RUFF_Skeleton-Real-Property-Autosaved (1).docx - REAL PROPERTY SKELETON NOTES MORTGAGES legal agreement by which mortgagee lends money at interest in

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Unformatted text preview: REAL PROPERTY SKELETON NOTES MORTGAGES legal agreement by which mortgagee lends money at interest in exchange for taking title of the debtor’s property. PENALTIES = amount EARLY of money/something DISCHARGE else OF MORTGAGE as a result or something else Andrews v ANZ Mortgagor wants early discharge Torrens Title (2nd Schedule) balance liquidated with acharge, penalty Wanner vthe Caruana - of TT Sdamages 93(1) CA Allows early redemption of a of - Question Registered mortgage is a statuary obtaining benefit 1. Is it a genuine pre-estimation of loss? indefeasibility 57 RPA mortgage, but must pay principle AND balance of 2. Is it aremains disproportionally large? the interest remaining AND rather costs than equity of - Mortgagor the registered proprietor of land, - redemption Can demand premium orobonus loan amount, if not linked No over matter what the mortgage says to default Potter v Edwards - If unregistered, it becomes an equitable mortgage Barry vmortgages Heider - S 93(4) CA applies to registered o Must notMortgagee be unreasonable, or unconscionable Cityland wants unfair early discharge WHAT REMEDIES AVAILABLE TO A Property Holdings vhave Dabrah - ARE OnlyTHE to pay principle AND interest accrued at MORTGAGEE PTAND 2? costs Cannot raise interest rates retrospectively because of default Strode v Parker that point Wanner v Caruana (applied in WHAT ARE THE REMEDIES AVAILABLE TO A MORTGAGEE PT 7. MORTGAGEE SALE (the preferred method)but o Can charge higher amount with a discounted rate offered, HC O’Dea v All States Finance) 1? REQUIREMENTS discount7.1 rate PREmust charged money demanded Wanner o be Any furtherifcosts = penalty andback would fail 1. FORECLOSURE (not common in Aus) (i) A default, Acceleration clauses are penalties is demanded upon default TYPES Mortgagee exchanges the debt for ownership of the mortgaged property - time A failure to not make repayments - Determined of(TC) entry date of default or breaching a term PRIORITIES Joint Tenancy (JT) Tenants at in the Common Krelinger v NewBETWEEN Patagonia MORTGAGEES (ii) Serving of statutory notice, and outstanding AFTER FURTHER ADVANCES - No penalty determining PV of future earnings on amounts Potential/aliquot shares 1. inUndivided shares - 1.Order for foreclosure (reg ss 57,61 RPA unreg s 99A CPA) TT s 57(2)(b) RPA OST s 111(2)(b) CA AMEV –UDC Finance v Austin - mortgagor 2 JT ½ shares and sodefaulted on 2. Unity of possession 1.1. The must have Call for the default to be rectified; OST priority E Legal > L Legal > E Equitable > L Equitable 3. Alienable Alienable - 2.Bank cannot touch until default writing by mortgagee/agent; and, or postponing conduct 4. No -rightBeofinsurvivorship Right ofnotice Survivorship - -3.At Unless this point, possession takes place Describe default in particular TT 1.2. priority Order of registration then unregistered - Inherited tothe heirs - Interest of remaining JTs is enlarged to the extent of Notice to remedy default within one month o Inaccuracy does not invalidate it Network Unless exception to infeasibility deceased share TT s 57(2)(b)the RPA OST s 111(2)(b) CA WHAT HAPPENS WHEN DIES? HOW DO WEXFinance CONVERT JT TO TC? (Severance) v Lane o 1.3.DOCTRINE OF TACKING may change the priority between mortgagees when the mortgagor defaults - Overrides any will the contrary Non-compliance with thetonotice 1. IS IT A JOINT TENANCY (JT) OR COMMON Destroy one of the four unities toINend right of (iii) Non-complianceTENANCY with thisnotice Old1.4. System Title –conducted Tubula Naufragio 4. Properly Presumption of survivorship auction(s 35 CA) (TC)? survivorship 7.2(equitable) DUTIESatWHEN (equitable) acquires M1’s to legal have notice of M2 the timeSELLING of the original loan, it may be -M3 Older person is presumed diemortgage, first Hickman v99A CA TT - s 61IfRPA OSTand sdidn’t a. PRESUMPTION of TC s 26(1) CA 1. UNILATERAL ACT/ ALIENATION s 97(1) RPA 7.2.1 A sale is necessary tacked onto M1 and have priority over M2 Taylor v Russell Peacy or dead after 7 years Halbert v Mynar, unless 1.5. Highest bid must be less than the mortgage debt ‘applies to law and equity Delehunt v Carmody At Law must be registered - of Mortgagee has discretion when to sell Belton v Bass Tacking advances (where M1 makes furtherOST advances, even M2) evidence says otherwise TT s 61Further RPA medical s 99A CAafter the creation b. ofUNLESS EXPRESSLY JT sLimited 26(2)still CA In(actual, Equity if not registered may be effective Ratcliffe and Gretton - Application M1 can tack further advancesto… to the legal estate if M1 had no notice M2 constructive or imputed) Hopkinson v Rolt 1.6. for foreclosure UNLESS the instrument expressly provides theyforce are to a. JT TRANSFERRING INTEREST o However, mortgagor may thetake salejoint by If there was notice, there is no change in priority Hopkinson TT RegisteroGeneral OST Supreme Court v Rolt; West v Williams tenants Enforceable contract with valuable consideration, court order Palk v Mortgage Services o period If provision only actual notice will prevent tacking Re O’Byrne’s Estate 1.7. Further givenfor toadvances, mortgagor to repay - NB s 100 RPA presumption in favour butentity in TT there register will severance at equity Mcoy vJT, Caelli 7.2.2 When selling to aofrelated must MATZNER EXCEPTION - TT 6 months 2 s 62 RPPA never practically do be thisa truly If registered severance at law Wright v Gibbons independent bargain o M1 can tack when it is against conscience for M2 to deny that M1 is entitled - OST Supreme Court makes a ‘decree nisi’ mortgage debt is c. IF s- 26(2) CA APPLIES, ENSURE THEthe FOUR UNITIES b. JT MORTGAGING INTEREST The closer the relation the greater burden ANZ v o Proportionality of the amount advanced calculated and the mortgagor is given a time-frame (usually 6 months) ARE -PRESENT (if not = TC) OST mortgage severs JT Bangadility Pastoral Further advance a reasonableinimprovement the property Southwall vUNITY RobertsOF POSSESSION 1.8. The o court must order theasforeclosure absolute i.e. in bank TT does notagent severwill be imputed on the vendor - - i. Failure of an o Without the further advance of M1, M2 would have nothing Westpac v Adelaide becomes owner and you own no more money) o Each tenant has the right to possession of all c. JT LEASING CAGA v Nixon OST further TT (tabula s 62(3) naufragio) RPA OST s 99A CAOST (tacking of properties - 7.2.3 Doesadvances) not sever only Cannot sell tosuspends oneself until term of lease If: If: If: 2. PERSONAL COVENANT If: ii. UNITY OF INTEREST Frieze v Unger - Can sell to related entity Farrar v Farrars Limited M1to sue for: 1. M1 (not considering 1. M1 (considering subsequent 1. same M1 property (considering - 1.Right Equal HAVE interestwith in the d.o MUST WRITTEN INSTRUMENT (s 7.2.4 Compliance s 111A CA 2. Breach M2 subsequent advances) advances) subsequent advances) 2.1. of contract, or 54A), CTTITLE ANDcare REGISTRATION CORIN UNITY OF - iii.Must take reasonable to ensure… the best priceV 3. Contractual M3 2. difference M2 2.2. debt (including the between the mortgage 2. M2 PATTON Must take virtueobtained of2.theM2 same instrument (a thatomay be reasonably in the circumstances’ And: 3. M1 (subsequent 3. M1 (advance) 3.e.g. M1 (advance) sale and debt s 100 CA) Gift = the donor must do everything that the donor written document, contract) - S 111A(8) CA applies to both reg and unreg - M3 acquiresTO M1POSSESSION advance) And: And: 3. THE RIGHTS do, toOF perfect the gift (including signing the iv. can UNITY TIME without notice of M2 And: - When the borrower defaults, the mortgagee may seek and order for transfer, authorise the giving of the CT) o AVAILABLE Alland co-owners must their share at the same REMEDIES TO Atake MORTGAGOR M3 hass priority M1 has not actual notice oftime M2 M1 M1 has actual notice of M2, but possession 60 RPA 2.(IMPROPER TRUST SALE) M1 has no notice TO (actual, M1 Taylor v Matzner exception M1 can 4. THEover RIGHT TO APPOINT A RECEIVER COLLECT RENTS can IF tackTC with Re O’Byrne’s - BEFORE Sever JT in equity, only unregisterable interest 2. AT LAW, FIND EQUITABLE INTEREST (EQUITY 1.priority EXCHANGE constructive or imputed) of M2109(1)(c) Russell - Both OST and TT, the receiver (appointed under ss 115A Estate tack with priority Matzner 3. MUTUAL AGREEMENT FOLLOWS LAW) to pay total debt into court to restrain va sale - THE Mortgagor M1 tack advance withof the 3. IF JT, THEN CA) must act in food faith and notcan sacrifice the interest Clyde - EQUITY Transfer from all tenants themselves in TC is valid FOLLOWS THEtoLAW UNLESS: Inglis v Commonwealth mortgagor priority over M2 Hopkins v Williams v Hensman s 99 CA and s 99 RPA a. THERE IS AN UNEQUAL CONTRIBUTION TO 2. BETWEEN EXCHANGE AND SETTLEMENT o Manage the property, receive incomeCredland and exercise Rolt; West Williams; v Still needs to be registered (only takes effect in PURCHASE PRICE - The court may restrain a s mortgagee sale on terms Potter delegated powers of the mortgagee equity) - JT means equal share, but can be TC in equity e.g. 70/30 Harvey v McWatters 5. THE RIGHT TO LEASE 4. MERGER - Rebuttable of theopresumption of JTsofforopportunity marriage – equity will not Small window - - OST can grant lease 5. - COURT ORDER TORRENS is thewhenever same as above with the additional arguable consideration ofCourt where M1 is registered and price has indefeasible right to all intervene and JT will apply reluctant when selling is same or greater - TTmoney, must bewhenever in possession - than AA JT may apply unilaterally the RG to sever a JT lent? b. THERE IS CONTRIBUTION TOto ADVANCE MONEY debt 6. THE RIGHT TO IMPROVE THE MORTGAGED PROPERTY by registration of a transfer to oneself under s 97 RPA OR 3. MORTGAGE AFTER SETTLEMENT - Must not change character, must enhance the value of the property and 6. UNLAWFUL KILLING - TC in proportion to thetoamount contributed - Confined damages unless fraud Latec Inv v Hotel be justifiable at the time Southwell v Roberts - Terrigal At law will not sever, but will require the surviving c. THERE ARE UNEQUAL PARTNERSHIP ASSETS party to hold their on trusttofor deceased - Must also account for the rent Fyfe v Smith - JT registered, however, equity interest TC proportion thethe purchase price party in equity v Jurewitsch - Assumption they have enteredRasmanis into a partnership as legally defined 7. factual BANKRUPTCY NB if any equity scenarios it will be held that the property is held in - Until the proceeds the sale areneed received trust for the other party. The party seekingof relief would to goand to the NICHOLAS RUFF JT ask is not bytoagreement for sale Supreme Court (Equity distributed, Division) and forsevered the Trust be dismissed and register the new interest TERMINOLOGY Mortgagor The borrower Mortgagee The lender RPA applies to registered CA everything else MORTGAGE UNDER… Old System Title Conveyance of the legal estate to the mortgagee, subject to the mortgagor’s equity of redemption 1 REAL PROPERTY SKELETON NOTES CO-OWNERSHIP two or more people own common property HOW TO END CO-OWNERSHIP? RIGHTS INTER SE DURING CO-OWNERSHIP 1. AN AGREEMENT TO SELL BETWEEN - Right to possession = no occupation fee. Each co-owner has a right to PARTIES possession of the whole - Only after proceeds of the agreed sale are received - Rights are very limited until the relationship comes to an end, only and distributed Re Allingham have: 2. ONE ACQUIRES SHARES OF THE 1. Any enforceable contract or contract term between the owners OTHERS/TRANSFERRED TO THE SAME 2. The entitlement against owners to be compensated for local PERSON government rates paid s 560 Local Gov Act 3. THE OPERATION OF THE RIGHT OF NB there is no right to compensation until the relationship coms to an end SURVIVORSHIP and then Equity ‘takes account’ 4. RESUMPTION Exceptions - Gov takes land - Ouster 5. COURT ORDER o Wrongful dispossession of one co-owner by the another o Includes forcibly removing someone; changing the locks - Court order of partition under s 66G CA and Part 4 o Does not include AVO of Environmental Planning and Assessment Act o Ousted co-owner may sue in trespass - Agreement - Off-set against improvements - When in domestic relationship and it is no longer to live in the same place Callow v Rupchev QUANTUM OF OCCUPATION FEE = market rent divided by proportion of co-ownership, UNLESS off set against improvements ACCOUNTING IN EQUITY Entitlement to occupy each co–owner is entitled to possession, if they choose not to occupy, they cannot sue for compensation unless the IS THERE A LEASE? contract expressly states so Forgeard v Shanahan 1. A RIGHT OF EXCLUSIVE POSSESSION OF THE PREMISES If the co-owner is expressly excluded, there is a right to sue Forgeard v Shanahan, - Fact actual and circumstance test RAIDICH V SMITH To seek equity one must do equity o Look to the terms (substance, not form) 1. COMPENSATION FOR IMPROVEMENTS 2. FOR A DEFINITE PERIOD, WITH CERTAIN TIME FOR COMMENCEMENT - An improvement is more than maintenance; it is a real and lasting improvement; it adds value to the property AND ENDING o Cost of improvement (at date of work) vs. increase in value of the property (at date of claim) Boulter v Boulter - Must be for a definite period, with knowledge of a start and end or a mechanism to o Set off against occupation rent for exclusive occupation (if rent is higher = no allowance for improvements) decide - Mortgage repayments are considered an improvemento Ryan v Dries Dates must be capable of being rendered certain if not the grant is void ab 2. ENTITLEMENT TO COLLECT RENT inito Lace v Chandler - Equity deems a co-owner collecting rent as an agent for the other co-owners Ryan v Dries so there is liability to account 3. IN THE APPROPRIATE FORM (Torrens) 3. OBLIGATION TO PAY PROFITS - Lease > 3y years must be registered and executed in the approved form s 53 RPA - The obligation to divide profits is dependent on: - Lease <3 years may be registered and is an exception to indefeasibility s 42(1)(d) RPA o Whether the business was conducted on behalf of the co-ownership, or whether it was personal business [Question of FACT] o Registration = infeasible title s 42 RPA o Whether the profits were from the common property per se or from the services of the co-owner conducting business on the - Unregistered: TYPES property Equitable Legal s 23D(2) CA 1. FIXED Intimately connected to the property of the person Squire v Rogers Complies with s 23C(1) CA + consideration Oral/deed/writing - Specific period before termination (not always) Lump sum - If not certain time, it is void ab Walsh v Lonsdale Taking effect in initio 1. Contract is final/enforceable possession 2. PERIODIC TENANCY (consideration) AND Implied legal lease (not really in (EXPRESS/IMPLIED) 2. Contract is sufficiently certain AND this course) - Rolls from period to period 3. In writing s 54A or pert-performance s Implied yearly tenancy - Notice period equals the period 23E AND with reference to which rent is Other 4. Equity would grant specific paid performance 3. TENANCY AT WILL Equitable estopple (Walton’s Stores) - Possession of the land with If there is an equitable lease…. consent of the owner, on terms that - Equity will: either party may determine the o Treat the parties as if they have a lease tenancy at any time o Order the parties to enter into a legal lease - Occupation fee (unless implied o Restrain the landlord from exercising right to terminate an implied legal lease periodic tenancy arises) - To enforce must approach a court with equitable jurisdiction 4. TENANCY AT SUFFERANCE Formal requirements of OST – not really in this course - Holding over after the lease ends, - Legal lease withoutNICHOLAS the consent of theRUFF owner o Deeds 23B(1) - Not a trespasser until asked to leave o Section 23D(d) o Implied periodic tenancies - Occupation fee (unless implied 2 REAL PROPERTY SKELETON NOTES LEASES granted by one person to another, which confers exclusive possession for a fixed period of certain duration. TERMINOLOGY Lessor grants the lease Lessee takes the interest, i.e. tenant Assignment transferring interest to a third party A lease agreement is both a contract and a property right TERMINATION AND REMEDIES Pt 1 WHAT ARE THE OBLIGATIONS IN A\ LEASE (LEASEHOLD COVENANTS)? 1. FORFEITURE AND RE-ENTRY ASSIGNMENT AND SUBLEASING 1. - EXPRESS CLAUSES Covenant breached Landlord has a right to re-enter Both estates in fee of simple and inyou reversion, and the leasehold estate are alienable -- There variety that can sexpect to find o areIfanot express,things implied statutory 85(1)(d) CA Assignment the transfer of a whole interest in land the building Sub-leasing creates another lease out of a lease (does not dispose REPAIR (is a biggie) something lesson than - - Must notice will depend therenewal type of of covenant breached of T, but carves out a lesser estate) Forbegive tenant it replaces -- Can significant percentage In a sub-lease/ assignment arrangement must be served on the assignee or sub-lessor - Tenant remain as tenant, but also become sub-lessor (subFor Landlord itislook the reversion is being transferred -- - Question cases that Manner ofofa fact forfeiture toRelevant notice serving summons for possession Physical re-entry (not ideal) Lessee may be ask the landlord) Landlordcourt for relief against the forfeiture Tenant Formalities (TT) WAS THE EASEMENT VALIDLY CREATED Pt 1? LL must have notice of the defect to be required - Generally, tenant undertakes this 2. CONTRACTUAL DAMAGES Registered lease is assigned by the registration of a 1. EXPRESS GRANT to repair the item No duty to repair an inherent defect - Both can be exercised Progressive Mailing House depends on what you want OST of transfer needs to a deed s 23B CA, equity – creation - Repair not memorandum renew- or improve - Sheville Builders contractual remedies can arise for prospective loss Unregistered lease evidence in writing, such as a deed Problems: is as for Torrens o Lessor has a duty to mitigate loss of assignment covenant: tenant is immediately in breach - TT validwriting easement = valid instrument ss 46 47(1) o Does the lese stipulate which clauses are fundamental o - Prospective Equity sufficient and performance to enable o Take the premises as you find them, tenant liable for RPA (i) Fundamental breach of an essential term orders of specific performance repair 1. Where only DT on CT must show ST was burdened by (ii) Repudiation COVENANTS AGAINST ASSIGNING IS THERE A VALID EASEMENT? – Re: Ellenborough Park easement created by deed - A lease may prohibit assignment if so it will be strictly contracted (Absolute) AND if found to prohibit subleasing = prohibit assignment 1. MUST BE A DT A ST 2. An easement on/after 1 Jan 1931 must comply with s 88(1) A lease may be subject toLAW the landlord’s consent (Qualified) - Cannot have easement in gross, unless Crown or Public utility 2. - IMPLIED BY COMMON CA if not will not be enforceable against subsequent o Cannot be unreasonably withheld ss133B(1) or impose a provider penalty Tennant 132 CA CA Landlord s 88A(1) purchasers 1. Unreasonable = cause the lessor financial detriment TERMINOLOGY (i) Covenant for quite enjoyment (i) Covenant to use the land THE in tenant-like manner 2. EASEMENT-MUST ACCOMMODATE DT TT in equity s 23C CA + consideration or s 54A 2. Un-consensual assignment = lessor have to give notice Dominant and terminate tenement lease (‘DT’) easement benefits - Protects the lessee’s right to exclusive possession (fromwill interference (CL and CA) - option Itormust make the DT land better and more convenient CA + consideration/part-performance o TEST would a reasonable person anticipate an adverse effect on the- property or kept futureinlease ability ifrepair the assignment is disturbance) Southwark Must be tenantable (lower them property AND there must be aa nexus between the easement 2. EXPRESS RESERVATION - Does not require allowed physical interference standa...
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