Um..... judgement mortgage

Victor

Surely the mortgage has to be paid off first?

http://www.rte.ie/news/2008/0730/lawlorl.html

Mahon cannot pursue Lawlor home
Wednesday, 30 July 2008 22:07

A High Court decision today means the Mahon tribunal cannot pursue claims against the late Liam Lawlor's home and lands in Lucan, Co Dublin, in order to meet legal costs of more than €430,000 due to it by the late TD.

Ms Justice Mary Laffoy ruled that when Mr Lawlor died in a crash in Moscow in October 2005, his interest in his family home and lands at Somerton, Finstown, Lucan, ceased and therefore various judgment mortgages granted to the tribunal against Mr Lawlor relating to the house and lands also ceased.

On the death of Mr Lawlor, the house and lands accrued to Mrs Lawlor solely by right of survivorship.

Spike440

Well it doesn't really matter since he lost any interest in the property when he died.

A mortgage and judgment mortgage are two very different things. A judgment mortgage is granted to a creditor in order to sell the property and satisfy the debt. In the case of a judgment mortgage being granted while the property is still mortgaged to the bank, it will be a case of division of the proceeds. You would normally have a situation where the creditors duke it out to try to establish priority over the proceeds of sale.

dermot_sheehan

Judgment mortgage only attaches to the interest a person holds in land, in a joint tenancy when one of joint tennants dies, that person's interest dies with them.

Registration of a judgement mortgage however breaks a joint tennancy in unregistered land, the reason being is because the judgement mortgages (ireland) act regards the registration of a judgement mortgage as a conveyance, and it therefore breaks one of the four unities (a joint tenancy is converted to a tennancy in common if one of the four unities: time, interest, title and possession is broken, a jont tenancy is when both parties own different shares of property and the share becomes part of their estate when they die, this is opposed to a tenancy in common where the survivor of the two owners gets all of the property.

In Registered land however, according to the Registration of Title Act 1964, registration of a judgement mortgage only acts as a charge on the folio, it doesn't break the unities and thus a joint tenancy is preserved. There's been no case law on this until now but most academic writers believed that a joint tenancy is not severed by the registration of a judgment mortgage against registered land, this appears to be what the high court found in this case.

Victor

"Thats a bit stupid though isn't it?"

I presume they can still chase the estate?

dermot_sheehan

They can chase Liam Lawlor's estate, and go after whatever assets are in that estate but the house would not form part of that estate as it passed to his wife as sole survivor of a joint tenancy

Victor

But the house comes out of her share, does it not?

dermot_sheehan

She would own 100% of the house, as it passes to her completly as sole survivor to a joint tenanc, not the 50% she would be entitled to if it were a tenancy in common

dats_right

Victor wrote: »

But the house comes out of her share, does it not?

No, because as Gabhain rightly points out, the house passes automatically to her as a result of survivorship. The deceased joint tenant's interest automatically ceases on his death and as a result does not form part of his estate.