Mortgage Deed - Does it need to be signed by the lender ?

[bhall]

Good Morning

 

Basically the question is -

 

For a mortgage deed to be valid and enforceable in possession proceedings does it have to be signed by the lender ?

 

I took part in a discussion in the below thread yesterday, as I strongly felt that the Lender did not have to sign it. The discussion has now reached an impasse.

 

As it is a question relating to a legal issue, I thought it would be beneficial to ask the question, in a seperate thread in the legal issues section, as to not hijack the OP's thread.

 

Kensington will not disclose securitisation

Edited March 26, 2013 by citizenB

[bhall]

The reason that I would say no is based upon

 

Eagle Star Insurance Company Ltd v Green & Anor [2001] EWCA Civ 1389 (8 August 2001) (including previous and subsequent hearings) -

 

Helden v Strathmore Ltd [2011] EWCA Civ 542 (11 May 2011)

 

s.53 of the Law of Property Act 1925

 

s.1 of the LP(MA)A 1989

 

I would be the first to admit that I may have misunderstood both the implications of both the above case law and legislation and therefore ask the contributors of the Legal Issues sub forum for their thoughts on this matter.

 

Thank you

[bhall]

Eagle Star Insurance Company Ltd v Green & Anor [2001] EWCA Civ 1389 (8 August 2001)

 

 

12. So, says Mr Green, section 2 requires the signature of all the parties to a mortgage, being a contract for the disposition of an interest in land. He says that if you look at this mortgage at the end where the signatures appear it will be seen (on page 50 of Volume 1 of the bundles of documents) that there are the signatures of himself and Miss Challis, but there is no signature on behalf of Eagle Star. So, he submits, the mortgage of 8th November 1989 does not comply with the requirements of section 2 of the 1989 Act, which by then had come into force. He made it clear that it is not disputed that he owes money to Eagle Star, but there is a dispute about the precise amount. He emphasised that he has been regularly paying monthly payments to Eagle Star, though he accepts there are arrears. He says that the effect of applying section 2 to the mortgage of 8th November 1988 is that it is unenforceable. That means that the Eagle Star company are not entitled to obtain the order for possession which it obtained from His Honour Judge Jones. He emphasised a number of times during his submissions that without the signature of someone on behalf of Eagle Star the mortgage is not a full and complete legal document and so they are not entitled to enforce the charging provisions in it against him.

 

13.Mr Green referred to some passages in the report of the Law Commission which led to the bill enacted in the 1989 Act. He referred to passages in the Law Commission Paper No.164, in particular 4.5, 4.6 and 4.8. He also referred to a number of authorities. I think the most important of these (because it was concerned with a mortgage, while the other cases he referred to concerned contracts for the sale of land) was United Bank of Kuwait Plc v Sahib [1997] Ch at 107. I have been supplied with a copy in [1996] 3 All ER 251. That is an important case. It decided that the requirements contained in section 2 of the 1989 Act to the effect that a contract for the sale or other disposition in land must be in writing in a single document incorporating all the terms and signed by the parties, abolished the rule that a mere deposit of title deeds relating to property by way of security created a mortgage or charge. Following the 1989 Act the rule had changed. There had to be a written document, not merely a deposit of title deeds by way of security in order to create a mortgage or charge.

 

14.Mr Green relied on that for the proposition that the same should apply to this case because there was, in this case, within the mortgage deed a contract by him in the form of the covenant to repay. There were also contractual provisions or covenants by Eagle Star. So, he said, if the mortgage in United Bank of Kuwait v Sahib was governed by section 2 of the 1989 Act, so should this mortgage with similar results for its enforceability.

 

15.In my judgment this argument does not stand any real prospect of success. This is not a case of a contract: it is a case of a deed. If we were simply dealing with a contract to create a mortgage then Mr Green would be right. But in this case he and Miss Challis have actually executed a deed. It is clear from the provisions of the 1989 Act itself that a distinction is drawn between the formal requirements affecting the execution of deeds and the formal requirements governing contracts. Section 1 makes alterations to the law about the execution of deeds. For example, they are no longer required to be written on any particular kind of substance and a seal is not required for the valid execution of an instrument as a deed by an individual. There are a number of detailed provisions in section 1 relating to deeds. Section 2 does not apply to deeds; it applies to contracts. It may be a contract for the sale of land, it may be a contract for some other kind of disposition of an interest in land, one other kind of disposition being a transfer by way of security over what is commonly called a mortgage or charge.

 

From the above

 

1) The Appllant claimed that the signature of all the parties to a mortgage, being a contract for the disposition of an interest in land was required.

 

2)However,there are the signatures of himself and Miss Challis, but there is no signature on behalf of Eagle Star.

 

3) He emphasised a number of times during his submissions that without the signature of someone on behalf of Eagle Star the mortgage is not a full and complete legal document and so they are not entitled to enforce the charging provisions in it against him.

 

4)In my judgment this argument does not stand any real prospect of success. This is not a case of a contract: it is a case of a deed. If we were simply dealing with a contract to create a mortgage then Mr Green would be right. But in this case he and Miss Challis have actually executed a deed. It is clear from the provisions of the 1989 Act itself that a distinction is drawn between the formal requirements affecting the execution of deeds and the formal requirements governing contracts.

 

In my mind the above precedent set by the above Court of Appeal case confirms that whilst the mortgage agreement (the contract) has to be signed by both the borrower and the lender, the mortgage deed (the charge) is executed (signed) by the borrower only.

 

Whilst the judgement can become clouded by reference to s.2. This is a deliberate attempt draw away from the simple fact that in this case the deed was only signed by the borrower and that it was the judgement of the Court of Appeal that the deed was valid and enforceable.

Edited March 26, 2013 by citizenB

[bhall]

Helden v Strathmore Ltd [2011] EWCA Civ 542 (11 May 2011)

 

This is another Court of Appeal case -

 

 

29. Mr Helden's case on section 53 is only marginally less weak. The section does indeed apply to mortgages, as, unlike section 2, it is concerned with the "creat[ion] or disposi[tion]" of any "interest in land". However, it is far less prescriptive than section 2, which requires every term of the arrangement to be included in a document or identical documents signed by both parties. Section 53 merely requires the arrangement to be in a document signed by the person creating or disposing of the interest. Section 2 therefore may give rise to problems when it comes to estoppel or rectification (as discussed in the thoughtful judgment of Morgan J in Oun v Ahmed [2008] EWHC 545 (Ch), paras 41-55), but no such problems arise in connection with section 53.

 

From the above

 

1) Section 53 merely requires the arrangement to be in a document signed by the person creating or disposing of the interest.

 

This case would appear to confirm that the document (the deed) merely needs to be signed only by the person creating or disposing of the interest, in otherwords the borrower only needs to sign the deed as a result of s.53 of the Law of Property Act 1925.

 

Edited March 26, 2013 by citizenB

[bhall]

s.53 of the Law of Property Act 1925

 

 

53 Instruments required to be in writing.(1)Subject to the provision hereinafter contained with respect to the creation of interests in land by parol—

 

(a)no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by his agent thereunto lawfully authorised in writing, or by will, or by operation of law;

 

(b)a declaration of trust respecting any land or any interest therein must be manifested and proved by some writing signed by some person who is able to declare such trust or by his will;

 

©a disposition of an equitable interest or trust subsisting at the time of the disposition, must be in writing signed by the person disposing of the same, or by his agent thereunto lawfully authorised in writing or by will.

 

(2)This section does not affect the creation or operation of resulting, implied or constructive trusts.

 

 

From the above

 

 

(a)no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by his agent thereunto lawfully authorised in writing, or by will, or by operation of law;

 

This confirms that deed must be in writing and signed by the person (the borrower_ creating or conveying the interest in land.

 

It makes no stipulation that it must also be signed by the lender.

 

 

Edited March 26, 2013 by citizenB

[bhall]

s.1 Law of Property (Miscellaneous Provisions) Act 1989

 

 

 

1 Deeds and their execution.

 

(1)Any rule of law which—

(a)restricts the substances on which a deed may be written;

(b)requires a seal for the valid execution of an instrument as a deed by an individual; or

©requires authority by one person to another to deliver an instrument as a deed on his behalf to be given by deed,

is abolished.

 

(2)An instrument shall not be a deed unless—

(a)it makes it clear on its face that it is intended to be a deed by the person making it or, as the case may be, by the parties to it (whether by describing itself as a deed or expressing itself to be executed or signed as a deed or otherwise); and

(b)it is validly executed as a deed by that person or, as the case may be, one or more of those parties.

 

(3)An instrument is validly executed as a deed by an individual if, and only if—

(a)it is signed—

(i)by him in the presence of a witness who attests the signature; or

(ii)at his direction and in his presence and the presence of two witnesses who each attest the signature; and

(b)it is delivered as a deed by him or a person authorised to do so on his behalf.

 

From the above

 

1) by the person making it

2) it is validly executed as a deed by that person

 

This further confirms that the deed must be executed (signed) by the person (the borrower) making it. As per s.53 of the Law of Property Act 1925, the above makes no stipulation that the deed must also be signed by the borrower.

 

Edited March 26, 2013 by citizenB

[steampowered]

In theory, I don't think there is any reason why a deed would need to be signed by both parties. It is possible to have a Deed which is only signed by one party and is binding on that party. The Land Registry have produced a guide setting out the requirements here - http://www.landregistry.gov.uk/professional/guides/practice-guide-8 - and execution by two or more parties is not one of the requirements.

 

I have only skimmed the thread. But I think the points raised about the parol evidence rule s53 are not relevant. These are just about things needing to be in writing rather than made orally. I also think the adjudicator's case posted in that thread has been misunderstood, since this is really about the Mercury case and related cases, which are about situations where one party attaches pages after signing or where only part of the document is signed. This would not apply in a straightforward mortgage where the borrower signed the full document. The basic reason why the security deed was not valid in that case seems to be because the signatory only signed the signature pages, and not the whole document (in essence it was a badly managed transaction involving a number of leases signed at different times).

 

The point about s2 which was discussed in the Eagle case has been covered by more recent case law. Helden v Strathmore is very clear that s2 is concerned with contracts for the future mortgage/sale/conveyance of land and not a present mortgage. I do not think s2 is relevant.

 

However, I do have real concerns about the delivery point. Applecart is correct to point out that Deeds must be delivered to be enforceable. It is true that delivery is presumed on signature, so there is no doubt that the borrower intended to deliver the deed. But there is a question in my mind over whether delivery will be seen to be conditional on both parties executing the Deed. This is the analysis taken in Silver Queen Maritime Ltd v Persia Petroleum Services [2010]. The basic facts of this case are that A executed a Deed containing an agreement settling litigation and gave it to B. A tried to withdraw its consent to the settlement before B signed. B then signed a few days later. The analysis taken by the judge was that the deed was delivered to party B was irrevocable with the only condition being B's signature. Accordingly the Deed was enforceable when B signed. The Deed is effectively held in escrow until Party B signs. It seems to me that this has to be correct, otherwise Party A would be bound to settle the litigation without Party B being obliged to make payment. If you are putting a contract with obligations on both parties inside a deed, delivery of that deed is surely intended to take place only when both parties bind themselves to the deed.

 

This would certainly apply to a situation where a borrower delivers a deed to the bank. If the mortgage is a straightforward piece of paper saying "I charge my house" and both borrower and lender sign a separate loan agreement, then there is no question that the deed is binding on borrower even without countersignature by lender. But if the loan and the mortgage are contained in a single document, that imposes contractual obligations on both parties, the borrower obviously did not intend to charge the house to the bank unless the bank agreed to lend him money. In my mind there is a real question mark over how long the bank (Party B) can hold onto the deed without signing. I have serious difficulty accepting the proposition that the bank can hold onto the deed indefinitely, and only bind itself to the agreement by signing years later - there must be a limit to how long the condition referred to in Silver Queen Maritime (namely execution by the other party) can remain outstanding. I had a brief look at the articles/cases citing Silver Queen and the cases you mentioned on a legal database but didn't see anything that would clarify this.

 

My conclusion? It is impossible to say either way. This is a point of legal principle that, unless I have missed something which is very possible, does not appear to have been litigated in the Court of Appeal or Supreme Court/House of Lords.

Edited March 26, 2013 by steampowered

[bhall]

Hello steampowered

 

Thank you for your post it is very much appreciated.

 

I will have to read '>Queen Maritime as I am not familiar with that case.

 

My personal view in relation to the mortgage deed discussion is that it has become lost that the mortgage deed only relates to the charge -being the security for the debt. The mortgage agreement -being the agreement to lend and repay the debt, results in the debt being created and is signed by both parties. As you say there would be contractual obligations for both parties.

 

Whereas the mortgage deed is unilateral as it is only the borrower that agrees to different things (such as they have received the advance /first payment, received the mortgage conditions and gives the actual charge) - , whereas in relation to deed the lender doesn't agree to perform any obligation and therefore leaves no requirement for it to be signed by the lender. - except for as described below.

 

Examples of mortgage deeds used

bhall said:

 

http://www.themortgageworks.co.uk/includes/pdf/T118_v7bw.pdf

 

The above is a mortgage deed for 'the mortgage works' - please note the second page is only used when the mortgage has been repaid and the charge is released.

 

http://www.leedsbuildingsociety.co.uk/introducers/solicitors/pdf/Mortgage_Deed.pdf

 

The above is a mortgage deed for the 'leeds building society'

 

http://www.accordmortgages.com/documents/ACCL0002MR.pdf

 

The above is a mortgage deed for 'accord mortgages'

 

http://www.mmbs.co.uk/Mortgage%20Deed%20-%207th%20Edition.pdf

 

The above is a mortgage deed for the 'melton mowbray building society'

 

As you can see the content of the above mortgage deeds, are pretty much the same. A charge may be made in form CH1 in accordance with r.103, LRR 2003. This form is not prescribed and lenders may use charges tailored to their own particular requirements.

 

http://www.landregistry.gov.uk/_media/downloads/forms/CH1.pdf

 

The above is a Land Registry CH1 form as referred to in Practice Guide 29

 

The purpose of posting the above mortgage deeds is to enable discussion about the actual forms and their content, especially in terms of execution and delivery by the borrower and/or lack therefore by the lender.

 

Without wishing to state the obvious none of the mortgage deeds, including the CH1 form from the Land Registry include a space for the signature of the lender. Indeed the CH1 form confirms that it only needs to by signed the lender if -

 

" If a note of an obligation to make further advances has been applied for in panel 8 this document must be signed by the lender or its conveyance"

 

By way of an example this Nationwide deed includes an obligation to make a further advance and therefore includes the requirement to be side by or on behalf of the lender

 

http://www.nationwide.co.uk/NR/rdonlyres/9E3EE5E9-5D4D-4DEC-AFB6-3822F30EF25F/0/M55_Oct_11.pdf

 

 

Thanks

 

Ben

 

I have only had a quick read of Silver Queen Maritime, so apologies if the following is incorrect.

116. In my view the relevant facts place the Settlement Deed firmly in the second of the three categories identified by Nourse LJ in Longman v Viscount Chelsea. This was an escrow. In other words, the Settlement Deed, when sent by Memery Crystal, in accordance with their instructions, to King & Spalding on 21 July 2009 was in the class of document described by Farwell LJ in the Foundling Hospital case (at p 377) as one which is "delivered upon a condition on the performance of which it will become a deed, and will take effect as from the delivery". The conditions, and the only conditions, upon which the Settlement Deed was delivered were those set in the e-mail sent at 5.01 p.m. on 21 July 2009 by Memery Crystal to King & Spalding to which it was attached, namely, first, that it was to be signed for Silver Queen, and secondly, that it was then to be sent back to Memery Crystal. Those conditions had both been discharged when King & Spalding's e-mail of 4.04 p.m. on 22 July 2009 was sent to Memery Crystal, whereupon the Settlement Deed took effect as a deed. Thus the escrow conditions were promptly discharged, and there is no room in the present case for any argument that their performance was unreasonably delayed (see Harman LJ's caveat in Beesly v Hallwood Estates (at p 118)). Being irrevocable from the time of its delivery as an escrow, the Settlement Deed could not be recalled by PPS pending its taking effect. Thus PPS's purported withdrawal "from the exchange of the settlement agreement" in Memery Crystal's e-mail of 8.15 a.m. on 22 July 2009 was not, and could not be, an effective revocation of it.

 

It would appear that the settlement deed was only signed by both parties, as it was a condition stipulated by Memery Crystal

 

As far as I am aware a mortgage deed is "not delivered upon a condition on the performance of which it will become a deed, and will take effect as from the delivery" - with the condition being stipulated by the borrower that it is signed by the lender.

Edited March 26, 2013 by bhall

[Gaston Grimsdyke]

Where is the room for discussion here? It's not even arguable that a deed has to be executed by the person in whose favour it is granted. A mortgage deed is the instrument which provides the security for the lending, it isn't the loan agreement. It is therefore a unilateral document which only has to be executed by the person granting the security.

[applecart]

I think we lose sight of the importance of a Deed in conveyance; a conveyance is not 'contractual' - this is why section 2 of the lp(mp) Act 1989 does not apply.

 

A Deed is the instrument that conveys an interest in land by way of legal mortgage - this is due to statute - not contract/agreement rights as would be the case for section 2 to apply.

 

Therefore it not only acts as security for the lender for the purported loan amount but also conveys a right for the lender to charge the estate with indebtedness and infers a right to possession etc etc...LRA 2002 s.23 (2)

 

Lets not forget that for the Borrower, the Law implies a right to redeem, a term of years absolute, and protections by virtue of the AJA 1978 etc, etc - it may even as Ben has stated previously; grant a right to the Borrower for further advances etc etc...

 

Against this - If we are to accept that the Mortgage Deed is a unilateral document, that for validity need only to be signed by the grantor (Borrower) - we would be accepting that Delivery is not party to the formality or validity of the Deed - and that the Lender, does not obligate to any of the legal implications in regards to the term of years, rights to redeem etc etc - we are essentially being asked to accept that when the Borrower signs the Deed and his solicitor attests it...that there are non of these obligations due from the Lender.....

 

Therefore I cannot see how a unilateral Deed in relation to a mortgage is possible at all...

 

Law of Property (Miscellaneous Provisions) Act 1989 s.1 (3) is the part that relates to the Borrower and states that:-

 

In the case of a deed executed by an individual it is provided, so far as is presently material, by Law of Property (Miscellaneous Provisions) Act 1989 s.1 (3) that:-

 

(3)An instrument is validly executed as a deed by an individual if, and only if—

(a)it is signed—

(i)by him in the presence of a witness who attests the signature; or

(ii)at his direction and in his presence and the presence of two witnesses who each attest the signature; and

(b)it is delivered as a deed by him or a person authorised to do so on his behalf.

 

We should not lose sight of the importance of the word 'delivered' the Judgment in Bibby Financial Services Ltd v Magson points us to the fact that 'Delivery' goes back some 400 yrs - Delivery involves acceptance - if it is not 'accepted' then it is simply not 'Delivered'.

 

To accept that a Deed is unilateral we are taking the word 'delivered' to be no more than a 'handing over' of the Deed via a solicitor to the Lender - This does not accord with the legal concept of 'delivery' as intended by the legislator at either the LP(MP) Act 1989 or the LPA 1924 s.74A

 

The Lender is obligated to execute the Deed much the same as the Borrower - LPA 1925 s.74A confirms this at section (1) in direct reference to section 1 (2)(b) LP(MP) Act 1989:

 

(1) An instrument is validly executed by a corporation aggregate as a deed for the purposes of section 1(2)(b) of the Law of Property (Miscellaneous Provisions) Act 1989, if and only if -

(a) it is duly executed by the corporation and

(b) it is delivered as a deed

 

 

The following is taken from the Judgment in 'Bibby Financial Services Ltd v Magson':

 

"Thus, in order for a document to be enforceable as a deed, whether executed by an individual or a limited liability company, it is necessary for it to be delivered as a deed. What amounts to delivery of a deed in English Law has been established for over 400 years. It was explained by Popham J in Hawksland v Gatchel (1601) Cro.Eliz.835 at pages 835 - 836:-

 

'for if, upon delivery, the words spoken by the obligor purport that it shall not be his deed, it is clear that it is not: as where one causeth an obligation to be written and sealed in my name, and brings it unto me, and prays that I would deliver it as my deed, and I say, 'Do you such a thing, and take it as my deed, otherwise not: "it is clear, that it is not my deed until the thing be performed. So if the obligor saith, 'Take it to you, I will not deliver it as my deed;' it is not his deed, wherefore in the principal case, when the obligation is delivered as an escrow, by express words, it is not possible that it should be his deed, for the words are not sufficient to make it so until the condition be performed'..

 

The critical thing is that the person who has signed the deed must have separately indicated that he intends to be bound by the deed. Mere signature is not enough, nor is it enough that what looks like a deed has been given to the person who appears to be the beneficiary of it - the issue is not whether the document has been physically handed over to the beneficiary, but whether the person whose deed it is supposed to be intended to be bound by it. The point was explained by Sir Charles Hall V.C in Watkins v Nash (1875) LR 20 Eq 262 at page 266:-

 

'you cannot deliver the deed to the grantee himself, it is said because that would be inconsistent with its preserving the character of an escrow. But if upon the whole of the transaction it be clear that the delivery was not intended to be a delivery to the grantee at that time, but that it was to be something different, then you must not give effect to the delivery as being complete delivery, that not being the intent of the persons who executed the instrument'."

 

 

The Lending practices of recent times rely that 'delivery' simply does not take place. Remember we are living in times where mortgages are bundled and sold on the primary and/or secondary markets, such practices require that the Deed signed by the Borrower remains in 'escrow' - '..if upon the whole of the transaction it be clear that the delivery was not intended to be a delivery to the grantee at that time, but it was to be something different, then you must not give effect to the delivery as being complete delivery, that not being the intent of the persons who executed the instrument'

 

 

Apple

 

Good Morning Apple

 

I feel that both 74A of the Law of Property Act 1925 and section 1 (2b) of the of the LP (MP) 1989 as you have quoted above both are when the corporation gives its deed and not when it receives a deed.

 

Your quote from Hawksland v Gatchel (1601) refers to delivery and 'my deed'. In the case of a mortgage it is the borrower giving his deed to the lender.

 

"for if, upon delivery, the words spoken by the obligor purport that it shall not be his deed, it is clear that it is not: as where one causeth an obligation to be written and sealed in my name, and brings it unto me, and prays that I would deliver it as my deed, and I say, 'Do you such a thing, and take it as my deed, otherwise not: "it is clear, that it is not my deed until the thing be performed. So if the obligor saith, 'Take it to you, I will not deliver it as my deed;' it is not his deed, wherefore in the principal case, when the obligation is delivered as an escrow, by express words, it is not possible that it should be his deed, for the words are not sufficient to make it so until the condition be performed'..

 

The lender does not give his deed to the borrower.

 

Even your reference to Watkins v Nash (1875) is about delivery to the grantee - being a mortgage deed the grantee is the Lender

 

'you cannot deliver the deed to the grantee himself, it is said because that would be inconsistent with its preserving the character of an escrow. But if upon the whole of the transaction it be clear that the delivery was not intended to be a delivery to the grantee at that time, but that it was to be something different, then you must not give effect to the delivery as being complete delivery, that not being the intent of the persons who executed the instrument'."

 

In relation to your assertion about escrow.

 

The document will only remain in escrow until such a time as the escrow conditions set by the person giving his deed have been performed. Once those conditions have been performed, it becomes his deed.

 

116. In my view the relevant facts place the Settlement Deed firmly in the second of the three categories identified by Nourse LJ in Longman v Viscount Chelsea. This was an escrow. In other words, the Settlement Deed, when sent by Memery Crystal, in accordance with their instructions, to King & Spalding on 21 July 2009 was in the class of document described by Farwell LJ in the Foundling Hospital case (at p 377) as one which is "delivered upon a condition on the performance of which it will become a deed, and will take effect as from the delivery". The conditions, and the only conditions, upon which the Settlement Deed was delivered were those set in the e-mail sent at 5.01 p.m. on 21 July 2009 by Memery Crystal to King & Spalding to which it was attached, namely, first, that it was to be signed for Silver Queen, and secondly, that it was then to be sent back to Memery Crystal. Those conditions had both been discharged when King & Spalding's e-mail of 4.04 p.m. on 22 July 2009 was sent to Memery Crystal, whereupon the Settlement Deed took effect as a deed. Thus the escrow conditions were promptly discharged, and there is no room in the present case for any argument that their performance was unreasonably delayed (see Harman LJ's caveat in Beesly v Hallwood Estates (at p 118)). Being irrevocable from the time of its delivery as an escrow, the Settlement Deed could not be recalled by PPS pending its taking effect. Thus PPS's purported withdrawal "from the exchange of the settlement agreement" in Memery Crystal's e-mail of 8.15 a.m. on 22 July 2009 was not, and could not be, an effective revocation of it.

 

In terms of a mortgage deed, what escrow conditions are set by the borrow to keep the document in escrow ?

 

Unlike in the above case, the person giving his deed (the borrower) does not impose the condition that the deed must be signed by the lender.

 

 

[steampowered]

There seems to be a lot of confusion over the idea of "delivery". These days it is a very limited concept. Delivery of a Deed simply means that it is intended to take immediate legal effect. You are presumed to deliver a deed by signing it unless you can prove the contrary. I do not think there is any question that a borrower who signs a Deed to secure his mortgage intends to be immediately bound by that and thus there is delivery. You could only contest that if there was a very good reason to think that the borrower intended for execution of the Deed to be conditional, which you would not be able to show if the lender's obligations are contained in a separate loan agreement.

 

The reason why there was no delivery in the Bibby case was because the Defendants signed a draft document. The document had handwritten changes marked all over it which needed to be processed. The Defendants convinced the court they only signed that document as a gesture of good faith, they did not intend to be bound by it because they were expecting a final form deed to be prepared which included the handwritten amendments.

[applecart]

There are 4 parts to s.1 (3) of Law of Property (Miscellaneous Provisions) Act 1989 - the important part for the Borrower is the issue of 'Delivery' - to make light of this legal requirement would in effect stand to repeal the intent of the legislator - the question begs...where there is statute - do we need to refer to common law?

 

These are:

 

(a)it is signed— we can agree that all borrowers comply with this legal requirement - albeit the 'it' element remains at issue

(i)by him in the presence of a witness who attests the signature; or - we can agree that all deeds will be attested by a Solicitor in most cases

(ii)at his direction and in his presence and the presence of two witnesses who each attest the signature; and we can agree that where the Borrower does not have the capacity to sign for whatever reason, this will be complied with in one way or another..

(b)it is delivered as a deed by him or a person authorised to do so on his behalf. ???????????

 

s.1 (3) (b) requires that 'it is delivered as a deed by him' this is not the same as 'signed as a deed by the Mortgagor' - are we to presume that this is to be interpreted as 'delivered as a deed by him' - to comply with statute - or is this the presumption?

 

You will then find in most Deeds signed by Borrowers that there will be space for the Lenders signature - but no signature - are we to presume that the 'blank' space is somehow to be construed as the Borrowers compliance with statute in relation to: 'delivered by him as a deed'

 

To 'sign as a deed' is not the same as 'delivered as a deed'

 

I mean no dis-respect to Steampowered when I say, ....Given that the 1989 Act has not been repealed - it doesn't seem right somehow to suggest that 'delivery' is a "very limited concept" when statute provides a contrary intention.

 

Further to that point....LP(MP)Act s 1 (4) states "In subsections (2) and (3) above “sign”, in relation to an instrument, includes making one’s mark on the instrument and “signature” is to be construed accordingly" with respect, there is no interpretation here that the signature of the Borrower is to be construed as 'delivery' - section 1 (3) (b) is a separate 'stand alone' legal requirement as intended by the legislator.

 

When we look at LP(MP)Act s 1 (10) this too makes no inference that the Borrowers signature is to be construed as a unilateral deed to confer that the Borrowers signature is to be presumed as a 'delivery' in favor of the Lender: - "The references in this section to the execution of a deed by an individual do not include execution by a corporation sole and the reference in subsection (7) above to signing, sealing or delivery by an individual does not include signing, sealing or delivery by such a corporation".

 

The above is statute - there is no need to opine further as far as I can see... if we are to opine at all, we could start by looking into what the legislator means by 'Delivery'?

 

Delivery refers to two separate acts:

 

a) the grantor’s (Borrowers) intent to convey title, not just the physical handing over of the deed to the grantee; and

 

b) the grantee’s (lenders) acceptance of the grant deed as an immediate conveyance.

 

It would seem to me that there must be a valid delivery, meaning that both the owner (Borrower) and the grantee (lender) must intend for the transfer of the estate to be conveyed concurrent with the handing of the deed to the grantee. and the owner of the estate must intend for the instrument that conveys the estate to operate as a deed which immediately divests the owner(borrower) of title before we can presume that the Deed meets statutory requirements of the LPA 1925 s.52 to be valid.

 

So in accepting Steampowered on his valuable points made in reference to 'Bibby' - if you have a Deed signed by a Borrower but not signed by the Lender - and it can be found that the Lender does not intend to sign the Deed until a later date (i.e statements such as:'when all the mortgage monies have been paid by the Borrower', 'the Lender acknowledges receipt in full of the Mortgage Debt' and such like to provide the 'contrary intention') this in simple terms would mean the Borrowers Deed (if I am to accept Ben's points as to who the signed Deed belongs to ) is 'draft' also awaiting completion by the Lender - it is not an effective valid Deed. The Deed is not 'final' until the Lender signs it...

 

Apple

[applecart]

...

Hello Apple

 

In relation to your assertion about escrow.

 

The document will only remain in escrow until such a time as the escrow conditions set by the person giving his deed have been performed. Once those conditions have been performed, it becomes his deed.

 

This is to suggest that the Borrower knew that there would be an escrow condition party to the Deed, there is no suggestion that any Borrower knew this would be the case, for the Borrower to be aware, the deed presented by the Lender as signed by the Borrower would have to show on its face that the Lender required a signature from the Borrower that was to be 'conditional' in some way - in this regard, it is not fair to suggest that it is the Borrowers Deed.

 

The Lender causes the Borrower to perform the Deed when there is an escrow condition in place that the Borrower is unaware of....It cannot be the Borrowers Deed if it is not to have effect at some time in the future. As Powersteamed says....this provides a contrary intention given that the Deed is taken for all intent and purpose is supposed to take immediate effect.

 

In terms of a mortgage deed, what escrow conditions are set by the borrow to keep the document in escrow ?

 

You are coming from the point of view that the Deed is the Borrowers Deed.....The Borrower sets no such escrow conditions - (this is why I said, it is not the 'Borrowers Deed' it is the Deed as presented to him by the Lender' - the 'Borrowers Deed' will show no escrow conditions and he is (made to be) obligated to perform the Deed as from the (purported) completion date. There will be no escrow condition evident in the deed at all.... you would have to seek out the terms and conditions of the agreement to see if there are escrow conditions within it...(these are the Lenders terms and conditions - written by the Lender of which the Borrower is obliged to adhere to - so again, it is not the Borrowers Deed - only that which has been presented to him by the Lender)

 

Unlike in the above case, the person giving his deed (the borrower) does not impose the condition that the deed must be signed by the lender.

 

With the greatest of respect, ...and neither would he get the chance to do so.....the Deeds of which we speak are conducted at arms length, there is no negotiation between the Borrower and Lender as to the content of the Deed that the Lender presents to the Borrower for signature or to the terms and conditions of the mortgage, the Borrower would simply assume that when the Lender gets the copy of his signed deed that the Lender will sign it and submit it to HMLR - notwithstanding this, the legislator is more than aware that Lenders present the Deeds on terms in its own favor, and as we are finding, the Lender does not sign the Deed when he gets it back,.......therefore Borrowers can rely that 'until the condition be performed' is a statutory protection provided for by statute at LP(MP) Act 1989 s.1 (3)(b) - that is to say - the condition is that the Deed be 'delivered' - The Borrower cannot 'deliver' the Deed - he can sign it, get it attested, but has no control over its 'delivery'....

 

Apple

[applecart]

Good Morning Apple

 

I feel that both 74A of the Law of Property Act 1925 and section 1 (2b) of the of the LP (MP) 1989 as you have quoted above both are when the corporation gives its deed and not when it receives a deed.

 

Your quote from Hawksland v Gatchel (1601) refers to delivery and 'my deed'. In the case of a mortgage it is the borrower giving his deed to the lender.

 

"for if, upon delivery, the words spoken by the obligor purport that it shall not be his deed, it is clear that it is not: as where one causeth an obligation to be written and sealed in my name, and brings it unto me, and prays that I would deliver it as my deed, and I say, 'Do you such a thing, and take it as my deed, otherwise not: "it is clear, that it is not my deed until the thing be performed. So if the obligor saith, 'Take it to you, I will not deliver it as my deed;' it is not his deed, wherefore in the principal case, when the obligation is delivered as an escrow, by express words, it is not possible that it should be his deed, for the words are not sufficient to make it so until the condition be performed'..

 

The lender does not give his deed to the borrower.

 

Even your reference to Watkins v Nash (1875) is about delivery to the grantee - being a mortgage deed the grantee is the Lender

 

'you cannot deliver the deed to the grantee himself, it is said because that would be inconsistent with its preserving the character of an escrow. But if upon the whole of the transaction it be clear that the delivery was not intended to be a delivery to the grantee at that time, but that it was to be something different, then you must not give effect to the delivery as being complete delivery, that not being the intent of the persons who executed the instrument'."

 

 

Thanks

 

Ben

 

Hi Ben'

 

That's correct - 'you (the Borrower) cannot 'deliver' the deed to the grantee (lender) himself....for 'delivery' the Lender must accept the borrowers deed - by signing it as well.

 

In other words the Borrowers signature alone does not constitute 'delivery' - LP(MP) Act 1989 s 1 (3) (b) is lacking when you evince a deed that does not have the Lenders signature on it.

 

Apple

[bhall]

D. E. C. Yale (1970). The Delivery of a Deed. The Cambridge Law Journal, 28, pp 52-74. doi:10.1017/S0008197300011600.

 

“The law as to ‘delivery’ of a deed is of ancient date,” said Lord Denning M.R. in a recent case, “but it is reasonably clear. A deed is very different from a contract. On a contract for the sale of land, the contract is not binding on the parties till they have exchanged their parts. A deed is binding on the maker of it, even though the parts have not been exchanged, as long as it has been signed, sealed and delivered. ‘Delivery’ in this connection does not mean ‘handed over’ to the other side. It means delivered in the old legal sense, namely, an act done so as to evince an intention to be bound. Even though the deed remains in the possession of the maker, or of his solicitor, he is bound by it if he has done some act evincing an intention to be bound, as by saying: ‘I deliver this my act and deed.’ He may, however, make the ‘delivery’ conditional: in which case the deed is called an ‘escrow’ which becomes binding when the condition is fulfilled.”

 

 

Says it all really

 

http://journals.cambridge.org/action/displayAbstract;jsessionid=30CE7965F50A0FB8AB28FBA44BE1F2AC.journals?fromPage=online&aid=2855072

 

If further confirmation was needed

 

http://www.official-documents.gov.uk/document/hc8788/hc00/0001/0001.pdf

 

Please refer to page 4 of the above document and the sections in regard to signature and delivery.

 

Thanks

 

Ben

[applecart]

Hi Ben,

 

This feels a bit like 'you say' - 'i say'... : )

 

Your last 2 posts - I would only comment to say: - a) Lord Dennings comments that you refer to, were made in 1970 and clearly refer to signed, sealed and delivered..this was prior to the 1989 Act and referred to for redress within the Law Commission report..... b) the Law Commission Report you posted is from 1987 - at Page 5 - para 2.10 states: 'we therefore somewhat reluctantly recommend that delivery should remain one of the required formalities for a Deed'...

 

We then see within the 1989 Act that s. 1 (3)(b) that 'delivery' does in fact remain a formality by statute.

 

We could argue that the Act specifically states 'delivered by him' - this could mean delivery by the individual .....as the report does relate specifically to the formalities in regard to individuals?

 

Do you have anything that we can refer to for an understanding of the reference to 'delivered by him' Ben?

 

Apple

[applecart]

Don't worry Ben - I have found what I was looking for...

 

http://www.legislation.gov.uk/uksi/2005/1906/schedule/2/made

 

The Regulatory Reform (Execution of Deeds) Order 2005 assists conclude that 'delivery' is necessary...

 

Article 10(2)

SCHEDULE 2

 

REPEALS

 

Chapter Short title Extent of repeal

 

1971 c. 27. The Powers of Attorney Act 1971. Section 7(3).

 

1985 c. 6. The Companies Act 1985. In section 36A— (a)subsection (5); and (b)in subsection (6), the words from “and, where” to “executed”.

 

1989 c. 34. The Law of Property (Miscellaneous Provisions) Act 1989. In section 1— (a) in subsection (3)(b), the words from “by him” to the end;

(b)in subsection (5), the words “involving the disposition or creation of an interest in land”; and

©in subsection (6), the definition of “interest in land” and the word “and” preceding it.

 

With the 'repeal' of the words 'by him or a person authorised to do so on his behalf' from s. 1 (3)(b)..... This means that section 1 (3)(b) should simply read 'it is delivered as a Deed'.

 

It remains a formality therefore that the Lender must sign the deed.

 

Apple

[bhall]

Hello Apple

 

I am always happy to assist you with your understanding.

 

The simplest way I can put it, is that the signature of the grantee - being in the case of a mortgage deed the lender is not a requirement for delivery. The main exception being when it is delivered in escrow with the specific condition that the deed will not take effect until that condition is fulfilled.

 

However, as you are well aware the grantor (the borrower) does not specify such a condition when he gives his deed.

 

The following should clarify 'delivery'

 

Silver Queen Maritime Ltd v Persia Petroleum Services Plc [2010] EWHC 2867 (QB) (18 November 2010)

 

108. There are three ways in which a deed, once it has been signed, can be delivered. The analysis set out in the judgment of Nourse LJ in Longman v Viscount Chelsea [1989] 58 P&CR 189, at p 195, identifies the three categories:

 

"A writing cannot become a deed unless it is signed, sealed and delivered as a deed. Having reached that stage, it is correctly described as having been "executed" as a deed. Having been signed and sealed, it may be delivered in one of three ways. First, it may be delivered as an unconditional deed, being irrevocable and taking immediate effect. Secondly, it may be delivered as an escrow, being irrevocable but not taking effect unless and until the condition or conditions of the escrow are fulfilled. Thirdly, it may be handed to an agent of the maker with instructions to deal with it in a certain way in a certain event, being revocable and of no effect unless and until it is so dealt with, whereupon it is delivered and takes effect; as to this method, see Governors and Guardians of the Foundling Hospital v Crane; and Windsor Refrigerator Co. Ltd. v Branch Nominees Ltd., per Cross J. …".

 

So the three ways that a deed can be delivered are:

 

1) First, it may be delivered as an unconditional deed, being irrevocable and taking immediate effect.

 

2) Secondly, it may be delivered as an escrow, being irrevocable but not taking effect unless and until the condition or conditions of the escrow are fulfilled.

 

3) Thirdly, it may be handed to an agent of the maker with instructions to deal with it in a certain way in a certain event, being revocable and of no effect unless and until it is so dealt with, whereupon it is delivered and takes effect.

 

If the borrower was to state that a condition of the escrow, was that the lender had to sign, the deed would not be considered to take effect until it is signed by the lender.

 

However the borrower does not state such a condition, so a signature is not required.

 

I have now run out of different ways to say the same thing. It is your choice now to conclude what you want.

 

You have repeatedly confused the requirements of what a company must do when it grants a deed with when a company receives a deed from a grantor. You must be able to see that. If not from the information I have posted, then from the posts of the other contributors to this thread.

 

Take a day or so, to digest what has been posted and then see if you are of the same opinion.

 

All the best

 

Ben

Edited March 28, 2013 by bhall

[bhall]

Where is the room for discussion here? It's not even arguable that a deed has to be executed by the person in whose favour it is granted. A mortgage deed is the instrument which provides the security for the lending, it isn't the loan agreement. It is therefore a unilateral document which only has to be executed by the person granting the security.

 

Hello Gaston

 

Thank you for your clarification

 

Thanks

 

Ben

[steampowered]

At the risk of flogging a dead horse, your argument basically seems to be that Deeds must be delivered and this requires signature by both parties. The first part of your reasoning is correct but your conclusion is not. Delivery means the signatory must intend the document to take immediate legal effect. Delivery is presumed to happen on signature and thus the burden of proof is on the signatory to prove that a reasonable person would not think he intended the document to have immediate effect. There is an explanation of the three ways in which delivery can occur in the Silver Queen case, and in many other cases (you can google for delivery of a deed). If the legislature wanted to require that deeds must be signed by at least two parties then that is what the legislation would say.

 

If you could prove there is some reason why the mortgage deed was not intended to take effect, then indeed there is no delivery. A lack of intention was proved in the Bibby case because the document was only a draft. It would also be easy to prove if the Deed itself puts obligations on both parties. However these are special circumstances, and unlikely to apply to the average case where a bank omitted to sign a Deed which does nothing more than grant security for a separate loan agreement. If the loan agreement was not yet signed or monies not yet advanced, you would have conditional delivery with the condition satisfied when the loan is signed and monies advanced.

Edited March 28, 2013 by steampowered

[applecart]

Hi Ben

 

I've taken your advise, I didn't need 2 days, but if you deem I should take more time out, please advise in due course : )

 

In relation to your question in this thread, I have moved on the premise that we are talking about execution and delivery of a mortgage deed for its validity pursuant to LPA 1925 s.52.

 

This is possibly why we differ somewhat on our use of the Law in relation to 'Delivery'.

 

I do not lose sight of the question you posed - which is: 'Mortgage Deeds - does it need to be signed by the lender?'

 

Your valid posts herein in the main confirm that there is a 'grey' area.....

 

In my mind we could be more specific.. i.e: Does the Deed need to be validly delivered to constitute a transfer within the provision of LPA 1925 s.52?

 

The answer to that in my mind is: 'YES'

 

I provided the understanding that the act of 'delivery' includes 2 acts:

 

a) the grantor’s (Borrowers) intent to convey title, not just the physical handing over of the deed to the grantee; and

 

b) the grantee’s (lenders) acceptance of the grant deed as an immediate conveyance.

 

If these acts are visible on the face of the deed, then delivery has taken place and the Deed complies with LPA 1925 s.52

 

For this... the document could simply state 'delivered as a deed' or wording to that effect...

 

The Judgment you posted in 'Silver Queen Maritime Ltd v Persia Petroleum Services Plc [2010] EWHC 2867 (QB) (18 November 2010)'....

 

Para 111 states: "There are two sorts of delivery, and only two known to the law, one absolute, and the other conditional,"

I do not see how a Deed that does not show the Lenders signature (i.e a deed in escrow - awaiting the lenders signature at some future date) meets the requirements of the LPA 1925 s.52.

 

I do not see how LPA 1925 s.53 or 54 (just because the document is in writing as opposed to a verbal or oral agreement) would assist the validity of a deed under the LPA 1925 s.52.

 

I do not see how section 2 LP(MP) Act 1989 (that relates to contracts for sale) would do so in reliance on Helden and Eaglestar.

 

Please correct me if you still perceive I am incorrect of course.

 

I gave due consideration to the Law Commission Report you pointed me to and found that at page 5, para 2.10 that whilst it was reluctantantly done, the Law Commission provided that 'delivery' remains an integral part in relation to the execution of deeds and as can be seen in both the 1989 Act and the 1925 Act (when updated and amended) 'it is delivered as a deed' is apparent in relation to both the Borrower and the Lender.

 

The Judgment you posted in 'Silver Queen Maritime Ltd v Persia Petroleum Services Plc [2010] EWHC 2867 (QB) (18 November 2010)' at para 108 - the important words being '"A writing cannot become a deed unless it is signed, sealed and delivered as a deed. Having reached that stage, it is correctly described as having been "executed" as a deed.

 

We both know the 'seal' is no longer required... that leaves 'signed' and 'delivered as a deed' as necessary formalities - so in essence it is not until the document meets both the signatory and delivery requirements by virtue of LP(MP)Act 1989 and the LPA 1925 s.74A that it becomes a valid deed for LPA 1925 s.52 purposes.

 

I do not agree that all Mortgage deeds state that they are 'delivered as a deed' - However I would be fool not to accept that HMLR will register a deed if it states 'signed as a deed' or 'executed as a deed' (practice guide 8) - I also recognise that HMLR is not concerned with the actual validity of the underlying Deed/agreement between the Borrower and Lender in regard to the wordng 'delivered as a deed' that would cause it to meet LPA 1925 s.52 (Practice Guide 39 - Clause 2.2)

 

Again, please correct me if I am wrong on this point.

 

From 'Silver' at para 108:

 

"A deed whether executed by a corporation or by an individual does not necessarily bind the grantor as soon as it is sealed. It only becomes binding when it has been "delivered" by the grantor as his deed, i.e. when the grantor has indicated by words or conduct that he intends the deed which he has executed to be binding on him."

 

At para 109: "… [What] is an escrow? Can a body or an individual having executed a document under seal as an escrow subject to a condition resile before the condition is accepted?..."

 

At para 110: "Two suggestions have been made about the deed, the effect of which we have now to consider. One is that the deed in question was what is called in law an escrow, that is a writing which is to take no immediate effect, but is only to come into operation upon the happening of some condition. The other suggestion is that there was no escrow, in fact that there was no delivery at all of this deed; that it was physically delivered by being handed over, after it had in form been executed by signing, sealing, and delivery, but handed over only to be kept by the agents, the solicitors, for Mr Hoe, and to be dealt with as Mr Hoe should direct. In that case there would be no delivery,..."

 

At para 111: "… There are two sorts of delivery, and only two known to the law, one absolute, and the other conditional, that is an escrow to be the deed of the party when, and if, certain conditions are performed. If the deed operated as a complete delivery, cadit quaestio; if it did not, then it must be either an escrow or a nullity. The mode in which it in fact operated is a question of intention, primarily of the grantor, and secondly of the grantee; nothing passes out of the grantor against his intention, and no one can be compelled to accept an assignment of any property, onerous or otherwise, without his consent. Now an escrow or script is not a deed at all; it is a document delivered upon a condition on the performance of which it will become a deed, and will take effect as from the delivery, but until such performance it conveys no estate at all. …"

 

This is where I am coming from - when I say, the lender is supposed to sign the Deed so that it creates an absolute delivery for the validity of LPA 1925 s.52 to have effect.

 

LPA 1925 s.52 (1) makes it a legal requirement that it is only a Deed that transfers the estate from the Borrower to the Lender - Above, it it clear that a 'escrow or script is not a deed at all'... This is to say, that on evidence that a document purporting to be a deed on its face that is not duly executed by the Lender and the Borrower or that states 'delivered as a Deed on the such and such date' in the absence of the Lenders signature - would not be a Deed.

 

It would be misconceived and distracting to infer that when a lender has not signed a deed, that the deed complies with the LPA 1925 s.52:....para 111 continues thus...

 

"… The questions therefore are: Was the assignment of Hoe ever delivered by him as his act and deed; or as an escrow; or was there no valid delivery at all? …"

 

"Was the deed then delivered as an escrow, or was there no delivery at all?

I doubt if a man, by executing a deed, and handing it over to his own solicitors to be held on his behalf until he gives them further instructions, makes a delivery of it as an escrow at all: I doubt also if a deed can be delivered as an escrow at all subject to an overriding power in the grantor to recall the deed altogether; but Hoe gave no such instructions …"."…

 

Did that document ever become operative by delivery either as a deed to have a present and binding effect as such, or as an escrow, that is, a document to take effect as a deed upon the happening of some event or upon the fulfilment of some condition?

 

In considering these questions the Court has to look at all the facts attending the execution, to all that took place at the time, and to the result of the transaction, according to the language of Parke B. in Bowker v. Burdekin …

 

I am satisfied in the present case that the true inference from the undisputed facts … is that Robert Hoe never intended to make a delivery of this document as a deed to take effect instanter. …

 

I am satisfied also that the defendants are not entitled to rely upon the delivery of the document as an escrow. I doubt whether there was any "delivery" of this deed in the legal sense of that word. According to the letters of September it was to be retained on behalf of Mr Robert Hoe until Mr Hopgood should have instructions to complete it. …".

 

It goes on.....Please see the full judgment here: http://www.bailii.org/ew/cases/EWHC/QB/2010/2867.html

 

If nothing else, we have provided the 'balance' for readers to view as we see it : )

 

Thanks to Steampowered also for his comments - but this 'dead horse' has reached its conclusion on the findings in 'bibby' and 'silver' as substantiated by the Law in relation to formalities in relation to the execution of mortgage deeds herein for now : )

 

Apple

[bhall]

Hello Apple

 

I wrote out a long response to your post. However, due to the length I feel that points will be overlooked and lost, so I have cut and paste it into more bite size pieces.

 

Hi Ben

 

I've taken your advise, I didn't need 2 days, but if you deem I should take more time out, please advise in due course : )

 

With the upmost respect I really think you should have taken additional time to digest the information posted.

 

Para 111 states: "There are two sorts of delivery, and only two known to the law, one absolute, and the other conditional,"

I do not see how a Deed that does not show the Lenders signature (i.e a deed in escrow - awaiting the lenders signature at some future date) meets the requirements of the LPA 1925 s.52.

 

I do not see how LPA 1925 s.53 or 54 (just because the document is in writing as opposed to a verbal or oral agreement) would assist the validity of a deed under the LPA 1925 s.52.

 

I do not see how section 2 LP(MP) Act 1989 (that relates to contracts for sale) would do so in reliance on Helden and Eaglestar.

 

Please correct me if you still perceive I am incorrect of course.

 

"I do not see how a Deed that does not show the Lenders signature (i.e a deed in escrow - awaiting the lenders signature at some future date) meets the requirements of the LPA 1925 s.52."

 

a) It is only escrow awaiting the lenders signature, if there is a specific escrow condition requiring the lenders signature. (we both know there is not such a condition, unless the deed contains an obligation from the lender to provide a further advance) - Please refer to the Mortgage Deed for the Nationwide and the CH1 form from the Land Registry for confirmation.

b) If there are no escrow conditions to be performed by the lender, it is not delivered in escrow but as the borrowers deed - Therefore meeting the requirement of the LPA 1925.

c) If there is an escrow condition that it is to be signed by the lender, upon performance of that condition it becomes the borrowers deed - Therefore meeting the requirement of the LPA 1925.

"I do not see how LPA 1925 s.53 or 54 (just because the document is in writing as opposed to a verbal or oral agreement) would assist the validity of a deed under the LPA 1925 s.52."

 

I have made no reference to the relevancy off s.54 of the Law of Property Act 1925. However, with reference to s.53 of the Law of Property Act 1925

 

Helden v Strathmore Ltd [2011] EWCA Civ 542 (11 May 2011)

 

29. Mr Helden's case on section 53 is only marginally less weak. The section does indeed apply to mortgages, as, unlike section 2, it is concerned with the "creat[ion] or disposi[tion]" of any "interest in land". However, it is far less prescriptive than section 2, which requires every term of the arrangement to be included in a document or identical documents signed by both parties. Section 53 merely requires the arrangement to be in a document signed by the person creating or disposing of the interest. Section 2 therefore may give rise to problems when it comes to estoppel or rectification (as discussed in the thoughtful judgment of Morgan J in Oun v Ahmed [2008] EWHC 545 (Ch), paras 41-55), but no such problems arise in connection with section 53.

 

From the above

 

1) Section 53 merely requires the arrangement to be in a document signed by the person creating or disposing of the interest.

 

s.53 states- (a)no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by his agent thereunto lawfully authorised in writing, or by will, or by operation of law;

 

s.53 confirms that the interest in land can only be created in writing and signed by the person creating it (the borrower) or by his agent. It does not say that it also has to be signed by the grantee (the lender)

 

"I do not see how section 2 LP(MP) Act 1989 (that relates to contracts for sale) would do so in reliance on Helden and Eaglestar. "

I don't understand your reference to 2 LP(MP) Act 1989 as it has nothing to do with Deeds.

 

Eagle Star Insurance Company Ltd v Green & Anor [2001] EWCA Civ 1389 (8 August 2001)

 

"15.In my judgment this argument does not stand any real prospect of success. This is not a case of a contract: it is a case of a deed. If we were simply dealing with a contract to create a mortgage then Mr Green would be right. But in this case he and Miss Challis have actually executed a deed. It is clear from the provisions of the 1989 Act itself that a distinction is drawn between the formal requirements affecting the execution of deeds and the formal requirements governing contracts. Section 1 makes alterations to the law about the execution of deeds. For example, they are no longer required to be written on any particular kind of substance and a seal is not required for the valid execution of an instrument as a deed by an individual. There are a number of detailed provisions in section 1 relating to deeds. Section 2 does not apply to deeds; it applies to contracts. It may be a contract for the sale of land, it may be a contract for some other kind of disposition of an interest in land, one other kind of disposition being a transfer by way of security over what is commonly called a mortgage or charge."

Edited March 28, 2013 by bhall

[bhall]

I gave due consideration to the Law Commission Report you pointed me to and found that at page 5, para 2.10 that whilst it was reluctantantly done, the Law Commission provided that 'delivery' remains an integral part in relation to the execution of deeds and as can be seen in both the 1989 Act and the 1925 Act (when updated and amended) 'it is delivered as a deed' is apparent in relation to both the Borrower and the Lender.

 

Whilst I am please to note that you gave due consideration to the Law Commission Report, did you digest point 2.6 which specifically deals the point you have raised in terms of the requirement of the signature of the lender.

 

For ease of reference I have copied it below -

 

Signatures

 

2.6 Our tentative proposal that all parties to a deed should sign it was not generally favored by those that responded to the working paper. It was thought likely to increase delay and costs, and in the context of conveyancing (and particularly mortgage deeds) it was thought it might cause considerable administrative difficulties. Against this it was suggested that it might be desirable in practice for donees to execute deeds of gift, and for purchasers to execute deeds of conveyance to them as these often contain express trusts. However, on balance we think the arguments against requiring the signatures of all parties as matter of law outweigh the arguments in favour, and we do not recommend the introduction of any such requirement.

 

The above confirms that as a matter of law there is no requirement for the deed to be signed by all the parties. However, this can only be read to mean that this relates to the grantee (the lender) as point 2.5 of this report states - "It should remain a requirement for that the grantor should sign a deed"

 

[bhall]

The Judgment you posted in 'Silver Queen Maritime Ltd v Persia Petroleum Services Plc [2010] EWHC 2867 (QB) (18 November 2010)' at para 108 - the important words being '"A writing cannot become a deed unless it is signed, sealed and delivered as a deed. Having reached that stage, it is correctly described as having been "executed" as a deed.

 

We both know the 'seal' is no longer required... that leaves 'signed' and 'delivered as a deed' as necessary formalities - so in essence it is not until the document meets both the signatory and delivery requirements by virtue of LP(MP)Act 1989 and the LPA 1925 s.74A that it becomes a valid deed for LPA 1925 s.52 purposes.

 

I do not agree that all Mortgage deeds state that they are 'delivered as a deed' - However I would be fool not to accept that HMLR will register a deed if it states 'signed as a deed' or 'executed as a deed' (practice guide 8) - I also recognise that HMLR is not concerned with the actual validity of the underlying Deed/agreement between the Borrower and Lender in regard to the wordng 'delivered as a deed' that would cause it to meet LPA 1925 s.52 (Practice Guide 39 - Clause 2.2)

 

Again, please correct me if I am wrong on this point.

"The Judgment you posted in 'Silver Queen Maritime Ltd v Persia Petroleum Services Plc [2010] EWHC 2867 (QB) (18 November 2010)' at para 108 - the important words being '"A writing cannot become a deed unless it is signed, sealed and delivered as a deed. Having reached that stage, it is correctly described as having been "executed" as a deed."

 

A deed is executed as a deed by the grantor of the deed. In terms of a mortgage deed the grantor is the borrower.

 

Eagle Star Insurance Company Ltd v Green & Anor [2001] EWCA Civ 1389 (8 August 2001)

 

15.In my judgment this argument does not stand any real prospect of success. This is not a case of a contract: it is a case of a deed. If we were simply dealing with a contract to create a mortgage then Mr Green would be right. But in this case he and Miss Challis have actually executed a deed.

 

"We both know the 'seal' is no longer required... that leaves 'signed' and 'delivered as a deed' as necessary formalities - so in essence it is not until the document meets both the signatory and delivery requirements by virtue of LP(MP)Act 1989 and the LPA 1925 s.74A that it becomes a valid deed for LPA 1925 s.52 purposes."

 

Apple I have said it before and I feel that I need to stress the point again. You are confusing the requirements between a lender granting a deed with a lender being the grantee of a deed.

 

The deed must be executed by the grantor. s.74a of the law of Property Act 1925 therefore only applies when the company grants a deed. It has no relevancy as in the case of a mortgage deed, when the lender is the grantee of the deed.

 

"I do not agree that all Mortgage deeds state that they are 'delivered as a deed' - However I would be fool not to accept that HMLR will register a deed if it states 'signed as a deed' or 'executed as a deed' (practice guide 8) - I also recognise that HMLR is not concerned with the actual validity of the underlying Deed/agreement between the Borrower and Lender in regard to the wordng 'delivered as a deed' that would cause it to meet LPA 1925 s.52 (Practice Guide 39 - Clause 2.2)"

 

The HMLR are not quite as hands off as you would appear to imply. I would draw your attention to Practice Guide 30 - Approval of Mortgage Documentation. As you will note the mortgage deeds I have previously posted to this thread all bear an MD reference meaning that they have been checked and approved by the HMLR.

[bhall]

From 'Silver' at para 108:

 

"A deed whether executed by a corporation or by an individual does not necessarily bind the grantor as soon as it is sealed. It only becomes binding when it has been "delivered" by the grantor as his deed, i.e. when the grantor has indicated by words or conduct that he intends the deed which he has executed to be binding on him."

 

At para 109: "… [What] is an escrow? Can a body or an individual having executed a document under seal as an escrow subject to a condition resile before the condition is accepted?..."

 

At para 110: "Two suggestions have been made about the deed, the effect of which we have now to consider. One is that the deed in question was what is called in law an escrow, that is a writing which is to take no immediate effect, but is only to come into operation upon the happening of some condition. The other suggestion is that there was no escrow, in fact that there was no delivery at all of this deed; that it was physically delivered by being handed over, after it had in form been executed by signing, sealing, and delivery, but handed over only to be kept by the agents, the solicitors, for Mr Hoe, and to be dealt with as Mr Hoe should direct. In that case there would be no delivery,..."

 

At para 111: "… There are two sorts of delivery, and only two known to the law, one absolute, and the other conditional, that is an escrow to be the deed of the party when, and if, certain conditions are performed. If the deed operated as a complete delivery, cadit quaestio; if it did not, then it must be either an escrow or a nullity. The mode in which it in fact operated is a question of intention, primarily of the grantor, and secondly of the grantee; nothing passes out of the grantor against his intention, and no one can be compelled to accept an assignment of any property, onerous or otherwise, without his consent. Now an escrow or script is not a deed at all; it is a document delivered upon a condition on the performance of which it will become a deed, and will take effect as from the delivery, but until such performance it conveys no estate at all. …"

 

This is where I am coming from - when I say, the lender is supposed to sign the Deed so that it creates an absolute delivery for the validity of LPA 1925 s.52 to have effect.

 

LPA 1925 s.52 (1) makes it a legal requirement that it is only a Deed that transfers the estate from the Borrower to the Lender - Above, it it clear that a 'escrow or script is not a deed at all'... This is to say, that on evidence that a document purporting to be a deed on its face that is not duly executed by the Lender and the Borrower or that states 'delivered as a Deed on the such and such date' in the absence of the Lenders signature - would not be a Deed.

 

It would be misconceived and distracting to infer that when a lender has not signed a deed, that the deed complies with the LPA 1925 s.52:....para 111 continues thus...

 

"… The questions therefore are: Was the assignment of Hoe ever delivered by him as his act and deed; or as an escrow; or was there no valid delivery at all? …"

 

"Was the deed then delivered as an escrow, or was there no delivery at all?

I doubt if a man, by executing a deed, and handing it over to his own solicitors to be held on his behalf until he gives them further instructions, makes a delivery of it as an escrow at all: I doubt also if a deed can be delivered as an escrow at all subject to an overriding power in the grantor to recall the deed altogether; but Hoe gave no such instructions …"."…

 

Did that document ever become operative by delivery either as a deed to have a present and binding effect as such, or as an escrow, that is, a document to take effect as a deed upon the happening of some event or upon the fulfilment of some condition?

 

In considering these questions the Court has to look at all the facts attending the execution, to all that took place at the time, and to the result of the transaction, according to the language of Parke B. in Bowker v. Burdekin …

 

I am satisfied in the present case that the true inference from the undisputed facts … is that Robert Hoe never intended to make a delivery of this document as a deed to take effect instanter. …

 

I am satisfied also that the defendants are not entitled to rely upon the delivery of the document as an escrow. I doubt whether there was any "delivery" of this deed in the legal sense of that word. According to the letters of September it was to be retained on behalf of Mr Robert Hoe until Mr Hopgood should have instructions to complete it. …".

 

It goes on.....Please see the full judgment here: http://www.bailii.org/ew/cases/EWHC/QB/2010/2867.html

 

If nothing else, we have provided the 'balance' for readers to view as we see it : )

 

Thanks to Steampowered also for his comments - but this 'dead horse' has reached its conclusion on the findings in 'bibby' and 'silver' as substantiated by the Law in relation to formalities in relation to the execution of mortgage deeds herein for now : )

 

Apple

 

Hello Apple

 

I am not sure of the point you are making with the above points. for the reasons detailed in my previous responses to your post.

 

Thanks

 

Ben