Commercial Law: Acquiring Business Premises - Essay Example

The company decides to purchase a freehold title to an office building and sources the money through a bank loan in form of a mortgage. However, just like any other bank loan, the business has to provide the bank with security for the mortgage, which the bank will take to recover the loan in the event the firm fails in its duties of settling the mortgage within the required time. As such, the company must have cognitive knowledge of what security is, how it works, and how the lender can enforce the security in the future if deemed necessary.

Consequently, the lawyers of JANN LLP need to be familiar with all the requirements of a security on a formal basis in order for it to be executable, and through this draft a mortgage deed that satisfies the interests of both the involved parties. In order to come up with the appropriate mortgage deed to use in the transaction, it is imperative for the lawyers of JANN LLP dealing with the issue to know the prerequisite legal contents of a mortgage deed. These include the liability of the company to make payments on the mortgage.

the company, as a mortgagor, in which it expresses in a statement that it unconditionally and irrevocably agrees to pay on demand to the bank all the monies, as well as discharge all liabilities and obligations in relation to the mortgage, both present and in the future2. The mortgage deed also specifies the legal date when the redemption of the mortgage passes, the charge creating the security in favor of the Bank, the property that is subject to such a charge, as well as when the power of sale arises.

In most cases, the power of sale for such a property attached as security arises when the mortgagor fails to undertake all their liabilities in relation to the mortgage deed.