PL-PRACTICE WEEK 12 (MORTGAGE AND CHARGES 2)
WEEK 12 — MORTGAGE AND CHARGES 2
COVENANTS IN A MORTGAGE:
– Punctual payment principal and interest as and when due. The rate usually graduates as default persists.
– Insurance: S 123, 130 PCL. Refer to insurance discussion on lease.
– Restricting redemption within a particular period: the right to redeem should not be clogged. But in the case of a company debenture it may but such suspension should not be unduly long.
– Consolidation: since Section 17 CA prohibits consolidation, if the mortgagee wishes to ensure that the mortgagor shall redeem all mortgage facilities at once rather than one by one, it should be expressly negatived in their agreement.
– Power of Sale, Insurance and appointment of a receiver: it appears it is conferred by operation of Law PCL. But refer to earlier discussion.
– Leasing by Mortgagor in possession: could be restricted thereby negativing S 121 PCL. May be absolute or qualified. Refer to earlier discussion.
– Covenant to observe and perform any condition in the head-lease.
Attorney Clauses: where mortgagor constitutes himself a tenant of the mortgagee and pays rent
IDENTIFY ETHICAL ISSUES INVOLVED.