Some rights a mortgagee of property has in the case of a mortgage contract

A mortgage is the transfer of interest in a property to secure payment of money advanced. The transferor is called a mortgagor. The transferee is called a mortgagee. The principal money and interest secured are called as mortgage money. The instrument by which this transfer is effected is called mortgage deed. The provisions related to mortgage of property are contained in the Transfer of Property Act.

A mortgage can be of various types. These include simple mortgage, mortgage by conditional sale, usufructuary mortgage, English mortgage, mortgage by deposit of title deeds and anomalous mortgage.

A mortgagee can take possession of mortgaged property in case of default. Under the Transfer of Property Act, if there is default in payment of mortgage money, the mortgagee can take possession of mortgaged property and sell it without intervention of a Court only in case of English mortgage. In addition, a mortgagee can take possession of mortgaged property where there is a specific provision in the mortgage deed and the mortgaged property is situated in Kolkata, Chennai or Mumbai. In other cases, possession of property can be taken only with the intervention of a Court.

English mortgage


It is a type of mortgage where the mortgagor binds himself to repay the mortgaged money on a certain date, and transfers the mortgaged property absolutely to the mortgagee, but subject to a provision that he will re-transfer the property to the mortgagor upon payment of the mortgage money as agreed. This is also called registered mortgage.

This is the safest form of mortgage for a bank. No documents of the property are required to create this kind of a mortgage. The borrower just needs to enter into a mortgage deed with the bank which needs to be stamped and registered in order to make it enforceable. However, this is an expensive way to create a mortgage as charges have to be borne by the borrower for stamping and registration. Further, the mortgagor binds himself to repay the money at a certain date and transfers property absolutely to the mortgagee subject to the condition that he will re-transfer it to the mortgagor on payment of the mortgaged money.

A mortgagee has a right to sue for the mortgage money in these cases:

• Where the mortgagor binds himself to repay.
• Where the mortgaged property is wholly or partially destroyed or the security is rendered insufficient. The mortgagee must have given the mortgagor a reasonable opportunity to provide further security to render the security sufficient and the mortgagor has failed to do so.
• Where the mortgagee is deprived of his security due to a wrongful act or default of the mortgagor.
• Where the mortgagor has failed to deliver possession of the property to the mortgagee.

If a suit is brought, the Court may stay the suit and all proceedings until the mortgagee has exhausted all his available remedies against the mortgaged property, unless the mortgagee abandons his security and re-transfers the mortgaged property.

Section 67 of the Act gives the mortgagee the right to foreclosure or sale. As per this provision, in case the mortgage money has become due to the mortgagee, before a decree has been made for the redemption of the mortgaged property, the mortgagee has a right to obtain a decree from the Court that the mortgagor be absolutely debarred of his right to redeem the property, or a decree that the property be sold. This suit to obtain a decree that the mortgagor be absolutely debarred of his right to redeem the mortgaged property is called a suit for foreclosure.

Fall In Interest Rates, Property Prices Makes It Tempting To Invest In A House, But Do A Reality Check
WITH interest rates on a downward spiral and prospects of getting a good deal on a house, the real estate sector could witness some buying in the coming months.

Though property consultants recommend waiting for a few months for the right price, some home seekers may be tempted to kick off their house hunting expedition soon.

Time for short listing

While there is no need to rush into a decision, you can start looking out for a house right away. Once the market bottoms out, home-seekers will start making a beeline for properties and loans. If you have identified your ideal home beforehand, you will be a step ahead. You can jump at the earliest opportunity available — in terms of price and interest rate. Lack of buying activity means that the market is skewed towards the buyer at the moment.

You can start quoting a price that seems reasonable to you. Try quoting a price that is 50% less than the highest price of a property in the locality commanded in the past. Another method of determining a property’s price is to ascertain, if you want to buy it in five years later, too. If the answer is in the affirmative, you can consider sealing the deal. Approaching an agent posing as a seller could be a good idea to determine the real price of the house — chances are that the selling price would be considerably different from the buying price quoted to you.

Identify your needs and capacity

Your heart may be set on a plush residential complex replete with state-of-the-art facilities, but that should not make you lose sight of your basic needs. For instance, if the well-equipped complex is not close to a railway station/bus stop, and you do not own a private vehicle, then commuting could turn out to be a nightmare. Hence, when you commence your house-hunting mission, it is advisable to keep a list of must-have attributes ready. In addition to quality of construction, evaluate the existing infrastructure. Finding a perfect house is nearly impossible, but comparing short listed properties will help you zero in on one that meets majority of your requirements.

This apart, the present and future market drivers, financial ability and personal investment objectives should be borne in mind. A ruthless assessment of your financial situation — current as well as future — is essential; factor in possible pay cuts and job loss. If you are planning to sell your old flat and buy a new one, it is better to do so only after securing the sales proceeds. Though bridge loans meant for such funding gaps are available, in the current scenario, it is better to steer clear of avoidable liabilities.

Consider old flats

If you are not fixated on ‘ultra-modern’ amenities, you can consider buying an old flat. If you locate a well-maintained house in the desired locality that boasts of robust ancillary infrastructure, there is no reason why it should not be considered. After all, the strain on your budget will be minimal. The difference in prices of new and resale properties would depend on various factors, but would usually be a third less than that of a new property. However, a comparison between the new and old houses should also cover renovation costs, the latter would necessitate.

Check if the property is already mortgaged

Many times, builders start developing properties after mortgaging the same to institutions that extend finance to the project. If it is mortgaged, you must insist on getting a no objection certificate (NOC) from the lender or satisfy yourself that your rights under the purchase contract are not subservient to the lenders. You must insist on an Occupation Certificate, sanctioned building plan and the Building Completion Certificate.

Get clarity on refund

While signing the contract, the buyer should enquire about the time frame within which the project will be completed and the penalty that the builder would be liable to pay in the event of delay.

The builder would be legally liable to render a refund, if it can be proved that he has not met his part of the pact. This would include unreasonable delays in construction, flawed construction, flawed title or evidence of previous claims on the property or the land on which it stands.

Buyers should enquire about the portion of advance paid that will be forfeited and the time frame within which the balance will be refunded, in case they choose to cancel the booking.

A tenancy agreement is entered into between the owner of a property and his tenant. A tenant is a person who takes any property on rent or lease from the owner of the property. Tenant also includes any person by whom or on whose behalf the rent of any premises is payable. He is not the owner of the property.

A tenant includes:

A sub-tenant of a tenant A person who continues in possession of the property after the termination of his tenancy In case of death of the person continuing in possession after the termination of his tenancy, it includes his spouse, son, daughter, and daughterin-law in case she is a widow of his pre-deceased son. This is subject to the condition that they had been living in the premises with him as a member of his family up to the date of his death. This won't include any person against whom an order for eviction has been made. Also. it won't include any person to whom a licence has been granted by the owner

The right of every successor to continue in possession after the termination of the tenancy is personal to him. On the death of a successor, it does not devolve on any of his heirs. So, it does not pass on to other heirs automatically.

In case a person who acquires the right to continue in possession after the termination of the tenancy by succession was not financially dependent on the deceased person on the date of his death, he will acquire the right for a limited period only .The right of this successor to continue in possession after the termination of the tenancy is terminated after the expiry of that period or on his death, whichever is earlier.

In case the right of any successor to continue in possession after the termination of the tenancy is terminated, the termination does not affect the right of any other succession of the same category to continue. In case there is no other successor of the same category, the right to continue in possession after the termination of the tenancy will not pass on to any other successor.