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I have mortgaged my property to bank to avail loan. The mortgage is simple mortgage which is registered. I am in possession of the property which is vacant.Can I let out this mortgaged property, which would help me financially to discharge the loan?

- by Ponnappa, Madikeri

Transfer of Property Act deals with this situation.  The relevant section is 65-A, which you may refer.  The mortgagor, if in lawful possession of the mortgaged property shall have all powers to let out / lease the property which is binding on the mortgagee. If the terms of your mortgage do not prohibit such leasing / renting of the property you may let out the property, subject to certain conditions stipulated in the act. Such lease should be in the ordinary course of management of the property and in accordance with local law, usage and custom.

Further, such lease shall reserve the best rent that can be reasonably obtained and should not have any premium or rental advance.  The lease should not provide for renewal. The lease should commence not later than six months from the date of lease.  In the case of lease of buildings, whether leased with or without the land on which they stand, the duration of lease shall not exceed three years and the terms of the lease shall provide for reentry on failure to pay the rent within the time specified.  However, these terms may be varied or changed by the mortgage deed itself.  So please verify the mortgage deed executed by you and proceed.


These are all the legal questions answered by Advocate S.Selvakumar in various magazines, in various occasion including realestate reporter monthly.