Business, Legal & Accounting Glossary
An agreement which does not satisfy the formality requirements to be a legal mortgage, but which the courts might be prepared to enforce on equitable grounds. In particular, if the Mortgagor and the Mortgagee have a written contract to create a mortgage, but no Deed has been executed, this might constitute an equitable mortgage. The Mortgagee under and equitable mortgage is in a precarious position because his security will be lost if the mortgagor sells the mortgaged property to a purchaser without notice, and doesn’t repay the loan. However, if the mortgagee registers his mortgage as a class C(iii) LandCharge (UnregisteredConveyancing) or a Notice (RegisteredConveyancing) then it will be enforceable against the purchaser of the mortgaged land.
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This glossary post was last updated: 6th April, 2020 | 0 Views.