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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:
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