Remedies available to the chargee upon chargors default to service the debt.

Introduction.

In cases when the chargor defaults in servicing the loan as per the terms, the chargee may exercise several courses of action with respect to the charged land. Such include:-

1. Chargee’s statutory power of sell. This remedy entails selling the charged land in order to recover the loaned amount. Sale can be conducted through public auction or private agreements. In exercising the charges power of sale, strict procedural rules including 90 days default notice and 40 days sale notice ought to be complied with failure to which the sale can be deemed illegal.
2. Sue the chargor to recover the debt. This remedy involves commencing a common litigation lawsuit to recover the money due upon the chargor.
3. Appointment of a receiver. The chargee can appoint a receiver to collect income for example rent from the property to satisfy the outstanding debt.
4. Take possession of the land. The chargee can take physical possession of the vacant land based on the charge terms till the date when the default will be remedied.
5. Lease the property. This relief involves leasing the charged property to third parties in order to generate income to service the debt.

At Siyasa and Company Advocates, we offer expertise and professional legal services to our clients to who aggrieved by the Chargor's default in servicing his debt. We have a seasoned, competent and esteemed team ready to serve you diligently. Contact us for further advise.

Disclaimer: “This article is for informational purposes only and does not constitute legal advice. For inquiries, please contact Siyasa and Company Advocates.”

-Contributed by-

-Francis Kitheka-