Real Estate and Property

Prepared by: Constantinople

A security right over immovable property is a right in rem securing a claim against the property. Transactions should not proceed on the assumption that the creditor automatically becomes owner if the debt is unpaid.

The Subject Matter of the Security

The records and underlying documents establish which property secures which claim, in what amount and at what rank. The property owner and personal debtor may be different people. Security over property and personal indebtedness create different liabilities. Continuation of the security also matters to a purchaser.

Scope and Priority

Whether principal, interest and expenses fall within the security is assessed from the entry and statutory provisions. Its rank, prior and subsequent rights, and arrangements for moving into a vacant rank may affect recovery. The full extent of risk may not be ascertainable from a single amount shown in the land register.

Payment, Enforcement and Cancellation

Payment of the claim, cancellation of the security entry and realisation of the security are separate stages. If enforcement proceedings have begun, notification and objection periods are also monitored. If the owner pays, any rights against the personal debtor are examined according to the particular relationship. The result should be verified against an up-to-date copy of the entry.

Documents to Prepare for an Initial Review

Send each document in its entirety as held by you, rather than only its first page or a screenshot. We determine, according to the file, what authority is needed to obtain missing official records. The following records are helpful at the outset:

• Security and rank entry
• Agreement underlying the claim
• Debt and payment account
• Owner and debtor details
• Complete enforcement file, if any

Why Do the Particular Circumstances Matter?

For example, an owner providing their property as security for someone else's loan is not the borrower. Both the risk to the property and the existence of personal liability are examined separately.