Q.3 Write a note on the rights and liabilities for mortgagee and mortgagor?
Ans: RIGHTS OF MORTGAGEE
Following are the important rights of mortgagee.
1. SELLING RIGHT
If borrower fails to return the loan in time then the mortgagee has the right to sell the property of the mortgagor. But it will be sold and getting decree from the court. Property will be sold by auction.
2. SHORTAGE OF MONEY CASE
After selling the property if amount is less then the loan, the balance can be recovered from the person by getting the decree from the court.
3. REFUSAL OF DEBT
If a borrower refuses to return the loan or he is unable to pay the debt then the lender can get a foreclosure decree from the court.
4. ADJUSTMENT OF PA YMENT
The banker has a right to distribute the payment received after the sale of property according the principal amount, interest and other charges.
5. JOINT SUIT
If the mortgagors are more than one person then suit will be filed against all of them if the loan is not returned.
6. SALE OF PRIVATE PROPERTY
In case of private property tie mortgagee will issue at least 3 months notice to the mortgagor before selling the property.
LIABILITIES OF MORTGAGEE
When property is in the possession of the mortgagee then it has the following duties of liabilities.
- Property may not be damaged.
- No alteration is allowed in property.
- The property must be insured.
- Property must be kept secured.
- Rent of the property must be collected.
- Govt revenue must be paid.
- Property must be kept clear from all dues.
RIGHTS OF LIABILITIES OF MORTGAGE
1. FREEDOM OF PROPERTY
As the loan is returned then a mortgagor has a right to redeem the property. All documents and the mortgage deed should be returned to the borrower.
2. RIGHT TO CLAIM DEMAGES
If the property is damaged during the possession of the mortgagee then the mortgagor has a right to claim the damages from the mortgagee.
3. PARTIAL REDEMPTION
If mortgagee wants to acquire a share in the mortgaged property through inheritance or purchase the mortgagor has the right of partial redemption.
4. RIGHT OF LEASE
If the possession of the property is in the hands of mortgagor then he can make lease of this property for the ordinary period.
5. FOLLOW THE AGREEMENT DEED
The mortgagor will observe all the conditions contained in the agreement deed. He will also defend the title of property if the property is in his possession.
6. RECOVERY OF POSSESSION
When the mortgagor returns the loan then he has a right to recover the possession of the property from the mortgagee.
7. LIABILITY OF TAXES
If property is in the possession of the mortgagor then the liability of all types of taxes will be on the mortgagor over of Modaraba certificates is not impressive. Now the ration of equity is very high in relation to debt financing.
8. CONTROL OF MODARABA COMPANIES
There are many checks on the Modaraba companies to regulate the Modaraba. The State Bank ofPakistan, religions board, corporate law authority and registrar of Modaraba are responsible to regulate the Modaraba Company.
9. APPOINTMENT OF AUDITOR
It is very necessary that Modaraba Company should appoint the auditor. Auditor should be qualified charted accountant approved by the registrar. The auditor should certify the objectives and accounts of the Modaraba.
10. AUDIT REPORT OF THE COMPANY
Auditor verified balance sheet and profit and loss, report about the company must be given to the Modaraba certificate holders within six month of the closing accounts period.
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