Section 16 Mortgage and Property Law of Lagos State

Section 16 of the Mortgage and Property Law of Lagos State 2010 is about Mode of creating mortgages. It provides as follows:

(1) A mortgage of a term of years absolute shall be create at law either by a sub-demise for a term of years absolute, less by one day at least than the term vested in the mortgagor, and subject to a provision for redemption, or by a charge by deed
expressed to be by way of legal mortgage; or by a deed expressed to be made by way of statutory mortgage in the forms provided under this Law; and where a licence to sub-demise by way of mortgage is required, such licence shall not be unreasonably refused:

Provided that a first mortgagee shall have the same right to the possession of documents as if his security has been effected by assignment.

(2) Any purported assignment of a term of years absolute by way of mortgage made after the commencement of this Law shall (to the extent of the estate of the mortgagor) operate as a sub-demise of the leasehold land to the mortgagee for a term of years absolute subject to redemption, in the following manners, namely—

(a) the term to be taken by a first or only mortgagee shall be ten (10) days less than the term expressed to be assigned;

(b) the term to be taken by a second or subsequent mortgagee shall be one day longer than the term bested in the first or other mortgagee whose security ranks immediately before that of the second or subsequent mortgagee, if the length of the
last mentioned term permits, and in any case for a term less by one day at least than the term expressed to be assigned; and in this subsection, any such purported assignment includes an absolute assignment with a deed of defeasance and any other assurance which, but for this subsection, would operate in effect to vest the term of the mortgagor in a mortgagee subject to redemption.

(3) This section applies whether or not the mortgage is made by way of sub-mortgage of a term of years absolute, or is expressed to be by way of trust for sale or other wise.

(4) Without prejudice to the provisions of this Law in respect of legal and equitable powers, every power to mortgage for or to lend money on mortgage of a term of years absolute by way of assignment shall be construed as a power to mortgage the term by subdemise for a term of years absolute or by a charge by way of legal mortgage, or to lend on such security.

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