Letter Of Mortgage Template for Malaysia

The Letter of Mortgage is a crucial security document in Malaysian property financing, used when a property owner pledges their property as collateral for a loan or financial facility. This document type is essential in both conventional and Islamic banking contexts, creating a registrable charge under the National Land Code 1965. The Letter of Mortgage includes detailed information about the charged property, the secured obligations, the parties' rights and obligations, and enforcement mechanisms. It's commonly used in both residential and commercial property transactions, requiring careful consideration of Malaysian banking regulations, land law, and where applicable, Shariah principles. The document must be properly executed and registered with the relevant land office to create a valid and enforceable security interest.

1. Parties: Identification of the Chargor (property owner/borrower) and Chargee (bank/financial institution)

2. Background: Context of the mortgage, reference to facility agreement or loan agreement

3. Definitions: Key terms used throughout the document, including Property, Secured Amounts, Security Documents

4. Creation of Charge: Express words creating the legal charge over the Property as security

5. Security: Details of the security being created and its scope

6. Representations and Warranties: Chargor's declarations regarding property ownership, authority to charge, and absence of encumbrances

7. Covenants: Chargor's obligations regarding property maintenance, insurance, payment of outgoings

8. Events of Default: Circumstances constituting default and triggering enforcement rights

9. Enforcement Rights: Chargee's rights and remedies upon default, including power of sale

10. Costs and Expenses: Responsibility for legal fees, stamp duty, and other charges

11. Notices: Method and addresses for serving notices between parties