Brittany is the sole registered proprietor of a property in Jannali.
Brittany is the sole registered proprietor of a property in Jannali. She wants to start an online business and needs some start up funds. She approaches her friend Sampson for a loan. Sampson grants to Brittany a written and signed mortgage over the property in exchange for $100,000.00. The mortgage is not registered.
Brittany’s business ventures are not going as well as she hoped, so she wants to raise more money. She decides to rent out her property and move back in with her parents’ to save money. She enters into an oral lease at market rent with Patrice for a term of two years with no option to renew. Patrice immediately moves onto the property.
Brittany’s online business is failing and she is now drowning in debt. She has a bunch of creditors demanding payment, so she decides to sell the property and wants a quick settlement. Brittany advertises the property for sale online. Malia, an international buyer, purchases the property on a whim, after seeing the photos online – no inspection of the premises is carried out. Malia is not aware there is a mortgage to Sampson. Settlement is now complete. Registration has not yet occurred but is imminent.
1. What is your advice to Sampson, Patrice and Malia?
2. Would your advice change if Malia becomes registered? Explain your answer.
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