BSBLEG528 Apply Legal Principles In Property Law Matters - Assessment Task 2

Assessment Task 2:

Case Study 3
Scenario A.
William borrows $360,000.00 from Westpac Bank to build a house. The loan is to be paid in six installments, each of $60,000.00 as each of the six stages of building has been completed. Westpac prepares a standard Mortgage agreement and once signed, the mortgage is registered against the property.
After two advances are made ($120,000.00 total), William borrows $250,000.00 from the ANZ Bank who register a second mortgage.
Westpac makes further advances totaling $120,000.00 (total advances $240,000.00) and then William defaults.
The security property is sold but only realises $390,000.00.
a. How will the money be distributed between the two mortgagees? Give reasons for you answer. (Consider: the Rule in Clayton's Case – [Devaynes v. Noble 1816])

b. What is a Priority Agreement and how would it be important in this situation?

Scenario B.
A client who has lent $250,000.00, which is due for repayment, has consulted you. The loan has been secured by a registered mortgage against the borrower's property. Your client asks you to finalise the repayment.
a. You send a letter to the borrower who agrees to pay the money next week. How should the money be repaid and what documents will you hand over in exchange for payment?

Scenario C.
Despite your polite letter you do not receive a response from the borrower. Over the next few months you take all the necessary steps, required by law, which results in the property being sold for $650,000.00.
a. Outline each of the steps that you took from receipt of instructions to distribution of the proceeds of sale and explain why you took each step.