The Right of Mortgagor to Grant and Accept Surrender of Leases
The mortgagee and mortgagor have common right to grant and accept surrender of leases. Since the mortgagor is usually left in possession of the land while the mortgagee always has the legal right to possession and the power to grant leases, the power to grant lease is common to both parties. Unless granted by either party in pursuance of a statutory power any lease granted by one is not binding upon the other unless they concur. The statutory power to grant lease may however be excluded or extended by the parties.
The principal rights of the mortgagor are the rights of redemption and the right to bring actions. In addition to these rights, a mortgagor has the right to seek relief from an extortionate bargain. He has the right to have the property sold under an order of the court, to inspect the title deeds and to compel a transfer of the mortgage. Equity of redemption is fundamental to the law of mortgage. Once a transaction is proved to be a mortgage, in substance, notwithstanding the language of the instrument, the operative maxim is: “Once a mortgage, always a mortgage. In the view of equity, the essential object of a mortgagor is to afford security to the lender, and as long as the security remains intact there is no justification for expropriating the property of the mortgagor merely because of his failure to make prompt payment. The principal right of the mortgagee is to the money, and this right to the land is only as a security for the money. Any provision therefore, which directly or indirectly exclude, prevent, restrict, prolong or postpone the exercise of the right of redemption or renders the right illusory is void. Also void are those provisions, which imposes additional sum of money on the mortgagor as penalty for failing to redeem on time or reserved an option to purchase for the mortgagee, unless the contract of purchase is independent of the mortgage or genuinely collateral to the mortgage. The mortgagor is normally left in possession of the property and as the person in possession; he could sue third parties for trespasses or nuisances or for recovery from anyone other than the mortgagee or someone claiming through him. Equitable remedies are also available to him against third party. Under the current law now in England, provided that the mortgagee has not given effective notice of his intention to take possession or enter into receipt of the rents and profits, the mortgagor in possession may sue in his own name for possession or for the rents and profits. He can also enforce all covenants and conditions in the lease of the property.
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