COURSE: LAND LAW

COURSE CODE: LW 214

TOPIC: MORTGAGE
DATE: 19/01/2105
NAME: KHAMIS F. ABDALLA

ZANZIBAR UNIVERSITY
Mortgage
A mortgage simply a transaction whereby property either land or
personal property is given as a security for the repayment of money
borrowed.
Normally the security used is really property a house but it can also be
personal property such as a valuable piece of jewelry.
Mortgage and Charge
Mortgage takes the form of; take my land until i pay you which indicates
that what is prime is the land.
Charge takes the form of; give me money if i fail to pay you take my
land.
The borrower called the mortgagor the lender called the mortgagee
over his property.
 Characteristics of mortgage
I. Security
It is governed by the principle that, once mortgage always mortgage.
The right of property entrusted by transfer is accessory to recover of the
debt.
A condition in the mortgage deed that the land shall stand sold to the
mortgagee if no redemption within the specified time was held to be
invalid for equity of redemption.
Suleiman v. Custodian Evacua Property Ltd [1975] 77 - 84
Nidhal v. Murlidhor [1903] 25 All 115

A mortgage shall always remain mortgage as intended by the parties.

Abdulbhai v. Kashi [1987] Bomb 562

The deed was called a debt and not a mortgage
2. Redemption
Paying back the money and restore the property
The equity of redemption starts from the date of mortgage and last to
the day of payment.
At the lapse of payment date the property can not be taken by
mortgagee but the mortgagor is given another equitable right known as
equitable right to redeem.
2. Redemption
No lapse of time for equitable right to redeem however mortgagee
allowed to sue for fore closure extinguish to end equitable right to
redeem
Limitation
Malekela Mahita v. Kibuwi Nzengwa [1989] 113 TLR HC, a suit to
redeem land in possession of a mortgage must be brought within
twelve years as prescribed under the first schedule to the Law of
Limitation Act, under section 3 (1).
 Types of mortgage
I. Simple mortgage, without delivery possessory mortgage property.
Mortgagor bound him self personally to pay and agrees expressly
or impliedly upon default mortgage property being to be sold.
II. Mortgage by conditional sale, this mortgage contained conditions
upon creation.
On default of payment of the mortgage money on a certain date
the sale shall become absolute.
On condition that on such payment being made the sale shall
become void.
National Bank of Commence v. Dar es
Salaam Education and Office Stationary
(1995)TLR 272, CA
Security- mortgages - mortgage deed empowering mortgage to sell the
mortgage property whether and under what circumstances court may
interfere with such sale.
Where a mortgagee is exercising its power to sale under a mortgage
deed court can not interfere.
iii. Usufructuary mortgage,
The mortgagor delivers possession or expressly or by impliedly
binds to deliver possession to mortgagee and authorize to retain
until payment of mortgage money.
The transaction called usufructuary mortgage and the mortgagee
called usufructuary mortgagee.
iv. English mortgage
Mortgagor bind to repay mortgage money on a certain date.
And transfer the mortgaged property absolutely to the mortgagee.
He will re-transfer to the mortgagor upon payment of the mortgage
money as agreed the transaction.
Look section 58 (3)(4)(5)(6) of the TPD
 Creation of Mortgages
I. Legal Mortgage, the mortgagor binds himself to repay the
mortgage money on a certain date and transfers the mortgage
property absolutely to the mortgagee.
The mortgagee will transfer on repayment of the mortgage money.
The mortgagor has the right to redeem his property not only in the
absence of default but also on default provided he can pay up the
amount due before his right is debarred.
The borrower keeps the mortgaged land with the mortgagee
subject to redemption upon payment
ii. Equitable Mortgage

It is created by delivery to the lender of the documents of title relating

to the borrower’s land provided there is intention to treat the land as
security.
Initially at common law there was no need for writing, the deposit of
the title deeds could suffice.
Equitable Mortgage
Due to necessity of proving intention it became necessary to make the
borrower sign some memorandum to the effect that the documents of
title were deposited for creating security by way of equitable mortgage.
Creation and Types of Mortgage
Recognized in Tanzania
Explained under part x section 112 – 142
Legal Mortgage created by an instrument in the prescribed form (deed)
to secure the payment of an existing or a future or a contingent debt or
other money or money’s worth or the fulfillment of a condition.
Charge (Informal Mortgage)
The law also allows the creation of a charge in land as a security. This
can be created by a written and witnessed undertaking with the
intention to charge the borrower’s land with repayment of the debt.
This means a proprietor of land can by an instrument create a statutory
charge by charging his land, lease or charge to secure the payment of an
existing or a future or a contingent debt.
Money or moneys worth the fulfillment of a condition.
Lien by Deposit of Documents
(Equitable Mortgage)
Lien means the holding by a lender of any document of title relating to
a right of occupancy or a lease as security for an advance of money or
money's worth or the fulfillment of a condition.
 A person create a security deposit
of

I. A certificate of a granted right of occupancy.

II. A certificate of customary right of occupancy.
III. A document of a lease (long term lease).
IV. Any other document that may be a valid evidence of a right to an
interest in land
V. Any other document that can be agreed to secure payments of a
debt.
Creation of Equitable
Mortgages Prior
An equitable mortgage could arise either because the mortgagee had
not executed an instrument which is sufficient to transfer the legal
estate, or because the mortgaged property was equitable, or because
the parties had decided to create an equitable mortgage.
 Equitable mortgages could
be summarized as follows:
i. Agreement to create a legal mortgage
ii. Mortgage by deposit of certificate of title
iii. Defect of form
The right of mortgagor to
redeem
The lender become the owner and the borrower did not recover rights
until the loan had been paid.
At the common law the lender own the property but the borrower had
a chance to recover his property.
If the borrower did not repay on the current day the property could be
claimed by the lender as his own.
 Mortgage of Matrimonial
Home
The mortgage concerns a matrimonial home will be valid if the
following circumstances appears:
I. Document used in applying for mortgage is signed by the
mortgagor and his spouse.
II. Living in that matrimonial home or there is evidence from the
document that all of them have assented.
Zanzibar situation
Lending institution specified in the Schedule
Any default the lending institution to assume possession of the right of
occupancy.
And utilize its productivity until the full value of the charge is repaid.
Upon repayment of the value of the charge the property shall be
redeemed to the original interest holder. Section 12 and 13 LTA
Thanks