RIGHTS AND LIABILITIES OF MORTGAGOR AND MORTGAGEE

Rights and Liabilities of Mortgagor and Mortgagee 

Mortgage, a common aspect of property transactions, entails rights and liabilities for both the mortgagor (borrower) and the mortgagee (lender). In India, the legal framework governing mortgages is primarily outlined in the Transfer of Property Act, 1882. Here are the key points concerning the rights and liabilities of both parties:

Rights of the Mortgagor:

1. Right to Redemption: The mortgagor has the right to redeem the mortgaged property by paying off the mortgage debt in full. This right allows the borrower to regain ownership of the property upon complete repayment.
2. Right to File Suit: If the mortgagee unlawfully takes possession of the property or violates any terms of the mortgage contract, the mortgagor has the right to file a suit for wrongful possession or breach of contract.
3. Right to Inspect Documents: The mortgagor is entitled to inspect and obtain copies of all documents related to the mortgage, including the mortgage deed and any other relevant agreements.
4. Right to Sue for Surplus: In case the sale of the mortgaged property yields a surplus after satisfying the mortgage debt and related expenses, the mortgagor has the right to claim the surplus amount.
5. Right to Redeem Partially: Subject to certain conditions, the mortgagor may redeem a part of the mortgaged property by paying off a proportionate part of the mortgage debt.

Liabilities of the Mortgagor:

1. Liability to Repay Debt: The primary liability of the mortgagor is to repay the mortgage debt in accordance with the terms agreed upon in the mortgage contract.
2. Liability for Property Maintenance: The mortgagor is responsible for maintaining the mortgaged property in good condition throughout the mortgage period.
3. Liability for Taxes and Charges: The mortgagor is liable to pay all taxes, rates, and charges related to the mortgaged property during the mortgage tenure.
4. Liability for Insurance: It is often a requirement for the mortgagor to insure the mortgaged property against risks such as fire, flood, or theft, and to keep the insurance policy active for the duration of the mortgage.
5. Liability for Default: If the mortgagor defaults on the mortgage payments or breaches any terms of the mortgage agreement, the mortgagee may take legal action to enforce their rights, including foreclosure.

Rights of the Mortgagee:

1. Right to Possession: Upon default by the mortgagor, the mortgagee has the right to take possession of the mortgaged property to recover the outstanding debt.
2. Right to Foreclose: In cases of default, the mortgagee has the right to initiate foreclosure proceedings to sell the mortgaged property and recover the outstanding debt.

1. Right to Inspect Property: The mortgagee has the right to inspect the mortgaged property to ensure that it is being properly maintained and that the value of the security is preserved.
2. Right to Receive Payments: The mortgagee has the right to receive timely payments of the mortgage debt as per the agreed terms.
3. Right to Sue for Deficiency: If the sale of the mortgaged property does not fully satisfy the mortgage debt, the mortgagee has the right to sue the mortgagor for the deficiency amount.

Liabilities of the Mortgagee:

1. Liability to Account: The mortgagee is liable to account for any profits made from the mortgaged property while in possession.
2. Liability for Diligence: The mortgagee is required to act with diligence and in good faith when dealing with the mortgaged property, including in the sale or management of the property.
3. Liability for Misuse: If the mortgagee wrongfully uses or damages the mortgaged property, they may be held liable for any resulting losses suffered by the mortgagor.
4. Liability for Unlawful Possession: If the mortgagee unlawfully takes possession of the mortgaged property without proper legal authority, they may be liable for damages or face legal action from the mortgagor.
5. Liability for Proper Sale Procedure: In case of foreclosure or sale of the mortgaged property, the mortgagee is liable to ensure that the sale is conducted in accordance with legal procedures and for the best price reasonably obtainable.

Understanding the rights and liabilities of both the mortgagor and mortgagee is crucial for ensuring a fair and transparent mortgage transaction in India. It helps to protect the interests of both parties and fosters a stable environment for property transactions.