Module 2 · Chapter 4

The Land: A Legal Mortgage

Land is the security a bank likes best. This chapter shows how the Bank took a legal mortgage over the factory: the search, the registration, the insurance and the limit on letting.

≈ 11 min read 8-question test

In this chapter

  • What a legal mortgage over the factory gives the Bank, and what it covers
  • How a priority search holds the Bank's place until registration
  • What the Company gave up: the insurance money and the freedom to let

4.1A legal mortgage in one paragraph

The Company owns its factory as a freehold (outright ownership). Clause 3.1 gives the Bank a charge by way of legal mortgage over it. The Bank gets the rights of a lender holding a mortgage, above all the right to sell the land if the loan goes bad. The charge becomes a legal mortgage only when HM Land Registry enters it on the factory's title.

Key point

The Company keeps the factory, and the Bank holds the right to sell it. That right may be used only after a default and a written notice. Until then the Company runs the factory as before, within the limits of the mortgage.

Also in this chapter

  1. Why the Bank wanted the factory
  2. What the mortgage covers
  3. The search that holds the Bank's place
  4. Why the order on the register decides
  5. The insurance money goes to the Bank
  6. No leases without the Bank's consent
  7. Your job

Preview

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