Uganda Act or statute

Parliament of Uganda

Mortgage Act

Provides definitions and meanings of key terms used in the Act (interpretation section). Defines 'consolidation' and states that rules of equity no longer apply to a mortgage; limits exercise of a…

Jurisdiction: Uganda
Structure: 42 provisions
Citation: Chapter 239
Dates: As at 31 Dec 2023

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Dates: As at 31 Dec 2023

Source attribution: Source: Uganda Legal Information Institute

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“Provides definitions and meanings of key terms used in the Act (interpretation section).”

Provides definitions and meanings of key terms used in the Act (interpretation section). Defines 'consolidation' and states that rules of equity no longer apply to a mortgage; limits exercise of a right to consolidate so it does not prejudice persons who acquired land before that right is recorded. Allows variation of mortgage terms: mortgagee may change interest rate by notice (with specified notice content and at least fifteen working days' written notice); amounts, term/currency, and covenants may be varied by a memorandum signed and annexed/endorsed as specified. A mortgagor who intends to start court action on mortgaged land must notify the mortgagee of the intention and nature of the action; on receipt of that notice a mortgagee may require joinder, take over the action (in which case the mortgagor must stop pursuing it), or take no action; a mortgagee may apply to court for sums awarded as damages to be paid to reduce or discharge the mortgage. Persons holding land may mortgage their interest (including to secure existing, future or contingent debts); mortgages take effect when registered but unregistered mortgages are enforceable between the parties.

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Preliminary - Interpretation

Provides definitions and meanings of key terms used in the Act (interpretation section).

Section 1

General - Priority

Mortgages rank by registration order for registered land; the recorder must register customary-tenure mortgages when presented; informal mortgages rank by date and time; a prior mortgagee's repayment right is postponed where a later mor…

Section 8

Powers of mortgagee - Power of mortgagee to lease

Section 22

Powers of court with respect to mortgages - Application for relief by mortgagor

Certain persons (mortgagor, joint mortgagors, spouse(s), trustee in bankruptcy) may apply to court for relief against mortgagee remedies; making an application is not an admission.

Section 32

Miscellaneous - Application of common law and doctrines of equity

Common law rules and equitable doctrines that apply to mortgages operate according to the Judicature Act unless they are inconsistent with this Act.

Section 42

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Showing 42 of 42 provisions

Provision 32Commencement 5Offence 3Interpretation

Part I

Preliminary

§ 1Preliminary - InterpretationInterpretation

Provides definitions and meanings of key terms used in the Act (interpretation section).

Section Interpretation Section In this Act, unless the context otherwise requires— “ civil debt recoverable summarily ” means a civil debt recoverable summarily in a court of competent jurisdiction; “ court ” means a court, not lower than a grade I magistrates court including a land tribunal, having jurisdiction to hear a case with regard to the value and location of the subject matter; “ currency point ” has the value assigned to it in Schedule 1 to this Act; “ customary land tenure ” has the meaning given to it by the Land Act ; “ extortionate ” means calculated to obtain property from another induced by wrongful use of actual or threatened force, violation or fear under colour of official right; “ freehold land tenure ” has the meaning given to it by the Land Act ; “ informal mortgage ” means a written and witnessed undertaking, the clear intention of which is to charge the mortgagor ’s land with the repayment of money or money’s worth obtained from the mortgagee and includes an equitable mortgage and a mortgage on unregistered customary land; “ land tenure ” means a system of holding land and includes customary land tenure , freehold land tenure , leasehold land tenure and mailo land tenure ; “ leasehold land tenure ” has the meaning given to it by the Land Act ; “ lien by deposit of documents ” means the deposit of any documents referred to in section 2(8)(b) ; “ mailo land tenure ” has the meaning assigned to it by the Land Act ; “ matrimonial home ” means a building or part of a building in which a husband and wife or, as the case may be, wives and their children, if any, ordinarily reside together and includes— (a) where a building and its curtilage are occupied primarily for residential purposes, that curtilage and outbuildings on it; and (b) where a building is on or occupied in conjunction with agricultural land or pastoral land, any land allocated by one spouse to his or her spouse or in the case of a husband, to his spouses for his, her, or their exclusive use; “ mediator ” has the meaning assigned to it by section 86 of the Land Act ; “ Minister ” means the Minister responsible for lands; “ mortgage ” includes any charge or lien over land or any estate or interest in land in Uganda for securing the payment of an existing or future or a contingent debt or other money or money’s worth or the performance of an obligation and includes a second or subsequent mortgage, a third party mortgage and a submortgage ; “ mortgagee ” means a person in whose favour a mortgage is created or subsists and includes any person deriving title under the original mortgagee; “ mortgagor ” means a person who has mortgaged land or an interest in land and includes any person from time to time deriving title under the original mortgagor or entitled to redeem the mortgage according to his or her estate, interest or right in the mortgaged property; “ receiver ” means a receiver, or a manager, or a receiver and manager in respect of any land, and includes any person appointed as receiver— (a) by or under any document; or (b) by the court in the exercise of a power to make such an appointment given by any Act or any rule of court , or in the exercise of its inherent jurisdiction, whether or not the person appointed is empowered to sell any of the property in receivership, and includes a sole receiver or two or more receivers and any successor in office of a receiver ; “ recorder ” means a recorder appointed under the Land Act ; “ Registrar of Titles ” means the Registrar of Titles appointed under the Registration of Titles Act; “ submortgage ” means a mortgage of a mortgage ; “ surety ” means a person who offers security in the form of money or money’s worth to ensure the payment of any money secured by a mortgage and includes a guarantor; “ third party mortgage ” means a mortgage which is created or subsists to secure the payment of an existing or future or a contingent debt or other money or money’s worth or the fulfilment of a condition by a person who is not the mortgagor , whether or not in common with the mortgagor ; “ trustee ”, in relation to a bankruptcy and the bankrupt, means the trustee of the bankrupt’s estate; “ unconscionable ” means unfair or oppressive, involving procedural abuses relating to terms of contract where the terms of the contract violate reasonable expectations of the parties; “ working day ” means any day other than a Saturday, Sunday or a public holiday.

Section 1Verify source

Part II

General

§ 10General - ConsolidationCommencement

Defines 'consolidation' and states that rules of equity no longer apply to a mortgage; limits exercise of a right to consolidate so it does not prejudice persons who acquired land before that right is recorded.

Section Consolidation Section Unless there is an express provision to the contrary clearly set out in the mortgage instrument— where a mortgagee has more than one mortgage from a single mortgagor ; or where the mortgagee has lent money or money’s worth to a single mortgagor on two or more securities, Notwithstanding subsection (1) , a right to consolidate shall not be exercisable to the prejudice of any person acquiring land under any form of land tenure or under a certificate of occupancy or any other interest in land entitling that person to the occupation and use of that land prior to the recording of that right to consolidate in the prescribed register. The rules of equity applicable to consolidation shall, from the commencement of this Act, no longer apply to a mortgage . For the purposes of this section, “consolidation” means the combination of two or more mortgages or securities.

Section 10Verify source

§ 11General - Variation of mortgageProvision

Allows variation of mortgage terms: mortgagee may change interest rate by notice (with specified notice content and at least fifteen working days' written notice); amounts, term/currency, and covenants may be varied by a memorandum signed and annexed/endorsed as specified.

Section Variation of mortgage Section The rate of interest payable under a mortgage may be reduced or increased by a notice served on the mortgagor by the mortgagee which shall— The amount secured by a mortgage may be reduced or increased by a memorandum which— is signed— The term or currency of a mortgage may be shortened, extended or renewed by a memorandum which— The covenants, conditions and powers expressed or implied in a mortgage may be varied, but not so as to impose any significantly greater burdens on the borrower than those set out in section 17 by a memorandum which— A memorandum for the purposes of subsections (2) , (3) and (4) — give the mortgagor not less than fifteen working days’ written notice of the reduction or increase in the rate of interest; state clearly and in a manner which can be readily understood, the new rate of interest to be paid in respect of the mortgage ; state the responsibility of the mortgagor to take such action as he or she is advised by the notice to take to ensure that the new interest rate is paid to the mortgagee . complies with subsection (5) ; in the case of a memorandum of reduction, by the mortgagee ; or in the case of a memorandum of increase, by the current mortgagor ; and states that the principal money intended to be secured by the mortgage are reduced or increased as the case may be, to the amount or in the manner specified in the memorandum. is signed by the current mortgagor and by the mortgagee ; and states that the term or currency of the mortgage is shortened, extended or renewed, as the case may be, to the date or in the manner specified in the memorandum. is signed by the current mortgagor and the mortgagee ; and states that the covenants, conditions and powers expressed or implied in the mortgage are varied in the manner specified in the memorandum. shall be endorsed on or annexed to the mortgage instrument; and when so endorsed or annexed to the mortgage instrument, operates to vary the mortgage in accordance with the terms of the memorandum.

Section 11Verify source

§ 12General - Suits by mortgagorCommencement

A mortgagor who intends to start court action on mortgaged land must notify the mortgagee of the intention and nature of the action; on receipt of that notice a mortgagee may require joinder, take over the action (in which case the mortgagor must stop pursuing it), or take no action; a mortgagee may apply to court for sums awarded as damages to be paid to reduce or discharge the mortgage.

Section Suits by mortgagor Section A mortgagee may, on receipt of the notice referred to in subsection (1) , either— A mortgagor intending to commence any action in a court in respect of the mortgaged land shall by notice in writing inform the mortgagee or mortgagees of his or her intention and the nature of the action which is to be commenced. require the mortgagor at his or her expense, to join the mortgagee in the action; inform the mortgagor that the mortgagee will take over the action and the mortgagor should cease to pursue the action; or take no action. Where a mortgagee informs the mortgagor that he or she will take over the action, the mortgagor shall forthwith cease to pursue the action. Where as a result of any decree or order of a court arising out of any action taken by the mortgagor under this section, any sum of money becomes payable to the mortgagor by way of damages on account of some damage or injury caused to the mortgaged land by the defendant, a mortgagee may apply to the court for an order that that sum or such proportion of it as the court thinks fit should be paid to the mortgagee in reduction or discharge of the mortgage .

Section 12Verify source

§ 2General - Power to create mortgagesProvision

Persons holding land may mortgage their interest (including to secure existing, future or contingent debts); mortgages take effect when registered but unregistered mortgages are enforceable between the parties.

Section Power to create mortgages Section Nothing in this section shall operate to prevent a borrower from offering and a lender from accepting— a deposit of any of the following— A person holding land under any form of land tenure , may, by an instrument in the prescribed form, mortgage his or her interest in the land or a part of it to secure the payment of an existing or a future or a contingent debt or other money or money’s worth or the fulfilment of a condition. The power conferred by subsection (1) includes the power to create third party mortgages, second, subsequent mortgages and sub-mortgages. The power conferred by this section shall be exercisable subject to any prohibition or limitation imposed by this Act, by regulations made under this Act, by any written law or by any restriction contained in an instrument creating or affecting an interest in land which is to be the subject of a mortgage . A mortgage created under subsection (1) shall only take effect when registered. Notwithstanding subsection (4) , an unregistered mortgage shall be enforceable between the parties. Where a second or subsequent mortgage is made by a mortgagor whose title is registered under the Registration of Titles Act, the second or subsequent mortgagee may, at his or her own expense, require the first mortgagee to produce any duplicate certificate of title which he or she may hold to the Registrar of Titles so that the second or subsequent mortgage may be registered. Where a second or subsequent mortgage has been registered, the second or subsequent mortgagee shall return the duplicate certificate of title to the first mortgagee . an informal mortgage ; or a certificate of customary ownership; a certificate of title issued under the Registration of Titles Act; a lease agreement; any other document which may be agreed upon evidencing a right to an interest in land; or any other documents which may be agreed upon, A sum secured by a mortgage shall be deemed to be a civil debt recoverable summarily .

Section 2Verify source

§ 3General - Duty to disclose informationOffence

Mortgagees and mortgagors must act honestly and in good faith and must disclose all relevant information about the mortgage; refusal to disclose is an offence punishable by a fine (48–120 currency points) or imprisonment (2–5 years), or both.

Section Duty to disclose information Section A mortgagee and mortgagor shall— act honestly and in good faith; and in particular, disclose all relevant information relating to the mortgage . A mortgagee or mortgagor who refuses, neglects or fails to disclose information relevant to a mortgage and which is in his or her possession, commits an offence and is liable, on conviction, to a fine not less than forty-eight currency points but not exceeding one hundred twenty currency points or to imprisonment for a term not less than two years but not exceeding five years, or both.

Section 3Verify source

§ 4General - Mortgage of matrimonial homeProvision

An intending mortgagee must take reasonable steps to determine if an intending mortgagor is married and whether the property is a matrimonial home; an intending mortgagor must fully disclose marital status and whether the property is the matrimonial home.

Section Mortgage of matrimonial home Section Notwithstanding section 40 of the Land Act , a mortgage of a matrimonial home, including mortgage on customary land of a matrimonial home is valid if— For the purposes of subsection (1) — any document or form used in applying for the mortgage is signed by or there is evidence from the document that it has been assented to by the mortgagor and the spouse or spouses of the mortgagor living in that matrimonial home ; or any document or form used to grant the mortgage is signed by or there is evidence that it has been assented to by the mortgagor and the spouse or spouses of the mortgagor living in that matrimonial home . an intending mortgagee shall take reasonable steps to ascertain whether an intending mortgagor is married and whether or not the property to be mortgaged is a matrimonial home ; and an intending mortgagor shall make full disclosure to the intending mortgagee as to his or her marital status and whether or not the property to be mortgaged comprises the matrimonial home . The mortgagee shall be deemed to have discharged the duty under subsection (2) , if the mortgagee obtains a marriage certificate issued in accordance with the laws of Uganda, and in the absence of it, a statutory declaration from the spouse or spouses of the mortgagor as proof of marriage.

Section 4Verify source

§ 5General - Consent to mortgage of matrimonial homeProvision

When a matrimonial home is being mortgaged, the mortgagee must ensure a spouse's consent (section 4) is informed and genuine; compliance is deemed if specified explanation or written advice plus a signed witnessed document (or waiver) is obtained. "Independent person" is defined, mortgagee may take additional steps, and false holding out as independent adviser is punishable by fine or imprisonment.

Section Consent to mortgage of matrimonial home Section Where a matrimonial home is the subject of an application for a mortgage , a mortgagee shall satisfy himself or herself that the consent of a spouse referred to in section 4 is an informed and genuine consent and that duty is deemed to have been complied with if— the mortgagee has— explained to the spouse or spouses of an applicant for a mortgage in the presence of an independent person, the terms and conditions of the mortgage which is being applied for; or in writing, advised the applicant for a mortgage that he or she should ensure that his or her spouse or spouses receive independent advice on the terms and conditions of the mortgage which is being applied for; and the spouse or spouses, as the case may be, provide a signed and witnessed document to the effect that they have received independent advice on the mortgage which is being applied for and have understood and assented to the terms and conditions of the mortgage or that they have, notwithstanding the advice from the mortgagee , waived their right to take independent advice. In this section an “independent person” means any officer of the Government, a Justice of the Peace, an advocate, a notary public, bank manager, a minister of any religion authorised to celebrate marriages, a medical practitioner and any other person authorised for that purpose by the Minister by statutory instrument. A mortgagee may take such other steps in addition to the steps set out in this section as he or she considers necessary and desirable to satisfy himself or herself that the assent of the spouse or spouses is informed and genuine. Where a person holds out to be providing independent advice as provided for under subsection (1)(a)(ii) , such a person is liable, on conviction, to a fine not exceeding one hundred twenty currency points or to imprisonment for a term not exceeding five years, or both.

Section 5Verify source

§ 6General - Application of Act to mortgages on customary landProvision

Mortgagors may apply to court to re-open mortgages on customary land after attempting mediation; mortgagees seeking remedies that may dispossess must apply to court after mediation; courts are to be guided by section 32; the section does not apply to community-owned customary land.

Section Application of Act to mortgages on customary land Section The mortgagor under a mortgage on customary land may, after making use of the services of the mediator to try and mediate on the matter with the mortgagee , apply to a court for the mortgage to be re-opened on the ground that the terms of the mortgage are— In any case concerning a mortgage on customary land, the court determining the case shall, where it appears to the court that— The creation and operation of mortgages on customary land shall, subject to this Act, continue to be in accordance with the customary law applicable to the land in respect of which the mortgage on customary land is created. Where the mortgagee under a mortgage on customary land seeks to exercise any customary remedy which involves or may involve the mortgagor being dispossessed or permanently deprived of the occupation of the mortgaged land, the mortgagee shall, after using the services of the mediator to try and mediate on the application of the proposed or any other remedy, make an application to the court for an order authorising the exercise of that remedy; and the court shall, in determining whether to authorise the exercise of that remedy, be guided by the provisions of section 32 . unconscionable ; an unreasonable departure from the normal terms of a mortgage on customary land applicable in the area where the land is located; or disadvantageous to the interests of the dependants of the mortgagor . the customary law applicable to that mortgage is inadequate; and no other system of customary law makes adequate or any provision for the matter in question, This section shall not apply to customary land which is owned by a community. In the case of customary land which is owned by a family, the land may only be mortgaged with the consent of the spouse or spouses and children of the mortgagor .

Section 6Verify source

§ 7General - Mortgage of land to take effect as security onlyCommencement

Mortgages operate as security only; a mortgagee may exercise powers and remedies subject to the Act; requiring a transfer as a condition is an offence punishable by a fine; in lease mortgages the mortgagee's liability to the lessor is limited.

Section Mortgage of land to take effect as security only Section On and after the commencement of this Act, a mortgage shall have effect as a security only and shall not operate as a transfer of any interest or right in the land from the mortgagor to the mortgagee ; but the mortgagee shall have, subject to this Act, all the powers and remedies in case of default by the mortgagor and be subject to all the obligations conferred or implied in a transfer of an interest in land subject to redemption. Where a mortgagor signs a transfer as a condition for the grant of a mortgage under this Act, the transfer shall have no effect. A mortgagee who requires a transfer as a condition for the grant of a mortgage under this Act, commits an offence and is liable, on conviction, to a fine not exceeding four thousand currency points. In the case of the mortgage of a lease, the mortgagee shall not be liable to the lessor for rent or in respect of the covenants and conditions contained or implied in the lease to any greater extent than he or she would have been if the mortgage had been by way of a sublease.

Section 7Verify source

§ 8General - PriorityProvision

Section Priority Section In respect of mortgages of land registered under the Registration of Titles Act, mortgages shall rank according to the order in which they are registered in accordance with section 48 of that Act. In respect of mortgages of land held for customary tenure under a certificate of customary ownership, mortgages shall rank according to the order in which they are registered by the recorder and the recorder shall register all such mortgages in the order and as from the time they are presented to him or her for registration. Informal mortgages shall rank according to the order of the date and time when they are made. Where a mortgagee , subsequent in time to a prior mortgagee under a mortgage , lends money or money’s worth to a mortgagor as a consequence of or through the fraud, dishonesty or misrepresentation of the prior mortgagee , either in conjunction with or separately from the fraud, dishonesty or misrepresentation of the mortgagor , that prior mortgagee ’s right to repayment under the mortgage shall be postponed to the rights of the subsequent mortgagee . The rules of priority for informal mortgages shall apply as far as the circumstances permit, to liens by deposit of documents.

Section 8Verify source

§ 9General - TackingProvision

A mortgagee may include terms in a mortgage to allow further advances or credit on a continuing account, subject to this section.

Section Tacking Section A further advance referred to in subsection (1) shall not rank in priority to any subsequent mortgage unless— A mortgagee may, subject to this section, make provisions in the mortgage instrument to give further advances or to give credit to the mortgagor on a current or continuing account. the provision for further advances is noted in the register in which the mortgage is registered; or the subsequent mortagee has consented in writing to the priority of the further advance. Except as provided for in this section, there is no right to tack. Where a mortgage provides for the payment of a principal sum by way of instalments, the payment of those instalments shall not be taken to be a further advance and such payment shall rank in priority to all subsequent mortgages.

Section 9Verify source

Part III

Discharge and release of mortgages

§ 13Discharge and release of mortgages - Right to dischargeProvision

The mortgagee must, at the mortgagor's request and cost and upon payment of all sums and fulfilment of secured obligations (including costs properly incurred by the mortgagee), release the mortgage; clauses attempting to deprive, fetter, or secure an unfair collateral advantage inconsistent with that right are void.

Section Right to discharge Section Subject to this section and section 14 , on the payment of all money and the performance of all other conditions and obligations secured by the mortgage, and on the payment of any costs and expenses properly incurred by the mortgagee in exercising any of his or her rights under the mortgage, the mortgagee shall at the request and cost of the mortgagor release the mortgage at any time and any agreement or provision in the mortgage instrument or otherwise which— purports to deprive the mortgagor of that right; seeks to fetter the exercise of that right; or stipulates for a collateral advantage which is unfair and unconscionable and inconsistent with the right to discharge, is void. A discharge whether of the whole or a part of a mortgage shall be made in the prescribed form.

Section 13Verify source

§ 14Discharge and release of mortgages - Release of mortgageProvision

The Registrar of Titles or recorder must enter a release on the original and duplicate certificate of title or certificate of customary ownership when a prescribed-form release, signed and attested and discharging the land wholly or partly, is presented for registration and the prescribed fees are paid.

Section Release of mortgage Section Upon the presentation for registration of a release of a mortgage registered under the Registration of Titles Act or the Land Act in the prescribed form signed by the mortgagee or his or her transferees, attested by one witness and discharging wholly or in part the land or any portion of the land from the mortgage, the Registrar of Titles or recorder as the case may be shall and upon payment of the prescribed fees, make an entry of the release upon the original and duplicate certificate of title or certificate of customary ownership evidencing the time and date of the registration. Upon the entry being made under subsection (1) , the land affected by the release shall cease to be subject to the mortgage to the extent stated in the release.

Section 14Verify source

§ 15Discharge and release of mortgages - Deposit of mortgage money where mortgagee cannot be foundProvision

Where a mortgagee cannot be found the Secretary to the Treasury may receive the mortgage money in trust; registrars must record receipts and the Secretary must deposit and pay out funds on requisition; mortgagors of informal mortgages may apply for discharge and courts may order discharge if obligations are met.

Section Deposit of mortgage money where mortgagee cannot be found Section Where a mortgagee is under a disability or is absent from Uganda or his or her whereabouts are unknown and there is no person authorised to discharge the mortgage at or after the date appointed for the payment of that money, it shall be lawful for the Secretary to the Treasury to receive the mortgage money with all arrears of interest due on it in trust for the mortgagee or other person entitled to it; and the interest upon that mortgage shall then cease to run or accrue. In the case of an informal mortgage , where the mortgagee cannot be found, a mortgagor may apply for an order of discharge and the court may, if satisfied that the mortgagor has discharged his or her obligations under the mortgage , make an order discharging the mortgagor . The Registrar of Titles or recorder as the case may be shall, upon the production of the receipt of the Secretary to the Treasury for the amount of the mortgage money and interest, make an entry in the register, stating the time at which the entry was made; and that entry shall be a valid discharge from that mortgage ; and the Registrar of Titles or recorder , as the case may be, shall make a corresponding entry on the duplicate certificate of title or customary ownership. The Secretary to the Treasury shall deposit all mortgage moneys and interest received by him or her under this section, together with all interest accruing on them, in the Consolidated Fund in trust for the benefit of the persons who are for the time being entitled to them; but nothing in this section shall render the Secretary to the Treasury liable for not so depositing the money and interest. At the request of the mortgagee or his or her representatives or successor in title, the Registrar of Titles or the recorder as the case may be, shall address to the Secretary to the Treasury requisitions to pay to such persons the money to which they are entitled under this section and the Secretary to the Treasury shall pay the money accordingly.

Section 15Verify source

§ 16Discharge and release of mortgages - Transfer of mortgageProvision

Sets rules for transfer of mortgages: eligible persons may request a transfer in writing; the mortgagee must transfer when requested and paid and must give notice; the mortgagor's consent must not be unreasonably withheld and the court may dispense with consent on appeal.

Section Transfer of mortgage Section Subject to the consent of the mortgagor , which consent shall not be unreasonably withheld, the persons who may make the written request under subsection (1) are any— The current mortgagor or any person mentioned in subsection (3) may at any time, other than a time when the mortgagee is in possession of the mortgaged land, in writing request the mortgagee to transfer the mortgage to a person named in the written request. The current mortgagee may at any time transfer the mortgage by a transfer in a prescribed form and shall give notice of the transfer to the mortgagor . person who has an interest in the land which has been mortgaged; surety for the payment of the amount secured by the mortgage ; or creditor of the mortgagor who has obtained a decree of sale of the mortgaged land. Where the consent required by subsection (3) is withheld, a person aggrieved by the withholding of the consent may appeal to the court for an order requiring the mortgagor to show cause why the mortgagor cannot give consent, and the court may, in its discretion, dispense with the consent. The mortgagee , on receiving a written request made under subsection (1) and on payment by the person or persons making the request of all money which would have been payable if the discharge of the mortgage had been made under section 13 , and the performance of all other obligations secured by the mortgage, shall transfer the mortgage to the person named in the written request. Any express or implied term in a mortgage instrument which conflicts with this section is void.

Section 16Verify source

Part IV

Covenants, conditions and powers implied in mortgages

§ 17Covenants, conditions and powers implied in mortgages - Implied covenants by mortgagorCommencement

Lists covenants implied by the mortgagor in every mortgage (unless third‑party mortgage), including payment of principal and interest, payment of rates and taxes, repair and insurance obligations, restrictions on leasing and transfers without the mortgagee's written consent (not to be unreasonably withheld), obligations for lease mortgages, obligations in subsequent mortgages to pay prior charges, and the mortgagee's power to remedy breaches and add costs to the principal provided notice is given.

Section Implied covenants by mortgagor Section There shall be implied in every mortgage the following covenants by the mortgagor with the mortgagee binding the mortgagor — except in the case of a mortgagor under a third party mortgage , to pay the principal money on the day appointed in the mortgage agreement, and, so long as the principal money or any part of it remains unpaid, to pay interest on it or on so much of it as for the time being remains unpaid at the rate and on the days and in the manner specified in the mortgage agreement; to pay all rates, charges, rent, taxes and other outgoings which are at all times payable in respect of the mortgaged land; to repair and keep in a reasonable state of repair all buildings and other improvements upon the mortgaged land and to permit the mortgagee or his or her agent at all reasonable times until the mortgage is discharged and after reasonable notice to the mortgagor , to enter the land and examine the state and condition of those buildings and improvements; to insure by insurance or any other means as may be prescribed or as are appropriate, that resources will be available to make good any loss or damage caused by fire to all buildings on the land, and where insurance is taken out, it is done in the joint names of the mortgagor and mortgagee with insurers approved by the mortgagee and to the full value of all the buildings; in the case of a mortgage of land used for agricultural or pastoral purposes, to use and continue to use the land in a sustainable manner and in accordance with the principles of good husbandry and any conditions subject to which the land is held and to comply with all written laws and lawful orders applicable to that use of the land; not to lease, or sublease the mortgaged land or any part of it without the previous consent in writing of the mortgagee , but that consent shall not be unreasonably withheld; not to transfer or assign a lease or a tenancy by occupancy or part of it without the previous consent in writing of the mortgagee , but that consent shall not be unreasonably withheld; in the case of a mortgage of a lease, during the continuance of the mortgage , to pay, perform and observe the rent, covenants and conditions contained and implied in the lease, on the part of the lessee to be performed and observed and to keep the mortgagee indemnified against all proceedings, expenses and claims on account of non-payment of the rent or part of it or the breach or non-observance of the covenants and conditions or any of them, and, if the lessee has an enforceable right to renew the lease, to renew it; where the mortgage is a second or subsequent mortgage , that the mortgagor will pay the interest from time to time accruing on each prior mortgage , not being a third party mortgage , when it becomes due and will at the proper time repay the principal money or part of it due on each prior mortgage ; and where the mortgagor fails to comply with any of the covenants implied by paragraphs (b) , (c) , (d) , (e) and (h) , the mortgagee may spend such money as is reasonably necessary to remedy the breach and may add the amount so spent to the principal money and that amount shall be deemed for all purposes to be a part of the principal money secured by the mortgage. The mortgagor shall keep all buildings upon the mortgaged land in a reasonable state of repair, but there shall not be read into any such covenant an undertaking by a mortgagor to put any building or part of it into a better condition than it was in at the commencement of the mortgage . The mortgagee shall not spend any money under subsection (1) (j) without giving notice to the mortgagor of his or her intention to do so.

Section 17Verify source

Part V

Powers of mortgagee

§ 18Powers of mortgagee - Notice on defaultProvision

If a mortgagor defaults the mortgagee may serve a written notice requiring the mortgagor to rectify the default (typically within 45 working days); for non-payment defaults the notice must state the amount and give at least 21 working days to pay; if not rectified the mortgagee may exercise remedies in section 19.

Section Notice on default Section The notice required by subsection (2) shall be in the prescribed form and shall adequately inform the mortgagor of the following matters— Where money secured by a mortgage under this Act is made payable on demand, a demand in writing shall create a default in payment. Where the mortgagor is in default of any obligation to pay the principal sum on demand or interest or any other periodic payment or any part of it due under any mortgage or in the fulfilment of any covenant or condition, express or implied in any mortgage , the mortgagee may serve on the mortgagor a notice in writing of the default and require the mortgagor to rectify the default within forty-five working days. the nature and extent of the default made by the mortgagor ; where the default consists of the non-payment of any money due under the mortgage , the amount that must be paid to rectify the default, which amount may be the whole of the money due under the mortgage , and the time, being not less than twenty-one working days, by the end of which the payment in default must have been made; where the default consists of the failure to perform or observe any covenant, express or implied, in the mortgage , the action the mortgagor must take or desist from taking so as to rectify the default and the time, being not less than twenty-one working days, by the end of which the default must have been rectified; that if the default is not rectified within the time specified in the notice, the mortgagee will proceed to exercise any of the remedies referred to in section 19 in accordance with the procedures provided for in this Part. A mortgagor will be deemed to be in default warranting the mortgagee to serve upon him or her a notice in writing of the default requiring the mortgagor to rectify the default within the prescribed number of days as stated in subsection (2) if the mortgagor fails to meet any obligation to pay the principal sum on demand or interest or any other periodic payment or any part of it under the mortgage after a period of thirty days from the date when the obligation to pay becomes due.

Section 18Verify source

§ 19Powers of mortgagee - Remedies of mortgageeProvision

If the mortgagor defaults and does not comply with the notice under section 18, the mortgagee may take several remedies including requiring payment, appointing a receiver, leasing or subleasing, taking possession, or selling the mortgaged land.

Section Remedies of mortgagee Section Where the mortgagor is in default and does not comply with the notice served on him or her under section 18 , the mortgagee may— require the mortgagor to pay all money owing on the mortgage ; appoint a receiver of the income of the mortgaged land; lease the mortgaged land or where the mortgage is of a lease, sublease the land; enter into possession of the mortgaged land; or sell the mortgaged land.

Section 19Verify source

§ 20Powers of mortgagee - Mortgagee's action for money secured by mortgageCommencement

The mortgagee may sue for the money secured by the mortgage only in the specific cases listed; the court may order a stay of proceedings on application by the mortgagor or a surety, subject to conditions.

Section Mortgagee's action for money secured by mortgage Section The mortgagee may sue for the money secured by the mortgage only in the following cases— where the mortgage deed provides that if there is default by the mortgagor , the money secured by the mortgage becomes payable in full; where the mortgagor is personally bound to repay the money; where a surety has agreed to be personally liable to repay the money in circumstances that have arisen; or where the mortgagee is deprived of the whole or a part of his or her security or the security is rendered insufficient through or in consequence of the wrongful act or default of the mortgagor . An action shall not be commenced under subsection (1) until the time for complying with a notice served under section 18 has expired. The court may, on the application of the mortgagor or a surety , order a stay of any proceedings brought under this section, until the mortgagee has exhausted all his or her other remedies against the mortgaged land, unless the mortgagee agrees to discharge the mortgage on payment of the money secured by the mortgage .

Section 20Verify source

§ 21Powers of mortgagee - Appointment, powers, remuneration and duties of receiverProvision

Sets rules for appointment and conduct of a receiver: mortgagee must serve notice (wait 15 working days) and appoint in writing; receiver must apply income in stated priority, may retain costs and commission (not exceeding 5%), may demand and recover income; mortgagee may apply to court; mortgagor generally responsible for receiver's acts unless mortgage says otherwise.

Section Appointment, powers, remuneration and duties of receiver Section The receiver shall apply all money received by him or her in the following order of priority— in payment of all reasonable expenses incurred in the doing of anything which a receiver is required or entitled to do in respect of the mortgaged land, including but not limited to— It is an implied condition in every mortgage that the mortgagee has the power to appoint a receiver of the income of the mortgaged land. Before the appointment of a receiver under this section, the mortgagee shall serve a notice on the mortgagor and shall not proceed until fifteen working days have lapsed from the date of the service of the notice of appointment of receiver . The appointment of a receiver shall be in writing signed by the mortgagee. A mortgagee may apply to the court for the appointment of a receiver and any such application may be made in an interlocutory application. A receiver may be removed at any time and a new receiver appointed in writing signed by the mortgagee . A receiver appointed under this section shall be deemed to be the agent of the mortgagor for the purposes for which he or she is appointed, and the mortgagor shall, unless the mortgage instrument provides otherwise, be solely responsible for the acts and defaults of the receiver . The receiver shall have the power to demand and recover all the income in respect to which he or she is appointed receiver , by action or otherwise, in the name of the mortgagor , and to give valid receipts for it. Subject to subsection (9) , the receiver is entitled to retain out of any money received by him or her all costs, charges and expenses incurred by him or her as receiver, and, for his or her remuneration, a commission at such rate not exceeding five percent of the gross amount of all money received, as is specified in the appointment, or if no rate is specified at the rate of five percent or such other rate as the mortgagor and mortgagee may agree or where the appointment of a receiver comes before the court, as the court shall deem fit. in the payment of all rents, rates, charges, taxes and other outgoings required to be paid in respect of the mortgaged property; in keeping down all annual sums or other payments, and the interest on all principal sums, having priority to the mortgage in respect of which he or she is the receiver ; in payment of his or her remuneration and expenses; the payment of any premiums on any insurance policy properly payable under the mortgage instrument; and the costs of undertaking necessary and proper repairs to any buildings comprised in the mortgaged land as directed in writing by the mortgagee ; in the repayment of any money paid or advanced by the mortgagee to meet the reasonable expenses referred to in paragraphs (a) , (b) , (c) and (d) together with any interest on any amount so paid or advanced at the rate at which interest is payable on the principal sum secured by the mortgage; in payment of the interest accruing and due in respect of any principal sum secured by the mortgage ; in and towards the discharge of the principal sum secured by the mortgage ; and shall pay the residue, if any, to the mortgagor or other person entitled to receive the income from the mortgaged land.

Section 21Verify source

§ 22Powers of mortgagee - Power of mortgagee to leaseProvision

A mortgagee may, unless the mortgage instrument says otherwise and subject to law, grant leases or accept surrenders of leases; before doing so the mortgagee must serve the mortgagor with a prescribed notice and wait fifteen working days. Every lease must reserve the best reasonable rent, be for no more than fifteen years or the mortgage term (whichever is shorter), include reasonable terms protecting mortgagor and others, and, if a receiver was appointed under section 21 prior to granting, declare that appointment. Leases do not bind prior-priority mortgage holders unless they consent.

Section Power of mortgagee to lease Section A mortgagee shall, unless the mortgage instrument expressly provides to the contrary, have power, subject to this Act and any other law applicable to the leasing of land— Every lease granted by the mortgagee shall— to grant leases in respect of the mortgaged land or any part of the land; and to accept a surrender of any lease so granted and of any lease granted by the mortgagor , Before granting a lease under this section, a mortgagee shall serve a notice on the mortgagor in the prescribed form and shall not proceed with the granting or execution of that lease until fifteen working days have lapsed from the service of the notice. reserve the best rent that can reasonably be obtained, having regard to the circumstances of the case; be for a term not exceeding fifteen years or the length of the term of the mortgage whichever is the shorter; contain any terms and conditions which are reasonable, having regard to the interests of the mortgagor and of any other persons having an interest in the mortgaged land; and if prior to granting a lease, the mortgagee has appointed a receiver under section 21 , contain a declaration that the lender has appointed a receiver, stating the date of the appointment. A lease created by a mortgagee under this section shall not be binding on any person holding a mortgage which has priority to the mortgage of the mortgagee who has granted the lease unless that person has consented to it.

Section 22Verify source

§ 23Powers of mortgagee - Power of mortgagee to take possession of mortgaged landProvision

Mortgagee may enter into and remain in possession after notice; mortgagee in possession can manage the land and take profits but has liabilities and must apply receipts as in section 21(9); certain payments under section 21(9)(c) are not payable to the mortgagee in possession.

Section Power of mortgagee to take possession of mortgaged land Section A mortgagee may exercise the power of entry into possession of mortgaged land by— The mortgagee shall be regarded as being in possession on the date— A mortgagee in possession of any mortgaged land— A person on whom a notice under subsection (1) has been served shall forthwith comply and continue to comply with that notice until— A mortgagee may, after the end of the period specified in section 18 , and after serving a notice of not less than five working days of his or her intention to do so, enter into possession of the whole or a part of the mortgaged land. entering into and taking physical possession of the land or a part of it during the day time using only such force as shall be reasonable in the circumstances; asserting management or control over the land by serving a notice in the prescribed form requiring any lessee of the mortgagor or any other occupier of the land to pay to the mortgagee any rent or profits which would otherwise be payable to the mortgagor ; or an order of court . on which he or she enters into possession in accordance with subsection (2)(a) or (c) ; or on which he or she first receives any rent or profit from the land. A mortgagee who has entered into possession may remain in possession, without prejudice to his or her right to withdraw from possession, so long as the mortgaged land continues to be subject to any liability under the mortgage . by occupation, shall be entitled to manage the land and take all the profits of the land, but is liable to the borrower for any act or omission by which the value of the land, or any building on, or other permanent improvement to the land is impaired or the mortgagor otherwise suffers loss; whether by occupation or by receipt of rents and profits shall be accountable to the mortgagor not only for the sums actually received by him or her, but also for any additional sums which he or she might reasonably have been expected to receive by the prudent exercise of his or her powers; where the mortgaged land is leased, is liable to the mortgagor to observe and perform all the covenants and conditions contained or implied by any rule of law or custom in the lease subject to which the mortgaged land is leased; and may renew a lease granted by the mortgagor on the same terms as the original lease but may not otherwise grant any lease out of the mortgaged land. A mortgagee in possession shall apply all the money received by him or her to the same payments and in the same order as apply to a receiver and as set out in section 21(9) ; except that a mortgagee in possession is not entitled to receive any payments under subsection 21(9)(c). a notice of withdrawal in the prescribed form is served on that person by the mortgagee in possession; the mortgagee in possession withdraws from that possession; or a court orders the mortgagee in possession to withdraw from possession.

Section 23Verify source

§ 24Powers of mortgagee - Withdrawal of mortgagee from possessionProvision

A mortgagee must withdraw from possession of mortgaged land in specified circumstances and, after withdrawal, may not re-enter possession except by complying with section 23.

Section Withdrawal of mortgagee from possession Section A mortgagee shall withdraw from possession of the mortgaged land where— A mortgagee in possession shall be taken to have withdrawn from possession of all or a part of the mortgaged land— when the mortgagee — a court makes an order directing the mortgagee to withdraw; the mortgagee appoints a receiver under section 21 ; the default which was the cause of the entry into possession has been rectified through the possession of the mortgagee ; the mortgagee has exercised the power of sale under section 25(2) ; or the mortgagor becomes entitled to a discharge of the mortgage under section 13 . when the court makes an order under subsection (1) ; when the receiver has been appointed in accordance with section 21 ; ceases to occupy the mortgaged land; or where he or she is not in occupation, serves a notice of withdrawal on all persons served with a notice under section 23(2)(b) ; when the purchaser of the mortgaged land enters into occupation of that land; or when the mortgagor obtains the discharge of the mortgage . A mortgagee who has withdrawn from possession of mortgaged land may not again enter into possession of that land, otherwise than by complying with section 23 .

Section 24Verify source

§ 25Powers of mortgagee - Power of sale of mortgageeProvision

If a mortgagor remains in default after the rectification period under section 18(3), a mortgagee may sell the mortgaged land but must first serve a notice to sell in the prescribed form and must not complete any sale contract until twenty-one working days have passed from service of that notice.

Section Power of sale of mortgagee Section A copy of the notice to sell served in accordance with subsection (2) shall be served on— Where a mortgagor is in default of his or her obligations under a mortgage and remains in default at the expiry of the time provided for the rectification of that default in the notice served on him or her under section 18(3) , a mortgagee may exercise his or her power to sell the mortgaged land. Before exercising the power to sell the mortgaged land, the mortgagee shall serve a notice to sell in the prescribed form on the mortgagor and shall not proceed to complete any contract for the sale of the mortgaged land until twenty-one working days have lapsed from the date of the service of the notice to sell. a mortgagor ; any spouse or spouses of the mortgagor in respect of a matrimonial home ; a surety ; the independent person as provided under this Act; or in case of customary land, the children and the spouse or spouses.

Section 25Verify source

§ 26Powers of mortgagee - Duty of mortgagee exercising power of saleProvision

A mortgagee exercising a power of sale must take all reasonable steps to obtain the best price as prescribed in the regulations; the mortgagee is not entitled to compensation or indemnity for liability from breach of that duty.

Section Duty of mortgagee exercising power of sale Section A mortgagee who exercises a power to sell the mortgaged land, including the exercise of the power to sell under an order of a court , owes a duty of care to the mortgagor , any surety of the whole or any part of the sums advanced to the mortgagor , any mortgagee under a subsequent mortgage including a mortgage on customary land or under a lien, to take all reasonable steps to obtain the best price as prescribed in the regulations. A mortgagee shall not be entitled to any compensation or indemnity from the mortgagor , any former mortgagor or any surety in respect of any liability arising from a breach of the duty imposed by subsection (1) .

Section 26Verify source

§ 27Powers of mortgagee - Powers incidental to power of saleProvision

When a mortgagee is entitled to sell, the mortgagee may sell the whole or part of the land (subject to conditions) and must publicly advertise an auction sale; transfers must be in prescribed form, Registrar accepts the form as evidence, and upon registration the purchaser takes the interest free of certain liabilities.

Section Powers incidental to power of sale Section Where a mortgagee becomes entitled to exercise the power of sale, that sale may be— of the whole or a part of the mortgaged land; subject to or free of any mortgage or other encumbrance having priority to the mortgagee ’s mortgage ; by way of subdivision or otherwise; by public auction, unless the mortgagor consents to a sale by private treaty; with or without reserve; and subject to such other conditions as the mortgagee shall think fit, having due regard to the duty imposed by section 26(1) . Where a sale is to proceed by public auction, it shall be the duty of the mortgagee to ensure that the sale is publicly advertised in advance of the sale by auction in such a manner and form as to bring it to the attention of persons likely to be interested in bidding for the mortgaged land and may include but not be limited to the mortgagee placing an advert including a colour picture of the mortgaged property, in a newspaper which has wide circulation in the area concerned, specifying the place of the auction, and the date of the auction, being no earlier than thirty days from the date of the first advert. A transfer of the mortgaged land by a mortgagee in exercise of his or her power of sale shall be made in the prescribed form and the Registrar of Titles or recorder shall accept that form as sufficient evidence that the power has been duly exercised. Upon registration of the transfer by the Registrar of Titles or recorder , the interest of the mortgagor as described in the transfer shall pass to and vest in the purchaser free of all liability on account of the mortgage , or on account of any other mortgage or encumbrance to which the mortgage has priority, other than a lease or easement to which the mortgagee had consented in writing.

Section 27Verify source

§ 28Powers of mortgagee - Protection of purchaserProvision

A purchaser who buys mortgaged land from a mortgagee generally acquires good title unless there is fraud, misrepresentation or other dishonest conduct by the mortgagee of which the purchaser had notice; the purchaser is not liable for misapplication of the purchase money and is not obliged to verify defaults, notices or regularity of the sale; a purchaser harmed by an unauthorised or irregular sale may claim damages against the mortgagee.

Section Protection of purchaser Section A purchaser is not— For the purposes of this section, a purchaser is— A purchaser in a sale effected by a mortgagee acquires good title except in a case of fraud, misrepresentation or other dishonest conduct on the part of the mortgagee of which the purchaser has actual or constructive notice. answerable for the loss, misapplication or non-application of the purchase money paid for the mortgaged land; obliged to see to the application of the purchase price; or obliged to inquire whether there has been a default by the mortgagor or whether any notice required to be given in connection with the exercise of the power of sale has been duly given or whether the sale is otherwise necessary, proper or regular. a person who purchases mortgaged land excluding the mortgagee when the mortgagee is the purchaser; or a person claiming the mortgaged land through the person who purchases mortgaged land from the mortgagee , but does not include the mortgagee where the mortgagee is the subsequent purchaser. A purchaser prejudiced by unauthorised, improper or irregular exercise of the power of sale shall have a remedy in damages against the mortgagee exercising that power.

Section 28Verify source

§ 29Powers of mortgagee - Sale by mortgagee to himself or herselfProvision

Certain persons (including the mortgagee and connected persons) may bid at a public auction but may not purchase the mortgaged land without the court's leave; the court must only grant leave if satisfied the sale is the most advantageous; if the court orders completion the mortgagee must attach the court order to the transfer; a sale in contravention is voidable by the mortgagor.

Section Sale by mortgagee to himself or herself Section The following shall not be permitted to purchase the mortgaged land without leave of court — Where the mortgaged land is to be sold by public auction, the mortgagee or other persons mentioned in subsection (1) may bid for the mortgaged land at the public auction so long as the price bid for the mortgaged land by the mortgagee is— a mortgagee ; an employee of the mortgagee or an immediate member of his or her family; an agent of the mortgagee or an immediate member of his or her family; any person in a position to influence the matter directly or indirectly; and a person in position of any other privileged information with regard to the transaction. A court shall not grant leave to a person mentioned in subsection (1) , unless the court is satisfied that the sale of the mortgaged land to that person is the most advantageous way of selling the land so as to comply with the duty imposed on the mortgagee by section 26(1) . the highest price bid for that land at the auction; or equal to or higher than the reserve price, if any, put upon the land before the auction, which ever amount is the greater; and immediately after the fall of the hammer, applies to the court for an order to conclude the sale. Where the court makes an order under subsection (3)(c) , the mortgagee shall attach the order of the court to the transfer form. Where the mortgagee sells the mortgaged land in contravention of this section, the sale shall be voidable at the option of the mortgagor .

Section 29Verify source

§ 30Powers of mortgagee - Application of proceeds of sale of mortgaged landProvision

A mortgagee who has exercised a power of sale must apply the purchase money in a set order of priority; a mortgagee holding proceeds in trust may apply to court for directions and deposit proceeds if ordered.

Section Application of proceeds of sale of mortgaged land Section The purchase money received by a mortgagee who has exercised his or her power of sale shall be applied in the following order of priority— in payment of any rates, rents, taxes, charges or other sums owing and required to be paid on the mortgaged land; in discharge of any prior mortgage or other encumbrance subject to which the sale was made; in payment of all costs and reasonable expenses properly incurred and incidental to the sale or any attempted sale; in discharge of the sum advanced under the mortgage or so much of it as remains outstanding, interest, costs and all other money due under the mortgage , including any money advanced to a receiver in respect of the mortgaged land; in payment of any subsequent mortgages in order of their priority; and the residue, if any, in payment to the person who, immediately before the sale, was entitled to discharge the mortgage . Where a mortgagee holding the proceeds of sale in trust under this section is in doubt as to the proper distribution of all or part of those proceeds, he or she may apply to the court for directions and may, if the court so orders, deposit the proceeds in court ; and the costs of any such proceedings shall rank in priority as if they were part of the expenses of the sale.

Section 30Verify source

§ 31Powers of mortgagee - Right of mortgagor to discharge mortgage on payment of sums due any time before saleProvision

A mortgagor (or other person entitled) may discharge the mortgage at any time before an agreement for sale by paying all money secured; where that payment is made the mortgagee must deliver a prescribed-form discharge and the title documents.

Section Right of mortgagor to discharge mortgage on payment of sums due any time before sale Section Where payment is made under subsection (1) , the mortgagee shall deliver to the mortgagor— At any time before an agreement is reached between the mortgagee and any purchaser for the sale to that purchaser of the mortgaged land, the mortgagor or any other person who is entitled to discharge the mortgage , may discharge the mortgage in whole or in part by paying to the mortgagee all money secured by the mortgage at the time of discharge. a discharge of the mortgage in the prescribed form over the whole or that part of the mortgaged land to which the payment relates; and all instruments and documents of title held by the mortgagee in connection with the mortgaged land.

Section 31Verify source

Part VI

Powers of court with respect to mortgages

§ 32Powers of court with respect to mortgages - Application for relief by mortgagorProvision

Certain persons (mortgagor, joint mortgagors, spouse(s), trustee in bankruptcy) may apply to court for relief against mortgagee remedies; making an application is not an admission.

Section Application for relief by mortgagor Section An application to the court for relief against the exercise by the mortgagee of any of the remedies referred to in section 19 may be made— An application for relief is not to be taken as an admission by the mortgagor or any other person applying for relief that— by the mortgagor ; if two or more persons are joint mortgagors, by one or more of them on their own behalf; by a spouse or spouses of the mortgagor ; or by the trustee in bankruptcy of the mortgagor . Where an application under subsection (1)(b) is not made by all the joint mortgagors, then, unless the court orders otherwise, it shall be served on all the other joint mortgagors. An application for relief may be made at any time after the service of a notice under section 18 , 21(2) , 22(2) , 23(1) or 25(2) , or during the exercise of any of the remedies referred to in those sections. there has been a breach of a covenant of the mortgage by the mortgagor ; by reason of such a breach, the mortgagee has the right to exercise the remedy in respect of which the application for relief has been made; all notices which were required to be served by the mortgagee were properly served; or the period for remedying the breach specified in the notice served under section 18 was reasonable or had expired,

Section 32Verify source

§ 33Powers of court with respect to mortgages - Power of court to review certain mortgagesProvision

Court may review mortgages obtained through fraud, deceit or misrepresentation by the mortgagor, or mortgages containing an unlawful provision.

Section Power of court to review certain mortgages Section Where a mortgage has been obtained— through fraud, deceit or misrepresentation by the mortgagor ; or in a manner or containing a provision which is unlawful,

Section 33Verify source

§ 34Powers of court with respect to mortgages - Application to court to exercise power under section 33Provision

Several named persons may apply to the court for powers under section 33; if not all joint mortgagors or mortgagees apply, the application must be served on the others unless the court orders otherwise; applications may be made before discharge or on a mortgagee's possession application.

Section Application to court to exercise power under section 33 Section An application to the court to exercise any of the powers conferred upon the court by section 33 may be made— An application under subsection (1) may be made— by the mortgagor or mortgagee ; if two or more persons are joint mortgagors or joint mortgagees, by one or more of them on their own behalf; by a spouse or spouses of the mortgagor ; by the trustee in bankruptcy of the mortgagor ; by the trustee in bankruptcy, receiver or liquidator of the mortgagee ; or by a surety . If an application made in accordance with subsection (1)(b) is not made by all joint mortgagors or mortgagees, then unless the court orders otherwise, the application must be served on all the other joint mortgagors or mortgagees. at any time before the mortgagor has obtained a discharge of the mortgage ; or on an application by the mortgagee to the court for an order for possession or the execution of such an order.

Section 34Verify source

§ 35Powers of court with respect to mortgages - Exercise of power under section 33 to review certain mortgagesProvision

On an application under section 33 the court may declare a mortgage void, modify its effect, or order repayment; but it shall not declare a mortgage void unless satisfied the circumstances justify it, and where unlawful, unconscionable or extortionate provisions are alleged the court should uphold the mortgage omitting those provisions.

Section Exercise of power under section 33 to review certain mortgages Section Upon an application made under section 33 , the court may— declare the mortgage void; direct that the mortgage shall have effect subject to such modifications as the court shall order; or require the mortgagee to repay the whole or part of any sum paid under the mortgage or any related or collateral agreement by the mortgagor or any surety or other person who assumed an obligation under the mortgage whether it was paid to the mortgagee or any other person. The court shall not declare a mortgage void unless it is satisfied that the circumstances justify it. Where an application is made on the grounds that the mortgage contains any provision which is unlawful, unconscionable or extortionate, the court shall to the greatest extent possible, uphold the mortgage with the omission of the unlawful, unconscionable and extortionate provision. Where an application is made on the grounds of the exercise of undue influence or other unconscionable conduct, and two or more persons are joint mortgagors or mortgagees, and those grounds are proved to the satisfaction of the court , the court shall uphold the mortgage to the extent of the interests of the joint mortgagors or mortgagees upon whom undue influence was not exercised.

Section 35Verify source

§ 36Powers of court with respect to mortgages - Extinction of certain rightsProvision

If the Registrar of Titles is satisfied that a mortgagee's right to recover under a mortgage has been extinguished by the Limitation Act, the Registrar must give at least thirty days' notice to the mortgagee and remove the mortgage from the land title, which will be deemed cancelled from the date of removal; the court must grant an order on application by a mortgagee who satisfies the court.

Section Extinction of certain rights Section Upon application by the mortgagee under subsection (2) , the court shall grant the order if the mortgagee satisfies the court— in the case of cancellation of a mortgage under subsection (1) that during the period of limitation— Where upon an application for the purpose, the Registrar of Titles is satisfied that the right of action to recover any security under a mortgage , whether the right is granted in that mortgage or otherwise, has become extinguished by the operation of the Limitation Act, the Registrar of Titles shall, after giving a notice of not less than thirty days to the mortgagee , remove the mortgage from the title of the land to which it relates; and the mortgage shall be deemed cancelled with effect from date of removal. Notwithstanding subsection (1) , the mortgagee may not later than ninety days from the expiration of the notification under subsection (1) apply to the court for an order restoring the mortgage and his or her right under it. the mortgagor or his or her successor in title acknowledged the mortgage debt in writing, and agreed to pay, or settle part of it; the mortgagor was dead and that either no successor had been appointed or there was no one competent to receive the notice requiring the repayment of the loan either as a personal representative or in some other capacity; or the exercise of his or her powers of sale or foreclosure had been denied by the court ; or in the case of the cancellation of a mortgage under subsection (1) that the exercise of his or her powers of sale or foreclosure had been denied by the court.

Section 36Verify source

§ 37Powers of court with respect to mortgages - Registrar of Titles may issue special certificate of title to mortgagorProvision

The Registrar of Titles must require the mortgagee (or transferee) to surrender a certificate of title within thirty days; surrendered certificates are to be returned to the mortgagor; and if the mortgagee fails to comply the Registrar must issue a special certificate of title.

Section Registrar of Titles may issue special certificate of title to mortgagor Section Where, upon the expiration of the time specified under subsection 36(2) for the mortgagee to apply to the court for the mortgage and his or her rights under the mortgage to be restored, the mortgage and the rights have not been so restored and there are no proceedings pending in court in respect to such application, the Registrar of Titles shall, by writing under his or her hand, require the mortgagee or his or her transferee within thirty days to surrender to the Registrar of Titles any certificate of title in his or her possession relating to the mortgaged land. A certificate surrendered to the Registrar of Titles pursuant to subsection (1) shall be returned to the mortgagor or his or her transferee. Where, upon a request by the Registrar of Titles under subsection (1) , the mortgagee or his or her transferee fails to comply within the time specified, the Registrar of Titles shall issue to the mortgagor or his or her transferee a special certificate of title in place of the certificate in possession of the mortgagee or his or her transferee, and the provisions of section 70 of the Registration of Titles Act relating to the validity and endorsement of special certificate of title and the entry of particulars of it in the register book shall, mutatis mutandis , apply to the special certificate of title issued under this section.

Section 37Verify source

Part VII

Miscellaneous

§ 38Miscellaneous - Offences and penaltiesOffence

Creates offences for impersonation, presenting a false spouse, forgery, purchasing mortgaged property contrary to section 29, a mortgagee selling in breach of section 26(1), and a mortgagee refusing to release a mortgage under section 13; prescribes fines and imprisonment ranges for some offences.

Section Offences and penalties Section Any person who— impersonates a spouse of a mortgagor ; presents to a mortgagee as his or her spouse, a person not being his or her spouse; or forges any document or utters a forged document to any person, for the purpose of fulfilling any duty or requirement under this Act, Any person who purchases mortgaged property in contravention of section 29 commits an offence and is liable, on conviction, to a fine not less than forty-eight currency points but not exceeding one hundred twenty currency points or to imprisonment for a term not less than two years but not exceeding five years, or both. A mortgagee who sells mortgaged property in breach of his or her duty to the mortgagor under section 26(1) , commits an offence and is liable, on conviction, to a fine not exceeding two hundred currency points. A mortgagee who refuses or neglects to release the mortgage under section 13 commits an offence and is liable, on conviction, to a fine not exceeding two hundred currency points.

Section 38Verify source

§ 39Miscellaneous - Short form of covenant by mortgagor to insureProvision

If a mortgagor uses the form in column one of Schedule 2, the mortgage is treated as if the words in column two were inserted and that form is a covenant by the mortgagor to the mortgagee binding successors; exceptions or qualifications added to the first-column form carry over to the second-column form.

Section Short form of covenant by mortgagor to insure Section Where in any mortgage under this Act the mortgagor uses the form of words contained in column one of Schedule 2 to this Act, the mortgage shall be taken to have the same effect and be construed as if he or she has inserted in it the form of words contained in column two of that Schedule; and every such form shall be deemed a covenant with the mortgagee by the mortgagor binding the latter and his or her heirs, executors, administrators, transferees and assignees in title. There may be introduced into or annexed to the form in the first column of Schedule 2 to this Act any express exception from or express qualification to the form; and the like exception or qualification shall be taken to be made from or in the form in the second column.

Section 39Verify source

§ 40Miscellaneous - RegulationsOffence

The Minister may make regulations (in consultation with the Bank of Uganda) to prescribe matters for carrying the Act into effect, including forms, conduct of mortgage business and auctions, persons to be served with notices, and penalties not exceeding seventy-two currency points or imprisonment up to three years, or both.

Section Regulations Section Without prejudice to the general effect of subsection (1) , Regulations made under this section may prescribe— The Minister may, in consultation with the Bank of Uganda, make regulations prescribing anything which may be prescribed under this Act and generally for the better carrying into effect of the purposes and provisions of this Act. the forms and notices to be used under this Act; the manner and form of the conduct of the business of mortgages; the persons on whom notices must be served; the conduct of auctions in connection with the sale of mortgaged land; or penalties in respect of the contravention of the regulations not exceeding a fine of seventy-two currency points or imprisonment for a term not exceeding three years, or both.

Section 40Verify source

§ 41Miscellaneous - Power to amend Schedule 1Amendment

The Minister may, by statutory instrument and with the approval of Cabinet, amend Schedule 1 to this Act.

Section Power to amend Schedule 1 Section The Minister may, by statutory instrument, with the approval of Cabinet, amend Schedule 1 to this Act.

Section 41Verify source

§ 42Miscellaneous - Application of common law and doctrines of equityProvision

Common law rules and equitable doctrines that apply to mortgages operate according to the Judicature Act unless they are inconsistent with this Act.

Section Application of common law and doctrines of equity Section The rules of common law and the doctrines of equity applicable to mortgages shall apply in accordance with the Judicature Act, except insofar as they are inconsistent with this Act.

Section 42Verify source

Legislative relationships

7 referenced instruments

Names are derived from the stored provision headings and citation-enrichment layer. Treat this as a research index and verify each relationship against the source text.

G–M

2 instruments

Land Act
Sections 1, 4
Limitation Act
Section 36

N–S

3 instruments

Registration of Titles Act
Section 37
Schedule 1 to this Act
Section 41
Schedule 2 to this Act
Section 39

T–Z

2 instruments

Titles Act
Sections 2, 8, 14
Uganda) to prescribe matters for carrying the Act
Section 40

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31 Dec 2023 · currentEnglish

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