Question

What contracts are presumed to be equitable mortgage?

Answer 1

Contracts involving transactions where the borrower conveys title to the lender, but with an option to repurchase, are presumed to be equitable mortgages.

Step-by-step explanation:

Contracts that give rise to a presumption of equitable mortgage typically involve a borrower transferring the title of a property to a lender with the provision that the borrower retains the right to repurchase the property. This arrangement is often characterized by the nature of the transaction, where the borrower, in essence, pledges the property as security with an understanding that they can reclaim ownership upon fulfilling certain conditions.

The presumption of an equitable mortgage arises when the terms of the contract suggest a security arrangement rather than an outright sale. In such cases, courts may intervene to protect the borrower's interests, recognizing the transaction's equitable nature and the borrower's equitable right to redeem the property.

This presumption is rooted in principles of fairness and preventing situations where a transaction is labeled as a sale when its substance is more akin to a mortgage. The law acknowledges the need to prevent potential exploitation and ensure that borrowers are not unfairly deprived of their property rights in situations where the economic reality of the transaction resembles a secured loan rather than a true sale.Answer:

Step-by-step explanation:

Answer 2

Contracts presumed to be an equitable mortgage typically involve the borrower delivering property title deeds to a lender as security for a loan while retaining ownership. Such arrangements are seen as providing security rather than transferring property ownership, and must comply with legal requirements.

Step-by-step explanation:

In the context of equitable mortgage, certain types of contracts are presumed to be an equitable mortgage rather than an outright transfer or a simple loan. These contracts usually involve the delivery of title deeds or some other form of ownership documents to a lender as security for a loan. The presumption is that the borrower intends only to provide the lender with security for the debt, not to transfer ownership.

In jurisdictions where the concept of equitable mortgages is recognized, some typical situations presumed to be equitable mortgages include:

• A debtor handing over the title documents of the property to a creditor without a formal mortgage deed.
• Instances where a formal mortgage may not be possible or practical, and possession of title documents serves as the security.

These arrangements are intended to provide security for the lender while allowing the borrower to retain ownership of the property as long as the terms of the loan agreement are met. It's important for both parties to understand the implications of such an arrangement and to ensure that it complies with all relevant legal requirements.