12
are developed and conveyed separately, but as part of one composite overall scheme, with some common services. There are technical rules which may otherwise prevent covenants being enforceable between such owners.
13. Clause 13 amends section 42 so that covenants contained in documents not under seal, such as tenancy agreements, are also saved from redundancy on the issue of a Crown lease, as are covenants by deed now.
14. Clause 14 amends section 45(3) which only permits tacking (the making of further mortgage advances to an original loan secured on a property to rank in priority to other loans made in the intervening period) in certain specified circumstances. Normally the priority of mortgages, which is important where there is doubt about the borrower's solvency, is dictated by the order in which loans are made. The proposed amendment will clarify the position where a security affects land and other property. Tacking will be permitted in relation to land only in the circumstances described in section 45(1).
15. Clause 15 amends section 50(6) which deals with the power of a mortgagee to appoint a receiver to protect his interests. The word "property" is replaced by "land" which is considered more appropriate.
16. Clause 16 amends section 53(1) to make it clear that it is the deed of assignment which is operative to transfer the mortgagor's estate dis- charged from the relevant and subsequent mortgages.
17. It was felt that the receipt should operate not only as a release of the mortgaged property as security for the loan and interest, but also, in the case of a mortgage by way of assignment, as a re-assignment of the land back to the mortgagor. Clause 17 amends section 56 to this effect.
18. Clause 18 adds a new section 56A to provide certainty as to the effect of any interest created under a floating charge, whereby the assets for the time being of a company are charged as security to a lender. The amendment would prevent a floating charge from affecting an interest in land acquired by any person until the floating charge became fixed on the assets of the company notwithstanding any restriction on alienation in the floating charge.
19. Clause 19 amends section 58(9) so that an under-lessee is protected on the failure of his landlord's lease on the bankruptcy of the landlord.
20. While the rest of Part VII refers to "property", section 60(3) refers to "land". Clause 20 changes this reference to "property" to be consistent with the other provisions of Part VII.
21. Clause 21 amends section 62 which deals with the service of notices. The proposed changes would be twofold—
(a) "or lessee" will be added after "on a mortgagor"; and
(b) notices which have to be served will be confined to notices served
pursuant to the Ordinance.
22. (a) Having regard to the wording of section 35(1)(a), which refers to "a Crown lease", and the presence of the words "the legal estate in" in the heading to Part I of the First Schedule, there was some doubt as to whether or not the implied covenants would be implied in an assignment of the equitable estate as, for example, in the assignment of an interest in land where a Crown lease has not been or deemed to have been issued. Since, in practice, the same form of
No comments yet.
Private notes are available after approval.