Showing posts with label Mortgagee. Show all posts
Showing posts with label Mortgagee. Show all posts

Friday, June 26, 2020

Property Mortgage Laws in India


The Transfer of Property Act, 1882 deals with the mortgage of immovable property in India. A mortgage is the transfer of an interest in real estate for the purpose of securing the performance of a loan or an engagement. Therefore, although the mortgage does not transfer the property to third parties, it generates interest in real estate. In this article, we look at some of the major laws and regulations regarding property mortgage in India.

Transfer of Property Act


The Transfer of Property Act deals with the mortgage of immovable property in India. A property mortgage is the transfer of an interest in a specific real estate to secure the payment of advanced funds in the form of a loan, an existing or future loan, or the performance of an engagement that may give rise to a peculiar liability.

Mortgagor - Mortgagee


Mortgagor: In a property mortgage transaction, a mortgagor is a person who borrows money in exchange for a mortgage on the property as an assurance to pay the loan.
Mortgagee: A mortgager person is a lender in a mortgage transaction. Usually banks or financial institutions.


Types of Mortgage In India:-

 

·    Simple mortgage


A simple mortgage occurs when a mortgage obligates the lender to pay the money according to the loan documents or gives the mortgagee the right to sell the property and act on the mortgage loan. In a simple mortgage, possession of the property cannot be given to the mortgagee.

·    Mortgage by conditional sale


A mortgage by conditional sale is when the mortgagee sells the mortgaged property to mortgage with a condition; the sale becomes absolute in case of default payment. In case of mortgage payment, the same property is void as per the terms.

·    Usufructuary Mortgage


The usufructuary is a mortgage when a mortgage saves possession of a property for the mortgage and authorizes the mortgagee to occupy the property until the debt is paid. Typically, the rent or profit of the property while in possession of the mortgage is applied in whole or in part towards the loan.

·    English mortgage


An English mortgage occurs when a mortgagee obligates himself to repay the loan on a certain date and has the property fully transferred to the mortgagee, subject to the provision that the mortgagee pays the property on payment of the loan amount. Will transfer back into the mortgage again.

·    Mortgage by title-deeds deposit


Mortgage by deposit of title deeds occurs when the mortgagee gives title to the real estate, with the intention of creating security until the payment of the loan, to the mortgagee.

·    Odd mortgage


Any mortgage that is not mortgaged by conditional sale or usury mortgage or English mortgage or title deed can be a simple mortgage.


Validity of property mortgage


Any mortgage other than a mortgage from the title deeds deposit is valid only when the mortgage is entered through a registered instrument that is signed by Mortgagor and verified by at least two witnesses.