Essentials of Mortgage - Rights of Mortgagor - Mortgage Loans

Definition of Mortgage

A mortgage is the transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, and existing or future debt or the performance of an engagement which may give rise to a pecuniary liability.

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Parties & Terms Involved In A Mortgage

1. Mortgage : A temporary loan secured (or money borrowed) from a creditor by keeping one's (owned) valuable property (e.g. House, Land, etc) as a mortgage security in order to give creditor an assurance for the repayment of debt within fixed time period.
2. Mortgagor : The transferor or the one who makes/gives the mortgage is called a mortgagor.
3. Mortgagee : The transferee or the one to whom mortgage is given or the one who takes/accepts the mortgage is called a mortgagee.
4. Mortgage Aggrement : The legal document specifying terms, conditions, duties and obligations of parties involved in a mortgage contract is called Mortgage aggrement.
5. Mortgage Money : The principal money and interest of which payment is secured for the time being are called the mortgage money.
6. Mortgage Deed : The instrument (if any) by which the transfer is effected is called a mortgage deed.

Essentials of a Mortgage

1. Specify immovable property : A mortgage is that the immovable property must be distinctly specified.
2. Consideration : The consideration of a mortgage may be either :-
   1. The performance of a contract giving rise to a pecuniary liability,
   2. money advanced or to be advanced by way of loan, or
   3. an existing or future debt.
3. Transfer of an interest : According to the definition given above the third requisite of mortgage is that there should be a "transfer of an interest" of an immovable property for the purpose of securing the payment of money advanced by way of loan or for the purpose of securing the performance.
   The words "transfer of interest" signify that the interest which passes to the mortgage is not ownership or dominion, which notwithstanding the mortgage, resides in the mortgagor. This right is only an accessory right which is intended merely to secure the due payment of the debt. In mortgage, there is a transfer of a partial interest.
4. Parties : The person who transfers an interest in the property is called the mortgagor, the person to whom the interest is transferred is called the mortgagee. The mortgagor must be competent to transfer. Thus a minor cannot be a mortgagor but a minor can be a mortgagee.

Rights of the Mortgagor

1. The Right of Redemption : or simply, 'The Right of Redemption'. The mortgagor is supposed to be the natural owner of the property and hence it is accepted that his interests in the property are always supposed to be natural. His rights are supposed to be statutory and legal for which legal remedies are available for him to establish his rights at the end.
   At any time after the principal money has become due, the mortagor has a right, on payment or tender, at a proper time and place, of the mortgage money to require the mortgagee :-
   1. to deliver to the mortgagor the mortagage deed and all documents relating to the mortgaged property which are in the possession or power of the mortagagee.
   2. Where the mortgagee, is in possession of the mortgaged property, to deliver possession thereof to the mortgagor.
2. Re-transfer Case : He being, the natural owner of the property has the inherent right to re-transfer his property to anybody else irrespective of the person in whose favour he has firstly transferred the property for the sake of money.
   In other words, at the cost of the mortgagor either to re-transfer the mortgaged property to him or to such third person as he may direct, or to execute and (where the mortgage has been effected by a registered instrument) to have registered an acknowledgment in writing that any right in derogation of his interest to the mortgage has been extinguished.
3. Right to Grant Lease : It should also be not treated that after mortgaging the property the mortgagor is not free to lease the property to any of the lease. We have noted that mortgage implied the temporary charge over the immovable property belonging to the mortgagor till the money taken is repaid to the mortgagor. It is, therefore, the inherent right of the mortgager to make the lease of the property whenever he desires for any purpose. Each such lease is supposed to be binding on the mortgagee.
4. Right of Inspection of the property : Since the mortgager is the natural owner of the property it is supposed to be his inherent right to inspect the property at any time and as and when he desires. It is his right to ascertain whether the property mortgaged is maintained properly or not and hence this right has been conferred on by the law itself. He can also ask for the documents of the property and is also eligible to get the copies of the documents.
5. Right of Reasonable Wastages : The right of reasonable wastages is also guaranteed by the law but it is to be noted that such of the wastages are minimum and reasonable and does not affect the property in any way or does not cause any destruction or the injury to the property of a permanent nature.
6. Right of Accession : It should not be supposed that on transfer, due to mortgage, the right of the mortgagor extinguished with regards to the property so mortgaged.
   
   But the mortgagor has the right to access into the property at any time.
   
   Such of the accession or the addition in the property can be possible on variety of occasions such as in the case of usufructuary mortgage for the improvement of the property or at the time of renewal of the lease of the mortgaged property for further period.