MORTGAGE AND PROPERTY LAW OF LAGOS STATE
DOWNLOAD OF A COPY OF THIS LAW IS AVAILABLE [N1,500 (PDF) AND N3000 (WORD)] CLICK HERE FOR ONLINE PAYMENT OR TRANSFER TO TREE & TREES, 0013401871, GTBANK. ALL THE LAWS OF LAGOS STATE IS ALSO AVAILABLE AS A COMPENDIUM. EMAIL: lawnigeria@gmail.com or info@gmail.com or Text/WhatsApp +23407067102097 LIST OF LAWS OF LAGOS, [ALPHABETICAL]
MORTGAGE & PROPERTY LAW
ARRANGEMENT OF SECTIONS
1. Establishment of the Lagos State Mortgage Board
2. Composition of the Board
3. Remuneration of members of the Board
4. Tenure of office of the members of the Board
5. Meetings and quorum
6. Power to co-opt
7. Functions of the Board
8. Powers of the Board
9. Secretary to the Board
10. Staff of the Board
11. Pensions
12. Negotiating lesser fees for documents presented for stamping and registrations
13. Financial provisions
14. Annual report
15. Mode of creating mortgages
16. Mode of creating mortgages
17. charges by way of Legal Mortgage
18. Equitable mortgage
19. Realisation of a Right of Occupancy
20. Realisation of leasehold mortgages
21. Realisation of equitable charges by the Court
22. Sale of mortgaged property
23. Right to sue for mortgage money
24. Actions for orders or reliefs
25. Matters which the Court must take into consideration when giving orders
26. Order for injunction
27. Power of court to refer disputes to board for mediation or arbitration
28. Consolidation of mortgages
29. Tacking and further advances
30. Obligation to transfer instead of recovering and right to take possession
31. Inspection, production and delivery of documents and priorities
32. Priorities between mortgages
33. Leasing powers of mortgagor and mortgagee in possession
34. Power of mortgagor and mortgage in possession to accept surrender of leases
35. Powers incidental to estate or interest of mortgagee to sell, insure, appoint receiver, etc.
36. Power to sell undivided share of mortgage property
37. Assignment on sale
38. Assignment on sale
39. Application of proceeds of sale
40. Exercise of the power of sale
41. Mortgagee’s receipts, discharge, etc.
42. Amount and application of insurance money
43. Appointment powers, remuneration and duties of receiver
44. Effect of advance payment on joint account
45. Notice of trust affecting mortgage debts
46. Transfer of mortgages
47. Reconveyances of mortgages by indorsed receipts
48. Cesser of mortgage terms
49. Terms statutory legal charge
50. Forms of statutory transfer of legal charges
51. Joint and several implied covenants
52. Forms
53. Filling of mortgage instruments
54. Protection of mortgagors from unconscionable practices
55. Estimate of charges
56. Regulation of mortgage promotion
57. Payment into escrow accounts
58. Prohibiting against kickbacks and unearned fees
59. Prohibition of collateral contract
60. Prohibition against negative amortisation
61. Financing of insurance or other products sold in connection with the loan
62. Prohibition of fees for preparation and submission of loan application for borrowers
63. Power to make regulations
64. Enforceability of a contract of mortgage
65. Interest in land
66. Penalties for violations, joint and several liability, treble damages, actions for injunction by Attorney-General of the State, costs and attorney fees
67. Interpretation
68. Repeal
69. Citation and commencement
SCHEDULES
MORTGAGE & PROPERTY LAW
A LAW TO ESTABLISH THE LAGOS STATE MORTGATE BOAR, ENCOURAGE THE GROWTH OF MORTGAGES IN REAL PROPERTY AND FOR THE REGULATION OF CONSUMER LOANS FOR ACQUISITION OF PROPERTY AND REALISATION OF SECURITIES AND FOR CONNECTED PURPOSES
(Commencement) (23rd August, 2010)
1. Establishment of the Lagos Stage Mortgage Board
(1) There is established a Board to be known as the Lagos Stte Mortgage Board (referred to in this Law as “the Board”).
(2) The Board shall –
(a) be a body corporate with perpetual succession and a common seal;
(b) have power to sue and be sued in the corporate name; and
(c) have power to hold, purchase, acquire and dispose of any property whether movable or immovable.
2. Composition of the Board
(1) The Board shall consist of six (6) members to be appointed by the Governor.
(2) The members of the Board shall be—
(a) a Chairman with professional qualification in financial or real estate management with at least fifteen (15) years cognate experience;
(b) the General Manager who is also the Chief Executive;
(c) the Deputy General Manager (mortgage operations);
(d) the Deputy General Manager (shared services);
(e) a representative from the Ministry of housing not less than an Assistant Director;
(f) a representative from the Ministry of Finance not less than an Assistant Director; and
(g) one (1) person from the public or private sector who shall be a Director in the agency.
(3) All appointment to the Board except those of the ex-officio members are subject to the confirmation of the House of Assembly.
(Mortgage & Property (Amendment) Law of 25th May 2015)
3. Remuneration of members of the Board
(1) The ex-officio and non-official members of the Board shall not be paid any salary.
(2) An allowance for the attendance of meetings may be paid to the non-official members of the Board, at a rate to be prescribed by the State Executive Council and payable from the funds of the Board.
4. Tenure of office of the members of the Board
(1) The General Manager/Chief Executive Officer shall hold office for a period of four (4) years, renewable for two (2) further terms.
Provided that the General Manager/Executive Officer may also be appointed on a fixed term contract not exceeding the maximum term provided for in subsection (1)
(2) The Chairman and the Director from the public or private sector shall hold office for a period of four (4) years, renewable for two (2) further terms.
Provided that the Director may also be appointed on a fixed term contract not exceeding the maximum term provided for in subsection (2).
(3) An ex-officio member of the Board shall hold office for such period as he remains in the office that qualified him for appointment on the Board
5. Meeting and quorum
(1) The Board shall meet at least once a quarter at the instance of the Chairman and at such other times as the Board may deem fit.
(2) Where the Chairman is unable or refuses to call a meeting for any reason, the Executive Office shall have the power to call a meeting on the directive of the majority of members of the Board.
(3) The Chief Executive shall issue notice of meetings to all members.
(4) The quorum for a meeting shall be any five (5) members.
(Mortgage & Property (Amendment) Law of 25th May 2015.)
6. Power to co-opt
The Board may co-opt any person(s) for any meeting of the Board or its Committee and such co-opted person(s) may take part in the deliberations of the Board or any of its committees but shall not be entitled to vote or to be counted as part of the quorum of the meeting.
7. Functions of the Board
(1) The functions of the Board shall be to—
(a) generate conducive environment for accessible and affordable mortgage or charge for the benefit of citizens of the State to acquire their own homes;
(b) advise the Governor on the funding, administration and structure of the State mortgage finance programme or policy for the benefit of the residents of the State;
(c) articulate any Lagos Mortgage Scheme or Policy which the Government has or may put in place from to time in connection with the making processing, registering or administration of mortgage lending in the State;
(d) protect the residents of the State and the stability of the State’s economy from unconscionable practices of mortgage brokers, lenders and all persons holding themselves out as offering funds on the security by way or mortgage or charge on any property in the State for development or the acquisition of homes or housing estates;
(e) implement and honour on behalf of government all obligations in any Agreement made between government and other parties with regards to the provisions of funds for land ownership or development of Estates in the State;
(f) report to government any default or breach on the part of any of the parties to any obligations or requirements in the Agreement mentioned in paragraph (c) above and to inform government with all dispatch on ways of remedying such default or breach by defaulting parties;
(g) encourage, promote and co-ordinate all forms of research concerned with the mortgage lending industry as it relates to economic wellbeing of the State and its residents, the stamping and registration system relating to mortgages in the State, the mode of application for application for Governor’s consent relating to secured credit transactions, and generally to disseminate same to government and the public;
(h) ensure continued intervention of government in the Lagos Mortgage Scheme through a formalised and institutionalised process;
(i) advise the Government on the adoption of standards and policies under which property -secured credit should be provided;
(j) act in an advisory capacity to the Government with regard to the mortgage lending industry and property secured credit;
(k) ensure the continued prominence and participation of government in the Lagos State Mortgage Scheme through the activities of the Board and those of other agencies of government;
(l) maintain a central statistical database of mortgages and transactions secured on, property in the State;
(m) perform such other functions as may from time to time be referred to it by the Governor or the State Executive Council as the case may be;
(n) secure compliance with the provisions of this Law and protect the interest of mortgagors of residential houses and other real estate within the State against unfair terms and unconscionable conduct of mortgage finance provides; and
(o) mediate in disputes between parties arising from mortgage transactions under this Law.
(2) Without limiting the generality of the provisions of subsection (1) of this section, the Board shall not solely or jointly, or through any person, company, enterprise or unit, develop, carryon, participate in, engage in, or be involved in any business(es) or commercial activities that result in or may result in direct or indirect competition with mortgage brokers, lenders, and real estate developers.
(Mortgage & Property (Amendment) Law of 25th May 2015.)
8. Powers of the Board
(1) The Board shall have the power to—
(a) borrow, deposit or accept any money from any person or corporation in respect of its functions under this Law;
(b) sell, let, dispose of or grant rights over the undertaking or any property of the Board for cash or for shares or any security of any company or for other consideration.
(c) encourage and negotiate sub-prime mortgage lending to the public on facilities provided by the State Government for Lagos State Mortgage Scheme, based or its intervention funding;
(d) appoint appropriate skilled personnel to advise the Board on the management and the implementation of any mortgage Scheme;
(e) act as an intermediary between the public or any group or special interest and the mortgage brokers, lenders and allied enterprises;
(f) give adequate protection to the members of the public seeking mortgage loans and generally to ensure that the mortgage industry is operated fairy, honestly, efficiently and free from deception or non-competitive practices;
(g) assist in negotiating on behalf of public is or any group or special interest, reasonable interest rate with Mortgage Lending Institutions and ensure the availability of funds on reasonable terms to provide affordable housing on Lagos State Government facility.
9. Secretary to the Board
There shall be a Secretary to the board who shall be—
(i) responsible for the day to clay management of the Board; and
(ii) appointed by the Governor on the recommendation of the Commissioner and hold office on such terms as the governor may approve.
10. Staff of the Board
(1) The Board may—
(a) employ such persons as members of its staff as it considers necessary; and
(b) approve conditions of service including the provision for payment of pensions:
Provided that not pension scheme shall be put into operations without the approval in writing of the Commissioner responsible for Establishment and Pensions.
(2) If the Commissioner thinks it is expedient that any vacancy in the Board shall be filled by a person holding office in the Civil Service of the State, he shall inform the Commissioner responsible for Establishment and Pensions and the relevant Service Commission of the State who may fill the vacancy by way of secondment or transfer.
(3) Where a member of the Civil Service Commission is seconded, the secondment shall be without prejudice to any pension rights which but for the secondment would still accrue to him.
(4) A person seconded under subsection (3) of this section may elect to be transferred to be a staff of the Board in which case any previous service of the State shall count as service for the purpose of any pension subsequently payable by the Board.
(5) Where a person who is a member of the Public Service is transferred to the service of the Board—
(i) that person’s former service in the Public Service shall be taken into account in applying the provisions of the Pension Law; and
(ii) that Law shall have effect as if the person’s subsequent services with the Board were services in the Civil Service Commission.
11. Pensions
(1) Notwithstanding the provisions of the Pension Reform Law 2007, service in the Board shall be Public Service for the purpose of the at Law and accordingly, officers and other staff of the board shall in respect of their services on the Board be entitled to such pensions, gratuities and other retirement benefits as are prescribed under the State Pensions Reform Law.
(2) The period of service of any person in the Board shall be joined to and deemed to be continuous with the period served by that person previously or subsequently in any other pensionable service.
(3) For the purpose of the application of the provisions of the Pensions Reform Law, any power exercisable under provisions of that Law by a Commissioner or other authority of the State (not being the power to make regulations) are vested in and shall be exercisable by the Board and not by any other person or authority.
(4) Nothing in the foregoing provisions of this section shall prevent the appointment of a person to any office on the Board on terms which preclude the grant of a pension or gratuity in respect of service in that office.
12. Negotiating lesser fees for documents presented for stamping and registration
The Board, in promoting affordable housing for the less privileged citizens, may use its best endeavours to promote concessions, deferred payments or instalmental payment of duties payable to the Commissioner of Stamp Duties with respect to the stamping of mortgage or charges and fees payable to the Registrar of Titles in respect of the registration of same at the Lands Registry.
13. Financial provisions
(1) The Board shall establish and maintain a fund from which all expenditure incurred by the Board shall be defrayed.
(2) There shall be paid and credited to the fund established under subsection (1) above—
(a) all such moneys as may from time to time be lent or granted to the Board by the Government;
(b) all moneys raised for the benefit of the Board by way of gift, loan, debenture, grant-in aid, or otherwise; and
(c) all subscription fees, charges for services rendered by the Board.
(3) The fund shall be managed in accordance with the rules made by the Commissioner and without prejudice to the generality of the power to make rules under this subsection, the rules shall in particular contain the following provisions—
(a) specifying the manner in which the assets of the fund are to be held and regulating the payment into and out of the fund;
(b) requiring the keeping of proper accounts and records for the purposes of the fund in such form as may be specified in the rules;
(c) ensuring that the accounts are audited periodically by an auditor approved by the Auditor-General; and
(d) requiring copies of the accounts and of the auditor’s report thereon to be furnished to the State Executive Council through the Commissioner within a stipulated time frame after the end of the period to which the accounts relate.
(Mortgage & Property (Amendment) Law of 25th May 2015.)
14. Annual report
(1) The Board shall prepare and submit to the Commissioner as soon as possible after the end of the financial year but not later than four (4) months after it, an operational report including audited accounts of its activities in such form as the Commissioner may direct on the activities of the Board during the immediate preceding financial year and such a report shall include a copy of the audited report of the accounts.
(2) The Commissioner shall present a copy of the report submitted to him under the provision of this section to the State Executive Council.
15. Mode of creating mortgages
(1) A mortgage of a right of occupancy in land shall be created at Law either by a demise for a term of years absolute, subject to a provision for censer on redemption, or by a charge by deed expressed to be by way of legal mortgage, or by a charge by deed expressed to be by way of statutory mortgage in the forms provided under this law:
Provided that a first mortgagee shall have the same right to possession of documents as if his security included a right of occupancy.
(2) Any purported assignment by way of mortgage made after the commencement of this Law shall (to the extent of the estate of the mortgagor) operate as a demise of the land to the mortgagee for a term of years absolute, but subject to redemption.
(3) This section applies whether or not the mortgage is made by way of sub-mortgage of a term of years absolute, or is expressed to be by way of trust for sale or otherwise.
(4) Without prejudice to the provisions of this Law in respect of legal and equitable powers, every power to mortgage or to lend money on mortgage of a right of occupancy by way of conveyance shall be construed as a power to mortgage the term by demise for a term of years absolute or by a charge, by way of legal mortgage, or to lend on such security.
16. Mode of mortgaging leaseholds
(1) A mortgage of a term of years absolute shall be create at law either by a sub-demise for a term of years absolute, less by one day at least than the term vested in the mortgagor, and subject to a provision for redemption, or by a charge by deed expressed to be by way of legal mortgage; or by a deed expressed to be made by way of statutory mortgage in the forms provided under this Law; and where a licence to sub-demise by way of mortgage is required, such licence shall not be unreasonably refused:
Provided that a first mortgagee shall have the same right to the possession of documents as if his security has been effected by assignment.
(2) Any purported assignment of a term of years absolute by way of mortgage made after the commencement of this Law shall (to the extent of the estate of the mortgagor) operate as a sub-demise of the leasehold land to the mortgagee for a term of years absolute subject to redemption, in the following manners, namely—
(a) the term to be taken by a first or only mortgagee shall be ten (10) days less than the term expressed to be assigned;
(b) the term to be taken by a second or subsequent mortgagee shall be one day longer than the term bested in the first or other mortgagee whose security ranks immediately before that of the second or subsequent mortgagee, if the length of the last mentioned term permits, and in any case for a term less by one day at least than the term expressed to be assigned; and in this subsection, any such purported assignment includes an absolute assignment with a deed of defeasance and any other assurance which, but for this subsection, would operate in effect to vest the term of the mortgagor in a mortgagee subject to redemption.
(3) This section applies whether or not the mortgage is made by way of sub-mortgage of a term of years absolute, or is expressed to be by way of trust for sale or other wise.
(4) Without prejudice to the provisions of this Law in respect of legal and equitable powers, every power to mortgage for or to lend money on mortgage of a term of years absolute by way of assignment shall be construed as a power to mortgage the term by sub-demise for a term of years absolute or by a charge by way of legal mortgage, or to lend on such security.
17. Charges by way of Legal Mortgage
(1) Where a Legal Mortgage of land is created by a charge by deed expressed to be by way of Legal or Statutory Mortgage, the mortgagee shall have the same protection, powers and remedies (including the right to initiate proceedings to obtain possession from the occupiers and the persons in receipt of rents and profits, or any of them) as if—
(a) where the mortgage is a mortgage of a right of occupancy, a mortgage term for the unexpired term of years has been created in favour of the mortgagee; and
(b) where the mortgage is a mortgage of a term of absolute, a sub-term less by one day than the term vested in the mortgagor had been created in favour of the mortgage.
(2) Where an estate vested in a mortgagee immediately before the commencement of this Law has be virtue of this Law been converted into a term of years absolute or sub-tem, the mortgagee may, by a declaration in writing signed by him, convert the mortgage into a charge by way of Legal Mortgage, and in that case the mortgage term shall be extinguished in the inheritance or in the head term as the case may be, and the mortgagee shall have the same protection powers and remedies (including the right to initiate proceedings to obtain possession from the occupiers and the persons in receipt of rents and profits or an of them) as if the mortgage term or sub-term has remained subsisting. The power conferred by this subsection may be exercised by a mortgagee notwithstanding that he is a trustee or personal representative.
(3) Such declaration shall not affect the priority of the mortgagee or his right to retain possession of documents, or affect his title to or right over any fixtures or chattels personal comprised in the mortgage.
18. Equitable mortgage
(1) As from the commencement of this Law, an equitable mortgage of a right of occupancy shall not be created by a mere deposit of title or charge on a property except it is accompanied by an agreement to create a legal mortgage in favour of the mortgagee or in case of mortgage of an equitable interest in a property by an assignment of an equitable interest in favour of the mortgagee with a provision for cesser on redemption.
(2) Provided that in a case of mortgage by deposit of title or charge accompanied by an agreement to create a legal mortgage, a mortgagee may within thirty (30) days by an Originating Summons bring an action in court requiring the mortgagor to execute a legal mortgage in his favour and thereafter exercise the powers of legal mortgagee under this Law.
19. Realisation of a Right of Occupancy
(1) Where a Right of Occupancy has been mortgaged by the creation of a term of years absolute limited thereout or by a charge by way of legal mortgage or by statutory mortgage and the mortgagee sells under his statutory or express powers of sale—
(a) the conveyance subject to the Governor’s consent, shall operate to vest in the purchaser the legal title in the land conveyed subject to any legal mortgage having priority to the mortgage in right of which the sale is made and to any money secure by it; and
(b) the mortgage term or the charge by way of legal mortgage or the charge by way of statutory mortgage and any subsequent mortgage term or charges shall merge or be extinguished with respect to the land conveyed and such sale or transfer may, as respects the legal title, be made in the name of the owner in whom it is vested.
(2) Where any such mortgagee obtains an order for foreclosure the order shall operate to vest the legal title in him (subject to the Governor’s consent and any legal mortgage having priority to the mortgage in right of which the foreclosure is obtained and to any money secured by it), and then the mortgage term, if any, shall be merged with the Right of Occupancy, and any subsequent mortgage term or charge by way of legal mortgage bound by the order shall be extinguished.
(3) Where any such mortgagee acquires a title under the Limitation Law, he or the person(s) deriving title under him, may enlarge the mortgage term into a right of occupancy under the statutory power for that purpose discharged from any legal mortgage affected by the title so acquired, or in the case of a charge by way of legal mortgage may by deed declare that the right of occupancy in him is discharged as foresaid, and the same shall best accordingly.
(4) Where the mortgage includes fixtures or personal chattels, any statutory power of sale and any right to foreclose or take possession shall extend to the absolute or other interest in it affected by the charge.
(5) In the case of a sub-mortgage b sub-demise of a long term (less a nominal period) itself limited out of a right of occupancy; the provisions of this section shall operate as if the derivative term, if any, created by the sub-mortgage had been limited out of the right of occupancy, so as to enlarge the principal term and extinguish the derivative term created by the sub-mortgage, and to enable the sub-mortgagee to convey the legal title or acquire it by foreclosure, enlargement, or otherwise as aforesaid.
(6) This section applies to a mortgage whether created before or after the commencement of this Law, and to a mortgage term created by this Law, but does not operate to confer a better title to the legal estate than would have been acquired if the same had been conveyed by the mortgage (being a valid mortgage) and the restrictions imposed by this Law in regard to the effect and creation of mortgages were not in force, and all prior mortgages (if any) not being merely equitable charges had been created by demise or by charge by way of legal mortgage.
20. Realisation of leasehold mortgages
(1) Where a term of years absolute has been mortgaged by the creation of another tem of years absolute limited thereout or by a charge by way of legal mortgage and the mortgagee sells under his statutory or express power of sale the—
(a) conveyance by him shall, subject to Governor’s consent, operate to convey to the purchaser not only the mortgage term, if any, but also (unless expressly exempted with the leave of the court) the leasehold reversion affected by the mortgage, subject to any legal mortgage having priority to the mortgage in right of occupancy which the sale is made and to any money thereby secured; and
(b) mortgage term, or the charge by way of legal mortgage and any subsequent mortgage term or charge, shall merge in such leasehold reversion or be extinguished unless exempted as aforesaid, and such conveyance may, in respects of the leasehold reversion, be made in the name of te estate owner in whom it is vested. Where a licence to assign is required on a sale by a mortgagee, such licence shall not be unreasonably refused.
(2) Where any such mortgagee obtains an order for foreclosure, the order shall, unless it otherwise provides, operate (without giving rise to a forfeiture for want of a licence to assign) to vest the leasehold reversion affected by the mortgage and any subsequent mortgage term in him, subject to any legal mortgage having priority to the mortgage in right of which foreclosure is obtained and to any money secured by it, and the mortgage term and any subsequent mortgage term or charge by way of legal mortgage bound by the order shall, subject to any express provision to the contrary contained in the order, merge in such leasehold reversion or be extinguished.
(3) Where any such mortgagee acquires a title under the Limitation Law, he or the persons deriving title under him, may be deed declare that the leasehold reversion affected by the mortgage and any mortgage term affected by the title so acquired shall vest in him, free from any right of redemption which is barred, and the same shall (without giving rise to a forfeiture for want of a licence to assign) vest accordingly, and thereupon the mortgage term, if any, and any other mortgage term or charge by way of legal mortgage affected by the title so acquired shall, subject to any express provision to the contrary contained in the deed, merge in such leasehold reversion or be extinguished.
(4) Where the mortgage includes fixtures or chattels personal, any statutory power of sale and any right to foreclose or take possession shall extend to the absolute or other interest therein affected by the charge.
(5) In the case of sub-mortgage by sub-demise of a term (less a nominal period itself limited out of a leasehold reversion, the foregoing provisions of this section shall operate as if the derivative term created by the sub-mortgage had been limited out of the leasehold reversion, and so as (subject as aforesaid) to merge the principal mortgage term as well as the derivative term created by the sub-mortgage and to enable the sub-mortgagee to convey the leasehold reversion or acquire it by foreclosure, vesting, or otherwise as aforesaid.
(6) This section takes effect without prejudice to any encumbrance or trust affecting the leasehold reversion which has priority over the mortgage right of which the sale, foreclosure, or title is made or acquired, and applies to a mortgage whether execute d before or after the commencement of this Law, and to a mortgage term created by this Law, ut does not apply where the mortgage term does not comprise the whole of tile land included in the leasehold reversion unless the rent (if any) payable in respect of that reversion has been apportioned in respect of the land affected or the rent is of no monetary value or no rent is reserved, and unless the lessee’s covenants and conditions (if any) have been apportioned, either expressly or by implication, as respects the land affected.
21. Realisation of equitable charges by the Court
(1) Where an order for sale is made by the Court in reference to an equitable mortgage on land created pursuant to section 18 of this Law (not secured by a legal mortgage) the court may, in favour of a purchaser, make a vesting order conveying the land or may appoint a person to convey the land or create and vest in the mortgagee a legal term of years absolute to enable him carry out the sale, as the case may require, in like manner as if the mortgage had been create by deed by way of legal mortgage in accordance with the provisions of this Law, but without prejudice to any encumbrance having priority to the equitable mortgage unless the encumbrance consents to the sale.
(2) In any action, whether for foreclosure, or for redemption, or for sale, or for the raising and payment in any manner of mortgage money, the Court on the request of the mortgagee, or of any person interested either in the mortgage money or in the right of redemption, and notwithstanding that –
(a) any other person dissents; or
(b) the mortgagee or any person so interested does not appear in the action, and without allowing any tie for redemption or (or payment of nay mortgage money), may direct a sale of the mortgaged property, in accordance with the terms of the contract or on such terms as it things fit, including the deposit in court of a sum equal to one-third of the known value of the mortgaged property at the time of making the order for sale.
(3) But, in an action brought by a person interested in the right of redemption and seeking a sale, the Court shall, on the application of any defendant, direct the claimant and or the person interested to give security for costs on an actual indemnity basis.
(4) In any case within this section the Court may, if it things fit, direct a sale without previously determining the priorities of encumbrances.
(5) This section applies to action brought either before or after the commencement of this Law.
(6) In this section “mortgaged property” includes the estate or interest which a mortgagee would have had power to convey if the statutory power of sale were applicable.
(7) For the purposes of this section the Court may, in favour of a purchaser, make a vesting order conveying the mortgaged property, or appoint a person to do so, subject or not to any encumbrance as the Court may think fit; or in the case of an equitable mortgage, may create and vest a mortgage term in the mortgagee to enable him to carry out the sale as if the mortgage had been by deed by way of legal mortgage.
23. Right to sue for mortgage money
The mortgagee has a right to sue for mortgage money where—
(a) the mortgagor binds himself to repay same;
(b) the mortgaged property is wholly or partly destroyed or the security is rendered insufficient and the mortgagee has given, the mortgagor a reasonable opportunity of providing further security enough to render the whole security sufficient and the mortgagor has failed to do so; and
(c) the mortgagee is deprived of the whole or part of his security by or in consequence of the wrongful act or default of the mortgagor.
24. Actions for orders or reliefs
Where any party seeks to enforce any right or obtain an order or reliefs from the Court arising from the operation of this Law, the Court shall ensure that the proceedings are heard and disputes determined expeditiously and treated with priority.
25. Matters which the Court must take into consideration when giving orders
A court must take into consideration the following items before giving any order—
(a) the prevailing interest rates for mortgage lending;
(b) the general availability of hosing or lack of it;
(c) the comparative ability of party to give monetary compensation;
(d) a party who is found by the Court to have deliberately delayed any proceedings to enforce a mortgage transaction under this Law shall be liable to pay any costs, additional cost and expenses incurred by the other party by reason of such delay;
(e) a party who declined a genuine offer to settle and failed to do better at judgment shall pay any or all the cost incurred by the party who offered after the date of offer.
26. Order for injunction
In granting an application for injunction to restrain the exercise of the rights or powers conferred by this Law on a mortgagee, a court shall require the mortgagor as a condition precedent to deposit any outstanding unpaid balance of the principal loan sum under the mortgage transactions as at the date of the grant of the order of injunction into an interest yielding account in the name of the Registrar of the High Court.
27. Power of court to refer disputes to board for mediation or arbitration
(1) A court may, with the consent of the parties to refer all or part of the issues arising for determination in a proceeding before it relating to mortgage transaction under this Law to the board for mediation and or arbitration.
(2) No such reference shall be revocable by any party except with the consent of the Court.
(3) On any such reference the award of the Board shall be entered ad the judgment of the Court in the proceedings and shall be as binding and effectual to all intents as if given by the Court.
(4) In this section the expression “award” includes an interim award.
28. Consolidation of mortgages
(1) A mortgagor seeking to redeem anyone mortgage is entitled to do so without paying any money due under any separate mortgage made by him, or by any person through whom he claims, solely on property other than that comprised in the mortgage which he seeks to redeem.
This subsection applies only, if a contrary intention is not expressed in the mortgage deed or by any party to the mortgage agreement or any other agreement between the parties.
(2) Save as aforesaid, nothing in this Law in reference to mortgages affects any right of consolidation or renders inoperative any stipulation in relation to any mortgage made before or after the commencement of this Law, reserving a right to consolidate.
29. Tacking and further advances
(1) After the commencement of this Law, a prior mortgagee shall have a right to make further advances to rank in priority to subsequent mortgages (whether legal or equitable) –
(a) if an arrangement has been made to that effect with subsequent mortgagees; or
(b) if he had no notice of such subsequent mortgages at the time when the further advance was made by him; or
(c) whether or not he has such notice as aforesaid, where the mortgage imposes an obligation on him to make such further advances and that obligation was noted on the register. This subsection applies whether or not the prior mortgage was made expressly for securing further advances.
(2) Tacking will only apply where the further advances does not exceed, with any other outstanding advance, the specified maximum amount secured under the prior mortgage which amount was noted in the register.
(3) In relation to the making of further advances after commencement of this Law, a mortgagee shall not be deemed to have notice of a mortgage merely by reason that it was registered under the Registration of Titles Law if it was not so registered at the time when the original mortgage was created or when the last search (if any) by or on behalf of the mortgagee was made, whichever last happened. This subsection only applies when the prior mortgage was made expressly for securing a current account of other further advances.
(4) Except in regard to the making of further advance as mentioned above, the right to tack is abolished:
Provided that nothing in this Law shall affect any priority acquired before the commencement of this Law by tacking, or in respect of further advances made without notice of a subsequent encumbrance or by arrangement with the subsequent encumbrancer.
(5) This section applies to mortgages of land made before or after the commencement of this Law.
30. Obligation to transfer instead of recovering and right to take possession
(1) Where a mortgagor is entitled to redeem, subject to compliance with the terms on which he would be entitled to require a reconveyance or surrender, he shall be entitled to require the mortgagee, instead of reconveying or surrendering, to assign the mortgage debt and convey the mortgaged property to any third person, as the mortgagor directs and the mortgagee shall be bound to assign and convey accordingly.
(2) The rights conferred by this section belong to and are capable of being enforced by each encumbrancer, or by the mortgagor, notwithstanding any intermediate encumbrance, but a requisition of an encumbrancer prevails over a requisition of the mortgagor, and as between encumbrancers, a requisition of a prior encumbrancer prevails over a requisition of a subsequent encumbrancer.
(3) The provisions of this section do not apply in the case of a mortgagee being or having been in possession.
(4) Nothing in this Law affects prejudicially the right of a mortgagee of land whether or not his charge is secured by a legal term of years absolute to take possession of the land, but the taking of possession by the mortgagee does not convert any legal estate of the mortgagor into an equitable interest.
(5) This section applies to mortgages made either before or after the commencement of this Law, and takes notwithstanding any provisions to the contrary.
31. Inspection, production and delivery of documents and priorities
(1) A mortgagor, as long as his right to redeem subsists, shall be entitled from time to time, at reasonable times, on his request, and at his own cost, and on payment of the mortgagee’s cost and expenses in this request to inspect and make copies or abstracts or extracts from the documents of title relating to the mortgaged property in the custody or power of the mortgagee.
(2) A mortgage whose mortgage is surrendered or otherwise extinguished, shall not be liable on account of delivering documents of title in his possession to the person not having the best right to it, unless he has notice of the right or claim of a person having a better right, whether by virtue of a right to require a surrender or reconveyance or otherwise.
32. Priorities between mortgages
Every mortgage affecting a legal interest in land made after the commencement of this Law whether legal or equitable shall rank according to its date of registration under the registration of Titles law.
33. Leasing powers or mortgagor and mortgagee in possession
(1) A mortgagor of land while in possession shall as against every encumberancer, have power to make from time to time building leases of the mortgaged land.
(2) A mortgagee of land while I possession shall as against all prior encumbrancer, if any, and as against the mortgagor, have power to make from time to time any such leases as aforesaid.
(3) Every person making a lease under this section may execute and do all assurance and things necessary or proper in that behalf
(4) Every such lease shall be made to take effect in possession not later tan twelve (12) months after its date.
(5) Every such lease shall reserve the best rent that can reasonably be obtained regard being had to the circumstances of the case, but without any fine being taken.
(6) Every such lease shall contain a covenant by the lease for payment of the rent, a condition of re-entry on the rent not being paid within a time therein specified not exceeding thirty (3) days .
(7) A counterpart of every such lease shall be executed the lessee and delivered to the Lessor, of which execution and delivery of the execution of lease by the Lessor shall, in favor of the lessee and all person deriving title under him, be sufficient evidence.
(8) Every such building lease shall be made in consideration of the lessee, some person by whose direction the lease is granted , having erected , or agreeing to erect within not more than five (5) years from the date of the lease, buildings, new or additional, or having improved or repaired building or agreeing to improve or repair building something that time, or having executed, or agreeing to execute within that time, on the land leased, an improvement for or in connection with building purposes.
(9) In any such building lease, a nominal or other rent less than the rent ultimately payable , may be made payable for the first five (5) years or any less part of the term,
(10) In case of a lease by the mortgagor, he shall, within one (1) month after making the lease, deliver to the mortgagee. Or where there are more than one of the mortgagee first in priority , a counterpart of the lease duly executed by the lessee, but the lessees shall not be concerned to see that this provision is complied with.
(11) A contract to make or accept a lease under this section may be enforced y or against every person on whom the lease if granted would be binding
(12) This section applies only if and as far as a contrary intention is not pressed by the mortgagor and mortgagee in the mortgage deed, or otherwise in, writing, and has effect subject to the terms of the mortgage deed or of any such writing and to the provisions therein contained.
(13) The mortgagor and mortgagee may, be agreement in writing whether or not contained in the mortgage deed, reserve to or confer on the mortgagor or the mortgagee or both, any further or other powers of leasing or having reference to leasing, and any further other powers o reserved or conferred shall be exercisable as far as may be as if they were conferred by the law and with all the like incidents, effects and consequences.
Provided that the powers so reserved or conferred shall not prejudicially affect the rights of any mortgagee interested under any other mortgage subsisting at the date of the agreement unless that mortgagee joins in or adopts the agreement.
(14) Nothing in this Law shall be construed to enable a mortgagor or mortgagee to make a lease for any longer term or on any other conditions that such as could have been granted or imposed by the mortgagor, with the occurrence of all the encumberancers, if this law had not been passed.
Provided that, in the case of mortgage of leasehold land, a lease granted under this section shall reserve a reversion of not less than one day.
(15) The provisions of this section referring to a lease shall be construed to extend and apply, as far as circumstances admit, to any letting, and to an agreement, whether in writing or not, for leasing or letting.
(16) For the purposes of this section referring to a lease shall be construed to extend and apply, as far as circumstances admit, to any letting and to an agreement, whether in writing or not, for leasing or letting.
(16) For the purposes of this section “mortgagor” does not include and encumbrancer deriving title under the original mortgagor.
(17) The powers of leasing conferred by this section shall, after a receiver of the income of the mortgaged property or nay part of it has been appointed y a mortgagee under his statutory power , and so long as the receiver acts, be excisable by such mortgagee instead of by the mortgagor , as respects any land affected by the relationship, in like manner as if such mortgagee were in possession of the land, and the mortgagee may, by writing delegate any such powers to the receiver.
34. Power of mortgagor and mortgagee in possession to accept surrender of leases
(1) For the purposes only of enabling a lease authorized under the last preceding section, or under any agreement made pursuant to that section, or by the mortgage deed (in this section referred to as an authorized lease) to be granted , a mortgagor of land while in possession shall, as against every encumbrancer, have, by virtue of this law, power to accept from time to time a surrender of any lease of the mortgaged land or any part thereof comprised in the lease, and, on a surrender of the lease so far as it comprises part only of the land leased, the rent may be appointed.
(2) For the same purpose, a mortgagee of land while in possession shall, as against all prior or other encumbrancers, if any, and as against the mortgagor , have virtue of this law, power to accept from time to time any such surrender as mentioned.
(3) On a surrender of part of the land leased, the original lease may be varied, provided that the lease when varied would have been valid as an authorized lease if granted by the person accepting the surrender; and on a surrender and the making if a new or other lease, whether for the same or for any extended or other term, and whether subject or not to be same or to any other covenants, provisions or conditions, the value of the lessee’s interest in the lease surrendered may, subject to the provisions or conditions, the value of the lessee’s interest In the lease surrendered may, subject to the provisions of this sections, be taken into account in determination of the amount of the rent to be reserved , and of the nature of the covenants, provisions, and conditions to be inserted in the new or other lease.
(4) Where any consideration for the surrender, other than an agreement to accept an authorized lease is given by or behalf of the lease to or on behalf the person accepting the surrender, noting in this section authorizes a surrender to a mortgagor without the consent of the encumbrancers, or authorizes a surrender to a second or subsequent encumbrances without the consent of every prior encumbrancer.
(5) No surrender shall by virtue of this section be rendered valid unless –
(a) an authorized lease is granted of the whole of land comprised in the surrender to take effect in possession immediately or within one month after the date of the surrender;
(b) the term certain or other I interest granted by the new lease is not less in duration that the unexpired term or interest which would have been subsisting under the original lease if that lease had not been surrendered and
(c) where the whole of the land originally lease has been surrendered, the rent reserved by the new lease is not less than the rent which would have been payable under the original lease if it had not be surrendered or where party only o the land has been surrendered, the aggregate rents respectively remaining payable or reserved under the original lease and new lease are not less that the rent which would been payable the original lease of no partial surrender had been accepted.
(6) A contract to make or accept a surrender under this section may be enforced by or against every person on whom the surrender, if completed would be binding
(7) This section applies only if and as far as contrary intention is not expressed by the mortgagor and mortgagee in mortgagee deed, or otherwise in writing, and shall have effect subject to the terms of the mortgage deed or of such writing and to the provisions therein contained,
(8) The provisions of this section referring to a lease shall be construed to extend and apply, as far as circumstances admit, to any letting and to an agreement, whether in writing or not, for leasing or letting.
(9) The mortgagor and mortgagee may, by agreement in writing, whether or not contained in the mortgage deed, reserve or confer on the mortgagor or mortgagee, or both any further or other powers relating to the surrender of leases and any further or other powers so conferred or reserved shall be exercisable, as far as may be, as if they were conferred by this law, and with all the like incidents, effects and consequences.
Provided that the powers so reserved or conferred shall not prejudicially affect the right of any mortgage interested under any mortgage subsisting at the date of the agreement, unless that mortgagee joins in or adopts the agreement.
(10) Nothing in this section operates to enable a mortgagor or mortgagee to accept a surrender which could not have been accepted by the mortgagor with the concurrence of all the encumbrances of this law has not been passed.
(11) For the purpose of this section “mortgagor” does not include an encumbrancer deriving title under the original mortgagor.
(12) The powers of accepting surrenders conferred by this section by this section shall after a receiver of the income of the mortgaged property or any part of it has been appointed by the mortgagee, under the statutory power and so long a s the receiver acts, exercisable by such mortgagee instead of by the mortgagee were in possession of the land, and mortgagee may, by writing have delegated any of such powers to the receiver.
35. Powers incidental to estate or interest of mortgage of sell, insure, appoint receiver etc
(1) A mortgagee shall by virtue of this law, have the following powers to the like extent as if they had been in terms conferred by the mortgage deed but not further –
(i) a power, when the mortgage money has become due, to sell or to concur with any other person selling, the mortgaged property , or any part of it , either subject to prior charges or not, and either together or in lots, by public auction or by private contract, subject to such conditions in respect of title or evidence of title, or other matter as the mortgagee thinks fit, with power to vary any contract for sale, and to buy in it an auction, or to rescind any contract for sale and to resell;
(ii) a power, at any time after the date of the mortgage, to insure and keep insured against lost or damage by fire any building or any effect or property of an insurable nature , whether affixed to the freehold or not, being or forming part of the property which or an estate of interest wherein is a mortgaged and premiums paid or any such insurance shall be a charge on the mortgaged property or estate or interest, in addition to the mortgage money, and the sane priority and with interest at the same rate as the mortgagee money;
(iii) a power, when the mortgage money has become due to appoint a receiver of the income of the mortgaged property, or any part of it, or , if the mortgaged property consist s of an interest in income or an annual or other periodical sum a receiver of that property or any part thereof and
(iv) a power, while the mortgage is in possession , to cut and sell timber and other trees ripe for cutting and not planted or left standing for shelter or an ornament or to contract for any such cutting and sale to be completed within any time not exceeding twelve (12) months from the making of the contract.
(2) Where the mortgage deed is executed after the commencement of this Law, the power of sale mentioned includes the following powers as incident to it –
(i) a power to impose or reserve or make binding, as far as the law permits, by covenant, condition or otherwise on the unsold part of the mortgage property or nay part of it, or on the purchase and any property sold any restriction or reservation with respect to building on other user of land or with respect to any other thing;
(ii) a power to sell he mortgaged property, or any part it –
(a) With or without a grant or reservation rights of way, rights of water, easement, rights and privileges for or connected with the building or other purposes in relation to the property remaining in the mortgage or any part here of, or to any property.
(b) With or without covenants by the purchaser to expend money on the land sold.
(3) The provisions of this law relating to the power earlier conferred either in this section or in any section regulating the exercise of those powers, may be varied or extended by the mortgage deed, and as so varied or extended shall as far as may be possible, operate in the like manner and with all the like incidents, effect and consequences as if such variation or extensions were contained in this law.
(4) This section applies only if and as far as a contrary intention is not expressed in the mortgage deed, and has effect subject to the terms of thee mortgage deed to the provisions contained I it.
36. Power to sell undivided share of mortgage property
(1) a person who was before the commencement of this law, a mortgagee of an undivided share in land shall have the same power to sell his share in the proceeds of sale of the land and in the rents and profits until sale, as independently of this law, he would have had in regard to the share I the land, and shall also have a right require the trustee for sale I whom the land is vested to account to hi for the income attributable to that share or to appoint a receiver to receive the same from such trustee corresponding to the right which, independently of his law, he would had to take possession or appoint a receiver of the rents and profits attributable t the same share.
(2) the powers conferred by this section are exercisable by the persons deriving title under such mortgagee
37. Assignment on Sale
(1) A mortgagee shall not exercise the power of sale conferred by this law unless-
(i) notice requiring payment of thee mortgage money has been served on the mortgagor or one of two or mortgagor, and default has been massed in payment of the mortgage money , interest on it or of part of it, for two months after such service or
(ii) there has been a breach of some provision contained in the mortgage deed or in this law, and on the part of the mortgagor, or of some person concurring in making the mortgage, to be observed or performed, other that and besides a covenant for payment of the mortgage money or interest thereon.
38. Assignment on Sale
(1) A mortgagee exercising the power of sale conferred by the law shall have power, by deed to assign the property sold, for such estate and interest therein as he is by this law authorized to conveyor may be the subject of the mortgage, freed from all estates, interests and rights to which the mortgage has propriety but subject to all interests and rights which have priority to the mortgage.
(2) Where a conveyance or an assignment is made in exercise of the power of sale conferred by this Law or any other law replaced by this Law, the title of the purchase shall not be impeachable on the f=ground –
(a) that no case has arisen to authorize the sale
(b) that due notice was not given or
(c) whether the mortgage was made before or after the commencement of this law, that the power was otherwise improperly or irregularly exercised and a purchaser is not, either before or on conveyance concerned to see or inquire whether a case has arisen to authorize the sale, or due notice has been given, or power is otherwise properly and regularly exercised , but any person prejudiced or affected by an unauthorized or improper or irregular exercise of the power shall have his remedy in damages against the person exercising the power
An assignment on sale by a mortgagee, made after the commencement of this la, shall be deemed to have been made in exercise of the power of sale conferred by the Law;
39. Application of proceeds of sale
The money which is received by the mortgagee, arising from sale, after discharge of prior encumbrances t which the sale is not made subject, if any or after payment into court under his law of a sum to meet any prior encumbrances shall be held by him in trust to be applied by him, first, in payment of all cost, charges and expenses properly incurred by him as incident to the sale or any attempted sale, or otherwise and secondly in discharge of the mortgage money, interest and costs and other money, if any, due under the mortgage, and the residue of the money do received shall be paid to the person entitled to the mortgaged property or authorized to give receipt for the proceeds of the sale.
40. Exercise of the power of sale
(1) The power of sale conferred by this Law may be exercised by any person for the time being entitled to receive and give a discharge for the mortgage money.
(2) The power of sale conferred by this Law does not affect the right of closure.
(3) The mortgagee shall not be answerable for any involuntary loss happening in or about the exercise or execution of the power of sale conferred by the law, or of any trust connected with it, or where the mortgage is executed after the commencement of this law, of any power or provision contained in the mortgage deed.
(4) At any time after the power of sale conferred by this Law has become exercisable, the person entitled to exercise the power may demand and recover from any person, other than a person having in the mortgaged property an estate, interest or right in priority to the mortgage all the deeds and document relating to the property or to the title, which a purchaser under the power of sale would be entitled to demand and recover from him.
41. Mortgagee’s receipts, discharges, etc
(1) The receipt in writing of a mortgagee shall be a sufficient discharge for any money arising under the power of sale conferred by this Law, or for any money or securities comprised in his mortgage, or arising, under it, and a person paying or transferring the same to the mortgagee shall not be concerned to inquire whether any money remains due under the mortgage
(2) Money received by a mortgagee under his mortgage or from the proceeds of securities comprised in his mortgage shall be applied in like manner as in this Law directed respecting money received by him arising from a sale under the powers of sale conferred by this Law, but with this Variation, that the cost, charges and expenses payable shall include the costs, charges and expenses properly incurred of recovering and receiving the money or securities, add of conversion of securities info money instead of those incident to sale.
42. Amount and application of insurance money
(1) The amount of an insurance effected by a mortgagee against loss or damage by fire under the power hi that behalf conferred by this Law shall not exceed the amount specified in the mortgage deed, or if no amount is specified, the amount specified by regulations made by the Board in case of total destruction, to restore the property insured.
(2) An insurance shall not under the power conferred by this Law be effected by a mortgagee in any of the following cases –
(a) Where there is a declaration in the mortgage deed that no insurance is required.
(b) Where an insurance is kept up by or on behalf of the mortgagor in accordance with the mortgagee deed;
(c) Where the mortgage deed contains no stipulation respecting insurance, and an assurance is kept up by or on behalf of the mortgagor with the consent of the mortgage to the amount to which the mortgagee is this law authorized to insure.
(3) All money received on an insurance of mortgaged property against loss or damage by fire or otherwise effected under this Law, or any other Law, or on an insurance for the maintenance of which the mortgagor is liable under mortgage deed, shall if the mortgagee so requires, be applied by the mortgagor to reinstate the mortgage property.
(4) Without Prejudice to any obligation to the contrary impose by law, or by special contract, a mortgagee may require that all money received on an insurance of mortgaged property against loss or damage by fire or otherwise effected under this Law or any other Law, or an insurance for the maintenance of which the mortgagor is liable under the mortgage deed, be applied in or towards the discharge of the mortgage money.
43. Appointment powers, remuneration and duties of receiver
(1) A mortgagee entitled to appoint a receiver after obtaining an order of a high court under powers conferred by this Law shall only appoint a receiver when he has become entitled to exercise the power of sale conferred by this Law, by appointing such person as he thinks fit to be receiver in writing.
(2) A receiver appointed under the powers conferred by this Law, or any other Law shall be deemed to be the agent of the mortgagor and the mortgagor shall be solely responsible for the receiver’s acts pr defaults unless the mortgage deed otherwise provided.
(3) The receiver shall have power to demand and recover all the income of which he is appointed receiver, by action, distress or otherwise in the name either of the mortgagor or of the mortgagee to the full extent of the estate or interest which the mortgagor could dispose of; and to give effectual receipt accordingly for the same, and to exercise any powers which may have been delegated to him by the mortgagee in accordance with this Law.
(4) A person paying money to the receiver shall not be concerned to inquire whether any incident has happened to authorize the receiver to act.
(5) The receiver may be removed, and a new receiver may be appointed, form time to time by the mortgagee in writing under his hand.
(6) The receiver shall be entitled to retain out of any money received by him, for his remuneration and in satisfaction of all costs, charges and expenses incurred by him as receiver, a commission at such rate, not exceeding five per cent on the gross amount of all money received, as is specified in his appointment and if no rate is so specified, then at the rate of five per cent on that gross amount, or at such other rate as the court thinks fit to allow, on application made by him for that purpose.
(7) The receiver shall, if so directed in writing by the mortgagee, insure to the extent, if any, to which the mortgagee might have insured and keep insured against loss or damage by fire, out of the money received by him, any building, effects or property comprised in the mortgage, whether affixed to the right of occupancy or leasehold or not being if an insurable nature.
(8) Subject to the provisions of this Law as to the application of insurance money, the receiver shall apply all money received by him as follows-
(a) in discharge of all rents, taxes, rates and outgoings whatever affecting the mortgaged property;
(b) in keeping down an annual sums or other payments and the interest on all principal sums, having priority to the mortgage in right whereof he is receiver.
(c) in payment of his commission and of the premiums on fire, life or other insurances if any, properly payable under the mortgage deed or under this Law and the cost of executing necessary or proper repairs directed in writing by the mortgagee;
(d) in payment of the interest accruing due in respect of any principal money due under the mortgage; and
(e) in or towards discharge of the principal money if so directed in writing by the mortgagee, and shall pay the residue, if any, of the money received by him to the person who, but for the possession of the receiver would have been entitled to receive the income of which he is appointed receiver or who is otherwise entitled to the mortgage property.
44. Effect of advance payment on joint account
(1) Where
(a) in a mortgage or an obligation for payment of money or a transfer of a mortgage or of such an obligation, the sum or any part of the sum, advanced or owing is expressed to be advanced by or owing to more persons than one out of money, or money belonging to them on a joint account; or
(b) a mortgage, or such an obligation, or such a transfer is made to more persons than one, jointly of the last survivor, shall be a complete discharge for all money or money’s worth for the time being due, notwithstanding any notice to the payer of a severance of the Joint account.
(2) This section applies if a contrary intention is not expressed in the mortgage, obligation or transfer and has effect subject to the terms of the mortgage, obligation, or transfer and to the provisions contained in it.
(3) This section applies to any mortgage or transfer made after 30th June 2010.
45. Notice of trust affecting mortgage debts
(1) A person dealing in good faith with a mortgagee, or with mortgagor if the mortgage has been discharged, released or postponed as to the whole or any part of the mortgaged property, shall not be concerned with any trust at any time affecting the mortgage money or the income thereof, whether or not he has notice of trust, and may assume unless the contrary is expressly stated in the instruments relating to the mortgage –
(a) that the mortgagee (if more than one) are or were entitled to the mortgage money on a joint account;
(b) that the mortgagee has or had power to give valid receipts for the purchase money or mortgage money and the income thereof (including any arrears of interests) and to release or postpone the priority or the mortgage debt or any part of it or deal with the same or the mortgaged property or any part of it, without investigating the equitable title to the mortgage debt or the appointment or discharge of trustees in reference thereto.
(2) This section applies to mortgages made before or after the commencement of this Law.
This section does not affect liability of any person in whom the mortgage is vested for the purpose of any trust to give effect to that trust.
46. Transfer of mortgages
(1) A deed executed by a mortgagee purporting to transfer his mortgage or the benefit of it shall, unless a contrary intention is expressed, and subject to provisions contained in it, operate to transfer to the transferee –
(a) the right to demand, sue for, recover and give receipts for the mortgage money or the unpaid part of it, and the interest then due, if any, and subsequently to become due on it;
(b) the benefit of all securities for the same and the benefit of and the right to sue on all covenants with the mortgagee, and the right to exercise all powers of the mortgagee; and
(c) all the estate and interest in the mortgaged property then vest in the mortgagee subject to redemption or cesser but as to such estate and interest subject to the right of redemption then subsisting.
(2) In this section, “transferee” includes his personal representatives and assigns.
(3) A transfer of mortgage maybe made in the form contained in the First Schedule of this Law with such variations and additions, if any, as the circumstances may require.
(4) This section applies, whether the mortgage transferred was made before or after the commencement of this Law
(5) This section does not extend to a transfer of a bill of sale of chattels by way of security.
47. Reconveyances of mortgages by Indorsed receipts
(1) A receipt indorsed on, written at the foot of, or annexed to a mortgage deed for all money secured by it, which states the name of the person who pays the money and is executed by the charge by way of legal mortgage or the person in whom the mortgaged property is vested and who is legally entitled to give a receipt for the mortgaged money shall operate, without any conveyance, surrender, or release –
(a) where a mortgage takes effect by demise or sub-demise as, a surrender of the term, so as to determine the term or merge the same in the reversion immediately expectant thereon;
(b) where the mortgage does not take effect by demise or sub-demise as a reconveyance to it to the extent of the interest which is the subject matter of the mortgage, to the person who immediately before the execution of the receipt was entitled to the equity of redemption; and in either case, as discharge of the mortgaged property from all principal money and interest secured by and from all claims under the mortgage, but without prejudice to any term or other interest which is paramount to the estate or interest of the mortgage or other person in whom the mortgaged property was vested.
(2) Provided that where the money appears to have been paid by a person who is not entitled to the immediate equity of redemption, the receipt shall operate as if the benefit of the mortgage had by deed transferred to him; unless –
(a) it is otherwise expressly provided; or
(b) the mortgage is paid off out of capital money, or other money in the hands of a personal representative or trustee properly applicable for the discharge of the mortgage, and it is not expressly provided that the receipt is to operate as a transfer.
(3) Nothing in this section confers on a mortgagor a right to keep alive a mortgage paid off by him, so as to affect prejudicially, any subsequent encumbarancer, and where there is no right to keep the mortgage alive the receipt does not operate as a transfer.
(4) This section does not affect the right of any person to person to require reassignment, surrender, release or transfer to be executed in lieu of a receipt.
(5) A receipt may be given in the form contained in the First Schedule to this Law with such variations and additions, if any, as may be deemed expedient; and where it takes effect under this section, it shall (subject as hereinafter provided) be liable to the same stamp duty as if it were a reconveyance under seal.
(6) In a receipt given under this section the same covenants shall be implied as if the person who executes the receipt had by deed been expressed to convey the property as mortgagee subject to any interest which is paramount to the mortgage.
(7) Where the mortgage consists of a mortgage and a further charge or of more than one deed, it shall be sufficient for the purposes of this section, if the receipt refers either to all the deeds whereby the mortgage money is secured or to the aggregate amount of the mortgage money thereby secured and for the time being owing, and is indorsed on, written at the foot of, or annexed to one of the mortgage deed.
(8) This section applies to the discharge of a charge by way of legal mortgage and to the discharge of a mortgage, whether made by way of statutory mortgage or not, executed before or after the commencement of this Law, but only as respects discharge affected such commencement.
(9) The provision of this section relating to the operation of a receipt shall (in substitution for the like statutory provisions relating to receipt given by or on behalf of a building, friendly, industrial or provident society) apply to the discharge of a mortgage made to any such society, provided that the receipt is executed in the manner required by the statute relating to the society, but nothing in this section shall render a receipt given by or on behalf of any such society liable to any stamp duty which would have been otherwise payable.
(10) This section does not apply to the discharge of a charge or encumbrance registered under the Registration of Title Law.
(11) In this section “mortgaged property” means the property remaining subject to the mortgage at the date of the receipt.
Without prejudice to the right of a tenant for life or other person having only a limited interest in the equity of redemption to require a mortgage to be kept alive by transfer or otherwise, a mortgage term shall, when the money secured by the mortgage has been discharged, become a satisfied term and shall cease.
48. Cesser of mortgage terms
Whether prejudice to the right of a tenant for life or other person having a limited interest in the equity of redemption to require a mortgage to be kept alive by transfer or otherwise, a mortgage term shall, when the money secured by the mortgage has been discharged become a satisfied term and shall cease.
49. Terms of statutory legal charges
(1) As a special form of charge by way of legal mortgage of right of occupancy or leasehold land may be deed expressed to be made by way of statutory mortgage being in one of the form (Nos 1 or 4) set out Terms of in the Second Schedule to this Law, with such variations and additions, if any, as circumstances may require, and if so made the provisions of this section shall apply thereon.
(2) There shall be deemed to be included, and shall by virtue of this Law be implied, in such a mortgage deed –
(a) first, a covenant with the mortgagee by the person therein expressed to charge as a mortgagor to the following effect:
(i) that the mortgagor will, on the stated day, pay to the mortgagee the stated mortgage money, with interest thereon in the meantime at the stated rate, and will thereafter, if and as long as the mortgage money or any part of it remains unpaid, pay to the mortgagee ( as well after as before any judgment is obtained under the mortgage) interest thereon, or on the unpaid part thereof, at the stated rate, payable at such times as may be agreed by the parties.
(b) secondly, a provision to the following effect:
(i) that if the mortgagor on the stated day pays to the mortgagee the stated rate, the mortgage money, with interest on it in the meantime the mortgagee at any time thereafter, at the request and cost of the mortgagor, shall discharge the mortgaged property or transfer the benefit of the mortgage as the mortgagor may direct.
50. Forms of statutory transfer of legal charges
(1) A transfer of a statutory mortgage, being in such one of the three forms (Nos 2, 3, or 4) set out in the Second Schedule to this Law as may be appropriate to the case with such variations and additions, if any, as circumstances may require, and if so made the provisions of this section shall apply to it.
(2) In whichever of those three forms the deed of transfer is made, it shall have effect as follows –
(i) there shall become vested in the person to whom the benefit of the mortgage is expressed to be transferred (who, with his personal representatives and assigns, is in this section designated the transferee), the right to demand, sue for, recover and give receipts for the mortgage money, or the unpaid part thereof, and the interest then due, if any, and subsequently to become due thereon and the benefit of all securities for the same, and the benefit of and the right is to sue on all covenants with the mortgagees and the right to exercise all powers of the mortgagee;
(ii) all the terms and interests, if any, subject to redemption of the mortgagee in the mortgaged land shall vest in the transferee, subject to redemption.
(3) If a covenantor joins in the deed of transfer, there shall also be deemed to be included and there shall by virtue of this Law be implied therein, a covenantor to the effect following –
(i) that the covenantor will on the next of the days fixed by the mortgage deed for payment of interest, pay to the transferee the stated mortgage money, or so much of it as then remains unpaid with interest on it, or on the unpaid part of it, in the meantime, at the rate stated in the mortgage deed and will thereafter as long as the mortgage money or any part of it remains unpaid, pay to the transferee interest on that sum, or the unpaid part of it, at the same rate, on the successive days fixed by the mortgage deed for payment of interest.
(4) The deed of transfer in Form No.4, shall by virtue of this Law, operate not only as a statutory transfer of mortgage, but also as a statutory mortgage, and the provisions of this section shall have effect in relation to it accordingly.
51. Joint and several implied covenants
In a deed of statutory mortgage, or of statutory transfer mortgage, where two or more persons are expressed to conveyor charge as mortgagors, or to join as covenant by the implied covenant on their part shall be deemed to a joint and several covenant by them; and where there are two or more mortgagees or more transferees, the implied covenant with them shall be deemed to be a covenant with them jointly, unless the amount secured is expressed to be secured to them in shares or distinct sums in which latter case the implied covenant with them shall be deemed to be a covenant with each severally in respect of the share or distinct sum secured to him.
52. Forms
A statutory mortgage may be surrendered or discharged by a receipt in the form (No.5) set out in the Second Schedule of this Law with such variations or additions, if any, as circumstances may require.
53. Filing of mortgage instruments
A mortgage institution shall file one copy of any instrument evidencing s mortgage transaction at th Office of the Executive Secretary of the Board.
54. Protection of mortgagors from unconscionable practices
Each mortgage institution shall, in addition to the duties imposed by Law, with respect to any transaction including any practice, or course of business in connection with the transaction, in which the mortgage institution solicits, processes, places or negotiates a home loan:
(1) Responsibilities –
(a) act with reasonable skill, care and diligence obtainable in the code of ethics and professionalism for universal banks and guidelines on best practices for primary mortgage institutions; and
(b) act in good faith and with dealing.
(2) Information by mortgagee to Lenders to Help Borrowers:
(a) any registered mortgage institution in the State shall at the time of receipt or preparation of loan application prepare and distribute booklets to help the borrowers seeking finance to purchase a residential real estate to understand better the nature and costs of real estate settlement services;
(b) each booklet shall be in such form and detail as the Board shall prescribe and, in addition to such other information as the Board may provide, shall include in clear and concise language –
(i) a description and explanation of the nature and purpose of each cost incident to a real estate settlement;
(ii) an explanation and sample of the standard real estate settlement form
(iii) a description and explanation of the nature and purpose of escrow account when used in connection with loans secured by residential or home ownership scheme,
(iv) an explanation of the choices available to buyers of residential real estate in selecting persons to provide necessary services incident to a real estate settlement, and
(v) an explanation of the unfair practices and unreasonable or unnecessary charges to be avoided by the prospective buyer with respect to a real estate settlement.
55. Estimate of charges
The booklet referred to in section 54 (2) above shall include a good faith estimate of the amount or range of charges for specific settlement services the borrower is likely to incur in connection with the settlement as prescribed by the Board.
56. Regulations of mortgage promotion
(1) A registered mortgage institution operating in the State shall take reasonable steps to ensure that, for any mortgage business promotion within the State and booklet issued to mortgage customers –
(a) it does not omit any matters the omission of which causes the housing and credit promotion not to be clear, fair and misleading;
(b) if it describes a feature of a secured loan, it gives no less prominence to the possible disadvantages as to the benefits;
(c) it uses plain and intelligible language, and is easily legible;
(d) the accuracy of all statements of fact in it can be substantiated;
(e) its promotional purpose is not in any way disguised or misrepresented;
(f) any statement of fact, promise or prediction is clear, fair and not misleading and any relevant assumptions are clearly and prominently disclosed;
(g) any statement of opinion is honestly held and unless consent is impracticable, given with the consent of the person concerned;
(h) the facts on which any comparisons or contrast is made as verified, or alternatively, that relevant, that relevant assumptions are prominently disclosed and that the comparison or contrast is presented in a fair and balanced way, which is not misleading and includes all factors which are relevant to the comparisons or contrasts;
(i) it does not contain any false indications in particular as to –
(i) firm’s resources and scale of activities, or
(ii) the scarcity of a secured loan;
(j) it does not include any reference to approval by any Federal, State or Local Government body, unless such approval has been obtained in writing from that body.
57. Payment into escrow accounts
if the terms of any home loan or sub-prime mortgage deed require the borrower to make payments to any mortgage institution to deposit into an escrow account for the purpose of assuring payment of taxes, insurance premiums, and other charges with respect to the property, the mortgage institutions shall make payments from the escrow account for such taxes.
58. Prohibition against kickbacks and unearned fees
(1) No person shall give and no person shall accept any fee, gratification, kickback, or thing of value pursuant to any agreement or understanding, oral or otherwise, in respect of any referral or a part of a home mortgage settlement service involving the State or federally related mortgage loan.
(2) No person shall give and no person shall accept any portion, split, or percentage of any charge made or received for the rendering of any mortgage settlement service in connection with a transaction involving a State or Federal related mortgage loan other than for services actually performed.
(3) Nothing in this section shall be construed as prohibiting –
(a) the payment of a fee –
(i) for all professionals services rendered,
(ii) by a mortgage institution to its duly appointed agent for services actually performed in the issuance of a policy property insurance
(iii) by a mortgage institution to its duly appointed agent for services actually performed in the making of a loan;
(b) the payment to any person of a bona fide salary or compensation or other payment for, goods or facilities actually furnished or for services actually performed;
(c) payments pursuant o brokerage and referral arrangements or agreements between real estate agents and brokers;
(d) affiliated business arrangements so long as –
(i) a disclosure is made of the existence of such an arrangement to the person being referred and, in connection with such referral, such person is provided a written estimate of the charge or range of charges generally made by the provider to which the person is referred,
(ii) such person is not required to use any particular provider of settlement services, and
(iii) the only thing of value that is received from the arrangement, other than the payment permitted under this subsection, is a return on the ownership interest or franchise relationship;
(e) the following shall not be considered a violation of subsection (2) of this section –
(i) any arrangement that requires a buyer, borrower, or seller to pay for the services of a legal practitioner, credit reporting agency, or real estate appraiser chosen by the mortgage institution to represent the mortgage institution’s interest in a real estate transaction, or
(ii) any arrangement where a legal practitioner or law firm represents a client in a real estate transaction and issues or arranges for the issuance of a policy of title insurance in the transaction directly as agent.
59. Prohibition of collateral
No mortgage agreement shall contain a requirement imposing an obligation on a mortgagor to purchase other financial products including insurance from the same mortgage lender or other lenders. The provision of this section shall not prelude a mortgage lender from marketing such financial products to the potential mortgagors.
60. Prohibition against negative amortization
(1) No mortgage agreement may contain a payment schedule with regular periodic payments that cause or may cause the principal balance to increase.
(2) A loan is considered to have such a schedule if the borrower is given the option to make regular periodic payments that cause the principal balance to increase, even if the borrower is also given the option to make regular periodic payments that does not cause the principal balance to increase.
(3) This section shall not prohibit negative amortization as a result of a temporary forbearance sought by a borrower.
61. Financing of insurance or other products sold in connection with the loan
No mortgage institution shall finance, directly or indirectly, any credit life, credit property insurance, or any other life or health insurance premiums, or any payments directly or indirectly for any debt cancellation or suspension agreement or contract, or any product or service that is not necessary, collateral or related to the home loan but not including fees paid to the lender, broker or agent, fees related to the recording of the mortgage, cancellation or suspension fees calculated and paid on a monthly basis shall not be considered financed.
62. Prohibition of fees for preparation and submission of loan application for borrowers
No fee shall be imposed or charged made upon any other person (as a part of settlement costs or otherwise) by a mortgage institution in connection with a mortgage loan made by it.
63. Power to make regulations
The Board with the approval of the Commissioner may make Regulations for the purpose of implementing the provisions of this Law subject to the approval of the House of Assembly.
64. Enforceability of a contract of mortgage
Any contract of mortgage that does not comply with the provisions of this law shall not be enforced in a court of law.
65. Interest in Land
(1) The only estates in land which are capable of subsisting or of being a subject matter of a mortgage under this law or create at law are –
(a) a right of occupancy absolute in possession evidenced in writing by a statutory or customary right of occupancy issued under the Land Use Act or any other state Land Law;
(b) registered land under the registration of Tittles Law;
(c) term of years absolute
(2) The only interest or charge in or over land which are capable of subsisting or of being created under this law is a charge by deed expressed to be by way of legal mortgage, or by a charge by deed expressed to be by way of statutory mortgage in the forms provided by this Law.
(3) All other estates, interests, and charges in or over land shall take effect as equitable interests.
66. Penalties for violations, joint and several liability, treble damages, actions for injunction by attorney –General of the state, costs and attorney fees
(1) Any person or persons who violates any of the provisions of section 53 -62 of this Law commits an offence and shall on conviction be liable to a fine not exceeding five Hundred thousand Naira (N500,000.00) or term of imprisonment for not more than one (1) year, or both or to any non –custodial sentence provided by Law.
(2) Any person or persons who violate any of the prohibition or limitations of the provisions of section 53 -62 of this Law commits an offence and shall be jointly and severally liable to the person or persons charged for the settlement service involved in the violation in an amount equal to three (3) times the amount of any charge paid for such settlement service.
(3) No person or persons shall be liable for a violation of the provisions of this part if such person or persons proves by a preponderance of the evidence, that such violation was not intermittal and resulted from a bona fide error notwithstanding maintenance of the procedure that are reasonably adopted to avoid such error.
(4) The Attorney- General of the State may bring an action to enforce the provisions of the law.
(5) In any private action brought to enforce the provisions of this Law, the court may award to the prevailing party the court costs of the action together with reasonable legal fees.
67. Interpretation
In this law unless the context otherwise requires –
“Auditor-General” means the Lagos State Auditor- General;
“Conveyance” includes a mortgage, charge, leases, assent, vesting declaration, disclaimer, release and every other assurance of property or of an interest therein by instrument except a will;
“Convey” has a corresponding meaning:
“Court” means the state High court;
“Disposition” includes a conveyance and also devise, bequest or an appointment of property contained in a will:
“Dispose of “ has a corresponding meaning
“Equitable powers” means all the powers in or over land under which equitable interest or powers only can be transferred or created;
“Home loan” means a home loan, including all inclusive credit plans, in which –
(a) the principal amount of the loan does not exceed the conforming loan size limit for a comparable dwelling as established from the time to time by the board.
(b) the borrower is a natural person,
(c) the debit is incurred by the borrower primarily for personal, family or household purposes
(d) the loan is secured by a mortgage, legal charge or deed of trust on land where there is located or there is to be located a structure or structures intended principally for residential accommodation or which will b occupied by the borrower as borrower’s principal dwelling, and
(e) the property is located in Lagos state
“Commissioner” means the commissioner for finance, Lagos state;
“Income” includes rents and profits;
“Legal mortgage” means a mortgage by demise or sub-demise or a change by way of legal mortgage and “Legal mortgage” has corresponding meaning:
Legal Powers” includes the power vested in a change by way of legal mortgage or in an estate owner under which is a legal estate can be transferred or created;
“Lessee” includes a sub-lease and a person deriving title under a lessee or sub-lease; and
“Lessor” includes a sub-Lessor and a person deriving title under a Lessor or sub-lessor.
“Mortgage” means a transfer of an interest in specific movable or immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing future debt or the performance of an engagement which may give rise to pecuniary liability and includes any charge or lien on any property for securing money or money’s worth;
“Mortgage Company” means mortgage institution licensed under the mortgage institution Act;
“Mortgage money” means money or money’s worth secured by a mortgage;
“Mortgagor” includes any person from time to time deriving the title under the original mortgagor or entitled to redeem a mortgage according to his estate interest or right in the mortgaged property;
“Mortgagee” includes a charge by way of legal mortgage ad any person from time to time deriving title under the original mortgagee;
“Mortgagee in possession” is for the purposes of this law, a mortgage who in right of the mortgage, has entered into and is in possession of the mortgaged property;
“Notice” includes constructive notice;
“Personal Representative” means the executor, original or by representation, or administrator for the time being of a deceased person, and as regards liability for the payment of death duties includes any person who takes possession of or intermeddles with the property of a deceased person without the authority of the personal representatives or the court;
“Property” includes anything in action and any interest in real or personal property;
“Purchaser” means a purchaser in good faith for valuable consideration and includes, a mortgagee or other person who for valuable consideration acquires an interest in property except where it is expressly provided in this Law “purchaser” only means a person who acquires an interest in or charge on property for money or money’s worth, and in reference to a legal estate includes a charge by way of legal mortgage, and where the context so requires “purchaser” intending purchaser “purchaser” has a meaning corresponding with that of “purchaser” and “valuable consideration” includes marriage by does not include nominal consideration in money;
“rent” includes an annual or periodical payment in money or money’s worth, reserved or issuing out of land, but does not include mortgage interest;
“Right of redemption” includes an option or repurchase only if the option in effect creates a right of redemption;
“Shared services” means consolidation of business operations for multiple parts of the same organization
“State” means Lagos state;
“Sub-prime Mortgage lending” means facilitating loans to citizens with poor or unfavorable credit history or rating and includes any category or persons with financial or asset disadvantage. It also a home loan in which the mortgage company carries a higher level or expectation of risk than that of commercial and conventional mortgage lending and generally accompanied by higher interest rate charges;
“tacking” includes the attachment of a junior charge to a first charge to acquire priority over an intermediate charge.
68. Repeal
The provisions of the conveyancing Act, 1881 shall not have any application and effect on mortgage transactions under the Law.
69. Citation and commencement
This Law may be cited as the Mortgage and Property Law 2010 and shall come into force on the 23rd August 2010.
SCHEDULE 1 Section 46(3) & 47(5)
FORMS OF TRANSFER AND DISCHARGE OF MORTAGAGES
FROM NO 1
FORM OF TRANSFER OF MORTGAGE
This transfer of mortgage made the ………………………………………… day of ………………………20……………….. Between of (etc) and (etc) and a further charge dated (etc) and made between (etc) affection etc (state short particulars of the mortgaged property)
Witnesseth that in consideration of the sum of N………………………………..
N…………………………….(for interest) now paid T. to M, being the respective amounts of the mortgage money, and interest owing in respect of the said mortgage and further (the receipt of which sums M hereby acknowledge) M, as mortgagee, hereby conveys and transfers to T, the benefit of the said mortgage and further charges.
In witness, etc.
FORM NO2
FORMS OF RECIEPT ON DISCHARGE OF A MORTGAGE
I, A.B, of (etc) hereby acknowledges the receipt of the sum of
N………………………………… representing the (aggregate) (balance remaining owning in respect of the principal) principal money secured by the within (above) written (annexed) mortgage (and by further charge dates etc or otherwise as required) together with all interest and costs , the payment having been made by C.D of (etc) and E.F of (etc)
This ……………………….. day of………………… 20………………..
As witness, etc.
Note; if the persons paying are not entitled to the equity of redemption state that they are paying the money out of a fund applicable to the discharge of the mortgage.
SCHEDULE II Sections 49(1) & 50(1)
FORMS RELATING TO STATUTORY CHARGES OR MORTGAGES OF FREEHOLD OR LEASEHOLD LAND.
FORM NO 1
STATUTORY CHARGE BY WAY OF LEGAL MORTAGE
This legal charge made by way of Statutory mortgage the………………….. day of …………….. 20………….. between A of (etc) of the one part and M of (etc) of the other part witnesseth that in consideration of the sum of N. now paid to A. by M. of which sum A hereby acknowledges that in consideration of the sum of N. now paid to A. by M. of which sum A herby acknowledges the receipt A as mortgagor and as beneficial Owner hereby charges by way of Legal Mortgage All that (etc) with the payment of M on the …………………… day of………………… 20….. of the principal sum N …………………. as the mortgage money with interest thereon at the rate of ……………. Per cent per annum.
In witness, etc
Note; Variation in this and the subsequent forms in this schedule to be made, if required, for leasehold land or for giving effect to special arrangements. M will be in the same position as if the charge had been effected by a demise of feehold or a sub demise of leasehold.
FORM NO 2
STATUTORY TRANSFER, MORTGAGOR NOT JOINING
This transfer of mortgage made by way of statutory transfer the …………….. day of………………………. 20….. between M. of (etc) of the one part and T of (etc) of the other part supplemental to a charge made by way of statutory mortgage dated /(etc) and made (etc) witnesseth that in consideration of the sum of N …… now paid to M. by T (being the aggregate amount N……………………… mortgage money and N………………. interest due tin respect of the said legal charge and which sum of M hereby acknowledges the receipt) M. As mortgagee hereby conveys and transfers to T. the benefit of the said legal charge.
In witness etc
Note: this and the next two forms also apply to a transfer of a statutory mortgage made before the commencement of this Law, which will then be referred to as a mortgage instead of a legal charge.
FORM NO. 3
STATUTORY TRANSFER, A COVENANT OR JOINING
This transfer of Mortgage made by way of statutory transfer the………………. Day of ………………………….20………….. between A. of (etc) of the first part, B (etc) of the second part and C. (etc) of the third part supplemental to Legal Charge made by way of statutory mortgage dated(etc) and made (etc)
Witnesseth that in consideration f the sum of N……………………… now paid by A to C (being the mortgage money due in respect of the said Legal Charge no interest being now due of payable thereon of which sum A hereby acknowledges the receipt)
A. as Mortgagee with the concurrence of B who joins herein as convenantor hereby conveys and transfers to C the benefit of the legal Charge.
In witness, etc
FORM NO 4
STATUTORY TRANSFER AND MORTGAGE COMBINED
This transfer and legal charge is made by way of statutory transfer and mortgage the……………………….. day of …………………… 20……………………., between A of (etc) of the first part of B of (etc) of the second part and C of (etc) of the tired part supplemental to legal charge made by way of statutory mortgage dated (etc) and made (etc) . where as a principal sum of N………. Only remains due in respect of the said legal charge as the mortgage money and no interest is no due thereon. And where as B is seised in fee simple of the land comprised in the legal Charge subject to that charge.
Now this deed witnesseth as follows-
1. In consideration of the sum of N…………… now paid to A. by C,(the receipt and payment of which sum A and B hereby respectively acknowledges ) A as mortgagee hereby conveys and transfers to C the benefit of the said legal charge.
2. For consideration aforesaid, B as beneficial owner hereby charges by way of legal mortgage all the premises comprised in the said legal charge with the payment of C on the …………………. Day of….20……. of the sum of N……………….. as the mortgage money with interest thereon at the rate of per cent per annum in witness etc (or in the case of a further advance after “acknowledgement” at insert “and of the further sum of N…………. now paid by C to B of which sum B hereby acknowledges the receipt” also at before “as beneficial owner” insert “as mortgagor and as” as well as where B is not the original mortgagor. And after “of” at ……………. Insert “the sums of N………….. And N……………………………. making together”.
Note: variation to be made, as required in the case of the deed being by indorsement, or in respect of any other thing.
FORM NO 5
RECEIPT ON DISCHARGE OF STATUTORY LEGAL CHARGE OR MORTGAGE
I, A.B, of (etc) hereby acknowledge that I have this ………………………. Day of ……………. 20……………. Received the sum N……………………… representing the (aggregate) (balance remaining owing in respect of the ) mortgage money secured by the (annexed) within (above) written statutory legal charge (or statutory mortgage) (and by the further statutory charge date, etc or otherwise as required) together with all interest and cost the payment having been made by C.D of (etc) and of (etc)
As witness, etc
Note, if the persons paying are not entitled to the equity of redemption state that they are paying the money out of a fund applicable to the discharge of the statutory legal charge or mortgage.
| READ MORE | DOWNLOAD (PDF-N1500/WORD-2000) |
LAWS OF LAGOS STATE
LAWS OF THE FEDERAL REPUBLIC OF NIGERIA
