Essential Features of a Mortgage

The following are the essential features of a mortgage:

(a) Immovable Property: A mortgage can be effected only in respect of immovable properties. Immovable properties include land and building, trees in the forest, standing crops, and any machinery that is permanently fixed to the earth.

(b) Transfer of Interest in the Property: Creation of a mortgage requires the transfer of interest in a specific immovable property. Transfer of interest does not mean transfer of ownership. The mortgager transfers some of his rights on the property to the mortgagee. Therefore, a mortgaged property cannot be sold without the consent of the mortgager in the event of any default.

 (c) Specific Property: The interest to be transferred is always with respect to a “specific property.” In other words, the property must be made specific through proper identity like its size, location, boundaries etc.

(d) Possession with the Mortgager: The actual possession of the mortgaged property is with the mortgager. He need not always transfer it to the mortgagee.

(e) Object or Purpose of Mortgage: The object of creating a mortgage is either to secure a loan or to perform an engagement. If the transfer of property is made for any other purpose, it cannot be called a mortgage.

(f) Reconveyance of Interest: On repayment of the loan the interest in specific immovable property is reconveyed to the mortgager. Thus, the mortgager gets back all his interest and rights in the property mortgaged as soon as he repays the loan.

(g) Right of Sale: In the event of non-payment of the loan, the mortgage has a right to sell the mortgaged property through the intervention of the court. But in case of legal mortgage, the mortgagee can sell the property without the intervention of the court.

(h) Mortgage Deed: An agreement in writing between the mortgager and the mortgagee is essential for creating a mortgage. The document which contains this agreement is called “mortgage deed.”