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    Can a mortgage contract stipulate automatic ownership transfer?

    Ali Faizan Syed1 min read0 viewsUpdated 1/2/2026
    No, Article (11) prohibits clauses that allow the automatic transfer of property ownership to the mortgagee if the debtor fails to pay by a certain date. It also forbids agreements to sell the property without following legal procedures. While the overall mortgage remains valid, such specific provisions are null and void. This protection prevents "equity stripping" and ensures that properties are sold fairly through supervised channels like public auctions.

    Related Topics:

    Automatic Transfer
    Void Clauses
    Property Auction
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