The Right of Redemption, and Clogs on It

In one line

A borrower can always get his property back by paying what he owes, and any term in the mortgage designed to stop him is struck out.

In exam wording: section 60 provides that at any time after the principal money has become due, the mortgagor has a right, on payment or tender at a proper time and place of the mortgage-money, to require the mortgagee to deliver the mortgage-deed and documents, to deliver possession where he holds it, and at the mortgagor's cost to re-transfer the property or to execute and register an acknowledgement that his rights are extinguished; and this right is called the right to redeem.

Why redemption is protected so fiercely

A mortgage is security, not a purchase. The lender bargained for his money back with interest; he did not bargain for the land. If the borrower pays, the lender has everything he contracted for, and to let him keep the property as well would turn a loan into a forfeiture.

Two maxims carry the whole topic and both should appear in an answer.

"Once a mortgage, always a mortgage." A transaction that begins as security remains security. It cannot, by its own terms, turn into a sale.

"A clog on the equity of redemption is void." A clog is any term whose effect is to prevent, hinder or postpone the borrower's right to get the property back. Equity strikes it out and leaves the mortgage standing, in exactly the way section 10 strikes out a restraint on alienation and leaves the transfer standing.

The reason equity intervenes is the inequality of the moment. Borrowers accept whatever is put in front of them. A rule that let a lender write his own terms would let him take the land in every case where the borrower was desperate enough to sign.

Section 60: the right to redeem

When it arises. At any time after the principal money has become due. Not before: the mortgagee is entitled to his agreed period of interest, so the mortgagor cannot force an early redemption.

What must be done. Payment or tender, at a proper time and place, of the mortgage-money.

What the mortgagor may then require, the three limbs of the section:

(a) delivery to him of the mortgage-deed and all documents relating to the property in the mortgagee's possession or power;

(b) where the mortgagee is in possession, delivery of possession;

(c) at the mortgagor's cost, either a re-transfer of the property to him or to a third person he directs, or the execution, and where the mortgage was by a registered instrument the registration, of an acknowledgement in writing that any right in derogation of his interest transferred to the mortgagee has been extinguished.