legal mortgage

A legal mortgage conveys the legal estate in property to the mortgagee (who is the lender in the transaction).

In the UK, there are two types of legal mortgages. The first type of legal mortgage is leases granted for a specified number of years. The property is re-conveyed to the owner upon repayment of the sums loaned. Secondly, deeds which are stated to be charges by way of legal mortgage.

All other types of mortgage are equitable mortgages. In such mortgages, the legal title is not conveyed to the mortgagee, but rather obtains an equitable interest in the property mortgaged.

Mortgages over registered land are registered upon the application of the mortgagee in the register of charges. The first mortgagee usually takes possession of the title deeds, as upon the granting of a legal mortgage it becomes the owner of the land. Further mortgages, subsequent to the first may be taken out over property.

Mortgages may be granted over a wide range of property, and is not limited to real property.

Usage: The owner of the patent rights granted a legal mortgage over the patent to secure funding.

Related Words: mortgage; charge; equitable mortgage; legal interest; beneficial interest; security interest; real property; personal property; equitable charge; legal charge; lien; fixed charge; floating charge; pledge; asset.