ADVANTAGES AND DISADVANTAGES OF EQUITABLE MORTGAGE

ADVANTAGES OF EQUITABLE MORTGAGE

1.     Where the period of repayment is short, equitable mortgage is preferable because it is easier and quicker to achieve than the legal mortgage.

2.    Equitable mortgage is not affected by the covenant in the head lease.

3.     Successive legal mortgages are possible.

4.      It encourages uniformity in the CA and the PCL States.

DISADVANTAGES

1. Unless where the two or any of the remedial devices of declaration of trust or creation of power of attorney exist, the mortgagee has difficulty in transferring legal mortgage to their party.

2. The mortgagee is not entitled to the title documents.

3. The mortgagee is not entitled to the benefits of the covenants in the head lease and there is no privity of estate between the head-lessor and the mortgagee.

To be continued with MORTGAGOR’S RIGHT TO REDEEM

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