SA Unregistered Mortgage - Unable to Sell Property?

[adelcomp]

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?

 

[Victoria S]

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.