Understanding the Implications of Discontinuing Occupancy on Mortgage Foreclosure Rights
Dear PAO,
My husband’s officemate (V) borrowed from us, payable within a period of one year. To secure the payment of the loan, V executed a real estate mortgage (“Sanglang-Tira” Agreement) over a condominium unit. We also agreed that my husband and I will reside on the subject property for free, for the duration of the loan agreement. However, under certain circumstances, we were forced to vacate the premises on the 6th month. Would this fact affect our right to foreclose the mortgage in case V fails to pay his loan?
Kring
Legal Precedent and Interpretation
Dear Kring,
Please be informed of the case of Dennis Mortel vs. Michael Brundige, GR 190236, June 15, 2015, where the Supreme Court, through Associate Justice Arturo Brion, upheld the validity of the real estate mortgage regardless of whether or not the mortgagor occupies the mortgaged property.
Key Points from the Legal Ruling
- The real estate mortgage contract remains valid even if the mortgagor does not occupy the property.
- The right to foreclose the mortgage is not dependent on the mortgagee’s possession of the property.
- The mortgagee has the legal right to foreclose the mortgage and have the encumbered property sold to settle the debt.
Accordingly, your decision to discontinue occupying the mortgaged property does not affect the validity of the loan and the mortgage agreement. You retain the right to foreclose the mortgage if V fails to fulfill his obligation. Remember, having a right does not mandate its enforcement; you have the discretion to exercise or waive it.
