SIMILARITIES BETWEEN MORTGAGE DEBENTURE AND MORTGAGE

Mortgage implies a debt and a personal obligation by the mortgagor/borrower to pay it. If there is a covenant or bond for the repayment of this debt, then it is a speciality debt but if it is not, it is a simple debt. See SHIRU V. BARCLAYS BANK OF NIGERIA (1975) NMLR 148.    

One of the essential elements of mortgage is the equity of redemption. A mortgagor/borrower has the right to redeem his property that is in possession of the mortgagee by paying to the mortgagee the principal money and interest. The rate of interest to be charged by a mortgagee is now regulated in Nigeria by the Central Bank and no mortgagee can impose arbitrary rate of interest on the mortgagor.

It is not only a freehold property that can be mortgaged, a leasehold property can also be mortgaged but in some cases, the consent of the lessor must be obtained to the transaction and if there is any default on the part of the mortgagor his unexpired residue in the leasehold property with the consent of the lessor can be assigned by the mortgagee/lender to a third party. See TRANS ATLANTIC COMPANY V. BANK OF THE NORTH (UNREPORTED) SUIT NO 1/7/35/91.

Credit - backyardwealth.wordpress.com 

A deed of legal mortgage must show clearly the parties to the mortgage agreement, the property under mortgage, the amount for which the property was mortgaged and the duration of the legal mortgage. If it is a leasehold property the term to be granted to the mortgagee by the mortgagor must be less one day because of the right of reversion of the lessor.

A mortgage debenture, on the other hand, is provided in Section 171 of CAMA which states that a company may issue perpetual debentures and a condition contained in any debenture or in any deed for securing any debenture shall not be invalid by reason only that the debenture are made irredeemable only on the happening of a contingency, however remote, or on the expiration of a period, any rule of equity to the contrary notwithstanding.

Source: www.lawrepository.com.ng 

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