Mortgage is a pledge on a real estate. Pledge is a limited real right of creditor on a precisely defined foreign object or right, the purpose of which is to insure one or more defined claims. The creditor has an authorisation to repay not timely paid overdue liabilities from the value of the pledged object. Their repayment of principal, interests and costs has a priority before all other debtor’s creditors. Mortgage is a non-possession pledge, according to which the debtor keeps possession and keeps using and exploiting the pledged property.
There are several types of mortgage. On the legal basis, we differ between contractual mortgage, which is set up on the basis of legal business; forced mortgage, which is set up on the basis of court decision; and statutory mortgage, which is based on the statute. Next to the base types, we also know special types of mortgage, namely shared mortgage, maximum mortgage and pledge on non-registered real estate.
Mortgage is a residual right, registered in the land register. Contractual and forced mortgages are created with registration in the land register, which has constituent effect. The statutory mortgage is created when the statutory terms are fulfilled. The registration in the land register has only a declaratory effect.
In connection to termination of mortgage, we know material and formal ways. The mortgage is materially terminated when the terms for deletion from the land register are fulfilled. It still exists formally, but it cannot be realized. The mortgage is formally terminated with deletion from the land register, which is not done automatically, but on the basis of official or private document, the most common way in praxis is on the basis of cancellation receipt.
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