MORTGAGES DECREE, 1972 (NRCD 96)
NATIONAL REDEMPTION COUNCIL DECREE
MORTGAGES DECREE, 1972 (NRCD 96)
As amended
ARRANGEMENT OF SECTIONS
Section
PART I—GENERAL PROVISIONS
1. Nature of a mortgage
2. Decree to govern all mortgages
3. Mortgages evidenced by writing
PART II—EFFECT OF A MORTGAGE
4. Extent of mortgaged property
5. Acts secured by mortgage
6. Personal liability of mortgagor
7. Mortgage to more than one person
8. Implied covenants on creation of mortgage
9. Implied covenants joint and several
10. Right to title documents
11. Insurance
12. Transfer by mortgagor
13. Transfer by mortgagee
14. Illegal, void and voidable transactions
15. Remedies of mortgagee on default
16. Appointment of receiver on default
17. Mortgagee in possession
18. Judicial sale
19. Priorities
20. Methods of redemption
21. Judicial sale in lieu of redemption
22. Discharge receipts
PART III—MISCELLANEOUS
23. Model precedents
24. Interpretation
25. Application
26. Commencement.
SCHEDULES
First Schedule—Implied covenants
Part I—Implied covenants by mortgagor
Part II—Implied covenants by mortgagor or leasehold property
Second Schedule—Model precedents
MORTGAGES DECREE, 1972
IN pursuance of the National Redemption Council (Establishment) Proclamation, 1972, this Decree is hereby made:
PART I—GENERAL PROVISIONS
Section 1—Nature of a Mortgage.
(1) A mortgage for the purposes of this Decree is a contract charging immovable property as security for the due repayment of debt and any interest accruing thereon or for the performance of some other obligation for which it is given, in accordance with the terms of the contract.
(2) A mortgage shall be an encumbrance on the property charged, and shall not, except as provided by this Decree, operate so as to change the ownership, right to possession or other interest (whether present or future) in the property charged.
(3) A mortgage may be created in any interest in immovable property which is alienable.
Section 2—Decree to Govern all Mortgages.
A mortgage of immovable property shall only be capable of being effected in accordance with the provisions of this Decree, and every transaction which is in substance a mortgage of immovable property, whether expressed as a mortgage, charge, pledge of title documents, outright conveyance, trust for sale on condition, lease, hire-purchase, conditional sale, sale with right of repurchase or in any other manner, shall be deemed to be a mortgage of immovable property and shall be governed by this Decree.
Section 3—Mortgages Evidenced by Writing.
(1) No mortgage shall be enforceable unless—
(a) it is evidenced by a writing signed by the mortgagor or by his agent authorised in writing to sign on his behalf; or
(b) it is excused from the necessity of a writing by the operation of the rules of equity including the rules relating to fraud, duress, hardship, unconscionability and part performance; or
(c) it is excused from the necessity of a writing by any enactment, in the case of a customary law transaction.
(2) Every writing evidencing a mortgage shall be deemed to be an instrument which may be registered in accordance with the Land Registry Act, 1962 (Act 122).
(3) A registrar empowered to register instruments in accordance with the Land Registry Act, 1962 (Act 122) may, in addition to any power given to him by that Act, refuse to register any writing evidencing a mortgage unless the writing—
(a) states the name and address of each mortgagor and each mortgagee;
(b) states the nature of the mortgagor's interest in the property which is mortgaged and the extent to which that interest is subject to the mortgage;
(c) identifies the mortgaged property by reference to its location and boundaries (which may be by reference to an official plan) or to a previously registered writing describing the same property;
(d) where the mortgage secures the payment of money, states the date on which payment is due and states the principal sum lent or to be lent or if the sum to be lent is indeterminate the writing so states, and if further advances are to be made and secured by the mortgage the writing so states.
(4) Every writing evidencing the transfer or encumbrance of a mortgage or any interest in a mortgage shall be deemed to be an instrument which may be registered in accordance with the Land Registry Act, 1962 (Act 122).
(5) Every writing evidencing a discharge of a mortgage or any part of a mortgage in accordance with section 22 shall be deemed to be an instrument which may be registered in accordance with the Land Registry Act, 1962 (Act 122), and such a writing shall be registered without payment of stamp duty.
PART II—EFFECT OF A MORTGAGE
Section 4—Extent of Mortgaged Property.
(1) Every mortgage is effectual to create a charge upon all interests and rights which the mortgagor has in the property mortgaged, or which he enjoys as an incident of his interest in the mortgaged property.
(2) Subsection (1) shall apply only if and as far as a contrary intention does not appear expressly or by necessary implication, and shall have effect subject to the provisions of the mortgage.
Section 5—Acts Secured by Mortgage.
Unless a contrary intention appears expressly, a mortgage shall be security only for the performance of the act or acts provided in the mortgage and not for any performance promised in any past or future contract.
Section 6—Personal Liability of Mortgagor.
Unless a contrary intention appears expressly or by necessary implication, the mortgagor shall be personally liable, as well as liable on the mortgage security, for the performance of the act or acts secured by the mortgage.
Section 7—Mortgage to More than One Person.
(1) Unless a contrary intention appears expressly or by necessary implication, a mortgage made to two or more mortgagees or transferred to two or more transferees or securing performance to two or more obligees shall, as against the mortgagor or obligor or any person deriving an interest through the mortgagor or obligor and without prejudice to the rights of the mortgagees, transferees or obligees among themselves, be deemed to be made to the mortgagees or transferred to the transferees or secured to the obligees as joint holders with right of survivorship.
(2) Subsection (1) of this section shall apply notwithstanding any notice to the mortgagor or obligor or person deriving an interest through either or both of them of a severance of the joint holding after the mortgage.
Section 8—Implied Covenants on Creation of Mortgage.
Unless a contrary intention appears expressly or by necessary implication, there shall be implied the covenants relating to the right to mortgage, quiet enjoyment, freedom from encumbrances, further assurance, maintenance, repairs and protection of the mortgage security in the terms set out in Part I of the First Schedule; and where the mortgaged property includes a leasehold as to that leasehold there shall be implied the further covenants relating to validity and past and future observance of the lease in the terms set out in Part II of the First Schedule.
Section 9—Implied Covenants Joint and Several.
Unless a contrary intention appears expressly or by necessary implication, in a mortgage or transfer of a mortgage where two or more persons are expressed to mortgage or transfer or to join as covenantors, an implied covenant on their part shall be deemed to be a joint and several covenant by them; and where there are two or more mortgagees or transferees an implied covenant with them shall be deemed to be a covenant with them jointly unless the performance secured by the mortgage is secured to them in shares or distinct sums, in which case the implied covenant shall be deemed to be a covenant with each in respect of the share or distinct sum secured to him.
Section 10—Right to Title Documents.
(1) Unless a contrary intention appears expressly or by necessary implication, as against the mortgagor the prior mortgagee shall be entitled to possession of all of the mortgagor's title documents which relate exclusively to the mortgaged property.
(2) Unless a contrary intention appears expressly or by necessary implication, where during the life of the mortgage the mortgagor becomes entitled to possess any title document relating exclusively to the mortgaged property it shall be the duty of the mortgagor to deliver that document to the then prior mortgagee.
(3) A mortgagee having possession of a mortgagor's title documents shall keep them whole, uncancelled and undefaced and shall be liable in an action for damages for any wilful or negligent failure so to do, and shall deliver them upon timely performance of the act or acts secured by the mortgage or upon redemption to the then prior mortgagee, and if there be no mortgagee then to the mortgagor or person succeeding to title through the mortgagor.
(4) Where the mortgagee has possession of title documents, the mortgagor at any reasonable time, on his request and at his own expense, shall be entitled in person or through an agent to inspect and make copies or extracts from any such document.
Section 11—Insurance.
(1) Both the mortgagor and the mortgagee have an insurable interest in the mortgaged property.
(2) Unless a contrary intention appears expressly or by necessary implication, where the mortgagor has covenanted to insure all or any part of the mortgaged property and fails to do so as required by the terms of the mortgage, the mortgagee shall be entitled, after giving notice in writing to the mortgagor, to insure and keep insured the mortgaged property against loss or damage by theft, fire, earthquake or other natural disaster; and the premiums paid by the mortgagee for any such insurance shall be secured with the same priority as the mortgage and, where the mortgage secures payment of money, shall be added to the principal sum with interest at the same rate as on the principal sum.
(3) Unless a contrary intention appears expressly or by necessary implication, where the mortgagor has covenanted to insure all or any part of the mortgaged property and the insurance has been effected by the mortgagor, or on behalf of the mortgagor by the mortgagee, all money received on such insurance shall be applied in making good the loss or damage in respect of which the money is received unless the mortgagor elects to apply all or part of it toward the performance of the act or acts secured by the mortgage.
Section 12—Transfer by Mortgagor.
(1) Unless a contrary intention appears expressly or by necessary implication, a mortgagor may transfer all or any part of his interest in the mortgaged property at any time without the concurrence of the mortgagee.
(2) The transfer of all or any part of his interest in the mortgaged property shall not relieve the mortgagor of his personal liability on any covenant in the mortgage.
(3) In a transfer of a mortgage from a mortgagor for valuable consideration, unless a contrary intention appears expressly or by necessary implication, the transferee shall be deemed to have covenanted to indemnify the mortgagor's personal liability on any covenant in the mortgage.
(4) Unless a contrary intention appears expressly or by necessary implication, it shall be implied that the mortgagor covenants to give notice to the mortgagee of any transfer of all or any part of the mortgagor's interest in the mortgaged property by the mortgagor subsequent to the mortgage:
Provided that notwithstanding any provision to the contrary, failure to give such notice shall not invalidate the transfer.
(5) In this section, a transfer includes a sale, lease, encumbrance or other disposition.
Section 12A—Mortgagor's Right to Transfer Restricted.
A mortgagor under a mortgage to which this Decree applies shall not transfer any interest in the mortgaged property under section 12 of the Mortgages Decree, 1972 (NRCD 96) without the consent in writing of the mortgagee.[Inserted and to be cited as National Mortgages, Financing and Guarantee Scheme Decree, 1976 (SMCD 23), s.32]
Section 13—Transfer by Mortgagee.
(1) A mortgagee may transfer all or any part of his interest in the mortgage at any time without the concurrence of the mortgagor, so however that any transfer shall be void and of no effect if it purports to make any disposition of the mortgagee's interest in the mortgaged property without making the same disposition of the right to performance of the act or acts secured by the mortgage.
(2) Unless a contrary intention appears expressly or by necessary implication, a transfer of a mortgage by a mortgagee operates to transfer the entire interest of the mortgagee to the transferee, including—
(a) the right to demand, sue for, recover and give receipts for performance of the act or acts secured by the mortgage, including performance then due or becoming due thereafter; and
(b) the benefit of all securities for performance including collateral securities, and the benefit of and right to sue on all covenants with the mortgagee and the right to exercise all powers of the mortgagee.
(3) In this section, a transfer includes a sale, lease, encumbrance or other disposition.
Section 14—Illegal, Void and Voidable Transactions.
(1) Where the performance of an act or acts secured by the mortgage is illegal, or derives from a contract which is illegal, the mortgage shall to that extent not be enforceable, so however that a court may order the return of title documents or the removal of any clog on the title to the mortgaged property.
(2) Where the performance of an act or acts secured by the mortgage derives from a contract which is void or voidable at the mortgagor's option, the mortgage shall to that extent not be enforceable, so however that a court may order restitution as a condition to the return of title documents or the removal of any clog on the title to the mortgaged property.
Section 15—Remedies of Mortgagee on Default.
Upon failure of performance of an act or acts secured by the mortgage the mortgagee may do either or both of the following:—
(a) sue the mortgagor or obligor or both on any personal covenant to perform;
(b) realise his security in the mortgaged property in all or any of the ways provided in this Part, and in no other way notwithstanding any provision to the contrary in the mortgage.
Section 15A—Section 15 of NRCD 96 Modified.
Subject to the provisions of this Decree upon failure of performance of an act or acts secured by a mortgage to which this Decree applies the mortgagee may exercise all or any of the rights referred to in section 15 of the Mortgages Decree, 1972 or conferred by this Decree and accordingly the words "and in no other way notwithstanding any provision to the contrary in the mortgage" appearing in paragraph (b) of the said section shall not apply to a mortgage to which this Decree applies.[Inserted and to be cited as National Mortgages, Financing and Guarantee Scheme Decree, 1976 (SMCD 23), s.30]
Section 16—Appointment of Receiver on Default.
(1) Upon failure of performance of an act or acts secured by the mortgage the mortgagee may apply to the court for the appointment of a receiver, and unless the court is satisfied that no grounds exist for the appointment of a receiver the court shall appoint a receiver.
(2) The court may empower a receiver appointed under this section to take possession of the mortgaged property, to collect by demand, action in the name of the mortgagor or mortgagee, or otherwise all income including arrears accruing from the mortgaged property, to give valid receipts for all income collected, and to do any other act necessary or proper to manage the property including the making of repairs and improvements, so however that no such repair or improvement shall bind the mortgagor, mortgagee or property until approved by the court.
(3) A receiver appointed under this section shall be liable to account at any time ordered by the court.
(4) A receiver appointed under this section shall be entitled to retain out of money received by him, for his remuneration, and in satisfaction of all costs, charges and expenses incurred by him as receiver, a fee or commission at such rate as the court in its discretion determines.
(5) Unless otherwise directed by the court, a receiver appointed
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