What is a mortgage
The mortgage is a real right of guarantee , governed by Articles 2808 and following of the Civil Code. The creditor, that is, to guarantee his credit, can register it in order to be satisfied on the mortgaged property with preference over other creditors. The same creditor maydemand the expropriation of the debtor's property if the debtor is insolvent, even against a third party who purchases the asset. In short, when the debtor is in default, the creditor may request that the mortgaged property be sold at auction, even if in the meantime it has been sold to third parties. In this regard, there is talk of "right to follow": the mortgaged property, even if sold, remains burdened by the previously registered mortgage, which will therefore remain opposable to the purchaser..
The three types of mortgage provided by the code: legal or judicial voluntary
The civil code basically provides three types of mortgage: the legal one (article 2817 of the civil code), the judicial one (article 2818) and the voluntary one (article 2821):
- The legal mortgage is recorded every time an asset of alienation (for example the sale) of an immovable property is not expressly renounced to it. The legal mortgage arises to guarantee the obligations deriving from the deed of sale.
- The court can be registered whenever there is a conviction for the payment of a sum, the fulfillment of an obligation or compensation for damages. The sentence is a suitable title for the purpose of registering the judicial mortgage.
- The voluntary mortgage may be granted by public deed or authenticated private deed, not by will . This is the most frequent case, the common one in which, for the purchase of a property, the buyer must apply for a loan to a credit institution, granting a guarantee on the purchased property. To obtain this right, it is necessary to go to the notary, who will subsequently arrange for the guarantee to be registered on the property. In practice, registration takes place for a value that is approximately half of that of the guaranteed loan. When, for example, the buyer of a building asks for a loan from the bank, 100,000 euros, the mortgage will be registered for an amount of 150000 euros.
All three have the characteristic of having to be renewed every twenty years, under penalty of extinction . After twenty years without renewal, the right will lose its effectiveness and will have no effect. Furthermore, on each property, more mortgages may be registered: those registered later will be higher . This means that the lowest grade creditor will be satisfied with preference over the senior one (which will have subsequent registration).
What happens when an asset is encumbered by a mortgage?
The mortgage is a so-called "real right of guarantee": it does not allow in any way the enjoyment of the property to who owns it . The owner, the usufructuary or the holder of other royal rights of enjoyment may in fact continue to exercise their respective rights. The creditor can not prevent the property from being sold, leased or donated . The real right of guarantee instead makes the difference when the debtor is in default. In this case the expropriation of the property may be requested in such a way that the credit can be satisfied on the proceeds.If the proceeds from the sale are higher than the part of the unpaid credit, the difference will be of the debtor.
The receipt and cancellation
Finally, when the guaranteed debt is extinguished , the Law 40 of 2007 (Bersani Law) established that, as regards the transfer of mortgages, the credit institution is obliged to issue a receipt with the payment of the last installment and send it to the conservatory, without any costs. for the client, the related communication. Once said communication will be possible to proceed with the cancellation.