Understanding Real Estate Mortgages: Concept, Characteristics, Constitution, Liability, Abusive Clauses, and Extinction.

Real estate mortgage.

HIS 19

Concept.

Article 104 Mortgage Law 1946: “The mortgage directly and immediately subjects the assets on which it is imposed, regardless of its owner, to the fulfillment of the obligation for whose security it was established.”

Characteristics.

• It is a real right and a guarantee right.
• Of value realization.
• As a guarantee of a pecuniary obligation.
• Of an accessory nature.
• Indivisible.
• Registry constitution.
• That falls on other people’s and alienable real estate.
• It does not require possession displacement.
• It attributes a special privilege to credit.

Constitution.

a) Personal element. Active subject: Mortgage creditor, one or more creditors. (I do not have the total money that the apartment is worth, the bank lends me a loan and the guarantee is the apartment, they can sell it or auction it, but not keep it.) Passive subject: – Mortgage debtor: Same debtor and owner of the property right. mortgage. (If I put it.) – Non-debtor mortgagee: Different person debtor and holder of the real right of mortgage. (If my mother puts it.) – Third holder of mortgaged property: He was not there at the time of establishing the mortgage but acquires it later with the real right established, he does not assume the obligation but the mortgage encumbers the property. (He who buys a property with a mortgage already. Ex: I see an auction of an apartment that is very cheap, because it carries a burden that is a mortgage. I have to pay the mortgage to the bank, because the mortgagor has not paid and the bank has executed the floor.) b) Formal element. – Public deed. – Registration in the RP. c) Real elements. – Assets or rights that can be mortgaged: Real estate that can be registered and real rights over real estate can be mortgaged. – They cannot be mortgaged. (Art. 108 LH):  Easements, unless they are mortgaged with the property. The water can be mortgaged.  Legal usufructs, with the exception of the widowed spouse (the only one surviving).

 The use and room because they are very personal and non-transferable.  Natural extension of the mortgage: Art. 109 LH. The mortgage extends to: ⬧ Natural accessions. ⬧ Improvements. ⬧ Compensation due to the owner.  Agreed extension of the mortgage: Art. 111 LH, unless expressly agreed or otherwise provided, the mortgage will NOT include: ⬧ Movable objects within the property. ⬧ Fruits. ⬧ Past due and unpaid rents.  Extension of the mortgage against the third holder: Art. 112 LH, has a more beneficial position than the non-debtor mortgagee that constitutes the mortgage: ⬧ The natural extension to the improvements is limited to repair, security or transformation works paid for by the owner. new owner. ⬧ The agreed extension does not cover the permanent furniture placed in buildings paid for by the new owner, nor the pending fruits and overdue rents that belong to him.

Mortgage liability.

The responsibility is double: personal, total and unlimited liability for the debtor, universal property liability (art. 1911 CC); and real liability, limited to the object given as guarantee. a) Mortgage limitation agreement. Liability is limited to the mortgaged assets; the other assets you have cannot be executed. (In case of non-payment it can only be directed against the mortgaged assets, it can only be directed against the guarantee.) The agreement that limits liability to the mortgaged assets is valid, not reaching the other assets of the debtor. Requirements: 1st. Pact at the time of constitution. 2nd. In the voluntary mortgage. 3rd. Debt inherent to the ownership of the property. Ex.: Loan for the rehabilitation of the property. b) Sale of mortgaged property.  Sale with assumption of debt: The purchaser assumes the debt.  Sale with retention: The amount of the mortgage is retained, assuming the obligation to pay it as a mandate.  Discounted sale: The seller remains the debtor and the buyer a third party holder of the mortgaged property.

Abusive clauses.

LAW 5/2019, OF MARCH 15, REGULATING REAL ESTATE CREDIT CONTRACTS

(LCCI)

• It is prohibited in the floor clause, art. twenty-one.

• The requirements for the appraisal of real estate are established (art. 13 LCCI).

• Action of devastation: If the bank proves that the apartment is in a state of ruin, the guarantee no longer covers the bank’s debt, so it may require the stacking of guarantees.

Extinction of the mortgage right.

The mortgage right is extinguished: – Due to the extinction of the credit: Once the credit is extinguished, the validity of the mortgage cannot be maintained due to its accessory nature. The registration must be canceled. – Due to the physical destruction of the property. – Forced expropriation of the property. – Waiver of the right. – Prescription of the real mortgage action: Art. 1964 CC, the mortgage action prescribes after twenty years.

Mortgage classes.

1. Voluntary mortgages.
2. Legal mortgages.
3. Unilateral mortgages: The bank goes to the notary and tells him that it is giving a mortgage on the apartment to Manu.
4. Mortgages on various properties.
5. Maximum mortgages: When they are obligations subject to conditions, when you don’t know what you will owe. A maximum limit is set because there must be an amount.
6. Reverse mortgage: An elderly man has no descendants and goes to the bank, sells it to them but the bank pays him an amount of money per month.