There is a certain procedure for equitable mortgage. All of this procedure are mention below step by step:
Procedure for equitable mortgage
- The mortgagor or his agent should deposit the title deeds relating to the property with the bank at a notified place.
- The mortgagor is required to send a covering letter with the title deeds acknowledging the deposit of title deeds with the intention to create an equitable mortgage thereon to secure a specific debt or debts.
- The bank should accept documents only in the original. Usually, the bank gets a list of documents from the mortgagor which he has to deposit with the bank.
- An equitable mortgage register is maintained by every bank. An authorized official will make an entry in the register giving details such as date, time, etc. or the deposit, particulars of advance, and a complete list of documents.
- The mortgagor has to furnish periodically and encumbrance certificate declaring that no charge has been created against the mortgaged property subsequent to the date of the mortgage.
- Periodical tax receipts should be verified.
- In case the mortgagor happens to be a limited company, the mortgage must be registered within 21 days of the execution of the mortgage.
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