Charge by way of legal mortgage means a mortgage created by charge under which, by virtue of the M1Law of Property Act 1925, the mortgagee is to be treated as an estate owner in like manner as if a mortgage term by demise or subdemise were vested in him, and “ legal mortgage ” has the same meaning as in that Act; Sample 1 Sample 2 Sample 3
What is charge in mortgage?
What is mortgage conveyance?
Is a mortgage a legal charge?
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Legal charge | Practical Law
A legal mortgage over land. Sections 85 and 86 of the Law of Property Act 1925 specify how a legal mortgage over land can be created. Almost always, a legal mortgage is created by the method referred to in the Law of Property Act 1925 as "a charge by deed expressed to be by way of legal mortgage".
Practice guide 75: transfer under a chargee's power of sale
1. Introduction. This guide explains HM Land Registry practice where: a charge has been created by a deed expressed to be by way of legal mortgage (whether or not it is a registered charge) over a ...
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What is charge in mortgage?
However, while a mortgage confers an interest in property, a charge is the appropriation of property without giving the creditor either a general or special interest in, or possession of, the subject of the security.
What is mortgage conveyance?
The classic description of a mortgage is ‘a conveyance of land…for the payment of a debt or the discharge of some other obligation for which it is given’ . The difference between the two is blurred by the reference to a 'charge by way of legal mortgage' in the Law of Property Act 1925.
Is a mortgage a legal charge?
Legal mortgages and legal charges. The terms ‘mortgage’ and ‘charge’ are often used as though they are interchangeable. Strictly speaking, they are not. Both are security for the payment of a debt or other obligation.
What is the difference between a charge and a mortgage?
The difference between charge and mortgage can be drawn clearly on the following grounds: The term mortgage alludes to a form of charge, in which the ownership interest in a particular immovable property is transferred. On the other hand, Charge is used to mean the creation of right over the assets in favor of the lender, ...
What is charge in property?
Charge denotes an impediment over the title of the property, i.e. when the charge is created on an asset, the asset is not allowed to be sold or transferred. Basically, there are three ways through which charge is created on the property, that are classified according to the movability of the asset, i.e. On movable property, the charge is created by way of pledge or hypothecation, whereas when the charge is created on an immovable asset, then it is known as Mortgage.
What does mortgage mean?
Meaning. Mortgage implies the transfer of ownership interest in a particular immovable asset. Charge refers to the security for securing the debt, by way of pledge, hypothecation and mortgage. Creation. Mortgage is the result of the act of parties.
What happens when a mortgagee does not make payment in time?
When the mortgagor does not make payment in time, the mortgagee can sell the asset, after giving a notice to the mortgagor.
What is charge in finance?
By the term ‘charge’ we mean, a right created by the borrower on the property to secure the repayment of debt (principal and interest thereon), in favor of the lender i.e. bank or financial institution, which has advanced funds to the company.
What is the purpose of creation of charge?
By and large, the creation of charge provides security to the lender that the amount lent to the borrower will be repaid. On the other hand, in mortgage, the borrower is bound to pay the mortgage money or else the amount will be realized by selling the asset, so mortgaged, but only by order of the Court, in a suit.
What is fixed charge?
Fixed Charge: The charge which is created on ascertainable assets, i. e. the assets which do not change their form like land and building, plant and machinery, etc. is known as fixed charge.
What is a mortgage?
A mortgage is the transfer of title to an asset by way of security for a debt or the discharge of certain obligations, on the express or implied condition that the asset will be transferred back to the security provider (the ' mortgagor ') on the discharge of such debt or obligations (this implied condition is known as the mortgagor's 'equity of redemption'). If legal title is transferred then this will be a legal mortgage, whereas if beneficial title is transferred, it is an equitable mortgage (see Mortgages—Mortgages can be legal or equitable. The secured party (the 'mortgagee') does not have to actually be in possession of the mortgaged property for a mortgage to exist.
What is the transfer of title to an asset by way of security for a debt or discharge of certain obligations?
A mortgage is the transfer of title to an asset by way of security for a debt or the discharge of certain obligations, on the express or implied condition that the asset will be transferred back to the security provider (the ' mortgagor ') on the discharge of such debt or obligations (this implied condition is known as the mortgagor's 'equity ...
Can a mortgage be taken over a tangible asset?
Legal mortgages can be taken over both tangible assets (eg land, ships and aircraft) and intangible assets (such as intellectual property rights). It is possible to create an equitable mortgage over any asset which can be the subject of a legal mortgage. See Practice Note: How is a mortgage created?.
What is charge in transfer of property?
Under section 100 of the Transfer of Property Act 1882, a charge is said to be created on an immovable property when the property of an individual is by the act of the parties or by the operation of law made a security for the repayment of money advanced by the lender . In other words, when a property of the borrower is kept as security to secure the repayment of debt in favour of the lender who has advanced money to him is called a charge. The person in whose favour the security is held is called the charge holder, he is said to have a charge on the property till the repayment of money. However, such a transfer shall not amount to a mortgage. The relevant provisions that apply to simple mortgage apply to charge under the Act. [i]
How is a mortgage created?
A mortgage on immovable property is created by the act of parties i. e. the lender or the borrower. Whereas a charge is created by the act of parties i. e. the charge creator or the charge holder or by the operation of law.
What does "mortgagor" mean?
Mortgage means when there is a transfer of an interest in ownership of an immovable property by the mortgagor as a security for the repayment of debt to the mortgagee. Whereas a charge on an asset implies a security of an asset created to secure a debt or a loan advanced by the lender, there is no transfer of ownership interest ...
What is a mortgage under section 58?
Under section 58 of the Act, when a borrower transfers interest in an immovable property to the lender for securing the payment of money advanced or to be advanced, an existing or future debt from the lender who might be a bank or financial institution that creates a pecuniary liability is said to have created a mortgage ...
What is a mortgage right in rem?
Right in Rem. A mortgage creates a right in rem i.e. a right enforceable against the world. Whereas a charge is available only against a particular set of persons. It may become a right in rem when a decree has been obtained.
What is immovable property?
Immovable property under General Clauses Act is defined as one which includes land, benefits arising out of the land, things attached to the land or things that are permanently fastened to anything that is attached to the earth.
What does foreclosure mean in a mortgage?
Foreclosure means when a property is sold through the intervention of court. In certain kinds of mortgages foreclosure can be done however in case of charge there can be no foreclosure. Only remedy that the charge holder has is to sell the security held by him after giving a notice to the charge creator.
What is charge in mortgage?
However, while a mortgage confers an interest in property, a charge is the appropriation of property without giving the creditor either a general or special interest in, or possession of, the subject of the security.
What is mortgage conveyance?
The classic description of a mortgage is ‘a conveyance of land…for the payment of a debt or the discharge of some other obligation for which it is given’ . The difference between the two is blurred by the reference to a 'charge by way of legal mortgage' in the Law of Property Act 1925.
Is a mortgage a legal charge?
Legal mortgages and legal charges. The terms ‘mortgage’ and ‘charge’ are often used as though they are interchangeable. Strictly speaking, they are not. Both are security for the payment of a debt or other obligation.