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Stamp paper is not included with this agreement and is for illustration purposes only. If e -stamp is applicable in your city you can order it during checkout.
Stamp paper is not included with this agreement and is for illustration purposes only. If e -stamp is applicable in your city you can order it during checkout.
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.