Possession:

The mortgagor, until default, has quiet possession of the property unless provided otherwise in the mortgage or associated standard charge terms. The mortgagee has rights to take action for possession immediately upon default. No time limits are presently included in the Mortgages Act or in the vast majority of mortgages.

Possession can be effected peaceably, or by taking legal action for possession (sue for possession) and obtaining a writ of possession, which is enforced by the Sheriff. Such action is commonly combined with a further action, e.g., judgement for judicial sale or foreclosure.

The Mortgages Act (Sec. 22(1)) provides, however, that the mortgagor is relieved from the consequence of such default, if he or she brings the mortgage back into good standing. In this instance, the mortgagee may have to, among other things, relinquish possession until the mortgage is restored to good standing.

A "mortgagee in possession" defines when he or she assumes control of the mortgaged property. The mortgagee is expected to mainain the property in a good state of repair. With a business venture, the operation must be managed prudently so that it can be sold as a business.

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