5. Recite the main points of the text. Unit 13. The Nature of Security

1. Words to be learned.

security – поручительство при займах

collateral security – обеспечение имуществом

lender – кредитор

lender/supplier – поставляющий в кредит

borrower – получатель кредита

surety – гарант

loan – кредит

to reimburse – возмещать

tangible (property) – имущественная собственность

intangible – нематериальная

fixed and floating charges – фиксированные и текущие расходы

компании

indemnity – гарантия возмещения убытка

retention – сохранение; удержание

lien – право удержания имущества за долги

title clauses – статьи, касающиеся прав владения имуществом

mortgagor – должник по ипотечному залогу

mortgagee – кредитор по ипотечному залогу

demise – передачи права владения, аренда

lease – аренда

to cesser – прекращать выполнение

redemption – выкуп (заложенного имущества)

unexpired term – не истекший срок

sublet – подаренда

deposite of title deed – обеспечение долга документами о передачи

правового титула

binding – обязательные

enforceable – имеющие исковую силу

undue influence – злоупотребление влиянием

liability – обязанность, обязательство

matrimonial – супружеский

constructive notice – уведомление, вытекающее в силу закона

to rebut – опровергать

title deed – документ, устанавливающий право на что-либо

void – недействительный

lessee – арендатор, съемщик

charges register – реестр долговых обязательств

caution – предупреждение

2. Text for reading. Securities for Loans The Nature of a Security

When a person lends money to another or supplies goods on credit, the lender/supplier will generally require some form of collateral security depending on the transaction and the property owned by the borrower or a third party prepared to stand as surety. In addition some forms of security arise automatically. If the borrower fails to pay for the goods or repay the loan, the lender reimburses himself by enforcing his rights against the property charged or the surety. Forms of security discussed in this chapter include:

1. mortgagesof real and personal property,tangibleandintangible;

2. fixed and floating charges created by companies;

3. guarantees/indemnities by a third party;

4. retention of title clauses;

5. liens over personal property.

Mortgages of Land

The essence of a mortgage is to use the mortgagor’s (the borrower’s) property as security for a loan by the mortgagee (the lender). If the mortgagor defaults, the mortgagee can recover the loan plus outstanding interest by realising the mortgaged property. Mortgages can be legal or equitable (formal or informal).

Legal mortgages

For most property, the mortgagor will effect a legal mortgage by transferring the property to the mortgagee subject to the mortgagee’s obligation to retransfer it on repayment of the loan plus interest. In respect of land, this has not been possible since the Law of Property Act 1925. There are two systems for creating a legal mortgage whilst allowing the mortgagor to retain title: the mortgage by demise and the legal charge.

Mortgage by demise.

The mortgagor creates a lease over the property to the mortgagee by deed subject to cesser (termination) on redemption, that is, terminable on repayment of the loan plus interest. The loan agreement will provide for repayment by the legal date of redemption, but is subject to the mortgagor’s equity of redemption which allows him to redeem the property at any time (subject to reasonable restrictions) by repayment of the loan plus interest.

Where the land is freehold, the lease is generally for 3000 years. The mortgagor may create second and subsequent mortgages over the same property. A second and subsequent mortgage will be created by a lease at least one day longer than that held by the first or prior mortgagee. In the case of leasehold property, the mortgagor creates a sub-lease to the mortgagee by deed, the length of the lease being at least one day shorter than the unexpired term on the mortgagor’s lease. Second and subsequent mortgagees will have sub-leases of at least one day longer than that of the prior mortgagee. This form of mortgage is only possible over leasehold property where the lease allows for sub-letting.