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Mortgage of lease
Generally, where a borrower (mortgagor) does not own land but leases land instead, the borrower’s right of occupation of the land (the leased premises) can be an asset of the borrower that can be used as security for a loan from a lender. A mortgage of lease, including a sub-lease, uses the lease as a security.
This guidance note starts with explaining the concept of leasehold interests in land, and considers the use of a mortgage of lease as a form of real property security. This includes outlining the typical terms in a mortgage of lease that would aid a legal practitioner when drafting or negotiating a mortgage of lease.
A checklist accompanies this guidance note, which can be used by legal practitioners when reviewing leases for the purposes of taking a mortgage over a lease.
See Mortgage of lease.
