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Mortgages

VIC

This publication guides practitioners in Victoria through the preparation of loan agreements, mortgages, and guarantees.

2 Matter Plans

Overview

The commentary covers the drafting and execution of mortgages, amendments, variations, and assignment deeds, as well as completion, registration, discharge, and default, whether acting for the mortgagor or the mortgagee.

The Reference materials folder includes guidance on electronic signing and remote witnessing, and the Getting the matter underway folder contains essential compliance and client engagement documents. The comprehensive Retainer Instructions ensure that all necessary information is gathered from the client at the outset of the matter.

Also included is 1001 Conveyancing Answers (VIC), which is a useful reference guide.

Precedents in this publication include:

  • Library of loan documents, including:
    • Mortgage-linked loan agreement;
    • Standard terms document – Registered memorandum;
    • No-security loan agreement;
    • Acknowledgements of debt;
    • Assignment, variation and priority;
    • guarantee;
    • minutes and declaration for a company mortgagor;
  • Letters and notices for default of the mortgagor.
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2 Matter Plans Included

  • Item icon ALERTS - Nil
  • Item icon Full Commentary - Mortgages (VIC)
  • Folder icon Reference materials
    • Item icon AI Prompts
      An AI prompt defines a specific task for AI to perform, like drafting a particular document, and provides clear instructions on how to execute that task. The goal is for the AI to quickly create a useful first draft of a document, which the user verifies and refines into a final version, ultimately ...

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    • Item icon Looking to the Future
    • Item icon Electronic Signing and Witnessing
    • Item icon 1001 Conveyancing Answers (VIC)
    • Item icon 101 Costs Answers
    • Item icon A Brief Explanation of the Transition to E-Conveyancing
    • Folder icon Papers and articles - Conveyancing and property
      • Item icon Plain language – A paper by the Hon. Michael Kirby AC CMG
      • Item icon Adjustment for cladding agreements
      • Item icon Adjustment of rates
      • Item icon Adjustment of rent
      • Item icon Adjustments
      • Item icon Adjustments and land tax in 2024
      • Item icon Agreement to lease
      • Item icon Avoiding off the plan - Quality defects
      • Item icon Avoiding off the plan - Statutory rights
      • Item icon Avoiding off the plan contracts - A sequel
      • Item icon Bits and pieces
      • Item icon Breach of contract - Penalty interest
      • Item icon Breach of contract – Reasonably foreseeable loss
      • Item icon Breach of section 32
      • Item icon Caveats (Vic)
      • Item icon Caveats - Forcible removal 1
      • Item icon Caveats - Forcible removal 2
      • Item icon Caveats - Insufficient proceeds from settlement
      • Item icon Caveats - Tenant’s caveats and the sale or mortgaging of freehold property
      • Item icon Caveats - Use them!
      • Item icon Costs and caveats
      • Item icon Certificates of title in electronic conveyancing
      • Item icon Clayton's settlement
      • Item icon Compensation for loss
      • Item icon Contamination
      • Item icon Contract – Australian Consumer Law – Impact on residential conveyancing
      • Item icon Contract - Avoiding off the plan contracts 1
      • Item icon Contract - Avoiding off the plan contracts 2
      • Item icon Contract - Changing the contract by special condition
      • Item icon Contract - Electronic conveyancing special condition
      • Item icon Contract - Electronic signatures
      • Item icon Contract - Entire contract
      • Item icon Contract - Guarantee
      • Item icon Contract - Is there a contract?
      • Item icon Contract - Misleading contracts
      • Item icon Contract - New contract
      • Item icon Contract - New contract - Contract of sale tweaked
      • Item icon Contract - New contract - Happy anniversary
      • Item icon Contract - New special conditions for contract of sale
      • Item icon Contract - Nomination
      • Item icon Contract - Terms contracts 1
      • Item icon Contract - Terms contracts 2
      • Item icon Contract - Terms contracts 3
      • Item icon Contract - Trust transactions
      • Item icon Cooling off
      • Item icon Co-owners - Joint tenancy or tenancy in common
      • Item icon Co-owners and easements – Two topics
      • Item icon Covenant - Removal of covenants 1
      • Item icon Covenant - Removal of covenants 2
      • Item icon Defects - Essential safety measures - Part 1
      • Item icon Defects - Essential safety measures - Part 2
      • Item icon Defects - Occupancy and insurance certificates
      • Item icon Deposit - Deposit release - 2010
      • Item icon Deposit - Deposit release - 2017
      • Item icon Deposit - Deposit release - A solution?
      • Item icon Deposit - Deposit release - Tough decisions?
      • Item icon Deposit - Deposit release - Why take the risk?
      • Item icon Deposit - Forfeiture of deposit
      • Item icon De-regulated Contract of Sale of Land
      • Item icon Deterioration - A matter of degree
      • Item icon Deterioration - General condition 24 has teeth
      • Item icon Deterioration - State of the premises
      • Item icon Disclosure of death
      • Item icon Estate agent - Agent beware
      • Item icon Estate agent’s commission – Money for nothing
      • Item icon Foreign residents capital gains tax withholding
      • Item icon GST - GST and mistake
      • Item icon GST - Margin scheme
      • Item icon GST withholding
      • Item icon Inadvertent disclosure
      • Item icon Inspection - Right to inspect
      • Item icon Land tax - Part 1
      • Item icon Land tax - Part 2
      • Item icon Land transfer duty benefits
      • Item icon Lease - Abandoned goods
      • Item icon Lease - Landlords beware
      • Item icon Lease - Retail lease
      • Item icon Lease - Retail lease - Predominant use
      • Item icon Lease - Retail lease cost
      • Item icon Lost trust deeds
      • Item icon Material facts
      • Item icon Measurements
      • Item icon Mortgage stress
      • Item icon Nomination
      • Item icon Nomination and the Australian Consumer Law
      • Item icon Nomination disputes
      • Item icon Notice of action
      • Item icon Notices - Liability for notices
      • Item icon Off the plan duty concessions
      • Item icon Owner-builder insurance
      • Item icon Owner-builders
      • Item icon Owners corporations
      • Item icon Personal Property Securities Act
      • Item icon Planning certificates - Accuracy
      • Item icon Power of attorney
      • Item icon Priority notice
      • Item icon Property - Rules and undertakings
      • Item icon Rescission - Consequences of rescission 1
      • Item icon Rescission - Consequences of rescission 2
      • Item icon Rescission - Costs on rescission
      • Item icon Retail lease outgoings
      • Item icon Retail premises
      • Item icon Retail repairs
      • Item icon Retail repairs revisited
      • Item icon Sale of land amendments
      • Item icon Scary short-stays
      • Item icon Self managed superannuation funds
      • Item icon Septic situation
      • Item icon Sheriff - Enforcement procedure
      • Item icon Sheriff's sale - Part 1
      • Item icon Sheriff's sale - Part 2
      • Item icon Solicitor - Lawyers selling real estate
      • Item icon Solicitor – Executor’s commission 1 – Horns of a dilemma
      • Item icon Solicitor - Executor's commission 2 - A fiduciary duty
      • Item icon Solicitor – Liability for commercial advice
      • Item icon Stamp duty concessions
      • Item icon Subdivision - Off the plan sales
      • Item icon Subdivision - Off the plan sales - Best endeavours - Part 1
      • Item icon Subdivision - Off the plan sales - Best endeavours - Part 2
      • Item icon Subdivision - Off the plan sales - Materially affects
      • Item icon Subdivision - Off the plan sales - Sunset conditions
      • Item icon Subdivision - Owners corporation certificates
      • Item icon Subdivision - Owners corporation repairs
      • Item icon Subdivision - Owners corporations
      • Item icon Subject to contract
      • Item icon Sunset clause – Vendor ending a contract – Purchaser’s consent or court order required
      • Item icon Time of the essence
      • Item icon To be or not to Airbnb
      • Item icon Trade practices – Fair trading in property transactions
      • Item icon Vendor statement - Aboriginal Heritage Act
      • Item icon Vendor statement - Breach of section 32
      • Item icon Vendor statement - Growth areas infrastructure contribution
      • Item icon Vendor statement - Honest and reasonable
      • Item icon Vendor statement and leases
      • Item icon Vendor statement review
      • Item icon Vendor statements and the Australian Consumer Law
      • Item icon Vendor's duty to co-operate
      • Item icon Wills and estates - Death in the house
    • Item icon Further information
  • Item icon Overview
    A mortgage is essentially a contract to secure the payment or performance of a monetary obligation on security of real property which gives the mortgagee a statutory ability to foreclose or sell on default. The mortgage is supported by a loan agreement between the parties. There are both legal, or ...

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  • Folder icon A. Getting the matter underway
    • Item icon File cover sheet - Mortgages
    • Item icon To do list - Mortgages
    • Item icon First steps
    • Item icon Client details and verifying identity
    • Item icon Verification of identity in electronic conveyancing transactions
    • Item icon Client authorisation
      A client authorisation enables a client to authorise a solicitor or conveyancer to act on their behalf for an electronic transaction. Although the authorisation is similar to a power of attorney, legislation specifically states that a client authorisation is not a power of attorney. When ...

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    • Folder icon Library of identity and authorisation forms - VIC
      • Item icon Verification of identity certificate
      • Item icon Client authorisation
      • Item icon Identifier declaration
      • Item icon Identity agent certification
      • Item icon Australian Embassy/High Commission/Consulate certification form
    • Item icon Retainer instructions - Mortgages
    • Item icon Conflict of interest check
    • Item icon Initial letter to mortgagor client with costs agreement
    • Item icon Initial letter to mortgagee client with costs agreement and summary of loan terms
    • Item icon Costs agreement - VIC
    • Item icon Standard costs disclosure form for clients - Fees under $3000
    • Item icon Conveyancers costs disclosure - VIC
    • Item icon Time and costs estimates
    • Folder icon If required - Updating costs disclosure
      • Item icon Letter to client updating costs disclosure
      • Item icon Charge securing costs
      • Item icon Guarantee securing costs
      • Folder icon Costs disclosure before settlement in litigation matters
        • Item icon Letter to client - Costs disclosure before settlement - NSW, VIC, and WA
        • Item icon Letter to client - Costs disclosure before settlement - QLD, SA, TAS, ACT, and NT
    • Item icon Summary of loan terms
    • Folder icon General deeds, agreements, execution clauses, and statutory declarations
      • Item icon Deeds and Agreements
      • Folder icon Deeds
        • Item icon Deed for general use
        • Item icon Deed of guarantee
        • Item icon Deed of release
        • Item icon General deed of indemnity
        • Item icon Deed of assignment of agreement
        • Item icon Deed of gift
        • Folder icon Library of standard clauses for deeds
          • Item icon Amendment
          • Item icon Confidentiality for defined information - All parties
          • Item icon Confidentiality for defined information - One party
          • Item icon Confidentiality for terms of deed - All parties
          • Item icon Confidentiality for terms of deed - One party
          • Item icon Costs
          • Item icon Counterparts
          • Item icon Dispute resolution
          • Item icon Events beyond control
          • Item icon Governing law and jurisdiction
          • Item icon Interpretation
          • Item icon No assignment
          • Item icon Notices
          • Item icon Severance
          • Item icon Waiver
          • Item icon Whole agreement
      • Folder icon Agreements
        • Item icon Agreement for general use
        • Item icon Heads of agreement
        • Item icon Non-disclosure agreement - Formal
        • Item icon Non-disclosure agreement - Informal
        • Folder icon Library of standard clauses for agreements
          • Item icon Amendment
          • Item icon Confidentiality for defined information - All parties
          • Item icon Confidentiality for defined information - One party
          • Item icon Confidentiality for terms of agreement - All parties
          • Item icon Confidentiality for terms of agreement - One party
          • Item icon Costs
          • Item icon Counterparts
          • Item icon Dispute resolution
          • Item icon Events beyond control
          • Item icon Governing law and jurisdiction
          • Item icon Interpretation
          • Item icon No assignment
          • Item icon Notices
          • Item icon Severance
          • Item icon Waiver
          • Item icon Whole agreement
      • Folder icon Execution clauses
        • Folder icon Library of execution clauses for agreements
          • Item icon Attorney
          • Item icon Authorised officer
          • Item icon Company
          • Item icon Company - Sole director
          • Item icon Individual
          • Item icon Individual - No witness
        • Folder icon Library of execution clauses for deeds
          • Item icon Attorney
          • Item icon Authorised officer
          • Item icon Company
          • Item icon Company - Sole director
          • Item icon Individual
      • Folder icon Statutory declarations
        • Item icon Commonwealth statutory declaration
        • Item icon Statutory declaration - blank - ACT
        • Item icon Statutory declaration - blank - NSW
        • Item icon Statutory declaration - blank - VIC
        • Item icon Statutory declaration - blank - QLD
        • Item icon Statutory declaration - blank - TAS
        • Item icon Statutory declaration - blank - SA
        • Item icon Statutory declaration - blank - WA
        • Item icon Statutory declaration - blank - NT
        • Item icon Standard annexure note for documents
      • Item icon Standard annexure note for documents
  • Folder icon B. The mortgage
    • Item icon The National Mortgage Form
      All mortgage dealings must be lodged electronically using the National Mortgage Form. Under s 74(1) of the Transfer of Land Act 1958, a Torrens mortgage is required to be in an approved form and s 121 of the Act gives the Registrar the right to approve this form.

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    • Item icon National Mortgage Form - completed in PEXA
    • Item icon Loan agreements and registered memorandum
      The mortgage must be supported by a loan agreement between the mortgagee and the mortgagor. The guide includes two loan agreements that may be used to record the creation of the loan relationship. The Mortgage Linked Loan Agreement included in this guide is linked to the mortgage which incorporates ...

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    • Item icon Mortgage linked loan agreement
    • Item icon Standard terms document - Registered memorandum AA2785
    • Item icon Second mortgages
      Where a registered mortgage already exists, a subsequent mortgage will usually be referred to as a ‘second mortgage’. There is no difference in the form of a second or subsequent mortgage. The same requirements apply to lodgement. To register a second mortgage, the second mortgagee will need to ...

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    • Item icon Collateral mortgages
      A collateral security is a security given in addition to the principal security which is independent of, but subordinate to, the principal agreement. A collateral mortgage, therefore, is a mortgage relating to the same debt as the principal security, often referred to as a primary instrument and ...

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    • Item icon Equitable mortgages
      Under the Torrens system there can be no legal mortgage without registration. However, once executed by the parties there is an equitable mortgage in existence pending registration. There are variants of the equitable mortgage but in essence there are two types:

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    • Item icon All monies mortgages
      A mortgage is ordinarily supported by a loan agreement which establishes how much money is owed by the borrower to the lender. However, some loan agreements are on an ‘all monies’ basis and seek to allow for further advances. These ‘all monies mortgages’ do not include a dollar amount of the ...

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    • Item icon National credit code
      The National Credit Code replaced the existing state and territory based consumer credit codes with effect from 1 July 2010. The code is found in Schedule 1 to the National Consumer Credit Protection Act 2009. The Code has a broad effect on mortgages and s 7 stipulates the type of mortgages ...

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    • Item icon Solicitor mortgages
      Practitioners acting in mortgage matters must ensure they fully understand their obligations under the Legal Profession Uniform Law 2014. The regulatory framework applies to mortgage practices rather than solicitor’s practices that on occasion receive instructions to act on a mortgage whether it is ...

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    • Item icon Personalty
      Personalty refers to personal property, as opposed to real property. The Personal Property Securities Register (PPSR) provides a national register for people wishing to register their security interests over personal property. The Personal Property Securities Act 2009 governs the priorities between ...

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    • Folder icon If required - Old system
      • Item icon General law mortgage
    • Folder icon If required - Ancillary documents
      • Item icon Business purpose declaration
    • Folder icon If required - No security loan agreement
      • Item icon No security loan agreement
  • Folder icon C. Acting for the mortgagee
    • Item icon Letter to mortgagor's solicitor submitting documents
    • Item icon Acknowledgement of receipt of memorandum
    • Item icon Statutory declaration - blank - VIC
    • Item icon Clause - Statutory declaration re mortgages notices claims etc
    • Item icon Authority to complete documents and satisfy requisitions
    • Item icon Mortgagee's requisitions
  • Folder icon D. Acting for the mortgagor
    • Item icon Letter to mortgagor to attend to sign mortgage
    • Item icon Letter to mortgagee's solicitor returning documents
    • Item icon Letter to discharging mortgagee requesting discharge
    • Item icon Direction to pay
    • Folder icon If required - Company mortgagor
      • Item icon Minutes of meeting of company mortgagor
      • Item icon Statutory declaration - blank - VIC
      • Item icon Example content - Statutory declaration that company is solvent
  • Folder icon E. If required - Independent legal advice, priorities, guarantees and caveats
    • Folder icon Independent legal advice
      • Item icon Australian legal practitioner's certificate 1
      • Item icon Australian legal practitioner's certificate 2
      • Item icon Certificate by translator or interpreter
      • Item icon Form of acknowledgment given by a borrower or surety to the certifying Australian legal practitioner
      • Item icon Consent to same solicitor legal advice - Borrower guarantor
    • Folder icon Priorities, guarantees and acknowledgements
      • Item icon Deed of priority
      • Item icon Deed of guarantee and explanation
      • Item icon Acknowledgement of loan
      • Item icon Acknowledgement of loan secured by mortgage
      • Item icon Acknowledgement of loan secured by caveat
      • Item icon Acknowledgement of loan secured by deposit of title deeds
      • Item icon Acknowledgement of debt arising from judgment secured by mortgage
    • Folder icon Caveats and priority notices
      • Item icon Caveats
        A mortgage creates a caveatable interest, so a caveat may be lodged under s 89 of the Transfer of Land Act 1958. It serves, until removed:

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      • Item icon Priority notices
        As an alternative to a caveat, a priority notice is a notification of an intended dealing with land. Once recorded, a priority notice will prevent registration of any other dealing over the relevant folio. A priority notice reserves the priority of the dealings, as set out in the notice, and to ...

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  • Folder icon F. If required - Discharge, transfer, assignment and variation
    • Folder icon PEXA
      • Item icon How to prepare discharge of mortgage in PEXA
    • Folder icon Discharge
      • Item icon Discharge of mortgage
        Once the principal or secured sum has been repaid, a discharge of mortgage can be obtained from the mortgagee. The procedure involved is set out in s 84 of the Transfer of Land Act 1958. The approved form must be used and lodged along with the certificate of title for registration. Once the ...

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      • Item icon General law discharge of mortgage
      • Item icon Deed of forgiveness of debt
    • Folder icon Transfer
      • Item icon Transfer of mortgage
        Section 45(1) of the Transfer of Land Act 1958 states that a registered proprietor may transfer an estate or interest in land by an instrument in an appropriate approved form. ‘Registered proprietor’ is defined in s 4 of the Act as any person appearing by the register to be the proprietor of ...

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      • Item icon Notice of transfer of mortgage
    • Folder icon Assignment
      • Item icon Notice of assignment of simple debt
      • Item icon Deed of assignment of debt - Concise
      • Item icon Deed of assignment of debt - Extensive
      • Item icon Deed of assignment of general law mortgage
    • Folder icon Variation
      • Item icon Variation of mortgage
        Once a mortgage has been registered it can be varied under s 75A of the Transfer of Land Act 1958 using the approved form. A variation of mortgage requires the endorsed consent of any subsequent mortgagees and/or chargees to its registration on title. The certificate of title is required to be ...

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      • Item icon Example content - Particulars of variation of mortgage or charge
      • Item icon Deed of variation of mortgage
      • Item icon Variation of priority of mortgages
        Under the Torrens system, registration gives priority. Section 34 of the Transfer of Land Act 1958 states that all instruments lodged for registration are to be registered in order of their date of lodgement. Therefore, priority is established on the basis of the time of lodgement for registration. ...

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  • Folder icon G. Default
    • Item icon Default
      A default usually, but not always, relates to a default in payment of the principal sum secured by the mortgage. A default can also relate to the performance or observance of the covenants contained in the mortgage and to be observed by the mortgagor. For example, the mortgagor may not keep the ...

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    • Item icon Power of sale
      A mortgagee is not able to exercise the mortgagee’s power of sale of the secured property under the Transfer of Land Act 1958 unless the mortgage is registered. It is possible to seek a court order for sale under s 91 of the Property Law Act 1958 in relation to an unregistered mortgage, but ...

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    • Item icon Obtaining possession
      Section 78 of the Transfer of Land Act 1958 gives the mortgagee the power to take possession of the secured property. The mortgagor may vacate the property voluntarily. If not, the mortgagee will have to commence proceedings for possession in the Supreme Court for an order or authority to the ...

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    • Item icon Power of foreclosure
      Section 79 of the Transfer of Land Act 1958 sets out the procedure for foreclosure. This is a process by which the mortgagee becomes absolute owner of the land free from any encumbrances and the rights of the mortgagor. This is not a simple procedure and is used as a last resort when all other ...

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    • Item icon Mortgagee sale
      Once a mortgagee exercises the power of sale and sells the secured property, the proceeds from the sale have to be accounted for. Section 77(3) of the Transfer of Land Act 1958 sets out the order of priority for payment of the proceeds of a mortgagee’s sale. It is:

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    • Item icon Notice to pay
    • Item icon Letter to mortgagor with notice to pay
    • Item icon Letter to encumbrancee with less priority advising exercising power of sale
    • Item icon Deed of forgiveness of debt
  • Folder icon H. Settlement and finalising the matter
    • Item icon Letter to mortgagor's solicitor advising ready for settlement
    • Folder icon If required - Forgiveness of debt
      • Item icon Deed of forgiveness of debt
    • Item icon Letter to mortgagor after settlement with summary
    • Item icon Letter to mortgagee after settlement with summary
    • Item icon Summary of loan terms
    • Item icon Example invoice incorporating notification of client's rights - VIC
    • Item icon Invoice recital - Mortgage
    • Item icon Closing the file
    • Item icon File closing checklist
  • Item icon Comments and suggestions for By Lawyers

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