KAMPALA INTERNATIONAL UNIVERSITY

COURSE: LLB
COURSE UNIT: LAND TRANSACTIONS
COURSE CODE: LLB2205
LECTURER’S NAME: MR. MANZI MARK
GROUP ONE
NAME REG.NO SIGN
AGUA HAKIMA ABDU 2023-08-19149
NAGABA SHIFAN 2023-08-19089
PIMER TRACY MAJORINE 2023-08-18863
ATWEBEMBIRE BORIS 2023-08-18332
ASHABA EBURAH 2023-08-18867
NUWAHEREZA BLAIR 2023-08-18871
NAMBI NAMUKWAYA SHARITAH 2023-08-17082
KIRYA ANDREW COLLINS 2023-08-19176
NAVUBYA MARIA 2023-08-19203
NINSIIMA ABDURASHID 2023-08-16880

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MORTGAGE
Section 1 of the Mortgage Act Cap 239 defines mortgage as that includes any
charge or lien over land or any estate or interest in land in Uganda for securing
the payment of an existing or future or a contingent debt or the other money or
money’s worth or the performance of an obligation and includes a second or
subsequent mortgage, a third-party mortgage and a sub mortgage. Matambulire
V Yosefu 1 a mortgage was defined as a transaction where the owner uses his or
her interest in land as security for the payment of loan.
Section 115 of the Registration of Titles Act Cap 240 expressly provides that a
mortgage created under the Act takes effect as security over the mortgaged land
but shall not operate as a transfer of the mortgaged land thereby mortgage. In
Muhindo Enterprises V Green land Bank HCCS 125 (1987), Court held that
a mortgage is a security of a payment of a debt and doesn’t operate as a transfer.
Although a mortgage created under the Registration of Titles Act Cap 240
doesn’t transfer ownership of land to the mortgagee, it creates in the
mortgagee’s favor a separate and distinct interest in the mortgaged land.
Mortgagor means a person who has mortgaged land or an interest in land and
includes any person from time-to-time deriving title under the original
mortgagor or entitled to redeem the mortgage according to his or her estate,
interest or right in the mortgaged property.
Mortgagee means a person in who’s a mortgage is created or subsists and
includes any person depriving title under the original mortgage.
A sub mortgage is a mortgage of a mortgage.
A third-party mortgage means a mortgage which is created or subsists to secure
the payment of an existing or future or a contingent debt or other money’s worth
or the fulfillment of a condition by a person who is not a mortgagor whether or
not in common with the mortgagor.
CREATION OF MORTGAGE
According to Section 2 of the Mortgage Act Cap 239, a mortgage can be
created by any person who claims an any estate or interest on land in land in
Uganda. By virtue of this section there are basically 2 categories of persons who
can create mortgage in Uganda and these people include those who have interest
on land either equitable interest or legal interest.

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Generally, in Uganda, interest in land determines the nature of mortgage in that
if a mortgagor claims legal interests, a legal mortgage shall be created and the
provisions of the Registration of Tittles Act shall govern the same and on the
other hand an equitable interest is created by a person claiming equitable
interest on that land.
A mortgage can be created in respect of unregistered land held under
customary tenure and the principles of equity will govern the same.
Apart from estate or interest in movable property can be used as security to
secure financial assistance hence if chattel is placed as security that shall not be
regarded as mortgage but rather a loan agreement.
A MORTGAGE DEED NOT TO CREATE A TRANSFER OF AN
INTEREST IN LAND
Section 7 of the Mortgage Act Cap 239 expressly provides that a mortgage
created under the Act takes effect as security only and shall not operate as
transfer of any interest or right in the land from the mortgagor to the mortgagee.
However, a mortgagee shall have subject to the Registration of Titles Act have
all the powers and remedies in case of default by the mortgagor and be subject
to all the obligations conferred in a transfer in an interest in land subject to
redemption.
Section 7(2) of the Mortgage Act Cap 239 is to the effect that where a
mortgagor signs a transfer as a condition for the grant of a mortgage under the
Mortgage Act, the transfer shall have no effect and therefore a mortgagee who
requires such transfer commits an offence and is liable on conviction to a fine
not exceeding four thousand currency points.
REQUIREMENTS OF A MORTGAGE
I. The mortgagor’s legal name must appear and this implies that the
mortgagor is of legal age for contracting
II. The mortgagee ‘s name must also appear on the in the mortgage.
III. The mortgage must contain words of conveyance or granting from the
mortgagor to mortgagee.
IV. The instrument must contain a legal description of the mortgaged
property that adequately identifies it as seen in the case of Mubiru v
Uganda Credit and saving bank
V. The mortgage must be signed by the mortgagor although it is not essential
for the mortgagee to sign documents.

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VI. Spousal consent in case of mortgage of a matrimonial home is need as
seen in the case of Juliet Dushabe Twangyerwe V Orient Bank And 2
Others2, it was stated that it was not in doubt that spousal consent was a
requirement before the matrimonial home could be mortgaged. Section
5(1) of the Mortgage Act Cap 239 which is to the effect that where a
matrimonial property is subject of an application for a mortgage, a
mortgagee shall satisfy himself or herself that the consent of the spouse is
genuine consent.

VII. Duty to disclose information as provided for under Section 3 of the

Mortgage Act Cap 239.
TYPES OF MORTGAES
a) Legal mortgage
This is defined in the Black’s law dictionary as creditors mortgage arising
by operation of law on the debtor’s property
Section 2(1) of the Mortgage Act Cap 239 confers a person holding land
under any land tenure to mortgage his or her interest in the land in the
prescribed form.
It is also important to note that such mortgage requires attestation and that
the signature of the mortgagee and the mortgagor to be in Latin as
provided under Section 132 of the Registration of Titles Act Cap 240. In
Fredrick Zzabwe v Orient Bank ltd and 5 others ,the guiding
principle and rationale for attestation and the signature being in Latin
character were set out to make clear to everybody receiving that
document as to who the signatory so that it can ascertained whether he
had the authority or capacity to sign .When a witness attesting to a
signature merely scribbles a signature without giving his name or
capacity how will the registrar or any person can ascertain the witness
had capacity in terms of Section 132 of the Registration of Titles Act Cap
240. Schedule 16 of the Registration of Titles Act Cap 240 pertains a
certificate of attesting witness as attached.
The registered proprietor of any land under the operation of Section 130
of the Registration of Titles Act Cap 240 is at liberty to sign powers of
attorney in favor of another person for purposes of mortgaging that land
so longer Section 132 of the Registration of Titles Act Cap 240 is
complied with.

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A power of Attorney being a public document for it to be effectual for
purposes of being a public document it to be effectual for purposes of
being transacted upon it must be registered in accordance with the
Registration of Documents Act and upon registration it remains in force
unless revoked.
Whenever a mortgage deed is entered into based on the powers of
Attorney, the deed must be a matter of requirement mention such powers
of Attorney otherwise it shall be null and void as seen. In the case of
Fredrick Zzabwe V Orient Bank ltd and others on issue of any
mention of a power of attorney in a mortgage deed arose and Supreme
Court observed as follows; ‘how would the Registrar by looking at this
mortgage deed know that the second respondent had authority at this
property ?in my view, this would have been simply solved by the
mortgage deed clearly stating that the second respondent was acting
under a power of Attorney issued in accordance with Section 130 of the
Act .
According to Section 2 (4) of the Mortgage Act Cap 239 every legal
mortgage only takes effect when registered and this section is in line with
Section 54 of the Registration of Titles Act Cap 240 which states that no
instrument is effective until registered. The mortgage deed shall be
registered as incumbrance on the encumbrance page of the certificate of
tittle.
EQUITABLE OR INFORMAL MORTGAGE
An equitable mortgage is a transaction that has the intent but not the form
of a mortgage and that a court of equity will treat it as a mortgage. This is
based in the equitable doctrine that equity regards as done that ought to
be done. Such an agreement creates an equitable mortgage.
Section 1 of the Mortgage Act Cap 239 defines an informal mortgage to
mean a written and witnessed undertaking, the clear intention of which is
to charge the mortgagor’s land with the repayment of money or money’s
worth obtained from the mortgage and includes an equitable mortgage
and mortgage on unregistered customary land.
By virtue of the above definition a mortgage is regarded equitable if
a) There is a written undertaking agreement between the mortgagor and
the mortgagee.
b) In such undertaking the mortgagor intended to charge his or her land
as security.
c) Such lands act as security for repayment of the money or money’s
worth obtained from the mortgage.

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And it should be noted that this kind of mortgage is regarded as equitable as it
doesn’t meet the silent features of a legal mortgage.
Section 2(1) of the Mortgage Act confers powers on any person holding land
under any land tenure to mortgage his or her interest in the land by an
instrument in the prescribed form such mortgage must be attested to both the
mortgagor and the mortgagee to be in Latin character as provided under Section
132 of the Mortgage Act Cap 239.
Lastly Section 2(5) of the Mortgage Act cap 239 provides that un registered
mortgage shall be enforceable between the parties’ further reference should be
made to Article 237(8) of the 1995 constitution of the Republic of Uganda and
Section 29 and 34(1) of the land Act which provides for the lawful and
Bonafide occupant.
Equitable mortgage is further emphasized by Section 2(8) of the mortgage Act
which allows a borrower and a lender to enter into an informal mortgage. the
same provision allows the lender to enter in to accept a deposit of a certificate
of customary ownership, a certificate of title issued under the Registration of
Title, a lease agreement or any other document which may be agreed upon
evidencing a right to an interest in land.
In relation to depositing a certificate of tittle an equitable mortgage cannot be
created if the object of depositing the tittle is merely for self-custody in
Guaranty Discount Co Ltd V Credit Tenance Corp Ltd and Another3 ,it
was observed that it is not necessary that a note or memo should accompany the
deposit however to avoid controversy and in the interest of both parties there
should be a memo setting outside of the objective of the deposit and the terms
of the same .
THERE ARE TWO TYPES OF EQUITABLE MORTGAGE
1) Equitable mortgage on customary land
2) Equitable mortgage on registered land
Equitable mortgage on customary land
Section 8(2) of the land Act Cap 240 provides that a holder of customary
certificate of ownership has a right to mortgage his or her land
Section 34(1) of the land Act Cap 240 provides that a tenancy by occupancy is
to pledge any other lawful transaction in respect of the occupancy

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Section 6(3) of the Mortgage Act Cap 239 provides that the mortgagor may
apply to court for the mortgage to be reopened on the grounds that the terms of
the mortgage are;
a) Unconscionable
b) Unreasonable departure from the normal terms of a mortgage on
customary land applicable in the area where the land is located
c) Disadvantages of the interest of defendants of the mortgagor
Section 6 (4) provides of the Mortgage Act Cap 239 that common law and
doctrines equity shall be applied where it appears to be the court that the
customary law applicable be that mortgage is inadequate. In the case of
Mutambulire V Kimera4 ,The appellant lent shs.2000 to the respondent
and the respondent was to pay it back with interest of shs.1800, this was to
be paid in lump sum as security, the respondent offered kibanja and house.
The respondent failed to pay the loan on the due date and the appellant took
possession of the kibanja, it was held that the transaction was not a contract
of sale of kibanja but a mortgage and was governed by the law regulating
mortgages under the Registration of Titles Act, the applicable law was
common law and doctrines of equity.
However, application of Common law and doctrines of Equity doesn’t apply
to customary land owned by the community as provided for under Section
6(5) of the Mortgage Act Cap 239.
Section 6(6) of the Mortgage Act Cap 239 is to the effect that where
customary land is owned by a family then the land can only be mortgaged
with the consent of the spouse or spouses and children of the mortgagor.
MORTGAGE OF MATRIMONIAL HOME
According to Section 1 of the Mortgage Act Cap 239 a matrimonial home
means a building or part of a building in which husband and a wife or as a
case may be wives and their children if any ordinarily reside together and
includes,
a) Where a building is occupied primarily for residential purposes
b) Where a building is occupied in conjunction with agricultural land
From the above definition above definition matrimonial home
includes a building occupied in conjunction with agricultural land or
pastoral land ,any land allocated by one spouse to his or her spouse for
his or her exclusive use so in relation to all the above one of the
partner cannot mortgage a matrimonial home without the consent of

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 the other partner and hence under Section 4 of the mortgage Act an
intending mortgagee shall take reasonable steps to ascertain whether
an intending mortgagor is married or whether the property to be
mortgaged is a matrimonial home and also the intending mortgagor
shall make full disclosure to the intending mortgagee as to his or her
marital status and whether or not the property to be mortgaged
comprises the matrimonial home .
PIORITY
Under Section 8 of the Mortgage Act Cap 239 in respect of mortgages
on land registered under the Registration of Titles Act, mortgages
shall rank according the order established under Section 48 of the
Registration of Titles Cap 240 which provides that every instrument
excepting a transfer presented for registration may be in duplicate and
shall be registered in order of and of that time the instrument is
produced for that purpose and instrument purporting to affect the same
estate or interest shall notwithstanding any actual or constructive
notice be entitled to priority between them according to the date of
registration and not according to the date of the instrument.
According to Section 8(2) of the Mortgage Act Cap 239 in respect of
mortgages of land held for customary ownership, mortgages shall rank
according to the order as from the time they are presented.
Section 8(3) of the Mortgage Act Cap 239 provides that rank shall be
according to the order of the date and time they are made and clause 4
further explains that where a mortgagee subsequent in time a prior
mortgage lends money or money worth to a mortgagor as a
consequence or through fraud, dishonest. conjunction with or
separately from the fraud that prior mortgagor’s right shall be
postponed to the rights of the subsequent mortgagee.
CONSOLIDATION
It is established under Section 10 of the Mortgage Act Cap 239 where a
mortgagee has more than one mortgage from a single mortgagor or where the
mortgagee has lent money or money’s worth to a single mortgagor on two or
more securities. The mortgagor may discharge any or some of the mortgages or
securities.
A right to consolidate shall not be exercisable to the prejudice of any form of
land tenure or any certificate of occupancy or any other interest in land entitling
that person to the occupation and use of that land prior to the recording of that
right to consolidate in the prescribed register.

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The rules of equity applicable to consolidation shall from the commencement of
this Act, no longer apply to mortgage
COVENANTS, CONDITIONS AND POWERS IMPLIED IN
MORTAGAGES.
Implied covenants by the mortgagor Section 17 of the Mortgage Act Cap
239 there shall be implied in every mortgage the following convents by
the mortgagor with the mortgagee binding the mortgagor
a) To pay the principal money on the day appointed in the mortgage
agreement.
b) To repair and keep in reasonable state of repair all buildings and other
improvements upon the mortgaged land.
c) To insure by insurance that resources will be available to make good
any loss or damage caused by fire to all buildings on the land.
d) To continue to use the land in sustainable manner and in accordance
with the principles of good husbandry in case of a mortgage of
agricultural land.
e) Not a lease or sub lease the mortgaged land or any part of it without
previous consent in writing of the mortgagee
f) Where the mortgage is a subsequent mortgage, the mortgagor will pay
the interest from time to time accruing on each prior mortgage which
it becomes due and will at the proper time repay the principal money
or part of it due on and each prior mortgage.

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 Schedule 16

Certificate of Attesting witness

Section 132

Signed by………………………………………………………………………………………………. (by)

his/her making his/her mark hereto in my presence *), and I certify of the above instrument (or
power of attorney) was first read over and explained to him or her, when he she appeared fully to
understand it.

…………………………………………………………………………………………

Signature of attesting witness (set out qualification)

(*strike out if inapplicable.)

……………………………….

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