Pawning and Mortgaging: Ruling on Handling Surplus Value of a Repossessed Mortgaged Property After Owner’s Death

Practical Laws of Islam as per the teachings of Imam Khamenei

Pawning and Mortgaging: Ruling on Handling Surplus Value of a Repossessed Mortgaged Property After Owner’s Death

English:

Question #1670:

The owner of a mortgaged property died and left behind minor children. The loan was not fully paid. The lender repossessed the property, which is worth much more than the outstanding amount of the loan. How should the extra amount [from the proceeds of selling the property] be treated? And how should the minor children restore their right?

Answer #1670:

Where it is possible for the mortgagee (lender) to sell the property to get his money back, the property should be sold for the highest price possible. If the property has fetched more than the amount of debt, the lender can take what is his and pay the remainder to the rightful owners. As the question goes, the surplus amount should go to the inheritors.

-Imam Khamenei, Practical Laws of Islam, Importance and Conditions of Pawning and Mortgaging