Property Finance

Chapter 13India¹

1. What are the principal securities lenders will require borrowers to provide?

Principal Securities are divided into movable and immovable property. Immovable property includes: land, buildings, anything attached to the land or permanently fastened to it and any interest in immovable property. The security granted over such immovable property is a mortgage. Any property that is not immovable is movable property. It includes pledge, hypothecation, and charges. Charges can be fixed or floating. Intellectual property rights and assignment of rental income also come under movable property.

2. What statutory provisions apply to such securities?

Answered with question 3.

3. What are the formal requirements for the establishment of such securities?

The statutory legislations governing real estate are: Indian Contract Act 1872, Transfer of Property Act 1882, Registration Act 1908, Specific Relief Act 1963, Urban Land (Ceiling And Regulation) Act 1976, Land Acquisition Act 1894, The Indian Evidence Act 1872, The Indian Stamp Act 1899, Securities and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002.

There are specific statutory provisions with respect to the securities which provide for real estate financing in India. One of the usual modes of raising money for financing real estate funds in India is by way of mortgage. The transferor is called a mortgagor, the transferee a mortgagee; the principal money and interest of which payment ...