Freehold Covenants

Introduction

A **mortgage** is a proprietary security interest over land, granted by a borrower (the **mortgagor**) to a lender (the **mortgagee**) as security for a debt. This chapter covers the topics the FLK2 syllabus requires you to master: the **creation** of legal and equitable mortgages; the **enforceability of mortgage terms** (the equity of redemption, clogs and fetters, undue influence); the **priority** of competing mortgages in registered and unregistered land; the **lender's powers and duties** (power of sale, receivers, possession, foreclosure); and the **protection of mortgagors and third parties** (the Administration of Justice Acts, the **Etridge** protocol, and overriding occupiers under **Boland**).

Assessment focus

The FLK2 syllabus requires you to understand: the **enforceability of mortgage terms**; **priority** between competing mortgages; the **lender's powers and duties** (especially on sale); and the **protection of mortgagors and third parties**. This is a dense topic — you should know **ss.101 and 103 LPA 1925** on the power of sale, the **Cuckmere Brick** duty to obtain the true market value, the **Etridge** protocol on undue influence, and how overriding occupiers under **Sch 3 para 2 LRA 2002** can defeat a lender's priority (**Boland**). Questions are single best answer questions set in realistic client scenarios; you must **apply** these rules rather than merely recall them.

Study tips

1) Master the distinction between the power of sale **arising** (s.101 LPA 1925) and **being exercisable** (s.103 LPA 1925) — a premature sale still passes good title but exposes the mortgagee to **damages**. 2) Remember the **Cuckmere Brick** duty: reasonable care to obtain the **true market value** at the time of sale — but no duty to delay to improve value (**Silven**). 3) Learn the **Etridge** protocol as a checklist: lender put on inquiry → insist on **independent legal advice** → obtain the solicitor's **written confirmation**. 4) Know that an occupier's beneficial interest can override a mortgage (**Boland**, Sch 3 para 2 LRA 2002) unless **overreached** by payment to **two trustees** (**Flegg**). 5) Note the limits of **s.36 AJA 1970**: it only applies where the mortgagee **brings possession proceedings** (Ropaigealach; Horsham).