Kinh tế học - Chapter 10: Property law: mortgages, leases and licences

This is the prescribed textbook for your course.Available NOW at your campus bookstore!Copyright © 2000 McGraw-Hill AustraliaProperty law: mortgages, leases and licencesChapter 101Copyright © 2000 McGraw-Hill AustraliaDefinitionsOwnership: Person has legal rights over the property.Possession: Person has physical control over the property.2Copyright © 2000 McGraw-Hill AustraliaPropertyReal property - Land - Items attached to land - LeasesPersonal property - Chattels that can be (not real property) possessed (tangible objects) - Chattels that cannot be possessed (intangible objects) interest in partnership copyright shares trademarks3Copyright © 2000 McGraw-Hill AustraliaReal property - attachmentsTestFixtures(part of real property for sale purposes)FittingsManner of attachmentPermanentCan be easily removedPurpose of attachment (intention)For enjoyment of the itemDamage resulting to removeMajor damageMinor damage4Copyright © 2000 McGraw-Hill AustraliaInterests in landDoctrine of Tenure: Absolute ownership not possible as all land owned by Crown.5Copyright © 2000 McGraw-Hill AustraliaEstates in landFreehold Interest in land of uncertain duration.Fee simple: Interest continues, provided owner dies leaving  an heir.Life estates: Created for life of a particular person.Leasehold Contract in the form of a lease for a fixed period between two parties: - lessor (landowner) - lessee (tenant)Native title to landTitle enjoyed by descendants of the original inhabitants.6Copyright © 2000 McGraw-Hill AustraliaEstate in land – freehold Reversion Remainder A (Fee simple of land) A (Fee simple of land) on B’s death B (Life estate of land) B (Life estate of land) on B’s death C7Copyright © 2000 McGraw-Hill AustraliaDefinitionsLease: An interest in land given by a landlord to a tenant, for a fixed period of time, granting exclusive possession. eg. lease of shop, house Licence: A contractual right (unable to be revoked) to do something on land that would otherwise be illegal. e.g. 4sell alcohol 4manufacture a product under patent 8Copyright © 2000 McGraw-Hill AustraliaComparison of lease and licence9Copyright © 2000 McGraw-Hill AustraliaTypes of leaseFixed term lease is for a fixed period.Periodic tenancy continues indefinitely from one period to another (ending by notice given by either party).Tenancy at will is without any fixed duration with the consent of the landlord, requiring no rent repayments (ending by notice given by either party).Tenancy at sufferance occurs where the tenant remains in possession of premises after the expiry of the previous tenancy, without the consent of the landlord, and does not pay rent.10Copyright © 2000 McGraw-Hill AustraliaTerminationLeaseExpiry of termNotice to quitForfeitureSurrenderRepudiationBreach of an essential term (i.e. condition) of a leaseTenancyExpress agreementBy tenantBy landlordSurrender11Copyright © 2000 McGraw-Hill AustraliaTerms of lease Covenant Condition Breach BreachRemedies: Damages Rescind contract Injunction Damages12Copyright © 2000 McGraw-Hill AustraliaCovenants of landlord and tenantCovenants by the tenantTo pay the rentTo keep and deliver up the premises to the landlord at the end of the term in a good state of repairPermit landlord to enter to inspectPermit landlord to re-enter if fail to pay rentNot to assign or sublet without landlord’s permissionNot to conduct illegal activity on premisesCovenants by the landlordTo allow the tenant quiet possession of premises (without interference)Pay rates and taxes except those expressly the duty of the tenantRepair the premises13Copyright © 2000 McGraw-Hill AustraliaComparison of leases14Copyright © 2000 McGraw-Hill AustraliaLand titleOld system land: Title based on the production of all deeds transferring or conveying land from one person to another.Torrens title: Title based on transactions recorded on one certificate of title creating indefeasibility of title.15Copyright © 2000 McGraw-Hill AustraliaIndefeasibility of titleMeans that the person who is registered on the title as owner hasan indefeasible or unquestionable title to the land. (State guarantees the correctness of information contained on the title and provides compensation under an assurance fund.)16Copyright © 2000 McGraw-Hill AustraliaInterests in landLegal Interests: Concerned with ownership (and controls associated with ownership).Equitable Interests: Concerned with those entitled to the benefits of the land. (Relevance: The holder of an equitable interest cannot enforce their claim against an innocent third party purchasing the legal interest in the land.)17Copyright © 2000 McGraw-Hill AustraliaExamples of legal and equitable interests18Copyright © 2000 McGraw-Hill AustraliaCo-ownership of landUnity of possessionEach person has interest over the whole of the land, but not to the exclusion of other owners. 19Copyright © 2000 McGraw-Hill AustraliaTypes of tenancy 20Copyright © 2000 McGraw-Hill AustraliaSecurities for loansA mortgage is a contract in which a borrower (the mortgagor) gives the lender (the mortgagee) his/her real property as security for a loan.21Copyright © 2000 McGraw-Hill AustraliaMortgages over real propertyOLD SYSTEMTORRENS SYSTEM Mortgagor transfers title to mortgagee.  Mortgagee registers on title. (Can be more than one)  Mortgagor redeems land on payment of all mortgage moneys. (Equity of redemption) 22Copyright © 2000 McGraw-Hill AustraliaRemedies in the event of defaultSue for breach of contractAppoint a receiverPower of sale Obtain a foreclosure order23Copyright © 2000 McGraw-Hill AustraliaPower of foreclosureMortgagee can take over the property if mortgagor defaults.Major requirements:Default of at least six monthsFailure to achieve mortgagor’s debt at public auctionShortfall is not recoverable from mortgagor.24Copyright © 2000 McGraw-Hill AustraliaCommon law dutiesCommon law duties of a mortgagee who sells up a property:Must give one month’s notice of intention to sellMust obtain best possible price for property sale.25Copyright © 2000 McGraw-Hill AustraliaBill of saleA contract allowing personal property to be used by the grantee (borrower) as security for a loan from the grantor (of the bill of sale).26Copyright © 2000 McGraw-Hill AustraliaSecurity interestsA pledge is a transfer of possession (not ownership) of a chattel, giving the lender (pledgee) the right to sell the pledged goods if the borrower (pledgor) defaults by the stipulated date, or within a reasonable time (if no date stipulated).27Copyright © 2000 McGraw-Hill AustraliaSecurity interestsA lien gives a creditor a right to possess the debtor’s property until the debt is paid.A particular possessory lien is the right of one person to retain possession of goods of another until the debt associated with those goods is paid.A general possessory lien is the right of one person to retain possession of goods (lawfully obtained) of another until the debt owing is paid.An equitable lien is the right to have the property of another utilised to ensure payment of a debt, without possession of the property.Maritime liens are specifically binding on a ship and its cargo and freight. Statutory liens are created by an Act of Parliament.28Copyright © 2000 McGraw-Hill AustraliaGuaranteeA contract where one party (the guarantor) promises another party (the creditor) to carry out the obligations to another (the debtor), should the debtor default on their obligations. 29Copyright © 2000 McGraw-Hill AustraliaIndemnityA contract where one party (the indemnifier) undertakes to become liable to another against any loss arising out of a transaction with a third party.30Copyright © 2000 McGraw-Hill AustraliaBailmentOccurs when possession (not ownership) of goods is transferred from one person (bailor) to another (bailee), e.g. pledge.31Copyright © 2000 McGraw-Hill AustraliaDuties and liabilities of a baileeDuties of a baileeTo return the goods to the bailor at the expiry of the bailmentNot to misuse the goodsTo retain possession of the goodsTo take (reasonable) care of the goodsLiability of a baileeBreach of contractTort of - Negligence - Conversion - DetinueVicarious liability32Copyright © 2000 McGraw-Hill AustraliaDuties of a bailorNot to interfere with possession of goods that the bailee has, for the duration of the bailmentTo ensure quality and fitness of goods for a particular purpose33Copyright © 2000 McGraw-Hill AustraliaInnkeepersPersons who hold themselves out as providing accommodation for travellers:Hotel keeperMotel keeperLiability: For loss or damage of guests’ property, taken into their possession for safekeeping34Copyright © 2000 McGraw-Hill AustraliaCommon carrierA carrier whose business is to carry goods for any customer requesting this service:AirlinesShipping operatorsRailwaysLiability: For any loss or damage to goods in its possession35Copyright © 2000 McGraw-Hill Australia