Sunday, 16 September 2012

Rights and liabilities of mortgagee and mortgagor

Following are the important rights of mortgagee :

1. Selling Right :-
If borrower fails to return the loan in time then the mortgagee has the right to sell the property of the mortgagor. But it will be sold and getting decree from the court. Property will be sold by auction.

2. Shortage Of Money Case :-
After selling the property if amount is less then the loan, the balance can be recovered from the person by getting the decree from the court.

3. Usufructuary Case :-
In this case mortgagee has no right to sell the property and to obtain the decree from the court. The banker can retain the possession till the recovery of the loan.

4. Refusal Of Debt :-

If a borrower refuses to return the loan or he is unable to pay the debt then the lender can get a foreclosure decree from the court.

5. Adjustment Of Payment :-
The banker has a right to distribute the payment received after the sale of property according the principal amount, interest and other charges.

6. Joint Suit :-
If the mortgagor are more than one person then suit will be filed against all of them if the loan is not returned

7. Sale Of Private Property :-
In case of private property the mortgagee will issue at least 3 months notice to the mortgagor before selling the property.

When property is in the possession of the mortgagee then it has the following duties or liabilities :
1.    Property may not be damaged.
2.    No alteration is allowed in property.
3.    The property must be insured.
4.    Property must be kept secured.
5.    Rent of the property must be collected.
6.    Govt. Revenue must be paid.
7.    Property must be kept clear from all dues.


1.    Redeem Of Property :-
As the loan is returned then a mortgagor has a right to redeem the property. All documents and the mortgage deed should be returned to the borrower.

2.    Right To Claim Damages :-
If the property is damaged during the possession of the mortgagee then the mortgagor has a right to claim the damages from the mortgagee.

3.    Partial Redemption :-
If mortgagee wants to acquire a share in the mortgaged property through inheritance or purchase the mortgagor has the right of partial redemption.

4.    Right Of Lease :-
If the possession of the property is in the hands of mortgagor then he can make lease of this property for the ordinary period.

5.    Follow The Agreement Deed :-
The mortgagor will observe all the conditions contained in the agreement deed. He will also defend the title of property if the property is in his possession.

6.    Recovery Of Possession :-
When the mortgagor returns the loan then he has a right to recover the possession of the property from the mortgagee.

7.    Liability Of Taxes :-
If property is in the possession of the mortgagor then the liability of all types of taxes will be on the mortgagor over of Modarba certificates is not impressive. Now the ratio of equity is very high in relation to debt financing.

8.    Control Of Modarba Companies :-
There are many checks on the Modarba companies to regulate the modarba. The state bank, religious board, corporate law authority and registrar of modarba are responsible to regulate the modarba company.

9.    Appointment Of Auditor :-
It is very necessary that modarba company should appoint the auditor. Auditor should be qualified charted accountant approved by the registrar. The auditor should certify the objectives and accounts of the modarba.

10.    Audit Report Of The Company :-
Auditor verified balance sheet and profit and loss report about the company must be given to the modarba certificate holders with in six month of the closing accounts period.

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