Practical Case of Land Law - Essay Example

Land Law al Affiliation) Land Law Part A How the bank could have a legal right to repossess and sell Ben’s In this case, the bank has the right to reclaim the mortgage from Ben. Despite the fact that Ben was a second signatory to the mortgage, the agreement between the bank and Cait is binding. Since the bank properly executed the mortgage, both the bank and the mortgagor who is the homeowner have the right to possess and own the property. In this case, the bank holds an alien right of the house. By owning the alien right, it too has the right to repossess it in case the mortgagor cannot afford to pay the loan that was advanced to him. However, when the mortgage is transferred to a third party like in Ben’s case, all the rights are transferred to him. The bank therefore, has the right to repossess and sell the house from Ben.1 By accepting to sign the mortgage papers as second owner though ignorantly, Ben becomes a holder in due course. Because the mortgage was transferred to him does not make him free of real defense. Real defenses imply the defenses ascribed to the formation of the initial contract.2 In this scenario, Ben was conned into signing the mortgage papers. Because he had been tricked into signing the paper, the bank does not have to allow him freely own the property. The initial agreement is paramount. Despite the fact that Ali has no revenue to recover the loan from Cait, the bank still has the right to recover the mortgage because it was not part of the agreement between Ben and Cait. The bank therefore, has the right to sue Ben and repossess and sell the house so that in can recover the debt that had been advanced to Cait.3 The bank has the right to repossess and sell Ben’s home because the terms and conditions of any mortgage allow the creditor to repossess the mortgage and sell it in order to recover its debt.4 In the scenario that has been presented, because Cait has lost her job and may be financially unstable to pay the loan, the bank has the entire mandate to sue her in a court of law so that it can recover the debt. Mortgages must also be paid within a given period of time.5 If the terms were transferred to Ben though ignorantly, he is expected to meet the deadline that the initial mortgagor had with the bank. If Ben is not able to meet this deadline, the bank, being a business entity that has all its operations governed by the law, has the right to go to court to compel the mortgagor to surrender the property. Inability to recover its loan within the agreed period of time according to the agreement implies that the bank will make losses. In the scenario that has been presented, the existing arrangement on payment of the loan has been Brocken down. By Cait losing her job, it means that she is not in a position to meet her loan obligation to the bank. The case is even complicated by the fact that, Ali is financially incapable of recovering the money. According to the law of the land, if an individual breaches an arranged contract on loan repayment then the creditor is allowed to take legal action against it in order to reclaim the loan. In this scenario, the bank’s decision to move to court to repossess the house and sell it is justified. The bank also has the legal right to move to court to posses the mortgage because; a mortgage transfer must always be recorded just like the transfer of any other real property. Because any property that is subjected to a mortgage and gets transferred retains the mortgagee’s interest, the bank still has interest in Ben’s house until the entire loan is cleared. For instance, in mortgage recovery case that pitied a lender and negligent mortgagor, Geoffrey Green Russell who had represented the bank had argued out successfully that the bank had lawfully executed the loan and therefore, the negligent mortgagor had to suffer the consequence of being ignorant about the terms of the mortgage. Whether or not the transfer of mortgage in Ben’s case did not follow the legal procedure or whether the transfer was never documented, the fact that loan repayment has not been completed makes Ben liable to surrender the property. In Ben’s case, he had signed all the mortgage documents that allowed for the transfer of the mortgage. Whether he was ignorant of the action or not, the documents bind him to the terms of the mortgage and therefore, he had to comply with them. In a case that involved a mortgagor and a UK bank, the judge had ruled that, the mortgagor had to comply with the agreement. In problem scenario, the mortgagor is unable to abide by the agreement. The bank has the right to seek the court’s direction on how it could posses the property, sell it and acquire the entire loan that had been advanced to the mortgagor. The bank was also right to move to court to confirm if the transfer of the mortgage was rightfully executed where if the court proves that it was not rightfully executed, then the bank has the right to posses the house freely without considering Ben’s interest. Ben was also negligent of knowing the terms and conditions of the mortgage that he had taken when he signed the papers. Forcing him to take the property that he is ignorant about the terms and conditions of its existence will therefore, be unfair. The bank being the mortgagee has the right to move to court to compel Ben to surrender the property. By surrendering the house, Ben would be punished for being ignorant of the terms of his engagement with the bank. In cases of mortgage transfer, the initial holders of the mortgage have the priority over the latter holders. In this case, Cait, being the initial holder of the mortgage, has the priority over Ben who was the second holder. If Cait is unable to pay the mortgage, the bank is allowed to seek legal redress on the issues so that they can recover the loan that they had advanced to her. In any foreclosure, the first mortgagee has preference over other subsequent mortgagees. In this scenario, Cait seemed to be mortgagee to Ben while the bank was mortgagee to Cait. The foreclosure rule gives preference to the agreement between Cait and the bank but not between the Ben and Cait. If the bank wants to get its loan back, it has the right to go by the first agreement. Though Ben stands to lose his house in this rule, the bank must just move to court to have orders given for the repossession and sell the house in order to get its money. The foreclosure rule also provides that, all mortgages that are inferior in preference to the foreclosing mortgage are automatically extinguished. In this case, all the proceeds of any such foreclosure are distributed. In case there is some money that is left after the foreclosure, then the inferior mortgagor takes this. The bank has the right to move to court and request the court to calculate the total amount of money that it is owed in terms of the mortgage. If Cait cannot pay this entire mortgage, the only ways to have it paid is to posses the house and then sell it. After the bank has recovered all its money from the sum that it gets from the sell, Ben can enjoy the little money that is retained after all the money has been paid. How Ben can rely on the defense of undue influence to prevent the repossession of his home From the scenario that has been presented, it is obvious that Devi, who did not explain to him the terms of the mortgage, influenced Ben into taking the mortgage. He was also not aware that the mortgage that was being advanced to him had also been advanced to Cait. The fact that Ben was ignorant of the terms of the loan and had been influenced to take it makes it possible for him to rely on the defense of undue influence to protect his house. It is easy for Ben to sustain an argument of undue influence because, in this scenario, the agreement between Ben and Devi who presented the forms to Ben was done in the absence of a solicitor. Because the law stipulates that a solicitor must witness all the agreement, Ben can rely on his absence to convince the court that he was influenced into signing the forms. On the other hand, the agreement between Ben and the bank was administered in the absence of any witness. In a landmark ruling in Australia where a third party had been influenced into signing a mortgage, the court had to look into his interest when the bank wanted to reclaim the property. Because it was proved that the bank agents had conned him, he was allowed to own the property but sign a fresh agreement with the bank. Ben can rely on the absence of the witnesses to convince the court that the agent influenced him into signing the form. The fact that he signed the mortgage without knowing that there was a second mortgage also gives him the moral authority to rely on the law of undue influence to protect his house. In this case, the documents must first be looked into and if it is realized that Ben had actually signed fake documents, then he stands to gain from the property or share the risk with the bank. By examining the papers that Ben signed, the law of undue influence could also be used. The law stipulates that if he unknowingly signed a mortgage on a fake document with the full knowledge of the agent, his rights must be protected.6 In this case, both Ali and Devi knew that Ben was actually signing a mortgage document that he did not understand. Because Devi worked on behalf of Ali who was the official agent of the bank, Ben’s interest stands to be paramount in the evidence undue of influence. The evidence of undue influence could also be helpful to Ben because through it, Ben can ask the bank that is the mortgagee, to redeem the property. By redeeming the property, Ben will be expected to cater for the entire mortgage loan debts alongside the interests and costs that it has accrued. Ben can enjoy the redemption rights until the foreclosure sale period is completed. During this period, Ben can formalize his agreement with the mortgagee and even release the house to the third party if he is not capable of repaying the loan. In the loan agreement form, the mortgagee’s right to possession is included. The circumstances under which the lender can re-acquire the mortgage are also contained. The copy of the loan agreement should also be given to the mortgagor. Ben can rely on the law of undue influence if the copy of the loan agreement was never given to him. If Ben can convince the court that the said agreement documents were never given to him, the bank stands to lose the property because; they did not indicate the conditions under which they would acquire the property. 7 Ben can also rely on the law of undue influence to protect his property because; mortgages for the purchase a home always have terms for repossession if the agreement is Brocken by the mortgagor. Because in this case Ben has not broken any rule, the mortgagee is not allowed to repossess the house from him. Ben had signed the documents in full knowledge that he was the first mortgagor. The agreement should be followed and he only stands to lose the property if he has failed in his part as the mortgagor. By Ben relying on the rule of undue influence, the bank will be forced to prove to the court that Ben has breached any part of the agreement in the documents that he signed. If he has breached any part of the agreement, then he will lose his property. However, if has not breached any, the agreement that he had with the bank must be honored. It is also necessary to rely on the evidence of undue influence to determine if Ben had been conned into signing the agreement. Because Devi who was just an accountant and not the official agent of the bank presented the documents to him, Ben can convince the court that he was not supplied with sufficient information concerning the mortgage. The evidence of undue influence will also be used to determine if Ben had actually been given valid mortgage documents to sign. If it is proven that he had been given fake documents after scrutiny of the documents that he had signed then his interest must be protected. In this case, legal action must be taken on both Ali and Devi who had conspired to defraud Ben. The evidence of undue influence is also necessary in this case because; it will protect Ben from losing all his money including those that he had paid. In the repossession of the house, Ben must seek information on what exactly the bank expects to recover. If it is proven that some money had been paid to the bank, Ben will have to pay only the remaining amount in order to retain his property.8 The evidence of undue influence will also determine who is liable to the breach of contract.9 If Ben is proven liable, he stands to lose his property. However, if Cait is proven to be the one liable, the court can compel her to pay for the property. This may involve her property being confiscated by the bank in order to recover the money. PART B Competing rights and responsibilities that is evident in the problem scenario. In this scenario, there are a number of competing interests and responsibilities. First, the bank that is the mortgagee is under pressure to recover its money. If the bank leaves the house to Ben Because Cait is unable to repay the loan then it stands to lose out in terms of the interest, profit and the capital that had been advanced to him. It is the responsibility of the bank to give out the mortgage to the clients. While giving out the mortgage, the bank must spell out the terms and conditions that govern such deals.10 The mortgagor must consent to these conditions by apprehending their signature.11 It is the rules and regulations that spell out the rights of the bank. In the problem scenario, Ripoff bank had lawfully granted Cait a mortgage. When she fails to pay the loan, the bank’s interest is paramount. The home must be repossessed so that the bank can recover its money. The second competing right concerns Ben. Ben had also ignorantly entered into a mortgage deal with the bank. Though the agent had never explained to him that this was a second mortgage, he had not breach any contract as per the document that he had signed. If the bank repossesses the house, Ben stands to lose the money that he has been advancing to the bank. He also risks losing a property that according to him, he had lawfully acquired. He has also failed in his responsibility as a mortgagor because; he signed the documents and had shown interest in paying the loan as stipulated in the agreement that he had ignorantly signed.12 Because the people who were to explain to him the terms and conditions of the mortgage had influenced Ben into signing the agreement, his rights must be protected. On the other hand, the bank’s interest in the property must also be respected. In a court of law, the determination of the case will depend on how the judge analyses the interest and responsibly of each interested party in the case. How the existence of an interest in the family home affects the outcome. The repossession of a home is always a serious case because it results to homelessness. Because of this, the court will expect the two parties to explore all the avenues to settle out the loan issue before it is presented to the court for determination. According to the Human Rights act, repossession cases should consider the right to a fair trial and the right to a private life and home.13 In this problem scenario, the bank must look into the kind of possession that Ben has. Despite the fact that Ben had been influenced into signing the contract, his right as a citizen to have a home must also be protected. Ben’s case is similar to case where Anthony Joyce and Co solicitors had successfully defended mortgagers in a mortgage repossession case where they risked losing their home. In the ruling, the judge indicated that, the house was a home to many and taking it would render the owners homeless. Because the home is an entity that gives an individual his identity and protection to his children, he must be protected from losing all these privileges. The bank in this case must, together with Ben, decide how Ben will meet the mortgage terms without becoming homeless. However, if the case moves to court, the judges must protect Ben’s interest of having a home. He will therefore be compelled to sign agreement with the bank on how to settle the loan without his house being repossessed. Bibliography Jackson, N. 2012. Gateway to Land Law. Sweet & Maxwell, 250-279. Ken, C. 2013. Understanding Your Foreclosure Rights: A Consumer Law Review. Business daily, 67-77. NPA. 2013. Mortgages and Foreclosure. National Juris University, 34-39. PSI. 2014. Home repossession. Retrieved 11 21, 2014, from public information: http://www.citizensinformation.ie/en/housing/losing_your_home/home_repossession.html Shelter. (2014). Rules mortgage lenders must follow before repossession. Shelter, 18-26. Read More