|
Home Mortgage
Finance Act,
2008
ACT 770
ARRANGEMENT OF SECTIONS
Section
Application
1 .
Application
2. Application of the
Mortgages Act, 1972 (NRCD
96)
3 Security for loan
Requirements for mortgage
4 Mortgage to be evidenced
in writing
5 Disclosure
6 Use of loan
7 Stamping and registration
8 Insurance
9 Rates
10 Mortgagor's right to
transfer restricted
Default and remedies
11 Default in payment
12 Mortgagee's remedies on
default
13 Mortgagee's right to
possession
14 Appointment of receiver
on default
15 Duties of a receiver
16 Remuneration of a
receiver
17 Obstruction of a
receiver
18 Valuation of mortgaged
property
19 Reserved price of
mortgaged property
20 Sale of mortgaged
property on default
21 Purchaser's right in the
sale of mortgaged property
22 Proceeds from sale of
mortgaged property
Miscellaneous
23 Offences by bodies of
persons
24 Action by motion on
notice
25 Regulations
26 Interpretation
27 Repeals
SCHEDULES
ACT
OF THE
PARLIAMENT OF THE
REPUBLIC OF GHANA
ENTITLED
HOME MORTGAGE FINANCE
ACT, 2008
(ACT 770)
AN
ACT to regulate home
mortgage financing and
for related matters.
DATE OF ASSENT: 4TH
DECEMBER 2008
ENACTED by the President
and Parliament:
Application
Application
1,
This Act applies to
transactions between
financial institutions
and
their
customers for the
provision of finance for
(a) the construction
or purchase of a
residential property,
(b) the completion
of a residential
property;
(c) extension to or
renovation of a
residential property;
(d) improvement to a
residential property for
ownership, sale or
rental;
(e) construction of
residential properties
for sale or rental; or
(f) purchase of
fixtures and chattels
related to residential
properties.
Application of the
Mortgages Act, 1972
(NRCD 96)
2,
(1) This Act is in
addition to the
Mortgages Act, 1972
(NRCD 96) and does not
derogate from the
provisions of that Act,
except as otherwise
provided in this Act.
(2)
Where there is an
inconsistency between
the Mortgages Act and
this Act, the provisions
of this Act shall
prevail.
Security for loan
3.
Where a financial
institution grants a
loan, security for the
loan shall include a
mortgage over the
property for which the
loan is granted and the
title deeds duly stamped
and registered deposited
with the mortgagee.
Requirement for mortgage
Mortgage to be evidenced
in writing
4.
(1) A mortgage is
not enforceable unless
it is evidenced in
writing and provides for
the
(a) name and address
of the mortgagor and
mortgagee; (b)
full description of the
mortgaged property;
(c) names of persons
whose consent is
required; if any (d)
date of creation of
the mortgage;
(e) root of title of
the mortgagor;
(f) nature of the
mortgagor's interest in
the mortgaged property;
(g) extent to which the
mortgagor's interest is
subject to the mortgage
(h) nature of the
charge created, in case
of a floating charge,
the nature of the
restriction on the power
of the mortgagor to
grant further charges
that rank in priority or
at the same level with
the charge created;
(1)
amount of the loan;
(j) acknowledgement
of receipt of the loan
by the mortgagor; (k)
right to redeem;
(1) insurance policy
related to the property;
(m) interest on the
principal amount;
(n) due date for
payment;
(0) terms and
conditions for renewal;
(p) covenants and
conditions;
(q) events of
default;
(r) signatures of
the mortgagor and
mortgagee; and
(s)
signatures of witnesses
.
(2)
Despite subsection (1),
a mortgage agreement is
enforceable with regard
to form and expression
if it is in the form
contained in the First
Schedule or in similar
form or uses expressions
of a similar effect.
Disclosure
5.
(1) A financial
institution shall, at
least fourteen days
before the disbursement
of a loan to the
mortgagor, disclose all
relevant information in
writing to the Mortgagor
in accordance with the
relevant sections of
Borrowers and Lenders
Act.
(2) A
mortgagor shall
acknowledge receipt of
the information in
writing within seven
days.
(3) A
financial institution
shall provide a
mortgagor a minimum
period of fourteen days
after the date of
receipt of the
application from the
mortgagor to the day of
the disbursement of the
loan and execution of
the mortgage agreement
to enable the mortgagor
seek legal and financial
advice on the documents
related to the loan.
(4) A
financial institution
which contravenes this
section is liable to the
mortgagor for
(a) actual damages
the mortgagor sustains
as a result of the
contravention; and
(b) any court costs
and legal fees.
(5)
Without limiting
subsection (4), a
mortgagee who fails to
comply with this section
is liable to a fine of
not more than one
thousand penalty units
. (6) A financial
institution is not
liable under subsection
(4) if on discovery of
an error made in a
disclosure, it notifies
the mortgagor of the
error and makes the
necessary adjustments to
the mortgagor's account
within sixty days after
the discovery of the
error.
(7)
The Bank of Ghana shall
issue notices as it
considers necessary for
the effective
implementation of this
section.
Use of loan
6.
(1) A person who obtains
a loan under this Act
shall not use the whole
or part of the loan for
a purpose other than the
purpose for which the
loan was obtained.
(2) A
person who contravenes
subsection (1) is liable
to pay the whole of the
outstanding amount
forthwith.
Stamping and
registration
7.
(1) A person who obtains
a loan under this Act
shall stamp and register
the title deeds and
mortgage deeds related
to the property for
which the loan was
obtained and deposit
them with the financial
institution.
(2)
Without limiting
(a) section 12 of
the Stamp Duty Act, 2005
(Act 689) on stamping of
instruments after
execution,
(b) section 24 of
the Land Registry Act,
1962 (Act 122) on
registration necessary
for validity, and
(c) section 72 of
the Land Title
Registration Act, 1986
(P.N.D.C.L. 152) on form
and effect of mortgages,
an
unstamped or an
unregistered mortgage
made under this Act is
valid only between the
original parties to the
mortgage.
Insurance
8.
(1) A mortgagor or
mortgagee shall insure a
mortgaged property
against loss or damage
by theft, fire,
earthquake or other
natural disaster.
(2)
Where the mortgagor
covenants to insure all
or part of the mortgaged
property and fails to do
so, the mortgagee may
insure and keep insured
the mortgaged property
after giving notice in
writing to the mortgagor
and the premiums paid by
the mortgagee for the
insurance shall be
secured with the same
priority as the
mortgage.
(3)
Unless a contrary
intention appears
expressly or by
necessary implication,
where the mortgagee
secures payment of money
on behalf of the
mortgagor, the money
shall be added to the
principal sum with
interest at the same
rate as on the principal
sum.
(4)
Unless a contrary
intention appears
expressly or by
necessary implication,
where the mortgagor
covenants to insure all
or part of the mortgaged
property and the
insurance has been
effected by the
mortgagor or on behalf
of the mortgagor by the
mortgagee, the money
received from insurance
shall be applied to make
good the loss or damage
for which the money is
received unless the
mortgagor elects to
apply all or part of the
money toward the
performance of the act
or acts secured by the
mortgage.
Rates
9.
(1) Despite the mortgage
of property, a mortgagor
shall pay property rates
on the mortgaged
property.
(2)
Where a mortgagor fails
to pay property rates
due in respect of the
mortgaged property, the
mortgagee may pay the
rates and money paid is
secured with the same
priority as the mortgage
and is added to the
principal sum with
interest at the same
rate as on the principal
sum.
Transfer of interest or
creation of further
charges 10.
(1) A
mortgagor shall not
(a) transfer an
interest, or
(b) create further
charges or interests
in
the mortgaged property
without the prior
written consent of the
mortgagee.
(2)
A mortgagee shall not
unreasonably withhold
the consent required
under subsection (1).
Default and remedies
Default in payment
11. (1) Where a
mortgagor fails to make
an installment payment
within fourteen days
after the due date for
the payment, the
mortgagee shall notify
the mortgagor in writing
of this fact and request
the mortgagor to take
urgent steps to pay the
amount due as agreed by
the parties.
(2)
Where the mortgagor
fails to make the
payment and defaults in
the payment of the
monthly instalment
immediately following,
the mortgagee shall
issue a demand note in
the form in the Second
Schedule to the
mortgagor and request
for the immediate
payment of the
aggregate or total
outstanding arrears.
(3)
The mortgagee may
deliver the notice and
the demand note to the
address provided by the
mortgagor
(a) by hand and
receipt acknowledged in
writing by the
mortgagor;
(b) through a person
apparently above the age
of eighteen years at the
mortgagor's address and
receipt acknowledged in
writing by that person;
or
(c) by registered
mail or by courier.
(4)
In the case of a body
corporate or a
partnership, the
mortgagee may deliver
the notice or note to
the registered or
principal place of
business and receipt of
the notice or note shall
be acknowledged in
writing by an officer of
the company or
partnership.
(5)
Where a note is
delivered by registered
mail or courier service,
the demand note is
considered to have been
received by the
mortgagor at the time at
which the note would
have been delivered in
the ordinary course of
post or the courier
service.
(6)
Where a settlement of
the arrears is not made
and the mortgagor has
not made a satisfactory
arrangement with the
mortgagee for the
settlement of the
outstanding amount after
the date of issue of the
demand note, the
mortgagor is considered
to be in default as soon
as the third succeeding
month's instalment also
falls into arrears.
Mortgagee's remedies on
default
12.
Where a mortgagor fails
to perform an act
secured by the
mortgage, the mortgagee
may
(a) sue the
mortgagor on any
personal covenant to
perform; or
(b) realise the
security in the
mortgaged property or by
any of the processes
provided under this Act.
Mortgagee's right to
possession
13.
(1) Where a mortgagor
fails to perform an act
secured by the mortgage,
the mortgagee is
entitled to possession
of the mortgaged
property as against the
mortgagor and any person
who has an interest in
the mortgaged property
through the mortgagor
and whose interest is
subsequent to that of
the mortgagee.
(2)
In the exercise of the
right of possession, the
mortgagee is not obliged
to take court
proceedings and may take
possession peaceably.
(3)
Where a mortgagee is
unable to enforce a
right of possession in a
peaceable manner the
mortgagee may use the
services of the police
to evict the mortgagor
or other person in
possession pursuant to a
warrant issued by a
court.
Appointment of receiver
on default
14.
(1) Where a mortgagor
fails to perform an act
secured by a mortgage,
the mortgagee may
appoint a receiver to
manage the mortgaged
property.
(2)
In the exercise of a
right of appointment of
a receiver, the
mortgagee is not obliged
to take court
proceedings.
(3)
The receiver is the
agent of the mortgagee.
(4)
The mortgagee may revoke
the appointment of the
receiver in writing to
the receiver.
Duties of a receiver
15.
(1) The receiver may
take possession of the
mortgaged property in
the manner specified in
this Act.
(2)
The receiver
(a) may collect by
demand or take action in
the name of the
mortgagor or mortgagee
for the income including
arrears which accrue
from the mortgaged
property,
(b) shall give valid
receipts for income
collected, and
(c) may take any
action that is necessary
to manage the property.
(3)
The receiver may make
reasonable repairs and
improvements to the
property to
(a) protect its
value, or
(b) maintain or
increase the income from
the property.
(4)
The mortgagee may direct
the receiver in writing
to insure the mortgaged
property and remedy any
defects of insurable
nature in the mortgage
to the extent, if any,
which the mortgagor
ought to have insured
and kept insured.
(5)
The receiver shall apply
money received to
(a) discharge rents,
taxes, rates and other
outgoings that affect
the mortgaged property;
(b) pay sums or
interest on the
principal sums that are
due and have priority to
the mortgage;
(c) pay the
commission and the
premium to be paid in
accordance with the
mortgage and cost of
necessary repairs;
(d) pay the interest
accruing in respect of
the principal money due
under the mortgag~;
(e) discharge the
principal amount due
under the mortgage as
determined
and
pay the residue if any,
or the money received to
the person who but for
the possession of the
receiver would have been
entitled to receive the
income for which the
receiver is appointed or
who is otherwise
entitled to the
mortgaged property.
Remuneration of a
receiver
16. (1) A receiver
is entitled to retain a
commission at a rate
(a) of not more than
five per centum of the
gross amount of money
received as specified in
the letter of
appointment, and
(b) where no rate is
specified, then at the
rate of two and a half
per centum of the gross
amount;
out
of the money received,
for the receiver's
remuneration and in
satisfaction of the
costs, charges and
expenses incurred as
receiver.
Obstruction of receiver
17. (1) A person
shall not obstruct a
receiver in the
discharge of duties
under this Act.
(2) A
person who obstructs a
receiver commits an
offence and is liable on
summary conviction
(a) to a fine of not
more than two hundred
penalty units or to a
term of imprisonment of
not more than twelve
months or to both, and
(b) in the case of a
continuing offence, to a
further fine of not more
than ten penalty units
for each day on which
the offence continues.
Valuation of mortgaged
property
18.
(1) Where a mortgagee
intends to sell a
mortgaged property, the
mortgagor and mortgagee
shall cause the property
to be valued by a
certified valuer agreed
on by them.
(2)
Where the mortgagor and
mortgagee fail to agree
on a certified valuer,
the mortgagee shall
appoint a valuer.
(3)
Where there is a dispute
over the value of the
mortgaged property the
party disputing the
value shall apply to the
Ghana Institution of
Surveyors to appoint an
independent valuer.
(4)
The decision of the
valuer appointed by the
Ghana Institution of
Surveyors is final as to
the value.
Reserved price of
mortgaged property
19.
(I) A mortgagee shall
not sell a mortgaged
property for less than
eighty-five per cent of
the appraised market
value of the property.
(2)
Where there is no sale
at eighty five per cent
of the appraised market
value after two attempts
at sale, the property
may be sold at a price
less than eighty-five
percent of the appraised
market value.
Sale of mortgaged
property on default
20.
(1) Where a mortgagor
fails to carry on an act
or acts secured by the
mortgage, the mortgagee
may sell the mortgaged
property.
(2) A
mortgagee may exercise
the right of sale
without recourse to
court.
(3)
The sale of mortgaged
property may be by
public auction or
private contract.
(4)
Where a sale is
conducted by a public
auction, the Auction
Sales Act, 1989
(P.N.D.C.L. 230) shall
apply except that the
Auctioneer's fees shall
not exceed three per
centum of the gross
amount realised from the
sale.
(5) Except
where a sale is
conducted by public
auction, a mortgagee who
intends to exercise the
power of sale shall give
fourteen days notice of
the sale to the
mortgagor and each
person of whom the
mortgagee has notice to
have an interest in the
property.
(6)
The notice required is
considered to be served
on the interested
persons if published in
a public local newspaper
on the seventh and
fourteenth day before
the date of the sale.
(7) A
mortgagee is liable for
loss caused by a sale
carried out in
contravention of this
Act.
(8) A
mortgagor or a person
who has an interest in
the mortgaged property
may purchase the
property at the sale
subject to the
conditions in subsection
(3).
Purchaser's interest in
the sale of mortgaged
property
21. (1) A mortgagee
at whose instance sale
is made shall not
purchase the mortgaged
property except where
the sale is carried out
at a public auction or
subject to the approval
of the mortgagor and all
the persons known to the
mortgagee to have an
interest in the property
where the sale is
carried out by private
contract.
(2) A
mortgagee who exercises
a right of sale may
convey to the purchaser
the whole of the
mortgagor's interest in
the mortgaged property.
(3) A
purchaser of a mortgaged
property shall take
(a) title to the
mortgaged property free
of interests to which
the mortgagee who
requested the sale has
priority but subject to
interests which have
priority to that
mortgage, and
(b) title documents
related to the mortgaged
property other than
title documents held by
a person with an
interest of priority to
the mortgage of the
mortgagee who requested
the sale.
(4)
Without limiting the
provisions of section 24
of the Lands Registry
Act 1962, (Act 122) and
the provisions of Part
IV of the Land Title
Registration Act, 1986
(P.N.D.C.L. 152)
(a) a certificate of
purchase executed by the
mortgagor, the
auctioneer and the
purchaser pursuant to an
auction sale of . the
mortgaged property; or
(b) where the sale
is by private contract,
a statutory declaration
by a mortgagee as proof
of a mortgage, default
by the mortgagor under
the terms and conditions
of the mortgage and a
sale of the mortgaged
property pursuant to the
default
is
sufficient to establish
the title of the
purchaser to the
mortgaged property and
for registration under
the Land Title
Registration Act, 1986
(P.N.D.C.L. 152) or the
Lands Registry Act, 1962
(Act 122).
Proceeds from sale of
mortgaged property
22. (1) The proceeds
from a sale of mortgaged
property shall be held
in trust for
distribution by the
mortgagee who caused the
sale.
(2)
Proceeds from the sale
shall be used
(a) fIrst in payment
of expenses properly
incurred as incidental
to the sale or any prior
attempted sale,
(b) secondly in
payment of the sums
secured by the mortgage
or with the same
priority as the
mortgage, and
(c) thirdly in
payment in the order of
priority of any
encumbrances subsequent
to that of the mortgagee
who requested the sale.
(3)
The residue of the
amount shall be paid to
the mortgagor or the
mortgagor's successor in
interest.
(4) A
mortgagee on whom a
right of trustee of
sale is conferred by
this section is not a
mortgagor in respect of
that right.
Miscellaneous
Offences by bodies of
persons
23. (1) Where an
offence under this Act
or under any rules made
under this Act is
committed by a body of
persons,
(a) in the case of a
body corporate, each
director and officer of
the body corporate is
considered to have
committed the offence;
and
(b) in the case of a
partnership, each
partner or officer of
the body is considered
to have committed the
offence.
(2)
Despite subsection (1),
a person is not liable
if that person proves
that the offence was
committed without that
person's knowledge or
that the person
exercised due diligence
to prevent the
commission of the
offence having regard to
the circumstances.
Action by motion on
notice
24.
Except as otherwise
provided in this Act, an
action brought under
this Act shall be by
motion on notice under
order 19 of the High
Court (Civil Procedure)
Rules 2004 (C. 1. 47).
Regulations
25.
The Minister may, by
legislative instrument,
make regulations on
(a) matters to be
disclosed,
(b) the contents of
a statutory declaration
required under this Act,
(c) sale of
mortgaged property on
default, and
(d) generally for
the effective
implementation of this
Act.
Interpretation
26.
In this Act unless the
context otherwise
requires:
"Annual percentage rate
(APR)" means the total
cost of credit that the
mortgagor pays,
expressed as a simple
annual percentage;
"certified valuer" means
a member of the Ghana
Institution of Surveyors
who is in good standing;
"demand note" means a
notice to the mortgagor
for the demand of the
arrears due;
"estimate" means a sum
.total of anticipated
costs that will be borne
by the mortgagor in the
mortgage transaction;
"financial institution"
includes a bank and
non-bank entity licensed
by the Bank of Ghana to
carry on the business of
banking;
"floating charge" means
an equitable charge over
the whole or specified
part of the company's
undertaking and assets
both present and future;
"guidelines" means
instructions drawn up in
furtherance of this Act
or regulations made
pursuant to this Act;
"loan" includes any
credit or other
financial assistance
granted by a financial
institution;
"mortgage" means an
encumbrance on the
property charged;
"mortgage agreement"
means an agreement
between a Mortgagor and
a mortgagee which grants
the mortgagee a charge
over the mortgaged
property as security for
the loan which sets out
the terms and condition
of the loan;
"Mortgages Act" means
the Mortgages Act, 1972
(NRCD 96); "mortgagor"
includes a person who
has taken a loan and any
person who derives title
through the original
mortgagor or entitled to
redeem a mortgage
according to an interest
in the mortgaged
property.
"mortgagee" includes an
institution that grants
loans for the purpose
specified in section 1
and any person who
derives title through
the original mortgagee;
"purchaser" includes a
person who buys property
in good faith for
valuable consideration,
a lessee or mortgagor.
Repeals
27. (1) The Home
Mortgage Finance Act,
1993 (P.N.D.C.L. 329)
is
repealed.
(2)
The National Mortgage
Financing and Guarantee
Scheme Act, 1976
(S.M.C.D. 23) is
repealed.
(3)
Despite sub sections (1)
and (2), regulations,
orders, directions,
notifications,
exemptions, approvals,
decisions and other
executive or
administrative acts
made, given or done
under the repealed Acts
shall upon commencement
of this Act continue in
force until amended or
repealed in accordance
with this Act.
SCHEDULES
FIRST
SCHEDULE (Section
4 (2))
Form of Mortgage
Agreement
This Mortgage is made
the
...............................
day of
......................
Two
Thousand and
................ (200 ..
) BETWEEN [Name and
Address of
Mortgagor] (hereinafter
referred to as the
"Mortgagor" which
expression shall where
the context so admits or
requires include the
personal representatives
successors and assigns
of the mortgagor) of the
one part
AND
[Name
of Bank/Financial
Institution] a limited
liability company
incorporated under the
laws of Ghana and having
its registered office
situate [address]
(hereinafter referred to
as the Mortgagee") of
the other part.
WHEREAS:
[Recitals]
*
Root of Title
*
Person(s) whose consent
and/or concurrence is
required.
*
Mortgagor's need for the
loan and
*
Mortgagees willingness
to grant the Loan
1 . Consideration and
personal covenant to pay
In consideration of the
loan of [amount] granted
to the Mortgagor by the
Mortgagee (receipt of
which the Mortgagor
acknowledges), the
mortgagor covenants
with the mortgagee to
duly and punctually
repay the said loan
together with interest
at [percentage of
interest % within
[term of loan] and
[additional charges
under disclosure
requirements] [according
to the payment
schedule in the second
schedule.
2. Mortgage
The Mortgagor as
beneficial owner hereby
mortgages the
[description of
property] which
property is particularly
described in the first
schedules hereto
(hereinafter referred to
as the "Property")
together with all
fittings and fixtures
attached thereto now or
to be attached hereafter
to the Mortgagee to
secure the repayment of
the loan, interest and
other money hereby
covenanted to be paid by
the Mortgagor.
3. Payment of
principal, interests and
other costs
1. The Mortgagor
covenants with the
Mortgagee to repay the
loan as follows:
(a)
at the interest rate in
[no. of instalments]
equal monthly
instalments of
.............................
[amount] each
within [term of loan]
years, the first
instalment to be made on
.................
[date] and the
subsequent payments to
be made not later than
the first day of each
month in arrears.
(b)
In the event of a delay
on the payment of any
installment, the delayed
instalment shall attract
an interest of [
]%per annum.
2. Where a mortgagor
makes a payment over and
above the required
monthly installment,
that payment would be
treated as an advance
payment and applied to
future repayments of any
payments payable under
this agreement unless
the Mortgagor indicates
that the extra amount
should be regarded as a
prepayment.
3. Where the
Mortgagor makes a
prepayment of [
]% or more of the Loan
at any time during the
mortgage, that
prepayment shall attract
a penalty of [ ] of
the amount prepaid.
4. In the event of
prepayment, the monthly
instalment of the Loan
shall be adjusted
accordingly to take
effect from the second
month following the
month in which the
prepayment was made.
5. The Mortgagor shall
pay an estimated Annual
Percentage Rate of] in
addition to the
principal payable [mode
of payment]
6. The Mortgagor shall
pay the additional
charges provided in the
Second Schedule as good
faith estimates of the
charges, fees and costs
of this mortgage
agreement.
4. Insurance
1. The Mortgagor shall
insure and keep insured,
at the mortgagor's own
expense during the
subsistence of this
mortgage, the property
together with all
fittings and fixtures
attached thereto now or
to be attached
hereafter, against loss
or damage, with a
reputable insurance
company to be mutually
agreed on between the
parties, [in the names
of both the Mortgagor
and the Mortgagee.
(2) The Mortgagor is
required to pay yearly
insurance premiums in
full prior to the
commencement of the
Mortgage and thereafter
not later than fourteen
days before the expiry
of such insurance cover.
(3) The Mortgagor shall
duly and punctually pay
all premiums and money
necessary for effecting
and maintaining that
insurance and deposit
evidence of such
payments with the
Mortgagee.
(4) A mortgagor shall at
any time at the request
of the Mortgagee produce
the insurance policy and
the premium payment
receipts for the
inspection of the
Mortgagee or its duly
authorised agents.
5.
Where the Mortgagor
fails to insure all or
any part of the property
in accordance with this
Agreement, the Mortgagee
is entitled to insure
and keep insured the
mortgaged property.
6.
Where premiums are paid
by the Mortgagee on
behalf of the Mortgagor
under of this Agreement
the premiums shall
attract an annual
interest rate of [ ] %
and a default interest [
] % and is payable as
additional loan in [no.
of installments] equal
monthly installments
from the date of payment
of such premiums.
7. Any money received
under any policy.of
insurance effected or
maintained by the
Mortgagor or on behalf
of the Mortgagor by the
Mortgagee, whether or
not pursuant to the
Mortgagor's obligation
under this Agreement
shall be applied to make
good the loss or damage
in respect of which the
money is received.
8. Restriction on
transfer
Mortgagor shall not
without the prior
written consent of the
mortgagee during the
subsistence of this
mortgage sell, lease, or
part with possession or
transfer all or part of
the interest in the
property.
9.
Mortgagor's covenants
1. The Mortgagor
covenants with the
mortgagee as follows:
(a)
that the Mortgagor or
with the consent or
concurrence of all other
persons whose consent or
concurrence is required,
has full power to
mortgage the property
expressed to be
mortgaged by the
mortgagor in the manner
in which it is expressed
to be mortgaged,
(b)
that if either or both
the Mortgagee and
persons deriving title
through the Mortgagee
enter into possession of
the mortgaged property,
the Mortgagor and every
person concurring in the
mortgage by his
direction and every
person deriving title
through the Mortgagor
(other than a person
having an interest to
which the mortgage is
expressly made subject)
shall not interfere
with, interrupt or
disturb the possession
of such person in
possession,
(c)
that the mortgaged
property is freed and
discharged from, or
otherwise by the
Mortgagor sufficiently
indemnified against, all
interests, encumbrances,
claims and demands
whatsoever, other than
those to which the
mortgage is expressly
made subject,
(d)
that the Mortgagor and
every person concurring
in the mortgage by the
Mortgagor's direction,
and every person
deriving title through
any of them, and every
other person having or
rightfully claiming any
interest in the
mortgaged property other
than an interest to
which the mortgage is
expressly made subject
will, from time to time
and at all times on the
request of the Mortgagee
or any person deriving
title through him,
execute and do all such
assurances and things
for further or more
perfectly assuring the
title to the security
interest as 'such person
may reasonably request,
the expenses in respect
of this covenant to be
borne by the Mortgagor
during the life of the
mortgage and thereafter
by the person making the
request,
(e)
that the Mortgagor and
every person deriving an
interest through the
Mortgagor, other than a
person having an
interest to which the
mortgage is expressly
made subject, will at
all times during the
life of the mortgage
preserve, protect,
repair and maintain the
mortgaged property so as
not to diminish its
value below what is
reasonably required as
security for the
performance of any act
secured by the mortgage
but which has yet to be
performed,
(f)
that the lease is at the
date of the mortgage a,
valid lease of the
mortgaged property.
(g)
that all the rents
reserved by, and all the
covenants, conditions
and agreements contained
in, the lease and to be
paid, observed or
performed by the
Mortgagor and persons
deriving title through
him have been paid,
observed and performed
up to the time of the
mortgage,
(h)
that the Mortgagor, or
the person deriving
title through the
Mortgagor during the
subsistence of the
Agreement, observe and
perform or cause to be
paid, observed and
performed, all rents
reserved by the lease
and all covenants,
conditions and
agreements contained in
the lease, which he or
they are bound to pay,
observe and perform.
10. Mortgagee's
covenants
1. The mortgage made is
discharged when the
Mortgagor performs all
the obligations under
this Agreement and
undertakes to issue a
written discharge to
the Mortgagee as soon as
the Mortgagor has duly
fulfilled all
obligations under this
mortgage.
2. The Mortgagee shall
furnish or deliver to
the Mortgagor a [monthly
/ quarterly / annual]
statement of Account on
the Loan payments on or
before the [ ] day of
[Month] of [period] and
the Mortgagor may raise
any queries on the
statement if any. In the
event that the Mortgagor
raises any queries the
Parties shall reconcile
the accounts.
11. Mortgagee's rights
and powers
1. The Mortgagee shall
hold all title documents
relating exclusively to
the Property and shall
keep same whole,
un(::ancelled and
undefaced.
2. The Mortgagee
acknowledges the right
of the Mortgagor to the
production of the title
documents and to the
supply of copies of
same.
3. The Mortgagee shall
upon receiving a
[duration of notice]
notice permit the
Mortgagor or its
representative to
inspect the title
documents.
4. The parties agree
that the Mortgagee has
the right to irrevocably
assign any of its rights
under this Agreement to
any third party without
prior notice to the
Mortgagor.
12. Events of default
1. Any breach of this
Agreement shall amount
to an Event of Default
in addition to the
following:
(a)
where the Mortgagee is
considered to be in
default under section 6
of the Home Mortgage
Finance Act,
(b)
where the Mortgagor
dies, becomes bankrupt
or makes any arrangement
with creditors generally
or takes or suffers
similar action as a
result of the debt,
(c)
where an execution is
levied upon the
Mortgagor's property,
(d)
where the Mortgagor
becomes of unsound mind,
(e)
where the Mortgagor
fails to comply with any
of the terms, conditions
covenants or obligations
under this Agreement; or
(f)
where an representation
or warranty given by the
Mortgagor to the
Mortgagee is found out
to be false.
13. Rights of mortgagee
upon default
1. In the event of the
occurrence of an Event
of Default, the
Mortgagee shall exercise
anyone or more of the
Mortgagee's rights in
accordance with the Home
Mortgage Finance Act,
2008 (Act..
......................................................................
).
2. The parties agree
that the Mortgagee's
right upon default by
the Mortgagor may be
exercised in the
Mortgagee's behalf by a
trustee or any
beneficiary to whom the
Mortgagee's rights might
have accrued .
14. Termination
This Agreement shall
remain valid and may
terminate after the
Mortgage is discharged
and the Mortgagee has
issued the written
discharge required under
section[ ] of this
Agreement.
15. Renewal of mortgage
If the Mortgagor shall
duly and punctually
repay the principal
money, interest and
other money the
Mortgagor has covenanted
to pay to the Mortgagee
in accordance with
section 3 of this
Agreement then, if the
Mortgagor so desires,
the security hereby made
is used to secure
further advances not
exceeding, in aggregate
of [amount] the
Mortgagee shall give the
Mortgagor at the
original interest rate
and priority. The
Mortgagor shall give at
least
[length of notice]
months' notice, in
writing to the Mortgagee
of the Mortgagor's
intention to enforce
this provision.
16. Notice
Any notice required to
be served under this
mortgage is sufficiently
served on the Mortgagee
if its delivered either
by hand and a receipt
acknowledged in writing
by the Mortgagor; or by
leaving it for the
Mortgagor with a person
apparently over the age
of eighteen years at the
Mortgagor's address and
acknowledged in writing
by that person; or by
pasting the notice on a
reasonably noticeable
part of the mortgaged
premises; or sent by
registered mail or by
courier or to the last
known address provided
by the Mortgagor.
17. Stamping and
registration
1. The Mortgagor shall
immediately after the
execution of this
Agreement
* Stamp this Agreement
in accordance with
section 12 of the Stamp
Duty Act 2005 Act 689.
* Register this
Agreement in accordance
with section 24 of the
Lands Registry Act 1962,
(Act 122) and the
provisions under Part IV
of the Land Title
Registration Act 1986
(PN.D.C.L. 152).
18. Waiver
Failure or neglect by
either party to enforce
a provision of this
Agreement shall not be
construed or considered
to be a waiver of rights
of the whole or part of
this Agreement.
19. Entire agreement
This Agreement
constitutes the entire
and only agreement
between the parties and
supercedes all previous
understandings,
commitments and
agreements whether oral
or written relating to
this Agreement.
20.
Amendments
Any term condition or
provision contained in
this Agreement may be
amended on the mutual
consent of both parties
and any agreed amendment
is in writing, executed
by both parties and
annexed to this
Agreement.
21. Jurat
[applicable when
Mortgagor is illiterate
and/or blind]
1…………………………... (name
and position of employee
or representative of
Mortgagee) declares
that on …….. …… day of
…………… (day/month/year)
I read and explained the
contents of this
Agreement to the
Mortgagor herein, who is
illiterate and/or blind
in the ... [language]
language and seemed
perfectly to understand
and approve of the
contents before
executing it.
IN WITNESS WHEREOF
the Mortgagor has set
his/her hand and the
Mortgagee has caused its
hand and seal to be
hereunto affixed on the
day, month and year
first above written.
[Detailed
description
of property and site
plan}
Signed
by the within named
Mortgagor Name:
Address:
Fax Tel:
Email
In the presence of
Name:
Address:
Fax Tel:
Email
Signed
by or on behalf of the
Mortgagee
Name:
Address:
Fax Tel:
Email
In the presence of
Name:
Address:
Fax Tel:
Second Schedule
Section
11 (2)
Demand Notice
[On
Mortgagee's Letterhead]
Dear Sir/Madam,
MORTGAGE DEMAND NOTE
We refer to:
1. The [Mortgage
Agreement] dated [ ]
entered into between [ ]
and the [ ] for a total
amount of [ ] in respect
of which there is a
current outstanding
indebtedness of [ ] plus
interest of [ ] making a
total of [ ]
2. The notification of
default dated [ ]
Despite the above, as at
[date] the amount
outstanding remains
unpaid. We hereby issue
this demand, in
accordance with section
11 (2) of the Home
Mortgage Finance Act
and Section [ ] of
the [Mortgage Agreement]
for the immediate
payment of the amount
outstanding plus
interest, from you as
primary obligor, within
seven (7) days of the
date of this letter.
Please note that if a
settlement of the
arrears is not made
within the stipulated
time and no arrangement
is entered with [the
financial institution]
for the settlement of
the amount outstanding,
we are entitled to
exercise our rights
against you in
accordance with sections
11-17 of the Home
Mortgage Finance Act,
2008 (Act. ).
Please be advised
accordingly.
Signed:
..................................
Date:
Date of Gazette
notification:
|
HOME 