Equitable Mortgage Declaration Template

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Declaration in Support of Equitable Mortgage Format

Are you looking for a professional Declaration in Support of Equitable Mortgage Format to secure your loan against property in India? This essential legal document confirms the deposit of title deeds, creating an equitable mortgage without the need for a formal deed, making it quick and cost-effective for borrowers and lenders alike.

What is a Declaration in Support of Equitable Mortgage?

A Declaration in Support of Equitable Mortgage is a crucial legal instrument under the Transfer of Property Act, 1882, particularly Section 58(f) in India. It serves as written evidence that the owner of immovable property has deposited the original title deeds with a lender to secure a loan or debt. Unlike a registered mortgage deed, an equitable mortgage is simpler, faster, and doesn't require registration in many cases, but it must be supported by this declaration to establish the intent and terms clearly. This format is widely used in urban areas like Mumbai, Delhi, and Chennai where title deeds are readily available.

Why is it Important?

In the Indian legal system, an equitable mortgage provides strong security for banks, NBFCs, and financial institutions without the hassles of stamp duty and registration fees associated with legal mortgages. The declaration prevents disputes by documenting the voluntary deposit of deeds, the loan amount, interest rate, and repayment terms. It's vital for enforceability in court, protecting lenders' rights to sell the property in case of default. For borrowers, using a ready-to-use Declaration in Support of Equitable Mortgage Format ensures compliance with RBI guidelines and state-specific requirements, reducing risks of invalidation due to improper drafting.

Key Elements of the Declaration in Support of Equitable Mortgage Format

A comprehensive Declaration in Support of Equitable Mortgage Sample includes:

Parties Involved: Full details of the mortgagor (borrower) and mortgagee (lender), including names, addresses, and PAN/Aadhaar.
Property Description: Precise details of the immovable property, such as location, survey number, boundaries, and title deed references.
Deposit Confirmation: Statement affirming the voluntary deposit of original title deeds on a specific date.
Loan Details: Amount advanced, purpose, interest rate, repayment schedule, and events of default.
Terms and Conditions: Rights of the lender to recover dues, foreclosure options, and mortgagor's obligations.
Witnesses and Execution: Signatures of parties, two witnesses, and date/place of execution.
Notarization Clause: Recommendation for notarization to enhance authenticity.

These elements make the document court-ready and compliant with legal standards.

Who Should Use It?

This Declaration in Support of Equitable Mortgage Format is ideal for:

Homebuyers or property owners seeking quick loans against their assets.
Banks, housing finance companies, and private lenders in real estate financing.
Businesses needing working capital secured by urban properties.
NRIs or residents in metro cities creating mortgages for personal or commercial loans. Common use cases include property-backed term loans, overdraft facilities, and debt consolidation in civil and commercial matters.

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Important Note

While this legal template is designed to meet standard court and company requirements, it's recommended to consult a local advocate for personalized advice. Customize the Declaration in Support of Equitable Mortgage Sample as per your jurisdiction. Explore related documents like Equitable Mortgage Deed, Loan Agreement Format, or Property Title Verification Affidavit for complete compliance. Start securing your finances today with our trusted legal templates!

DECLARATION IN SUPPORT OF EQUITABLE MORTGAGE

Non-Judicial

Declaration in Support of Equitable Mortgage

IN THE MATTER OF MORTGAGE BY DEPOSIT OF

TITLE DEEDS IN RESPECT OF IMMOVABLE PROPERTY

M/S. A B C Limited

__________________________________

I, __________________________, Indian Inhabitant, at present residing at ______________________________ do hereby solemnly declare and state as follows:

1. I am the Director of M/S. ABC Limited, a Company within the meaning of the Companies Act 1956 having its registered office at ___________________________________________________ (hereinafter called ?the Borrower?) and duly authorised by the Board of Directors of the Borrower to make this declaration for and on behalf of the Borrower.

2. The Borrower is the Owner of and well and sufficiently seized and possessed of the immovable property described in the First Schedule hereunder written (hereinafter referred to as ?the said immovable property?).

3. In terms of the loan documents, the ___________________ (hereinafter called ?the Bank?) has allowed the Borrower various credit facilities by granting all or some or any of the credit facilities by way of Overdraft, Demand Loans, Loans, Cash Credits, Term Loans, pre-shipment and post-shipment credits, opening of letters of credit, issuing of guarantees, Negotiation and discounting of bills and cheques, inland as well as foreign and such other facilities as from time to time required by the Borrower for amounts not exceeding the principal sum of Rs. ________________/- (Rupees _____________________________ only) on the terms and conditions specified therein.

4. One of the conditions of the grant of the aforesaid credit facilities is that the repayment of the said principal sum of
Rs. ____________________/- (Rupees ________________only) and all accruing interest, discount, commission, charges and all kind of costs and expenses payable to or incurred by the Bank in relation thereto along with all other further dues, cost, expenses etc. shall stand secured by creation of equitable mortgage of the said immovable property in favour of the Bank.

5. By its Board Resolution passed at its meeting held on _________ day of __________200____, by the Board of Directors of the Borrower, Shri ______________________, the Director of the Borrower companies is authorised to create the said security by way of equitable mortgage of the said immovable property and to deposit the said title deeds with the Bank.

6. The Borrower has accordingly with intent to carry out its said obligation and to creating the said security of the said immoveable property described in the First Schedule hereunder written deposited with the Bank the said title deeds more particularly described in the Second Schedule hereunder written with the intention that the said property would remain as security for such repayment.

7. That the said deposit of the title deeds by the said Shri _____________________________ was made on behalf of the Borrower with intent to create a mortgage by deposit of title deeds of the said premises in favour of the Bank as security to secure repayment of all monies including interest, costs, charges and expenses due or becoming due and payable by the Borrower to the Bank under or in respect of all or some or any of the facilities either in Indian or foreign currencies granted and/or agreed to be granted to the Borrower and for any other indebtedness and liabilities, past, present and future of the Borrower to the Bank.

8. That the documents of title now deposited with the Bank were the only documents of title in possession of the Borrower in respect of the said premises of the Borrower and that the Borrower is the absolute owner of the said property and that the Borrower has marketable title thereto.

9. That there is no mortgage, charge, lien or any other encumbrance or attachment on the said immovable property or any part thereof by any Government or local authority or by Income Tax Department and that no notice has been issued and/or served on the Borrower under the Rules 2, 16 or 51 or any other Rules of the Second Schedule to the Income Tax Act, 1961, or under any other law.

10. That the Borrower has not entered into any agreement for sale, transfer or alienation thereof or any part or parts thereof and that no encumbrance hereafter will be created by the Borrower except with the express prior permission in writing of the Bank so long as the Borrower continues to be indebted to or remain liable to the Bank on any account.

11. Shri _______________________ on behalf of the Borrower also acknowledges that the maximum amount intended to be secured by the said mortgage created as aforesaid was for the purpose of Section 79 of the Transfer of Property Act, 1882 and for no other purpose and without affecting the Borrower?s full liability to the Bank under the said mortgage for all subsisting liabilities together with interest and all costs, charges and expenses thereof.

12. That the Borrower has passed the requisite Resolution under Section 293(1)(9) of the Companies Act, 1956 for creating security in favour of the Bank as aforesaid.

13. The Borrower has duly paid all rents, royalties and all public demands, including Provident Fund dues, gratuity dues, Employees State Insurance dues, income tax, sales tax, corporation tax and all other taxes and revenues payable to the Government of India or to the Government of any State or to any local authority and that at present there are no arrears of such dues, rents, royalties, taxes and revenues due and outstanding and that no attachments or warrants have been served on the Company in respect of Sales Tax, Income Tax, Government revenues and other taxes.

14. That the said loans borrowed/to be borrowed by the Borrower are within the borrowing limits of the powers of Board of Directors of the Borrower.

15. That I am not aware of any act, deed, matter or thing or circumstances which prevents the Borrower from charging the said immovable property in favour of the Bank.

16. That I have made the aforesaid declaration for and on behalf of the Borrower solemnly and sincerely believing the same to be true and knowing fully well that on the faith thereof the Bank has agreed to complete the said transaction of mortgage by deposit of title deeds in respect of the said immovable property.

THE FIRST SCHEDULE ABOVE REFERRED TO:

(Description of the immovable property)

THE SECOND SCHEDULE ABOVE REFERRED TO:

(List of Title Deeds)

Solemnly affirmed at ___________ )

On this day of 201___ )

Before me;

NOTARY

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Important Guidelines

Guideline for Drafting Declaration in Support of Equitable Mortgage

Usage: This declaration is used in financial transactions, particularly in India, where an equitable mortgage is created. An equitable mortgage involves the deposit of title deeds or documents of title as security for a loan without the transfer of ownership. This declaration helps establish the lender's security interest in the property.

Common Mistakes to Avoid:

Incomplete or Inaccurate Description: Provide a precise and accurate description of the property and the documents being deposited as security. Any errors or omissions can affect the validity of the equitable mortgage.

Missing Key Terms: Clearly state the loan amount, interest rate, repayment terms, and any other essential financial details in the declaration.

Lack of Consent: Ensure that the property owner (mortgagor) consents to the equitable mortgage and signs the declaration. Without proper consent, the mortgage may not hold.

Improper Witnessing: Have the declaration witnessed by at least two independent witnesses who are not related to the transaction. Witnesses should sign, date, and provide their contact details.

Notary Public or Legal Stamp: Depending on local laws, the declaration may require notarization or a legal stamp. Failure to comply with these requirements can lead to legal challenges.

Failure to Register: In some jurisdictions, equitable mortgages need to be registered with the appropriate authorities. Ensure you follow local registration requirements to protect the lender's interest.

Ambiguous Language: Use clear and unambiguous language to state the intention to create an equitable mortgage. Vague language can lead to disputes.

Inadequate Legal Counsel: Seek legal advice to ensure compliance with applicable laws and regulations, as equitable mortgages can be subject to legal scrutiny.

Neglecting Due Diligence: Conduct a thorough due diligence check on the property's title and ownership to ensure there are no existing encumbrances or disputes.

Incomplete Documentation: Maintain copies of all relevant documents, including the declaration, title deeds, and any correspondence related to the equitable mortgage for future reference and legal protection.

By following this guideline and avoiding common mistakes, both lenders and borrowers can ensure that the Declaration in Support of Equitable Mortgage serves its intended purpose and provides legal security for the loan.

Frequently asked questions

What is a Declaration in Support of Equitable Mortgage?→

This is a legal document in India used to affirm the deposit of title deeds with a lender, creating an enforceable equitable mortgage under the Transfer of Property Act, 1882, without a formal deed.

Is this declaration legally valid in India?→

Yes, it is legally valid in India, particularly in notified towns where deposit of title deeds constitutes an equitable mortgage, as per Section 58(f) of the Transfer of Property Act.

Do I need to pay stamp duty on this declaration?→

Stamp duty is applicable as per state laws under the Indian Stamp Act, 1899; it is often nominal for such declarations supporting equitable mortgages. Verify with local stamp authorities.

In what format is this document available for download?→

Download the Declaration in Support of Equitable Mortgage in editable Word or ready-to-use PDF format, suitable for legal use in India.

Can I customize or edit this declaration?→

Yes, this customizable Word template allows editing of details like borrower/lender names, property description, and loan terms for your specific equitable mortgage in India.

Who should use this Declaration and when?→

Borrowers and lenders should use it when depositing title deeds to secure a loan via equitable mortgage in India, ideal for quick, unregistered financing.