Mortgages and Mortgagee Powers

This assignment examines the legal powers and obligations of a mortgagee (Pty Ltd) when dealing with a defaulted mortgage payment from Mr. Henry. It discusses the available options for Pty Ltd, including foreclosure, sub-mortgage, and legal action, while emphasizing the importance of adhering to legal procedures and providing appropriate notices to Mr. Henry. The second part considers a scenario where Sly, an employee of Pty Ltd, takes out a loan personally and defaults on payment, highlighting the potential challenges and risks involved in such situations.

Conveyance
Name
Department
College
Date

Conveyer
Part one
Home is usually considered to be the largest asset of an individual thus sold as a mortgage. The
mortgagee according to laws, is entitled to certain powers and obligations. It is advisable to
understand these capabilities before buying any house on mortgage. In this situation, Pty Ltd has
several legal duties and powers. Foremost, Pty Ltd has a constitutional right to sue Mr. Henry
for default in payment. Mr. Henry must have agreed on monthly payment according to the
‘personal covenant' document that guides entry into this kind of agreement. Pty Ltd can take the
security of the Torrens Title property by either taking back the building or directly selling the
house. However, according to the laws, he can decide to settle this case with Henry in a court of
law1.
It is also possible that Pty Ltd can decide to sub-mortgage the building. In this case, Henry will
be allowed only a section of the property while another person or people will have to be in
charge of a different section. This is most appropriate in the situation where Pty Ltd feels that
Henry defaults in payment maybe because he cannot afford to pay the monthly bill that is
required. It is however advised that this kind of an agreement be settled in a court of law or after
mutual consensus. It is a fact that Henry may not be comfortable with this new arrangement but
Pty Ltd has all the rights to force this or to leave it for another option2.
1Welling, Henry. "Construction of Inconsistent Provisions in a Bond and Mortgage." St. John's Law
Review 5, no. 2 (2014): 12.
2 Brotman, Helen L. "Insurance--Effect of Mistatement of Ownership on Rights of Mortgagee under
Standard Mortgagee Clause." St. John's Law Review 6, no. 1 (2014): 16.

However, before making any of above decisions, Henry must be served with a notice as
described in the Property Law Act. This is according to the legal requirements. It is not to just
decide to do something as mortgagee with informing Henry promptly. Usually, this
communication is done a month before the real day. For example, if Pty Ltd wanted to sell the
property to another person they would have to give Henry at least a one-month vacation notice.
Before the vacation notice, however, he must be issued with cautionary notice3. This notice
warns him of the possible implications of failing to pay the mortgages as agreed at the point of
entering into this agreement. During this period Henry can settle the outstanding balance. He can
as well appeal against this decision a move that must be taken in a court of law. Change of the
interest rates is only done when it is oppressive. However, there must be other evidence of
exploitation such as unequal bargaining for the court to agree to lower the interest rates charged.
In fact, Henry can use this loophole to ensure that he pays less to Pty Ltd to be able to keep up
with the monthly payments. Henry must pay the mortgages even after defaulting. If he keeps up
with payment, there will not be a need for Pty Ltd to withdraw the agreement and enter into a
new agreement with another person4.
After issuing the notice, Pty Ltd would be free to mortgage the property to anyone they wish.
This would be a new agreement that would have different terms and conditions. The terms of this
new agreement must be agreed upon by all the parties involved. The greatest issue of concern, in
this case, would be interest rate which can change depending on the decision of Pty Ltd. It is
possible for Pty Ltd t to sell to Sly provided that Sly acts on his own and not on behalf of the
company. This a special provision that Pty Ltd can undertake. All that matters is that Sly agrees
3 Tabb, Charles J. "The Bankruptcy Clause, the Fifth Amendment, and the Limited Rights of Secured
Creditors in Bankruptcy." U. Ill. L. Rev. (2015): 765.
4 Dixon, Bill. "Mortgagee's failure to take reasonable care to sell at market value." The Queensland
Lawyer 34, no. 4 (2014): 151-153.

to act as per the provision of the company5. Failure to abide by the terms of the agreement would
have the company sue Sly just like any other person. In some instances. Failure to comply with
the terms of the mortgage can even have Sly loss her job. In this situation, the deputy of Sly
would have to act on behalf of the director while dealing with Sly.
Part two
My answer would not be different if the loan secured by the registrar of the mortgage were made
by Sly personally. The greatest concern in this situation is to ensure the security of loans. It is
always challenging to give loans to people in situations where their financial accounts cannot be
easily accessed in case of default6. Sly, in this case, works for Pty Ltd, to mean that the company
is responsible for his monthly payment. It is, therefore, possible to have favorable terms of
payment between Sly and the Company in this situation. Unlike Henry who possible would be
going to make a monthly payment at the bank, Sly can allow the Pty Ltd to be deducting a
portion of his monthly wage to cater for the mortgage7.
Sly and Slick being kept out of the business of providing finances gives me more reasons to trust
my decisions. The fact that someone else would be handling the money provide the person to
question in case Sly fails to corporate8. On the other hand, it gives direction to the people who
should follow up and ensure that Sly complies with the terms of payment. The dangerous part of
this agreement is the fact that it was an arrangement between Henry and Sly. It is not clear
5 Brotman, Helen L. "Insurance--Effect of Mistatement of Ownership on Rights of Mortgagee under
Standard Mortgagee Clause." St. John's Law Review 6, no. 1 (2014): 16.
6 Tabb, Charles J. "The Bankruptcy Clause, the Fifth Amendment, and the Limited Rights of Secured
Creditors in Bankruptcy." U. Ill. L. Rev. (2015): 765.
7Patterson, Dennis. "Waiver Problem in Maine Real Property Foreclosure Law: A Commercial Paper
Perspective." (2014).
8 Tabb, Charles J. "The Bankruptcy Clause, the Fifth Amendment, and the Limited Rights of Secured
Creditors in Bankruptcy." U. Ill. L. Rev. (2015): 765.

whether Sly was acting on behalf of the company but assuming that was not the case then there is
lots of need to worry. If Sly works on his volition then it is not possible to abide by the act that
guides this kind of agreement9. This kind of understanding requires the presence of witnesses and
agreement between Sly and Henry. The company would not be liable to any challenges faced by
Sly because of the move to engage Henry on his own. In fact, the company may sue Henry or Sly
if they drag the name of the company into their agreement. Sly can only sell the property to
Henry if she has already bought it or in situations where the ownership is transferred to her by a
third party10.
Bibliography
9 Dixon, Bill. "Mortgagee's failure to take reasonable care to sell at market value." The Queensland
Lawyer 34, no. 4 (2014): 151-153.
10 Tabb, Charles J. "The Bankruptcy Clause, the Fifth Amendment, and the Limited Rights of Secured
Creditors in Bankruptcy." U. Ill. L. Rev. (2015): 765.

Brotman, Helen L. "Insurance--Effect of Mistatement of Ownership on Rights of Mortgagee
under Standard Mortgagee Clause." St. John's Law Review 6, no. 1 (2014): 16.
Dixon, Bill. "Mortgagee's failure to take reasonable care to sell at market value." The
Queensland Lawyer 34, no. 4 (2014): 151-153.
Patterson, Dennis. "Waiver Problem in Maine Real Property Foreclosure Law: A Commercial
Paper Perspective." (2014).
Tabb, Charles J. "The Bankruptcy Clause, the Fifth Amendment, and the Limited Rights of
Secured Creditors in Bankruptcy." U. Ill. L. Rev. (2015): 765.
Welling, Henry. "Construction of Inconsistent Provisions in a Bond and Mortgage." St. John's
Law Review 5, no. 2 (2014): 12.