Mortgagor meaning

Scope of this Checklist This Checklist sets out the points to consider when a company is proposing to grant a mortgage. It proceeds on the basis that an English or Welsh company will be granting a mortgage to a lender situated in England or Wales. In this Checklist: the company granting the mortgage is the 'mortgagor' the party to whom the mortgage is granted is the 'mortgagee' the document recording the mortgage is the 'security document' Preliminary questions before taking security by way of a mortgage Is a mortgage the right method of taking security? A mortgage transfers title to the asset, while preserving the mortgagor's equity of redemption so that, once sums due have been paid in full, title can be transferred back to the mortgagor (note that some mortgages, such as over land, are statutory, meaning there is no transfer of title). The use and possession of the asset will remain with...

This Checklist outlines the pre-contract searches that a buyer, tenant or mortgagee ought to carry out as part of property due diligence. This is not a comprehensive list; further searches might be needed depending on the property’s nature, location and intended use, as necessary. For ease, any mention of the seller in this Checklist also includes a landlord or mortgagor, where appropriate. References to the buyer likewise cover a tenant or mortgagee. Search When is it required? ...

Banking & Finance—October 2024 case round-up Brierley v Otuo and others [2024] EWHC 2549 (Ch) — Security: cost recovery on legal mortgages The court refused the mortgagee’s appeal against a 28 July 2023 order that barred recovery of sale and enforcement costs on specified properties. The decision followed the established rule on legal mortgages set out in Fisher & Lightwood’s Law of Mortgage (paragraph 55.6). Put simply, unless the mortgage contains an express term, there is no implied duty on the mortgagor to pay the mortgagee’s costs, charges and expenses, so they cannot be recovered from the mortgagor personally, save where personal liability has arisen in the particular case. Nevertheless, those costs are rolled into the secured indebtedness and, as against the mortgagor and anyone with an interest in the equity of redemption, they are treated as part of the amount owing under the security and must be satisfied as a condition of redemption......

Lexham Securities Ltd and another v Earlsfort Capital Partners Ltd and others [2023] EWHC 909 (Ch) What are the practical implications of this case? This decision confirms that a mortgagor may still exercise the equity of redemption even after a receiver has concluded a contract on their behalf. Historically, it has been accepted that the equity of redemption is, for a period, put on hold between the making of a sale contract by the mortgagee and the subsequent completion of that contract (see Property and Bloodstock Ltd v Emerton [1968] Ch. 94). The situation is, in practice, different where the sale contract is made by a receiver. Although the receiver is appointed by the mortgagee, the receiver acts as the owner/mortgagor’s agent, not the mortgagee’s. That almost invariably follows from the provisions of the original loan agreement; agreed at the outset, at a time when the mortgagor hopes and expects to comply with the loan terms. Consequently, in National Westminster Bank plc v Hunter [2011] EWHC 3170 (Ch) (‘Hunter’),...

In this issue: Key developments and horizon scanning Transferring property Property insolvency Property management Residential property Property development Property in Wales Property taxes Property in Scotland Additional property updates this week Daily and weekly news alerts New and updated content Trackers New Q&A Key developments and horizon scanning Budget 2025—key property announcements In her Budget 2025 statement, the Chancellor of the Exchequer, Rachel Reeves, set out an annual ‘High Value Council Tax Surcharge’ (HVCTS) for owners of residential homes in England valued above £2m. The levy will be £2,500 a year, increasing to £7,500 for properties exceeding £5m, commencing in 2028–29. Local authorities will handle collection alongside council tax on behalf of central government, with proceeds channelled to support funding for local government services; further detail will follow at the next spending review. The government will consult on how HVCTS should be implemented in the new year. Some are...

FORTHCOMING CHANGE On 27 October 2025, the Renters’ Rights Act 2025 obtained Royal Assent. For guidance on the Act’s effect on residential tenancies in England, see Practice Note: Renters’ Rights Act 2025—key provisions. This Practice Note sets out mortgagee possession claims, including the mortgagee’s right to seek possession and their duties once in possession, the mortgagor’s right to request time to pay under the Administration of Justice Act 1970, the position of any tenants of the mortgagor, the pre-action protocol, and the process for bringing a claim. For guidance on the range of remedies available to mortgagees, see Practice Note: Mortgages and land—enforcement of mortgages and legal charges over land. The right to possession Where a mortgagor has fallen into default, the mortgagee will often wish to sell the property and may first need to secure possession. However, it is also possible to: sell without taking possession: a sale subject to a tenancy can be especially attractive for a commercial property let at a...

A receiver commonly operates as the mortgagor's agent in collecting income and in disposing of the assets in respect of which that receiver has been appointed. This Practice Note considers the effect of bankruptcy or liquidation on the position of the receiver as agent of the mortgagor, and the consequences of a receiver losing that agency in that capacity in practice. The receiver's status is important because it affects: the potential liability of both the receiver and the appointing mortgagee for acts carried out by the receiver, and for omissions by the receiver to do those acts how any documentation is structured, ie whether the receiver enters into an agreement as principal, or as the mortgagor's agent Where the receiver cannot act as the mortgagor's agent, they will either act as principal or, less preferably from the mortgagee's point of view, as the mortgagee's agent, in such circumstances as applicable. For an explanation of the different types of receivers, see...

This Practice Note This Practice Note examines how a mortgagee may enforce its security after an event of default in a ship finance deal and, in particular, addresses: the mortgagee’s entitlement to take possession of the vessel private disposal of the vessel by the mortgagee arrest of the vessel and sale by the court (a judicial sale) maritime and possessory liens Where the vessel’s owner commits an event of default, amounts secured by the ship mortgage will typically become immediately due and payable. If those sums are not remitted, the mortgagee can enforce the security, seek to sell the ship, and recover the outstanding indebtedness. For the mortgagee to secure the highest level of protection in the UK, the ship mortgage ought to be registered against the vessel at the UK Ship Registry and, where the mortgagor is a body corporate under the Companies Act 2006 (CA 2006), it should also be registered at Companies House under section 859A...

This Deed is dated [ date ]. Parties [ insert name of Chargor ], a company incorporated in England and Wales with registered number [ insert company number ], whose registered office is at [ insert address ] (the Chargor); and [ insert name of Lender ] of [ insert address ] (the Lender). Recitals: This Deed is supplemental to the Debenture (as defined below), under which the Chargor created mortgages and charges over, among other assets, all of its then existing freehold and leasehold property in favour of the Lender, for the purpose of offering security to the Lender in respect of the Secured Obligations (as defined below). The Chargor enters into this Deed pursuant to clause [ insert relevant clause number ] (Further assurance) of the Debenture, in order to grant a legal mortgage over the Mortgaged Property (as defined below), thereby affording the Lender additional security in relation to the Secured Obligations (as defined below)......

This Deed is dated [ date ] Parties [ insert name of Chargor ], a company incorporated in England and Wales, registered number [ insert company number ], with its registered office at [ insert address ] (the Chargor) [ insert name of Lender ] of [ insert address ] (the Lender) Recitals: The Lender has consented to provide a loan facility to the Chargor on the terms and conditions contained in the Facility Agreement (as defined below). As a condition precedent to the availability of that loan facility, the Chargor is required to enter into this Deed to grant security in favour of the Lender for the Secured Obligations (as defined below). ...

Proceeding on the basis that the legal mortgage is valid and duly executed, the only flaw is a failure to register. The question concerns what remedies are available where a mortgage remains unregistered. Where a valid charge is created by way of legal mortgage but not entered on the register, it takes effect in equity as an equitable mortgage...

Under sections 101 and 103 of the Law of Property Act 1925 (LPA 1925), a mortgagee in possession is empowered to dispose of the property, usually once possession has been obtained; however, the parties may by agreement contract out of this statutory power. When the power of sale is exercised, the mortgagor’s equitable right to redeem is brought to an end, and the mortgagee holds any surplus sale proceeds on trust for the mortgagor and other interested parties...