortgage of a mortgage. When a borrower grants a charge to the lender it is not a mortgage of a mortgage, just a mortgage. How can a mortgage granted to a lender by a borrower be classed as a sub mortgage ?

 

A borrower as you must be aware is unable to grant a mortgage on a mortgage they have given to the lender already.

[bhall]

......where Ben tells you that the definition of a mortgage by demise or sub demise defined is 'different' due to the definition at section 205 says: "or" a 'charge by way of legal mortgage.......this is not because it is 'different'........it is stated in that way because ......the definition of a 'charge by way of legal mortgage has the 'same effect' as a mortgage by demise or sub-demise.....so, because the 'charge by way of legal mortgage' has the 'same effect' it's definition is included alongside the definition of a mortgage by demise, or sub-demise....Not because a Borrower is 'allowed' or has power to grant such a disposition as Ben would have you believe....

 

It is true that a charge by legal mortgage has the same effect as a mortgage by demise. However, just because two things have the same effect it does not mean they are the same thing. The legislation is crystal clear that a legal mortgage can be a charge by way of legal mortgage.

 

When I am hungry, I could eat a beef burger from McDonalds or a beef burger from Burger King. They are both beef burgers and both will have the same effect of not making me hungry anymore. However, whilst both being beef burgers, a beef burger from McDonalds is different from a beef burger from Burger King.

 

Please excuse my rather simplistic analogy however, I think it is the only way I can make this distinction clear at this time.

[bhall]

Without wishing to state the obvious -

 

A deed for a charge by way of legal mortgage, does not involve any conveyance of the property to the lender, as a deed for a mortgage by demise / subdemise would.

 

A deed for a charge by way of legal mortgage grants sufficient rights over the property to the lender to enable them to enforce their security, for instance by taking possession of the property or selling it.

 

A charge by way of legal mortgage may have the same effect as a mortgage by demise (s.87 of the LPA 1925) but it does not convey the same thing to the lender - being the actual property.

 

87 Charges by way of legal mortgage.

 

(1)Where a legal mortgage of land is created by a charge by deed expressed to be by way of legal mortgage, the mortgagee shall have the same protection, powers and remedies (including the right to take proceedings to obtain possession from the occupiers and the persons in receipt of rents and profits, or any of them) as if

—

(a)where the mortgage is a mortgage of an estate in fee simple, a mortgage term for three thousand years without impeachment of waste had been thereby created in favour of the mortgagee; and

(b)where the mortgage is a mortgage of a term of years absolute, a sub-term less by one day than the term vested in the mortgagor had been thereby created in favour of the mortgagee.

 

The same effect you have spoken of is that both a charge by way of legal mortgage and a mortgage by demise grant the lender the same protection, powers and remedies. However, they convey different things to the lender.

Edited August 12, 2013 by bhall

[applecart]

LPA1925 sec 205 xvi states that legal mortgage has two possible alternative definitions. The 'or' relationship here does not make the alternatives equivalent it makes them alternatives. Are you basing your assertion of equivalence on this clause?

 

'Alternative'??....no, not 'alternative'....think more 'EFFECT'.... this is because, when you see the words 'Full Title Guarantee...that suggests that it is the whole of the Borrowers legal estate that is party to the disposition...see here the LP(MP)Act 1994 section 2:

 

2 Right to dispose and further assurance.

 

(1)If the disposition is expressed to be made with full title guarantee or with limited title guarantee there shall be implied the following covenants—

 

(a)that the person making the disposition has the right (with the concurrence of any other person conveying the property) to dispose of the property as he purports to, and

 

(b)that that person will at his own cost do all that he reasonably can to give the person to whom he disposes of the property the title he purports to give.

 

(2)The latter obligation includes—

 

(a)in relation to a disposition of an interest in land the title to which is registered, doing all that he reasonably can to ensure that the person to whom the disposition is made is entitled to be registered as proprietor with at least the class of title registered immediately before the disposition; and

 

(b)in relation to a disposition of an interest in land the title to which is required to be registered by virtue of the disposition, giving all reasonable assistance fully to establish to the satisfaction of the Chief Land Registrar the right of the person to whom the disposition is made to registration as proprietor.

 

(3)In the case of a disposition of an existing legal interest in land, the following presumptions apply, subject to the terms of the instrument, in ascertaining for the purposes of the covenants implied by this section what the person making the disposition purports to dispose of—

(a)where the title to the interest is registered, it shall be presumed that the disposition is of the whole of that interest;

(b)where the title to the interest is not registered, then—

(i)if it appears from the instrument that the interest is a leasehold interest, it shall be presumed that the disposition is of the property for the unexpired portion of the term of years created by the lease; and

(ii)in any other case, it shall be presumed that what is disposed of is the fee simple.

 

 

If not I am assuming that the inclusion of the full title guarantee makes the legal mortgage a mortgage demise?

 

That's right....the inclusion of the words 'full title guarantee' combined with the words 'legal mortgage' and the definitions that apply to them......have the SAME EFFECT as a 'MORTGAGE BY DEMISE....by jove, I believe you've got it : )

 

I am also still unclear why it is a sub-mortgage?

 

The 'Sub-Mortgage' is to do with your powers of disposition in relation to registered charges...there are 2 places on the title that HMLR can make 'entries'.....either in the 'proprietorship' section or the 'charges' section

 

Anything entered by HMLR in the 'Proprietorship' section encumbers your LEGAL power and rights to charge the legal estate - that's them there 'restrictions' that we see....

 

And..... anything in the 'charges' section is intended to secure any indebtedness - the only 'permitted power within the general law is stated within the provision of the LRA section 23 (2)(b):

 

(b)power to charge at law with the payment of money indebtedness secured by the registered charge.

 

let's say you owe a creditor money....you do not pay..lets say the creditor wants to 'secure' payment of that debt..... the creditor has to make an application to court for a 'charge' to be registered on your title to secure the debt..now, because that creditor has not obtained a signed document from you that says he can go ahead and charge your title..(ie...no 'approved' charge document or CH1) he does not have your 'consent'...however, if the creditors application is successful.....the entry will and should only be made in the 'charges' section of your title.....it should not ever be entered in the 'Proprietorship' section..and is not intended to be entered there...it is a debt....you have power to secure debt without encumbering your legal estate....you can object...but generally if the court grants it...then, that is where it will be entered..... he would then have to apply to court to enforce the debt as secured against your property.....you can defend it.....

 

Your Lender...is different....he obtains your consent to a charge being entered on your title before he gives you a loan/mortgage....he secures the debt before he even gives you the money....non the less it is still a debt...it is entered in the 'charges' section of your title...in other words, the lender did not have to make an application to court for the charge to be entered there....he essentially gained your prior consent.......in reliance of which....HMLR will enter the charge on an application to them without an order of the court...either due to a CH1 form or in the lenders 'approved' form as granted by HMLR...HMLR are only supposed to do so; so long as there is a valid charging clause and the charge meets it other criteria..After all; HMLR 'guarantee' that they will only register charges that include 'valid' charging clauses...We all rely that we can rely that HMLR will be diligent to ensure that this will always be the case......the guarantee is backed by the Law to say that if HMLR have by mistake accepted an invalid charging clause ...then they will indemnify the innocent party......in these cases....HMLR have been found to be entering 'legal sub mortgages' on Borrowers titles...at a time when since 2002...such terms are no longer 'valid' .....

 

Now....the difference is this....because any other creditors charge is not directly related to a 'land transaction'.....it does not matter that the document used is not signed by the Borrower... in fact, if all a lender wanted to do is the same as any other creditor...it could have done so....it chose instead to create a legal mortgage......it forgot that the statutory protections and limited powers of the Borrower that came into force to limit the Borrowers power......however...despite this.....the fact is......your lenders debt and subsequent charge directly relates to a land transaction...it acquired its charge 'extra judicially'....The Law says it must be by deed.....It must conform with the LPA 1925 section 52... that is:

 

"All conveyances of land or of any interest therein are void for the purpose of conveying or creating a legal estate unless made by deed."

 

So, as you know....your signature is stated as signed 'by deed'....and the document is headed up as a 'deed'....however; a 'deed'...must also be signed by both lender and borrower...it is a speciality contract and must meet other legal formalities for its validity....

 

I have already pointed you to the sections that apply to the signature of the Borrower and that of the Lender....

 

...convoluted....yes....but necessary....because you cannot circumvent UK Law due to commercial convenience (Guargillo)... for whilst it is ok...for HMLR to make an entry on the charges register of your title....it is not ok...that they portray to the world at large that it is valid for other purposes ----- if there is not a 'valid' charging clause contained within it.....then the charging clause is void

 

and....if it has not been executed by the lender....then it is a void all together...its terms and the document as a whole... it is apt to be set aside and the charge apt to be removed......

 

The 'invalid' charging clause is the one that gives effect to a 'legal sub-mortgage'......a 'legal sub-mortgage' is in evidence when you see the words 'charge by way of legal mortgage'.....as defined by the LRA section 23 (3) ©...

 

"(3)In subsection (2)(a), “legal sub-mortgage” means—

(a)a transfer by way of mortgage,

(b)a sub-mortgage by sub-demise, and

©a charge by way of legal mortgage."

 

So, it is a 'sub-mortgage' or better stated a 'legal sub-mortgage'..... because the words used state 'a charge by way of legal mortgage'.....

 

It would of course have an all together different meaning, if the word 'legal' was not included.... for then... it would say 'a charge by way of mortgage'......it would then be saying to the world at large... that it provides as the legislator intended within the provision and definition of a "mortgage" as provided for within the LPA 1925 section (vxi):

 

“Mortgage” includes any charge or lien on any property for securing money or money’s worth;

 

This is not to say that a Judge will not look to see what he can do to grant possession... far from it... he has much the same power as the Property Chamber....he can order that the word 'legal' be removed where there is a default...to effect a possession in favor of the lender as protected by the 'security'........however, before he does so.....the Judge would also have to take into account that the deed is void for want of execution by the lender....he cannot make the lender execute a deed...just so that he can give him possession...there is no presumption of delivery on sight of the borrowers signature alone......he also has to take into account the sale in Is It Me's friends case.... that occurred off the back of the un-executed deed....the Judge has no power to circumvent the law - he has power to enforce it....and the power does not extend to causing a document to be 'delivered' when the evidence in front of him clearly shows that it has not been......The Judge cannot circumvent the Law ....and I can't see that any credible Judge would even consider doing so in any shape, way or form.....to do so would bring our entire judiciary system in to disrepute....totally unthinkable.....

 

so.....hopefully now...you have a fuller explanation..... : )

 

If you still don't understand...just 'shout'....

 

Apple

[applecart]

Without wishing to state the obvious -

 

A deed for a charge by way of legal mortgage, does not involve any conveyance of the property to the lender, as a deed for a mortgage by demise / subdemise would.

 

A deed for a charge by way of legal mortgage grants sufficient rights over the property to the lender to enable them to enforce their security, for instance by taking possession of the property or selling it.

 

A charge by way of legal mortgage may have the same effect as a mortgage by demise (s.87 of the LPA 1925) but it does not convey the same thing to the lender - being the actual property.

 

87 Charges by way of legal mortgage.

 

(1)Where a legal mortgage of land is created by a charge by deed expressed to be by way of legal mortgage, the mortgagee shall have the same protection, powers and remedies (including the right to take proceedings to obtain possession from the occupiers and the persons in receipt of rents and profits, or any of them) as if

—

(a)where the mortgage is a mortgage of an estate in fee simple, a mortgage term for three thousand years without impeachment of waste had been thereby created in favour of the mortgagee; and

(b)where the mortgage is a mortgage of a term of years absolute, a sub-term less by one day than the term vested in the mortgagor had been thereby created in favour of the mortgagee.

 

The same effect you have spoken of is that both a charge by way of legal mortgage and a mortgage by demise grant the lender the same protection, powers and remedies. However, they convey different things to the lender.

 

 

aaah Bless you, you poor misguided gorgeous being : )

 

Apple

[applecart]

Before being too quick to dismiss the information, I have previously posted may I suggest that you read 'The Law of Real Property By Robert Megarry, Charles Harpum, William Wade' - page 175 from part 3 onwards - more specifically from

"The scope of the owner's powers depends upon whether the owner is the proprietor of the registered proprietor of a registered estate or of a registered charge."

 

I feel the need to again draw attention to the use of the word or - meaning one or the other :-)This book goes on to detail, as I have previously in this thread, the powers of the owner of the estate and the powers of the owner of the charge.

 

If you continue to read the section in the book, you will also see that it states:

 

"(iii) Under the Law Registration Act 2002, the only way in which a legal chargee can create a sub-charge (in other words over the indebtedness secured by the legal charge) is to charge that indebtedness with the payment of the money."

 

As it is the borrower that grants the charge to the lender, the borrower is the chargor and the lender is the chargee.

 

The question of what is a sub-charge is also being overlooked. A sub-charge as previously posted is a mortgage of a mortgage.

 

http://www.practicalconveyancing.co.uk/content/view/7808/0/

 

"A sub-mortgage is a mortgage of a mortgage. For example, A borrows £10,000 from B and mortgages his house to B as security for the loan. B then needs to borrow £1,000. B borrows the money from C and then mortgages the asset he has i.e. the mortgage of A’s house, to C as security for the loan."

A sub mortgage is (or least was) a charge granted by the lender to a 3rd party. How can a borrower, grant a charge on a charge it has already given to the lender ?

 

and as previously posted -

 

The proprietor of a registered charge cannot create a "legal sub-mortgage" i.e. a transfer by way of mortgage, a sub-mortgage by sub-demise or a charge by way of legal mortgage (sections 23(2)(a) and 23(3)). The proprietor does have the power to "charge at law with the payment of money indebtedness secured by the registered charge" (section 23(2)(b)). The registered proprietor of a subcharge has, in relation to the property subject to the principal charge, the same powers as the principal chargee (section 53).

 

If the provisions of the LRA 2002 had applied in this case, it is submitted that the principal mortgagee would still have had the right to take possession of the property because a registered principal charge will continue to operate as if the mortgagee had a term of years (pursuant to section 51 of the LRA 2002 and section 87(1) of the LPA 1925). On the assumption that the sub-charge was created pursuant to section 23(2)(b) of the LRA 2002, the sub-chargee will not be deemed to have a term of years under the LPA 1925. However, the subchargee should nevertheless have a right to possession of the property under section 53 of the LRA 2002.

 

I have posted 3rd party sources that both evidence, support and prove the points I am making in relation to a charge by legal mortgage etc. Therefore, it would be misleading to imply that it is just bhall telling anyone anything, when I have provided independent 3rd party sources.

 

eeeerm Ben... who is the 'owner' of first instance? Is it not the Borrower??

 

At which point do we find that the Lender can be 'said' to be owner Ben??? Is it not AFTER the Borrower signs the Deed???

 

Is the Lender who exercising 'owners' powers doing so legally Ben??? or is he doing so because HMLR have accepted invalid charging clauses as valid?? when the law removed any power for the Borrower to confer or for HMLR to give effect to any such power in the Lender????

 

Do you assert that an un-executed deed grants ownership powers to the lender??? that's not what the Law says Ben....

 

eeerm...sorry Ben..... there is no need to take any notice of the information that you post ....it is dismissed...... : )

 

Apple

[applecart]

Swiftly moving on...

 

Why is it that a Judge will grant a possession of your property...well... you know that there 'restriction' we spoke of sitting in your 'proprietor' section..... remember that the Law says that as a Owner - you as a Borrower have the permitted right within the provision of LRA section 23 (1) (b) to encumber your estate with:

 

(b)power to charge the estate at law with the payment of money.

 

The effect of this would mean that the Lender has been granted a legal right to possession of the property itself...eeerm not only would no borrower intend to do that ....for crying out loud... that's where the family live... his kids... his dog... his garden shed.... why on earth would he look to risk the roof over their heads.... the legislator respects borrowers...

 

The legislator says..... to grant possession of the roof over the head of your family, dog, and garden shed is not 'permitted within the general law'.......in fact, the only power a Borrower has to charge that legal estate is if it is to do with the payment of money.....

 

(b)power to charge the estate at law with the payment of money.

 

the legislator says it is not permitted within the general law for any Borrower to charge the roof (the legal estate) over the family;s. dogs and garden shed by way of demise or sub diemise......

 

any words contained in an invalid charging clause that seeks to do so...is not permitted......

 

there is no intent by any Borrower or the legislator for a finding that it should at any time be inferred, or acted upon to remove the possession of the legal estate out of the possession of the Borrower, his family, his dog, or his garden shed.....

 

Any attempt to do so is legally defended by the RRO 2005 and section 23 etc..

 

 

Apple

[UNRAM]

Thank you for your explanation. Is there a standard procedure to determine if a mortgage (with an MD reference on the deed) has been securitsed by a lender? Standard docs/formats?

Edited August 12, 2013 by UNRAM

[applecart]

Thank you for your explanation. Is there a standard procedure to determine if a mortgage (with an MD reference on the deed) has been securitsed by a lender? Standard docs/formats?

 

You are welcome : )

 

I am not sure, why you are asking the question....I could put two and two together - but.... I prefer that you tell me why you ask this question? and, if there was such a 'format' etc.... what purpose do you think it will serve???

 

Your reply will assist me direct the response on point.....

 

Apple