Rights & Duties of Mortgagee

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Rights & Duties of Mortgagee

 

Rights of Mortgagee

 

  1. A Mortgagee, at any time after the mortgage-money has become due to him, and before a redemption decree or the mortgage-money has been paid or deposited, has a right to obtain from the court a decree that the mortgagor shall be absolutely debarred of his right to redeem the property, or a decree that the property be sold.
  2. The mortgagee has a right to sue for the mortgage-money:
  1. where the mortgagor binds himself to repay the same;
  2. where, the mortgaged property is wholly or partially destroyed;
  3. where the mortgagee is deprived of the whole or part of his security in consequence of the wrongful act or default of the mortgagor.

 

Rights of mortgagee in possession:

 

A mortgagee may spend such money as is necessary-

  1. for the preservation of the mortgaged property from destruction, forfeiture or sale;
  2. for supporting the mortgagor's title to the property;
  3. for making his own title thereto good against the mortgagor; and
  4. when the mortgaged property is a renewable lease-hold, for the renewal of the lease, and may, in the absence of a contract to the contrary, add such money to the principal money, at the rate of interest payable on the principal, and, where no such rate is fixed, at the rate of nine percent per annum:

 

Liabilities of Mortgagee

 

When the mortgagee takes possession of the mortgaged property, he must:

 

  1. manage the property as if it were his own;
  2. collect the rents and profits thereof;
  3. pay the government revenue, charges of a public nature and rent;
  4. make necessary repairs of the property;
  5. must not commit any act which is destructive or permanently injurious to the property;
  6. he must keep clear, full and accurate accounts of all sums received and spent by him as mortgagee;

 

Liabilities of mortgagee in possession:

 

When, during the continuance of the mortgage, the mortgagee takes possession of the mortgaged property, -

 

  1. he must manage the property as a person of ordinary prudence would manage his own property;
  2. he must try his best endeavors to collect the rents and profits thereof;
  3. he must, in the absence of a contract to the contrary, out of the income of the property, pay the government revenue, all other charges of a public nature and all rent accruing due in respect thereof during such possession, and any arrears of rent in default of payment of which the property may be summarily sold;
  4. he must in the absence of a contract to the contrary, make such necessary repairs of the property as he can pay for out of the rents and profits thereof after deducting from such rents and profits and the interest on the principal money;
  5. he must not commit any act which is destructive or permanently injurious to the property;
  6. where he has insured the whole or any part of the property against loss or damage by fire, he must, in case of such loss or damage, apply any money which he actually receives under the policy or so much thereof as may be necessary, in reinstating the property, or, if the mortgagor so directs, in reduction or discharge of the mortgage-money;
  7. he must keep clear, full and accurate accounts of all sums received and spent by him as mortgagee, and, at any time during the continuance of the mortgage, give the mortgagor, at his request and cost, true copies of such accounts and of the vouchers by which they are supported;
  8. his receipts from the mortgaged property, or, where such property is personally occupied by him, a fair occupation-rent in respect thereof, shall, after deducting the expenses properly incurred for the management of the property and the collection of rents and profits and the other expenses and interest thereon, be debited against him in reduction of the amount (if any) from time to time due to him on account of interest and, so far as such receipts exceed any interest due, in reduction or discharge of the mortgage-money; the surplus, if any, shall be paid to the mortgagor;
  9. when the mortgagor tenders, or deposits in the manner hereinafter provided, the amount for the time being due on the mortgage, the mortgagee must, notwithstanding the provisions in the other clauses of this section, account for his receipts from the mortgaged property from the date of the tender or from the earliest time when he could take such amount out of court, as the case may be, and shall not be entitled to deduct any amount there from on account of any expenses incurred after such date or time in connection with the mortgaged property.