Transfer of Property Act Section 82 — Contribution to mortgage-debt
CHAPTER IV OF MORTGAGES OF IMMOVEABLE PROPERTY AND CHARGES — Marshalling and Contribution
General
Summary
When a mortgaged property is owned by more than one person with separate shares, each share must contribute its fair proportion to paying off the mortgage debt, unless there is an agreement saying otherwise. The value of each share for this purpose is its value on the date the mortgage was created, minus any other mortgage or charge that already existed on that share at that time. If one property is mortgaged for one debt, and later both that property and another are mortgaged together for a second debt, and the first debt is paid off using the first property, then both properties must contribute fairly to the second debt, after subtracting the amount of the first debt from the value of the property used to pay it. This section does not apply to property that is already liable under section 81 to the claim of a later mortgagee.
Official Text
2[Where property subject to a mortgage belongs to two or more persons having distinct and separate rights of ownership therein, the different shares in or parts of such property owned by such persons are, in the absence of a contract to the contrary, liable to contribute rateably to the debt secured by the mortgage, and, for the purpose of determining the rate at which each such share or part shall contribute, the value thereof shall be deemed to be its value at the date of the mortgage after deduction of the amount of any other mortgage or charge to which it may have been subject on that date.] Where, of two properties belonging to the same owner, one is mortgaged to secure one debt and then both are mortgaged to secure another debt, and the former debt is paid out of the former property, each property is, in the absence of a contract to the contrary, liable to contribute rateably to the latter debt after deducting the amount of the former debt from the value of the property out of which it has been paid. Nothing in this section applies to a property liable under section 81 to the claim of the 3[subsequent] mortgagee.