Office of Public Sector Information
PART III continued
(1)A receipt endorsed on, written at the foot of, or annexed to, a mortgage for all money thereby secured, which states the name of the person who pays the money and is executed by the chargee by way of legal mortgage or the person in whom the mortgaged property is vested and who is legally entitled to give a receipt for the mortgage money shall operate, without any reconveyance, surrender, or release—
(a)Where a mortgage takes effect by demise or subdemise, as a surrender of the term, so as to determine the term or merge the same in the reversion immediately expectant thereon;
(b)Where the mortgage does not take effect by demise or subdemise, as a reconveyance thereof to the extent of the interest which is the subject matter of the mortgage, to the person who immediately before the execution of the receipt was entitled to the equity of redemption;
and in either case, as a discharge of the mortgaged property from all principal money and interest secured by, and from all claims under the mortgage, but without prejudice to any term or other interest which is paramount to the estate or interest of the mortgagee or other person in whom the mortgaged property was vested.
(2)Provided that, where by the receipt the money appears to have been paid by a person who is not entitled to the immediate equity of redemption, the receipt shall operate as if the benefit of the mortgage had by deed been transferred to him; unless—
(a)it is otherwise expressly provided; or
(b)the mortgage is paid off out of capital money, or other money in the hands of a personal representative or trustee properly applicable for the discharge of the mortgage, and it is not expressly provided that the receipt is to operate as a transfer.
(3)Nothing in this section confers on a mortgagor a right to keep alive a mortgage paid off by him, so as to affect prejudicially any subsequent incumbrancer; and where there is no right to keep the mortgage alive, the receipt does not operate as a transfer.
(4)This section does not affect the right of any person to require a reassignment, surrender, release, or transfer to be executed in lieu of a receipt.
(5)A receipt may be given in the form contained in the Third Schedule to this Act, with such variations and additions, if any, as may be deemed expedient; F1. . .
(6)In a receipt given under this section the same covenants shall be implied as if the person who executes the receipt had by deed been expressed to convey the property as mortgagee, subject to any interest which is paramount to the mortgage.
(7)Where the mortgage consists of a mortgage and a further charge or of more than one deed, it shall be sufficient for the purposes of this section, if the receipt refers either to all the deeds whereby the mortgage money is secured or to the aggregate amount of the mortgage money thereby secured and for the time being owing, and is endorsed on, written at the foot of, or annexed to, one of the mortgage deeds.
(8)This section applies to the discharge of a charge by way of legal mortgage, and to the discharge of a mortgage, whether made by way of statutory mortgage or not, executed before or after the commencement of this Act, but only as respects discharges effected after such commencement.
(9)The provisions of this section relating to the operation of a receipt shall (in substitution for the like statutory provisions relating to receipts given by or on behalf of a building F2. . . society) apply to the discharge of a mortgage made to any such society, provided that the receipt is executed in the manner required by the statute relating to the society F1. . .
(10)This section does not apply to the discharge of a [F3registered charge (within the meaning of the Land Registration Act 2002)].
(11)In this section “mortgaged property” means the property remaining subject to the mortgage at the date of the receipt.
F1Words repealed by Finance Act 1971 (c. 68), Sch. 14 Pt.VI
F2Words repealed by Industrial and Provident Societies Act 1965 (c. 12), Sch. 5 and Friendly Societies Act 1971 (c. 66), Sch. 3
F3Words in s. 115(10) substituted (13.10.2003) by Land Registration Act 2002 (c. 9), ss. 133, 136(2), Sch. 11 para. 2(11) (with s. 129); S.I. 2003/1725, art. 2
C1S. 115 extended by Industrial and Provident Societies Act 1965 (c. 12), s. 33; s. 115 extended by Friendly Societies Act 1974 (c. 46, SIF 55:1), s. 57
C2S. 115(1)(3)(6)(8) extended by Building Societies Act 1986 (c. 53, SIF 16), ss. 13(7), 54(3)(a)(5), 119(5), Sch. 4 para. 2(2); and (1.12.1997) by 1986 c. 53, Sch. 2A para. 1(2) (as inserted (1.12.1997) by 1997 c. 32, s. 7(2), Sch. 2; S.I. 1997/2668, art. 2, Sch. Pt.I)
C3S. 115(9) excluded by Building Societies Act 1986 (c. 53, SIF 16), ss. 13(7), 54(3)(a)(5), 119(5), Sch. 4 para. 2(3); and (1.12.1997) by 1986 c. 53, Sch. 2A para. 1(3) (as inserted (1.12.1997) by 1997 c. 32, s. 7(2), Sch.2; S.I. 1997/2668, art. 2, Sch. Pt.I)
Without prejudice to the right of a tenant for life or other person having only a limited interest in the equity of redemption to require a mortgage to be kept alive by transfer or otherwise, a mortgage term shall, when the money secured by the mortgage has been discharged, become a satisfied term and shall cease.
(1)As a special form of charge by way of legal mortgage, a mortgage of freehold or leasehold land may be made by a deed expressed to be made by way of statutory mortgage, being in one of the forms (Nos. 1 or 4) set out in the Fourth Schedule to this Act, with such variations and additions, if any, as circumstances may require, and if so made the provisions of this section shall apply thereto.
(2)There shall be deemed to be included, and there shall by virtue of this Act be implied, in such a mortgage deed—
First, a covenant with the mortgagee by the person therein expressed to charge as mortgagor to the effect following, namely:
That the mortgagor will, on the stated day, pay to the mortgagee the stated mortgage money, with interest thereon in the meantime at the stated rate, and will thereafter, if and as long as the mortgage money or any part thereof remains unpaid, pay to the mortgagee (as well after as before any judgment is obtained under the mortgage) interest thereon, or on the unpaid part thereof, at the stated rate, by equal half-yearly payments the first thereof to be made at the end of six months from the day stated for payment of the mortgage money:
Secondly, a provision to the following effect (namely):
That if the mortgagor on the stated day pays to the mortgagee the stated mortgage money, with interest thereon in the meantime at the stated rate, the mortgagee at any time thereafter, at the request and cost of the mortgagor, shall discharge the mortgaged property or transfer the benefit of the mortgage as the mortgagor may direct.
This subsection applies to a mortgage deed made under section twenty-six of the M1Conveyancing Act, 1881, with a substitution of a reference to “the person therein expressed to convey as mortgagor” for the reference in this subsection to “the person therein expressed to charge as mortgagor.”
(1)A transfer of a statutory mortgage may be made by a deed expressed to be made by way of statutory transfer of mortgage, being in such one of the three forms (Nos. 2, 3 or 4) set out in the Fourth Schedule to this Act as may be appropriate to the case with such variations and additions, if any, as circumstances may require, and if so made the provisions of this section shall apply thereto.
(2)In whichever of those three forms the deed of transfer is made, it shall have effect as follows (namely):—
(i)There shall become vested in the person to whom the benefit of the mortgage is expressed to be transferred (who, with his personal representatives and assigns, is in this section designated the transferee), the right to demand, sue for, recover, and give receipts for the mortgage money, or the unpaid part thereof, and the interest then due, if any, and thenceforth to become due thereon, and the benefit of all securities for the same, and the benefit of and the right to sue on all covenants with the mortgagee, and the right to exercise all powers of the mortgagee:
(ii)All the term and interest, if any, subject to redemption, of the mortgagee in the mortgaged land shall vest in the transferee, subject to redemption.
(3)If a covenantor joins in the deed of transfer, there shall also be deemed to be included, and there shall by virtue of this Act be implied therein, a covenant with the transferee by the person expressed to join therein as covenantor to the effect following (namely):
That the covenantor will, on the next of the days by the mortgage deed fixed for payment of interest pay to the transferee the stated mortgage money, or so much thereof as then remains unpaid, with interest thereon, or on the unpaid part thereof, in the meantime, at the rate stated in the mortgage deed; and will thereafter, as long as the mortgage money or any part thereof remains unpaid, pay to the transferee interest on that sum, or the unpaid part thereof, at the same rate, on the successive days by the mortgage deed fixed for payment of interest.
(4)If the deed of transfer is made in the Form No. 4, it shall, by virtue of this Act, operate not only as a statutory transfer of mortgage, but also as a statutory mortgage, and the provisions of this section shall have effect in relation thereto accordingly; but it shall not be liable to any increased stamp duty by reason only of it being designated a mortgage.
(5)This section applies to the transfer of a statutory mortgage created under any enactment replaced by this Act.
In a deed of statutory mortgage, or of statutory transfer of mortgage, where more persons than one are expressed to convey or charge as mortgagors, or to join as covenantors, the implied covenant on their part shall be deemed to be a joint and several covenant by them; and where there are more mortgagees or more transferees than one, the implied covenant with them shall be deemed to be a covenant with them jointly, unless the amount secured is expressed to be secured to them in shares or distinct sums, in which latter case the implied covenant with them shall be deemed to be a covenant with each severally in respect of the share or distinct sum secured to him.
A statutory mortgage may be surrendered or discharged by a receipt in the form (No. 5) set out in the Fourth Schedule to this Act with such variations and additions, if any, as circumstances may require.
(1)Where a person is entitled to receive out of any land, or out of the income of any land, any annual sum, payable half-yearly or otherwise, whether charged on the land or on the income of the land, and whether by way of rentcharge or otherwise not being rent incident to a reversion, then, subject and without prejudice to all estates, interests, and rights having priority to the annual sum, the person entitled to receive the annual sum shall have such remedies for recovering and compelling payment thereof as are described in this section, as far as those remedies might have been conferred by the instrument under which the annual sum arises, but not further.
(2)If at any time the annual sum or any part thereof is unpaid for twenty-one days next after the time appointed for any payment in respect thereof, the person entitled to receive the annual sum may enter into and distrain on the land charged or any part thereof, and dispose according to law of any distress found, to the intent that thereby or otherwise the annual sum and all arrears thereof, and all costs and expenses occasioned by non-payment thereof, may be fully paid.
(3)If at any time the annual sum or any part thereof is unpaid for forty days next after the time appointed for any payment in respect thereof, then, although no legal demand has been made for payment thereof, the person entitled to receive the annual sum may enter into possession of and hold the land charged or any part thereof, and take the income thereof, until thereby or otherwise the annual sum and all arrears thereof due at the time of his entry, or afterwards becoming due during his continuance in possession, and all costs and expenses occasioned by nonpayment of the annual sum, are fully paid; and such possession when taken shall be without impeachment of waste.
(4)In the like case the person entitled to the annual sum, whether taking possession or not, may also by deed demise the land charged, or any part thereof, to a trustee for a term of years, with or without impeachment of waste, on trust, by all or any of the means hereinafter mentioned, or by any other reasonable means, to raise and pay the annual sum and all arrears thereof due or to become due, and all costs and expenses occasioned by nonpayment of the annual sum, or incurred in compelling or obtaining payment thereof, or otherwise relating thereto, including the costs of the preparation and execution of the deed of demise, and the costs of the execution of the trusts of that deed:
Provided that this subsection shall not authorise the creation of a legal term of years absolute after the commencement of this Act, save where the annual sum is a rentcharge held for a legal estate.
The surplus, if any, of the money raised, or of the income received, under the trusts of the deed shall be paid to the person for the time being entitled to the land therein comprised in reversion immediately expectant on the term thereby created.
The means by which such annual sum, arrears, costs, and expenses may be raised includes—
(a)the creation of a legal mortgage or a sale (effected by assignment or subdemise) of the term created in the land charged or any part thereof,
(b)the receipt of the income of the land comprised in the term.
(5)This section applies only if and as far as a contrary intention is not expressed in the instrument under which the annual sum arises, and has effect subject to the terms of that instrument and to the provisions therein contained.
(6)The rule of law relating to perpetuities does not apply to any powers or remedies conferred by this section . . . F1
(7)The powers and remedies conferred by this section apply where the instrument creating the annual sum comes into operation after the thirty-first day of December, eighteen hundred and eighty-one, and whether the instrument conferring the power under which the annual sum was authorised to be created came into operation before or after that date, unless the instrument creating the power or under which the annual sum is created otherwise directs.
F1Words repealed by Perpetuities and Accumulations Act 1964 (c. 55), s. 11(2)
C1S. 121 saved by Perpetuities and Accumulations Act 1964 (c. 55), s. 11(1); extended by Statute Law (Repeals) Act 1969 (c. 52), s. 3
(1)A rentcharge or other annual sum (not being rent incident to a reversion) payable half yearly or otherwise may be granted, reserved, charged or created out of or on another rentcharge or annual sum (not being rent incident to a reversion) charged on or payable out of land or on or out of the income of land, in like manner as the same could have been made to issue out of land.
(2)If at any time the annual sum so created or any part thereof is unpaid for twenty-one days next after the time appointed for any payment in respect thereof, the person entitled to receive the annual sum shall (without prejudice to any prior interest or charge) have power to appoint a receiver of the annual sum charged or any part thereof, and the provisions of this Act relating to the appointment, powers, remuneration and duties of a receiver, shall apply in like manner as if such person were a mortgagee entitled to exercise the power of sale conferred by this Act, and the annual sum charged were the mortgaged property and the person entitled thereto were the mortgagor.
(3)The power to appoint a receiver conferred by this section shall (where the annual sum is charged on a rentcharge) take effect in substitution for the remedies conferred, in the case of annual sums charged on land, by the last preceding section, but subsection (6) of that section shall apply and have effect as if herein re-enacted and in terms made applicable to the powers conferred by this section.
(4)This section applies to annual sums expressed to be created before as well as after the commencement of this Act, and, but without prejudice to any order of the court made before the commencement of this Act, operates to confirm any annual sum which would have been validly created if this section had been in force.
C1S. 122 saved by Perpetuities and Accumulations Act 1964 (c. 55), s. 11(1)
F1Ss. 123, 124, 125(1), 126–129 repealed by Powers of Attorney Act 1971 (c. 27), Sch. 2.
F1Ss. 123, 124, 125(1), 126–129 repealed by Powers of Attorney Act 1971 (c. 27), Sch. 2.
F1(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2)Notwithstanding any stipulation to the contrary, a purchaser of any interest in or charge upon land [F2(not being registered land)] shall be entitled to have any instrument creating a power of attorney which affects his title, or [F3a copy] thereof or of the material portions thereof delivered to him free of expense.
(3)This section only applies to instruments executed after the commencement of this Act, and no right to rescind a contract shall arise by reason of the enforcement of the provisions of this section.
F1Ss. 123, 124, 125(1), 126–129 repealed by Powers of Attorney Act 1971 (c. 27), Sch. 2.
F2Words in s. 125(2) substituted (13.10.2003) by Land Registration Act 2002 (c. 9), ss. 133, 136(2), Sch. 11 para. 2(12) (with s. 129); S.I. 2003/1725, art. 2
F3Words substituted by Law of Property (Amendment) Act 1926 (c. 11), Sch.
F1Ss. 123, 124, 125(1), 126–129 repealed by Powers of Attorney Act 1971 (c. 27), Sch. 2.
Law of Property Act 1925