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.

Caveat

It is fair to say that a caveat is not strictly classified as a real property security like a mortgage. However, a caveat can act as security, and caveats are an effective means of protecting legitimate proprietary interests. This is because they place a “freeze” on anyone dealing with the title to land until the subject of the caveat has been resolved. Accordingly, a working knowledge of the operation and effect of a caveat is an essential component of a legal practitioner’s skill set, especially when the legal practitioner’s work involves advising on the taking of security, such as in financing transactions.

This guidance note starts with explaining what caveats are used, and what are caveatable interests (that is, interests that will support a caveat).

In order for legal practitioners to utilise caveats as a means of protecting legitimate proprietary interests, legal practitioners need to appreciate the effect of lodging a caveat, which is explained in this guidance note. This guidance note also includes a number of practical tips to assist a legal practitioner when completing a matter or a transaction that involves a caveat.

Two checklists accompany this guidance note, which can be used by legal practitioners to help determine whether an interest would or would not support a caveat.

See Caveat.

Personal property in the context real estate financings

While the Personal Property Securities Act 2009 (Cth) (PPS Act) does not regulate real property security interests, it is not correct to think that personal property securities (PPS) plays no role in the taking of real property security. The guidance note provides an overview of the role of personal property in the context of real estate financings. To enable legal practitioners to appreciate this, this guidance note starts with a brief overview of the PPS legal framework, then explains real property and real property security in the context of the PPS regime.

This guidance note also includes examples of how the PPS Act may interact with real property or real property security.

See Personal property in the context real estate financings.