Credit Transactions Test Bank Insights
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Arielle D.Credit Transactions Test Bank Insights
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Arielle D.Common questions
Powered by AIA stipulation that forbids the alienation of a mortgaged immovable is considered void under the law. Such a provision contravenes public policy by unduly restricting the owner's fundamental property rights, making it unenforceable and without legal effect .
The sale of a mortgaged property does not automatically extinguish the existing mortgage. Instead, the mortgage continues to exist, thereby binding the new owner unless explicitly settled or released. This continuity ensures that the mortgagee retains security on their owed obligation despite changes in property ownership .
A key element distinguishing a pledge from a mortgage is that in a pledge, the pledged item must be delivered into the possession of the creditor or a third person, highlighting its role as an accessory contract involving personal property. In contrast, a mortgage involves real property that remains in the debtor's possession, serving as security without transfer of physical control .
The nullification of a Torrens title does not affect the validity of the mortgage as long as the bank or the mortgagee has acted in good faith. This is because the mortgage is a separate legal document, independent of the status of the title, which primarily serves to provide a record of ownership .
A chattel mortgage must be registered in two different registries when the mortgagor resides in one province and the property subject to the mortgage is located in another. This requirement ensures proper documentation and public notice in both jurisdictions involved, facilitating enforceability across different administrative areas .
An individual who mortgages their property to secure another's debt can be compelled to pay the deficiency after foreclosure if they have expressly assumed personal liability for the debt. This agreement must be explicit, marking the mortgagor's acceptance of responsibility beyond the value of the property mortgaged .
Machinery installed by a lessee on leased premises can be subject to a chattel mortgage as long as it is regarded as personal property. This classification allows the machinery to be used as security for a debt, reflecting the parties' agreement and provided it does not form part of the immovable property under lease .
Including after-acquired properties in a real estate mortgage implies that properties obtained by the debtor after the mortgage agreement are automatically subject to the existing mortgage. This differs from securing future obligations, which means the mortgage explicitly covers debts incurred after the mortgage is established. Both statements about these implications are true, allowing for greater security for the mortgagee by extending coverage beyond initially stated properties or obligations .
An unrecorded mortgage in the Registry of Property is binding between the parties involved but is unenforceable against third parties who lack knowledge of the mortgage. This status underscores the importance of recordation for enforcement against external claims .
A chattel mortgage established as security for installment-purchased personal property cannot include provisions for a deficiency judgment in case of default. Any agreement to the contrary is deemed void, adhering to protective consumer laws that prevent excess liability beyond the value of the secured property .