Annulment of a Mortgage Deed
2024-05-29
A mortgage deed is an official document drafted at a notary's office, under which the mortgagor (rahen) or debtor places their property as collateral for their debt in mortgage to the mortgagee (morteh-en) or creditor. If the mortgage deed was not drafted in a fully lawful manner, the interested party may file a petition with the court to annul the mortgage deed.
It sometimes happens that a person places another person's property, as if it were their own, in mortgage to another person (whether a natural or legal person). After the owner learns that their property has been placed in mortgage, they may file a petition for annulment of the mortgage deed.
Parties to the Lawsuit
In a lawsuit for annulment of a mortgage deed, the plaintiff is the owner of the property, or the person who has been harmed by the property's being placed in mortgage, and the defendants are the mortgagor and the mortgagee.
Competent Court
The competent court for filing a lawsuit for annulment of a mortgage deed is the court within whose jurisdiction the immovable property is located.
Method of Enforcing the Judgment
After the judgment annulling the mortgage deed is issued and becomes final, the court issues a certificate of finality, and, upon the interested party's submission of the final judgment from the judicial authority to the Registry of Deeds and Properties Organization, the head of the registry office examines the matter and refers it to the property registry office.
After examining the matter, the official in charge of the property registry records the annulment of the mortgage deed in the remarks column of the relevant property register. In the draft of the new title deed, in addition to recording the new owner's complete particulars, the history of the registration case file, the manner of the mortgage deed's annulment, and the number and date of the document establishing the annulment must be written out in full.
Important Points Relating to a Lawsuit for Annulment of a Mortgage Deed
A person who claims ownership of a property on the basis of an ordinary sale agreement (mobayeh-nameh) and has no official deed is not recognized as the owner in court and cannot file a petition for annulment of a mortgage deed; rather, they must first file a petition to compel the execution of an official deed. At the same time as, or before, the petition for annulment of the official (mortgage) deed, confirmation of the invalidity of the mortgage contract underlying the mortgage deed must also, as applicable, be sought from the court, because annulment of the mortgage deed is ancillary to the invalidity of the mortgage contract. It sometimes happens that a petition for annulment of the official deed is filed together with a petition to stay and annul the writ of execution issued under the mortgage deed. In such a case, the court of the place where the property is located first hears the petition for annulment of the mortgage deed, and, after a final judgment annulling the deed is issued, it then hears the claim to stay and annul the writ of execution.
Source: Property Litigation, by Hossein Eghdami.