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SA Unregistered Mortgage - Unable to Sell Property?

Discussion in 'Property Law Forum' started by adelcomp, 16 March 2016.

  1. adelcomp

    adelcomp Member

    12 March 2016
    Likes Received:
    Does a caveator, holding a Memorandum of Mortgage (not registered against a property, there is only one registered mortgagee - the bank), have the power to obtain an Order of Possession, then evict a tenant who holds a current 12-month lease?

    I am aware the pursuant to the Property Law that person(s) needs to be a registered mortgagee to cause a sale of property, the relevant wording being mortgagee. However, if the MofM is an unregistered mortgage, am I correct in saying any power within that document is weakened by the fact it is unregistered?
  2. Victoria S

    Victoria S Well-Known Member

    9 April 2014
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    That's correct, an unregistered mortgage does not give the unregistered mortgagee power of sale in the event of the borrowers default. It merely creates a personal covenant by the borrower to the Lender to repay the debt. It does not confer a right to exercise a power of sale in the event of default.

    A caveat does not create a charge on the land or confer a power of sale in event of default. Repayment of the first mortgage always has priority to the second mortgage, even when there are further advances on the first mortgage.
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