Mortgagee: Rights and liabilities A mortgage is the transfer of interest in a property to secure payment of money advanced as a loan. The debt may be an existing one or a future debt.
In case of a mortgage, the possession of the property may be given to the mortgagee. When the mortgagee has possession of the property mortgaged to him, he has certain rights and liabilities which are conferred to him by law under the Transfer of Property Act 1882. The transferor is called a mortgagor, the transferee a mortgagee. The principal money and interest of which are secured are called the mortgage money. The instrument by which the transfer is effected is called a mortgage deed. Rights of a mortgagee in possession include: Claim expenses: A mortgagee may spend some money as is necessary for the preservation of the mortgaged property from destruction, forfeiture or sale. He may also do it for supporting the mortgagor's title to the property or for making his own title good against the mortgagor. He may also spend money for the renewal of the lease. Unless otherwise agreed upon between the parties, the mortgagee may add this expense to the principal money due, at the same rate of interest as is payable on the principal. It is essential that the expenditure is necessary. Learning Center- http://learning.investorline.co.in/ Mutual funds - http://mutualfunds.investorline.co.in/ Life Insurance - http://insurance.investorline.co.in/ Further, in the first instance, the mortgagor should have been called upon to pay and he must have failed to take proper and timely steps to preserve the property or its title. Claim insurance cost: In case the property is insurable, the mortgagee may insure it against loss or damage. The premium paid for any such insurance will be added to the principal money with interest at the same rate as is payable on the principal money. The amount of such insurance should not exceed the amount specified on this behalf in the mortgage deed or two-thirds of the amount that would be required in case of total destruction to reinstate the property. The mortgagee is not entitled to insure in cases where insurance of the property is already taken the mortgagor. The liabilities of a mortgagee in possession include: Maintain property: The mortgagee in possession must manage the property as a person of ordinary prudence would manage it, as if it were his own property. He must not commit any act which is destructive or permanently damaging to the property. Learning Center- http://learning.investorline.co.in/ Mutual funds - http://mutualfunds.investorline.co.in/ Life Insurance - http://insurance.investorline.co.in/ Payment of dues: He must pay the tax and all other charges of a public nature . He must also pay all rent accruing during his possession. Insurance claim: If he has insured the property against loss or damage, in case of a loss or damage, he must use the money he receives under the policy in reinstating the property. Accounts: He must keep clear, full and accurate accounts of all amounts received and spent by him as a mortgagee, and give the mortgagor true copies of such accounts. In case the mortgagee fails to perform any of these duties, he may be liable for such amounts to the mortgagor. When the mortgagor deposits the amount due on the mortgage, the mortgagee must account for his receipts from the mortgaged property from the date of such payment. He is not entitled to deduct any amount from it on account of any expenses incurred after such date. -- Visit site at – http://investorline.co.in/ Learning Center- http://learning.investorline.co.in/ Mutual funds - http://mutualfunds.investorline.co.in/ Life Insurance - http://insurance.investorline.co.in/ Investor Forums- http://forums.investorline.co.in/ Iwebs Open Source Web Publishing Platform - http://webs.investorline.co.in/iwebs/ --~--~---------~--~----~------------~-------~--~----~ Get latest market updates & search internet right from your browser-download our toolbar here- http://investorline.ourtoolbar.com/ Visit our site at – http://investorline.co.in/ Newsroom: http://newsroom.investorline.co.in/ Learning Center- http://learning.investorline.co.in/ Mutual funds - http://mutualfunds.investorline.co.in/ Life Insurance - http://insurance.investorline.co.in/ Investor Journal - http://research.investorline.co.in/ Newscatcher- http://catcher.investorline.co.in/ Interested in Financial Planning-Let us Contact you- http://spreadsheets.google.com/viewform?key=pb_z4f1_zGMg4iBBFT3-SWQ&email=true If you like the site then promote it here- https://www.freetellafriend.com/tell/?url=http://investorline.co.in/blogs/news Create your own free blog on- http://investorline.co.in/blogger Visit this group at http://groups.google.com/group/india-investor -~----------~----~----~----~------~----~------~--~---
