Mortgages and the mortgagee's power of sale in Uganda
In brief
A mortgagee cannot simply seize and sell. Under the Mortgage Act, Cap. 239 (2023 Revision), default triggers a sequence: the mortgagee serves a notice of default requiring the borrower to rectify it within forty-five working days (s.18); only if the default continues may the mortgagee exercise a remedy (s.19), and before selling must serve a separate notice to sell and wait at least twenty-one working days (s.25). The mortgagee owes a duty to obtain the best price (s.26), normally sells by public auction after a valuation (s.27; Mortgage Regulations, 2012, reg. 11), and the borrower may redeem by paying all sums due any time before a sale is agreed (s.31).
1. Governing law
The Mortgage Act, Cap. 239 (2023 Revision) regulates enforcement closely. A mortgagor is in default after thirty days from when a payment falls due, whereupon the mortgagee may serve a written notice of default requiring rectification within forty-five working days (s.18(2), (4)); the notice must state the default and a rectification period of not less than twenty-one working days (s.18(3)). On continued default the mortgagee's remedies are to sue for the money, appoint a receiver, lease, take possession, or sell (s.19), but a money suit cannot start until the s.18 notice period has expired (s.20). Before selling, the mortgagee must serve a notice to sell and may not complete a sale until twenty-one working days have lapsed, with copies served on the mortgagor, any spouse in respect of a matrimonial home, and any surety (s.25). The mortgagee owes a duty of care to obtain the best price reasonably obtainable (s.26), and a sale is by public auction unless the mortgagor consents to a private treaty, publicly advertised with the auction no earlier than thirty days from the first advert (s.27). A mortgagee (or connected person) may not buy without leave of court, and a sale in breach is voidable at the mortgagor's option (s.29); proceeds are applied in the statutory order (s.30). The borrower may discharge the mortgage and stop the sale by paying all sums due at any time before an agreement for sale is reached (s.31). A matrimonial home cannot be mortgaged without the spouse's informed consent (ss.4-5). The Mortgage Regulations, 2012 require a valuation of current market value and forced sale value, by a report not made more than six months before the sale (reg. 11). Statutory text verified against the consolidated Laws of Uganda as at 31 December 2023. Sourced from the Uganda Legal Information Institute (ulii.org).
2. Key statutes & rules
- Mortgage Act, Cap. 239 (2023 Revision) — ss.4-5 (mortgage of a matrimonial home requires the spouse's informed consent); s.18 (notice of default; rectify within forty-five working days; default after thirty days); s.19 (remedies: sue, receiver, lease, possession, sale); s.20 (no money suit until the notice period expires); s.23 (power to take possession); s.25 (notice to sell; twenty-one working days; copies to spouse and surety); s.26 (duty to obtain the best price); s.27 (public auction unless private treaty consented; advert thirty days before auction); s.29 (no purchase by the mortgagee without leave of court; sale in breach voidable); s.30 (application of proceeds); s.31 (mortgagor may redeem before a sale is agreed).
- Mortgage Regulations, 2012 — reg. 11 (valuation of current market value and forced sale value; report not more than six months before the sale); reg. 13 (adjournment of an auction on a deposit of 30% of the forced sale value).
3. Practical guidance
Mortgagees: serve a compliant s.18 notice of default and let the forty-five working days run before doing anything else.
Serve a separate s.25 notice to sell and wait the twenty-one working days; serve copies on the mortgagor, any spouse of a matrimonial home and any surety.
Obtain a current valuation (market and forced sale value) by a report no older than six months, and sell by public auction unless the mortgagor consents to a private treaty (reg. 11; s.27).
Advertise the auction so as to reach likely bidders, with the auction no earlier than thirty days from the first advert (s.27).
Do not buy the property yourself or through a connected person without leave of court (s.29).
Borrowers: you can stop the sale by paying everything due at any time before the mortgagee agrees a sale (s.31), and you can ask the court to adjourn an auction on the prescribed deposit (reg. 13).
This note is a practitioner orientation, not legal advice, and does not create an advocate–client relationship. Ugandan law changes and chapter and section numbers were revised in the 2023 Laws of Uganda. Verify every statute, rule and authority against the current primary source — and the specific facts of your matter — before filing or relying on it.