• 🔒 When Mortgages Go Wrong: Understanding Clogs, Fetters, and Redemption Rights

  • Apr 19 2025
  • Length: 16 mins
  • Podcast

🔒 When Mortgages Go Wrong: Understanding Clogs, Fetters, and Redemption Rights

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  • Summary

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    Mortgage law balances protecting borrowers from unfair restrictions while giving lenders security for their advances through established principles around the equity of redemption.

    • Courts strike down unconscionable terms like excessive interest rates shown in City Land Properties (57% interest rate)
    • The test for unconscionability examines whether a "sensible, well-advised person" would accept the terms
    • Any attempt to exclude redemption rights is automatically void and unenforceable
    • "Collateral advantages" like tied-house agreements for pubs or petroleum stations face scrutiny as potential clogs
    • Modern courts apply both mortgage doctrine and restraint of trade principles to evaluate these arrangements
    • Lenders have three main remedies: suing for money due, exercising power of sale, or foreclosure
    • Power of sale arises when contractual redemption date passes but becomes exercisable only after specific triggers
    • Lenders must take reasonable care to obtain the best price reasonably available when selling property
    • The landmark Cookmere Brick case established that lenders can prioritize their interests in timing a sale


    💡⚖️ Let’s learn the law together—one session at a time!

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