Module 9 - Other Equitable Interests
Equitable interests do not just arise under unexecuted uses or trusts and
under wills since the Estates Administration Act. There is a number of
other situations in which you may have an equitable interest. Thus, for
example, a person who mortgages land technically conveys the fee to
the mortgagee. This means that the mortgagee obtains the legal title (assuming
the original estate was legal), but equity treats the mortgagor as having
the equitable fee. This, at any rate, is the law unless legislation exists
which converts a mortgage into a charge, i.e., solely a security interest.
Land titles legislation does so, but registry statutes do not. However,
since 1984 in Ontario, you can no longer create a mortgage, only a charge
in the registry system: Land Registration Reform Act, S.O. 1984,
c.32, ss.1(a), 6(1). Therefore, since that time the mortgagor no longer has the equitable
fee.
An equitable interest which starts out as equitable, may eventually become
legal. A question then arises whether that has implications for future
interests.
The following problems address these issues.
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