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Paper 1 · Lesson 3 — Interests in Land, Mortgages and Caveats — priorities

Mortgages nature and priority

The nature of a mortgage / charge and priority between competing mortgages (legal beats equitable; the deposit-of-deed equitable mortgage).

2 questionsAnswers & explanations includedFree — no sign-up

Question 1

Mr Devan borrows $500,000 from a bank to complete the purchase of his flat and signs the bank's mortgage over it; he remains the registered proprietor throughout. A colleague tells him that, because the bank is the one "doing the mortgaging", it must be the bank that grants the security and Mr Devan who could sell up if things went wrong. Mr Devan asks his agent, as between the two of them, who actually grants the security and who may enforce it should the loan fall into arrears.

Which statement is correct?

  1. A. Mr Devan both grants the security and may enforce it, being owner throughout.
  2. B. The bank grants the security and Mr Devan may enforce it on default.
  3. C. The bank both grants and enforces the security, holding it until repaid.
  4. D. Mr Devan grants the security and the bank enforces it on his default.
Show the answer and full explanation

Answer: D

The rule. The mortgagor is the borrower, who grants the security and stays the registered proprietor. The mortgagee is the lender, who receives the security and may enforce it — by sale — only on default.

Why D is correct. Mr Devan, the borrower, grants the mortgage; the bank, the lender, is the one who may enforce it if he falls into arrears.

The other options.

  • B inverts the two — the very error the colleague makes in the stem, reasoning that the bank is "doing the mortgaging".
  • A and C put both roles on one party, the borrower or the lender.

Exam note. The party doing the mortgaging is the one giving the security, not the one taking it. Enforcement runs the other way — it is the lender's remedy on default.

The mortgagor is the borrower, who grants the security and stays the registered proprietor →

Question 2

Kamala signed a mortgage of the house in favour of a bank in March 2026.

Which statement most appropriately describes the position?

  1. A. She could grant a valid mortgage, though it would end on her death and Rajen would be looked to.
  2. B. She could grant a valid mortgage, a person in possession being able to deal as an owner.
  3. C. She could grant a valid mortgage provided Rajen was given notice before it was completed.
  4. D. She could not grant a mortgage of the house at all, holding it for her lifetime only.
Show the answer and full explanation

Answer: D

The rule. A life tenant cannot mortgage the property. She holds the use of it, not the estate.

Why D is correct. She could not grant it at all.

The other options.

  • B treats possession as ownership
  • C offers notice to Rajen as a cure
  • A has the mortgage ending on her death with the bank looking to Rajen — superficially tidy and wrong, since Rajen never charged anything.

Exam note. The bank's failure to examine the title is stated for a reason. The document was signed; it was not effective.

A life tenant cannot mortgage the property →

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