Paper Example on Land Law Equity and Trust Laws

Introduction

Home ownership in the UK has been renowned as a compulsive love affair gone wide of the mark. It is an obsession that has led to the establishment of policies in recent years to a degree of backing from the government. Some of these procedures include the Mortgage to Rent scheme which a few years back was restructured to offer the courts authority to check with a degree of enquiry in repossession activities so to avert repossession of a household due to mortgage debts that can be refunded by reasonable instalments. There some cases these efforts all fail and mortgagors and landlords can repossess the property due to the default of the mortgagor or the tenant (Macula, 2007).

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In the event a mortgagee is unable to fulfil his mortgage payment under the UK house repossession laws, the mortgage lender could decide to act on his right to forfeit the lease and make a move to repossess the property. In occasions where the landlord Is also the mortgagee, the mortgagor could either repossess the property by forcing a sale or intercepting the rent. By The House repossession laws, the mortgage lender is allowed to out rightly repossess the property without going to court. If the right to forfeit may arise, a landlord has to be guided by statutory notice process before the lease can be terminated as per requirements under section 146 of the law of property act (Harman 1970). However, most of the mortgage lenders use the court system to enforce a repossession order. The mortgage lender is required by law to disclose owed to him by the mortgager, contemplate a bid from the mortgager to change his method of payment, in case of an offer by the mortgager, the mortgagee is also obliged to respond and in case of a rejection offer a valid reason within ten days, in cases where the mortgager decides to pursue court action a written fifteen day warning has to be given to the mortgagee and also the mortgage lender is obliged to notify the mortgagee's council inside five days of receiving notice of court hearing in event the mortgagee has to apply to council as homeless.

The mortgagee is protected by the section 6 of the administration of justice act ("AJA") in the case the mortgager may attempt to repossess the residential property. A mortgagee has a right to request for the court to implement its powers and defer repossession by the virtue of section 36 of the AJA. This is done via the filing of relief by the tenant/mortgagee. If relief in the court which if granted overrules the forfeit and the tenant is allowed to keep his lease The court is obliged to establish if the mortgagee can be able to pay the sums due in a reasonable period upon which it is possible to exercise its power.( Administration of Justice Act 1970) However, as it was established during Halifax Building Society v Clark a drafting error of the 1970 section 8 of the administration of justice act due to a drafting error stating "any amount due" was required meant that the total obligation came to be owed on default (Haley 2007). This error meant the mortgagor was obligated to be capable to illustrate means to pay back the whole loan, rather than simply the arrears, for section 36 to apply. The section has been amended over the years with a notable amendment in 1973 where the court was granted the power to set out a fair amount upon which a mortgagee is able to show therefore proving his ability to be able to pay. The law over the years in relation to repossession has been reviewed. The most recent piece of legislation in parliament the house of repossession protection bill of 2009.The law amended the law of property act 1925. It is now only by going through the court that the mortgagor is able to force as the power of sale on the repossessed property.

The court considers issues like the tenant's mental health, the potential of the tenants to sell other assets to cover payments and other essential factors to make its decision

The government also has established The Mortgage Rescue Scheme as an effort to give mortgagees advice on how to keep their property and allow a communal property-owner to gain a part of their home. It has however not been as effective as it was established to be. However, due to the overly stern eligibility standards, it is avoiding thousands from being homeless and gives a substantial level protection. Alternatively, the Homeowners Mortgage Support Scheme permits the mortgager to apply for amount overdue to be paid for two years. These options present good choices upon which a mortgagee is protected by the government (Greer 2009)

It is however still possible for a mortgagor to evict the tenant without going to the court if a borrower is in default. This is accomplished by manipulation of the mortgage deed's provisions through the mortgagor. It is also evident that although there is a system in place to protect the mortgagee, eligibility into these systems is too strict and has discouraged the public from enrolling. This protection is therefore not enough considering the loopholes available to mortgagor to take advantage of the mortgagee's naivety, hopes and dreams

Conclusion

In the face of the recent 2008 economic turmoil, not many are convinced that real estate a safe option in terms of investment. However, many people want a home and with these economic times, mortgages offer a perfect opportunity for them achieve this objective. The government has done a lot in an attempt to facilitate this. However, it is not enough yet. The country could be much further, the mortgagees could be protected and The Administration of justice act needs a few more reforms to ensure further protection for the borrowers. It is important better rules are put in place to facilitate UK's aptitude to make a sound economic recovery.

References

Administration of Justice Act 1970, s.36 (1)

Clements L.M (1999) "Residential Mortgage Repossessions and the Administration of Justice Acts 1970 -1973 - A Case for Reform, Web Journal of Current Legal Issues http://webjcli.ncl.ac.uk/1999/issue3/clements3.htm [Accessed April 25, 2018]

Greer, S. (2009) Horsham Properties Group Ltd v Clark: possession - mortgagee's right or discretionary remedy? Conveyancer and Property Lawyer, Conv. 2009, 6, 516-524, p.522

Haley, M. (2008) "Mortgage Default: Possession, Relief and Judicial Discretion" Legal Studies 483 Page 484

Harman J. Four Maids Ltd. v. Dudley Marshall (Properties) Ltd [1970] Ch. 317 Page 320

Home Repossession (Protection) Bill 2008-09 at http://services.parliament.uk/bills/2008-09/homerepossessionprotection.htm

Macula, P. (2009) Mortgage arrears: the repossession crunch, Journal of International Banking and Financial Law, (2009) 3 JIBFL 137, p.3