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PART 10
Mortgages
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Chapter 1
Creation of mortgages
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Legal mortgages.
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89.— (1) A legal mortgage of land may only be created by a charge by deed and such a charge, unless the context requires otherwise, is referred to in this Part as a “mortgage”; and “mortgagor” and “mortgagee” shall be read accordingly.
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(2) Subject to subsection (3), from the commencement of this Chapter—
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(a) any instrument which would, but for the provisions of this section, convey a legal estate or interest in land by way of mortgage, or
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(b) any other transaction which under any instrument would operate, but for the provisions of this section, as a mortgage by conveyance of a legal estate or interest in land,
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does not create a legal mortgage.
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(3) From the commencement of this Chapter, any transaction which under any statutory provision would, but for the provisions of this section, operate as a mortgage by conveyance of a legal estate or interest in land operates as if it were a mortgage under this Part.
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(4) From the commencement of this Chapter, any power, whenever created, to mortgage or lend money on mortgage of a legal estate or interest in land operates as a power to mortgage the legal estate or interest by a mortgage under this Part or to lend money on the security of such a mortgage.
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(5) This Part applies to both unregistered and registered land.
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(6) Nothing in this section affects the creation of equitable mortgages of land.
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(7) From the commencement of this Chapter, it is not possible to create a Welsh mortgage and any purported creation of such a mortgage is void.
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(8) For the purposes of subsection (7), a “Welsh mortgage” includes any transaction under which a grantee or chargee of land is entitled to hold possession, and take rents and profits in lieu of interest on a loan, of land without the grantor or chargor being under a personal obligation to repay the loan, but being entitled to redeem.
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