Legal Opinion Regarding Mortgage And Documentation Status example 2

Mr. Z

Address….

Dear Sir,

RE: LEGAL OPINION REGARDING MORTGAGE AND DOCUMENTATION STATUS

We refer to your Fax dated 27.12.2005 and subsequent communication over telephone thereafter on the above subject. Our further opinion with regard to your queries are given below.

Our Opinion:

Opinion No. 1: With regard to the construction of legal documentation to cover non-funded facility.

In our opinion dated 27.12.2005 we have opined that if the Bank intends to cover the non-funded facility within the instrument of the mortgage deed, then the same shall have to be inserted in the mortgage deed. Our opinion dated 27.12.2005 is confined to protect the interest of the Bank in securing the non-funded facility. However, even if the non-funded facility is not covered under the mortgage deed, in case of default of the Borrower, Bank may recover the liabilities from the surplus of the sale proceeds of the property mortgaged to cover the other liabilities of the Borrower. Our opinion dated 26.05.2003 also states that there lies no problem in recovering the outstanding liabilities of the Borrower by selling the mortgaged property even if the non-funded facility is not covered under the mortgage deed.

However, in no way the non-funded facility which is not covered under the mortgage deed can be termed as a secured loan.

Opinion No. 2: With regard to the protection of the interest of the Bank in case of two separate mortgage deed being executed of a portion of the total land offered as security covering a portion of the loan amount and execution of another mortgage deed covering the balance loan amount due to non-mutation of the land.

In our opinion dated 27.12.2005 we have suggested that the Bank may obtain mortgage of the entire land coupled with an undertaking from the mortgagor to the effect that the mortgagor shall complete the mutation within a specified period. However, in case of non-mutation of the balanced land pursuant to the execution of the mortgage deed, Bank may take additional security.

If two separate mortgage deed is being executed with regard to the total land offered as security each covering a portion of the loan amount, legal complication may arise in recovering the total loan amount in case of enforcement of the securities.

All papers/documents referred to us, are returned herewith.

If you have any further query, do not hesitate to contact us.

Thanking you.

Yours faithfully

………………….

For: “The Lawyers & Jurists”

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