A mortgage is a charge over land, which can be used by the lender of a loan to secure its debt. A mortgage permits the borrower to remain the legal proprietor of the property, but places restrictions on the borrower’s ability to deal with the land without the lender’s consent, such as the right to sell the land. Once the loan is repaid, the mortgage can be discharged.

Some key questions addressed by a mortgage include:

• The requirement for the borrower to repay the loan in full, including costs and expenses associated with the loan and mortgage
• The rights of the lender in the event of default, such as the right to take possession of the property, the right to sell the property to repay the loan, and the right to receive income from the property to repay the loan.
• A power of attorney in favour of the lender.

In Western Australia, a mortgage can be registered with Landgate. This means that the mortgage will appear on the title of the property. If a mortgage is unregistered, the effectiveness of the mortgage in the event of default by the borrower is much more limited than a registered mortgage.

Second Mortgage

In certain circumstances, where there is already a mortgage on the borrower’s property by a lender, the second lender may enter a second mortgage over the same property. Second mortgages give rise to legal issues, such as priority claims where the first mortgage takes precedent in the event of default,

Security Agreements

In situations where the lender secures its loan over personal assets of the borrower, such as motor vehicle, shares, intellectual property or equipment, then a Security Agreement may be appropriate.

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We work with lenders and borrowers on a range of mortgage legal issues.