Mortgage of property on lease

Manoj (Querist) 28 February 2012 This query is : Resolved
Hello to all experts

A have purchase two commercial units i.e shops. A executes lease deed in favour of B for a period of 20 years.

(1) Now can 'A' mortgage commercial units in favour of Bank as the com units are given on lease to B

(2) what are the documents that are required to be executed by "A" and what are the documents that are required to be executed by "B" the lessee if the units are mortgaged to Bank.

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Adv.R.P.Chugh (Expert) 29 February 2012
There is no bar on you mortgaging your interest in the said property - a regular mortgage deed with a stipulation as to possession with tenant would do.

Raj Kumar Makkad (Expert) 29 February 2012
1). There is no legal bar to do so.

2). It shall be good to raise this question to the bank wherein you intend to mortgage your property because different banks demand different types of documents.

malipeddi jaggarao (Expert) 29 February 2012
Banks will not accept the property which is already leased out.

prabhakar singh (Expert) 29 February 2012
Lease does not passes title of property in lessee hence mortgage without possession/ equitable mortgage can be validly created.