What is Mortgage?

A mortgage is a disposition of landed property to secure payment of money. The person who gives money is called the mortgagee (lender/creditor) and the person who takes money is called mortgagor (the debtor) while the money taken is called mortgage dept.

A mortgage is a common form of loan security. It involves landed property to secure a loan from the lender. 

Since land is immovable, many financial institutions prefer mortgage in loan transactions. Mortgage simply means ‘take my land until I pay your money’

However, in this case, the mortgagee does not own the land, but interest in the land protected by law.

The law in Tanzania requires a mortgage to be registered to be effective. Here you will find the procedures to register the mortgage in Tanzania.


The laws which govern the registration of the mortgage in Tanzania are;
  • The Land Act No. 4 of 1999
  • The Land Registration Act [CAP 332 R.E 2002]
  • The Stamp duty Act [CAP 189 R.E 2002]
  • The Companies Act No. 9 of 2002 (for the company’s mortgage)

Mortgage Registration Process in Tanzania

1. Preliminary Stage

At this stage a prospective the mortgagor has to find a proper creditor who can take a loan from. When looking for the creditor, the mortgagor should consider the loan interest rate, types of security required by the creditor and other 'Know Your Client' (KYC) issues.

After selecting a proper creditor based on the above highlights or any other favorable reasons, a prospective mortgagor should approach the creditor to exchange valuable information concern the mortgage transaction. 

This information avails how the prospective mortgagor can obtain the loan from the creditor.

2. Engagement Stage

The prospective mortgagor will board on this stage when satisfied with the terms and conditions of the loan. 

At this stage, the prospective mortgagor obtains all documents required by the creditor. 

Those documents may include but not limited to Identity card and resident introduction letter from the local authority where the prospective mortgagor resides, land Rent Clearance from land office, property tax clearance from the municipality where the properly locate etc.

3. Valuation Stage

Valuation is the process of examining the property to ascertain its market value. Valuation is always conducted by a professional person called value. 

This is a very critical stage. 

The law requires the mortgagee to conduct due diligence to make sure that the value of mortgage property corresponds with the value of the loan.

In mortgage issues, the valuation is conducted to the landed property to see whether the value of the property to be mortgage is corresponding with the loan requested.

A mortgagor may apply for a valuer from the municipal land offices or in other case the creditor may use his valuer to do an evaluation.

After getting a valuer, Valuer will visit the site, conduct valuation and prepare the valuation a report which must be verified by the government valuer to be valid.

4. Drafting Mortgage Deed

Mortgage deed is a legal document that setouts mortgage terms. It shows the rights and obligations of both parties.

It is the base of the mortgage transaction. It is the document that creates a mortgagor-mortgagee relationship. 

The mortgage deed is drafted by a lawyer. 

It can be the prospective mortgagor or creditor’s lawyer. The deed must be attested and signed by both parties.

5. Registration Stage

Registration of mortgage is initiated through a formal application. 

Application to register a mortgage is made to the Ministry of lands or to the District/Municipal land Registry where the land situates. 

The following are the documents required for registration of the mortgage.
  • Certificate of the Right of Occupancy
  • Property Tax clearance certificate
  • Land rent clearance certificate.
  • The mortgage application forms in duplicate
  • Copies of the mortgage deed
  • Valuation Report and the receipts for the approval of the valuation report
  • Land Form No. 40

Once filled, the land officers will receive and examine the application. 

The applicant will be required to pay registration fees and stamp duty. 

Then the application and receipt will be forwarded to Commissioner for Lands or an Authorized Land Officer for assessment and approval. 

Once approved, the documents will be forwarded to the Registrar of Title for review and registration.

When the mortgage is registered correctly, the mortgagor is issued a copy of the registered mortgage deed and the Certificate of Title is endorsed to show the existence of a mortgage.  

The mortgagor will submit the endorsed Certificate of Title to the bank in order to obtain the loan.

N.B In case of any curable defects, the applicant will be required to correct and resubmit the application. 

However when a registrar make any decision, order or act which affect a person, he is required by law to adduce the reasons for his decision in writing and the person aggrieved may appeal against that decision to the High Court.

Final remarks
Failure to register a mortgage renders the mortgagee helpless in case of default by the mortgagor.

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