What are your rights as a mort­gagor?

The Trans­fer of Prop­erty Act, 1882 (Act) en­lists the rights and en­ti­tle­ments avail­able to the mort­gagor for the prop­erty mort­gaged

HT Estates - - HTESTATES - Su­nil Tyagi

Gone are the days when a per­son of the mid­dle or lower in­come groups could not af­ford to buy a home. Now, banks, fi­nan­cial in­sti­tu­tions and pri­vate lenders of­fer sev­eral loan schemes to buy res­i­den­tial, com­mer­cial as well as in­dus­trial prop­er­ties. A stan­dard and popular scheme is loan against prop­erty. A buyer can sim­ply ap­ply for a loan to buy a prop­erty by plac­ing the same prop­erty as se­cu­rity for re­pay­ment of the loan. In le­gal ter­mi­nol­ogy, such ar­range­ment is recog­nised as mort­gage wherein a per­son trans­fers in­ter­est in a spe­cific im­mov­able prop­erty for se­cur­ing the pay­ment of the loan ad­vanced.

It is im­por­tant for the mort­gagor to iden­tify his statu­tory rights un­der In­dian laws. The Trans­fer of Prop­erty Act, 1882 (Act) en­lists the rights and en­ti­tle­ments avail­able to the mort­gagor in re­spect of the mort­gage.

Right of re­demp­tion: One of the most im­por­tant rights of the mort­gagor is the right of re­demp­tion. To ex­er­cise this right, the mort­gagor re­quires the mort­gagee to de­liver back the mort­gage deed and all doc­u­ments per­tain­ing to the mort­gaged prop­erty and pos­ses­sion of the mort­gaged prop­erty (in case where mort­gagee is in pos­ses­sion of such prop­erty), upon re­pay­ment of loan amount. Where the mort­gagee acts in de­fi­ance of the afore­said right, the mort­gagor may en­force such right by fil­ing a suit for re­demp­tion.

Right of as­sign­ment: Fur­ther, in case where the mort­gaged prop­erty is trans­ferred to the mort­gagee, the mort­gagor may (upon re­demp­tion) re­quire the mort­gagee to as­sign the mort­gage debt and trans­fer the mort­gaged prop­erty to any third party of his choice in­stead of re-trans­fer­ring the mort­gaged prop­erty to the mort­gagor. How­ever, this right of the mort­gagor will not be avail­able if the mort­gagee is or has been in pos­ses­sion of the mort­gaged prop­erty.

Right of in­spec­tion: The mort­gagor is en­ti­tled to in­spect and make copies or ab­stracts of, or ex­tracts from, ti­tle doc­u­ments re­lat­ing to the mort­gaged prop­erty which are in cus­tody or power of the mort­gagee. How­ever, the mort­gagor has to pay the mort­gagee’s fees and bear all costs and ex­penses on this be­half. This right is avail­able to the mort­gagor as long as his right of re­demp­tion sub­sists.

Right of ac­ces­sion: Where the mort­gaged prop­erty is in pos­ses­sion of the mort­gagee and the prop­erty has re­ceived any ac­ces­sion ( ie, any ad­di­tion or im­prove­ment) that has in­creased the value of such prop­erty, then on re­demp­tion of the mort­gage, the mort­gagor will be en­ti­tled to re­ceive the mort­gaged prop­erty along with ac­ces­sion, pro­vided there is no agree­ment con­trary to this un­der­stand­ing be­tween the par­ties. In case where such ac­ces­sion was car­ried out at the ex­pense of the mort­gagee and is ca­pa­ble of sep­a­rate pos­ses­sion and en­joy­ment, then in or­der to take such ac­ces­sion with the mort­gaged prop­erty, the mort­gagor has to pay ex­penses and costs to the mort­gagee to­wards such ac­ces­sion.

Leas­ing of mort­gaged prop­erty: The mort­gagor who is in pos­ses­sion of the mort­gaged prop­erty will be en­ti­tled to cre­ate lease of such mort­gaged prop­erty on the fol­low­ing terms as men­tioned in the Act: The lease will be such as the one made in the or­di­nary course of man­age­ment of t he prop­erty con­cer ned. Fur­ther, such lease should be in ac­cor­dance with any lo­cal law, cus­tom or us­age The lease should re­serve the best rent that can rea­son­ably be ob­tained. No pre­mium shall be paid or promised and no rent should be payable in ad­vance

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