Q&As

A CH1 charge by way of legal mortgage was obtained as security for a loan. The charge was not registered at HM Land Registry because there was a prior mortgagee who refused for the charge to be registered as their consent was not obtained. Can the second mortgagee prevent the mortgagor from selling the property at an undervalue, and could they apply to the court for an order that the property is sold at market value?

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Published on LexisPSL on 14/09/2020

The following Property Disputes Q&A provides comprehensive and up to date legal information covering:

  • A CH1 charge by way of legal mortgage was obtained as security for a loan. The charge was not registered at HM Land Registry because there was a prior mortgagee who refused for the charge to be registered as their consent was not obtained. Can the second mortgagee prevent the mortgagor from selling the property at an undervalue, and could they apply to the court for an order that the property is sold at market value?

This Q&A assumes that the legal mortgage is otherwise valid and executed correctly, and the only defect is the failure to register.

This question raises the issue of the remedies available in respect of an unregistered mortgage.

The creation of an otherwise valid charge by way of legal mortgage, which is not registered, gives rise to an equitable mortgage. This is the effect where form CH1 is used because it meets the requirement of being made by deed and states that the chargor intends to grant a charge by way of legal mortgage. See Commentary: Equitable mortgage

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