What are the new changes in the ＂real right for security＂ in the Judicial Interpretation of Civil Code Guarantee System？
This article was originally written by "Suning Financial Research Institute" in WeChat official account. The author is Tiruo, a special researcher of Suning Financial Research Institute. The first picture is from Yitu. com.
On December 31st, 2020, the Interpretation of the Supreme People’s Court on the Application of Relevant Guarantee System (referred to as "Judicial Interpretation of Civil Code Guarantee System") was issued and came into force on January 1st, 2021. Following the interpretation of the highlights of "General Provisions" and "Guarantee Contract" in Judicial Interpretation of Guarantee System of Civil Code, the highlights of "Real Right for Security" are now interpreted.
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Eight Highlights of "Real Right for Security"
(A) clear rules for the transfer of mortgaged property during the mortgage period, emphasizing the importance of registration.
The Judicial Interpretation of the Civil Code Guarantee System stipulates that the mortgagor transfers the mortgaged property in violation of the stipulation that the mortgage contract prohibits or restricts the transfer of the mortgaged property, and the property transfer contract is valid.
The following situations should be distinguished as to whether the mortgaged property is transferred:
1. If the mortgagee fails to register the agreement and the mortgaged property has been delivered or registered, the property right will be transferred and the mortgaged property will be owned by the transferee;
2. If the mortgagee has registered the agreement, or there is evidence to prove that the transferee knows the agreement, even if the mortgaged property has been delivered or registered, the property right will not be transferred, and the mortgaged property will still be owned by the mortgagor.
(two) according to the type of publicity, distinguish the influence of the principal creditor’s rights over the limitation of action on the effectiveness of security interests.
1, registration as a way of publicity of security interests. If the limitation period of action for principal creditor’s rights expires, or if the creditor only sues the debtor and exceeds the limitation period of application for execution, the security interest is no longer protected by law;
2. Security interest in the form of delivery or possession. Upon the expiration of the limitation period of the principal creditor’s rights, the security interest shall not be affected. If the lien holder still has the right to possess the retained property, and applies for auction or sale of the retained property, he will be given priority in compensation.
(three) clear the way to deal with the inconsistency between the mortgage contract and the registration
Article 58 of "Nine Minutes of the People" stipulates that the guarantee scope of the real estate security interest in the form of registration shall generally be subject to the scope of registration. However, considering the differences in regional development, in areas where the registration system and the design of registration rules are not standardized, the people’s court may determine the scope of guarantee according to the agreement in the mortgage contract.
However, the Judicial Interpretation of the Civil Code’s Guarantee System is more explicit, emphasizing that if the records of the mortgaged property and the secured creditor’s rights in the real estate register are inconsistent with the mortgage contract, the contents of the register shall prevail.
(four) to recognize the priority of mortgage notice registration.
If the right holder of advance notice registration has already registered the mortgage advance notice, it shall be deemed that the mortgage right has been established since the date of advance notice registration, except in any of the following circumstances:
1. The building ownership has not been registered for the first time;
2. The property registered in advance is inconsistent with the property when the ownership of the building is registered for the first time;
3. The mortgage advance notice registration has expired.
(5) Clarify the effect of unregistered chattel mortgage.
If the mortgage registration is not handled after the signing of the chattel mortgage contract, the validity of the chattel mortgage shall be dealt with according to the following circumstances:
1, shall not be against bona fide assignee. After the mortgagor transfers the mortgaged property and the transferee takes possession of the mortgaged property, the mortgagee has no right to exercise the mortgage right to the transferee, unless the mortgagee can prove that the transferee knows the mortgage fact.
2. Do not fight against bona fide lessees. If the mortgagor rents out the mortgaged property and transfers possession, if the mortgagee exercises the mortgage right, the lease relationship will not be affected, unless the mortgagee can prove that the lessee knows the mortgage fact.
3. Not against ordinary creditors in litigation or execution. Ordinary creditors have filed a lawsuit with the court to apply for preservation or enforcement of mortgaged property, and the mortgagee cannot claim the priority of compensation.
4. Never confront bankrupt creditors. If the mortgagor goes bankrupt, the mortgagee can’t claim the priority of compensation for the mortgaged property.
At the same time, the ownership of the seller and lessor is unregistered in contracts such as ownership retention sale and financial lease, and it shall be handled with reference to the provisions on unregistered chattel mortgage.
(six) detailed chattel mortgage can not be against the buyer’s rules in normal business activities.
In the normal business activities, if the buyer obtains the chattel for which a security interest has been established by paying a reasonable consideration, the security interest holder has no right to be compensated in priority for the chattel, except in one of the following circumstances:
1. The quantity of purchased goods obviously exceeds that of ordinary buyers;
2. Purchase the seller’s production equipment;
3. The purpose of concluding a sales contract is to guarantee the seller or a third party to perform the debt;
4. There is a direct or indirect control relationship between the buyer and the seller;
5. Other circumstances in which the buyer should inquire about the mortgage registration but fails to do so.
The Judicial Interpretation of Civil Code Guarantee System also expands the application space of this rule, which is not only applicable to the registered chattel mortgagee, but also applicable to the seller of title retention sale and the lessor of financial lease contract.
(7) Expand the applicable subject of the super chattel mortgage rule.
The people’s court shall support the following obligees who conclude a guarantee contract for the realization of creditor’s rights or rent for the guarantee price and register within ten days after the delivery of movable property, claiming that their rights are prior to the floating mortgage established earlier:
1. The seller who establishes mortgage or retains ownership on the chattel;
2. Creditors who set up mortgage on the chattel to provide financing for the payment of the price;
3. The lessor who leases the chattel by means of financial lease.
(eight) to distinguish the focus of the existing accounts receivable and the future accounts receivable pledge review.
"Judicial Interpretation of Civil Code Guarantee System" divides accounts receivable into existing accounts receivable and future accounts receivable according to the time of generation, and makes different provisions on their pledge consequences, and the focus of review is also different.
1. Pledge the existing accounts receivable and focus on the authenticity of the accounts receivable. With the existing accounts receivable pledged, the debtor of accounts receivable has confirmed the authenticity of accounts receivable to the pledgee; Or although the authenticity of the accounts receivable is not confirmed, the pledgee can prove that the accounts receivable really exist at the time of pledge registration, and the pledgee has the priority to be compensated for the accounts receivable.
2, in order to pledge accounts receivable, focus on the review of whether a specific account has been set up. Where the creditor’s rights arising from infrastructure and public utility projects, the provision of services or labor services and other future accounts receivable are pledged, and the parties concerned set up a specific account for the accounts receivable, the pledgee has the right to give priority to the payment in the specific account.
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Legal risks and countermeasures
(A) the risk of private disposal of mortgaged property and its countermeasures
At present, the mortgage contract usually stipulates that the transfer of mortgaged property is prohibited or restricted, but the Civil Code has stipulated that the mortgagor can transfer the mortgaged property during the mortgage period. After the promulgation of the Judicial Interpretation of the Civil Code Guarantee System, the agreement prohibiting or restricting the transfer of mortgaged property needs to be registered by the mortgage registration department before it can be effective.
In order to prevent this risk, financial institutions should continue to pay attention to the legislative trends, pay attention to the revision of the Civil Code and the supporting registration system after the implementation of the judicial interpretation, register the agreement prohibiting the transfer of mortgaged property, and communicate with the registration authority for supplementary registration on the mortgage registration of surviving projects if necessary.
(two) the risk of the principal creditor’s rights exceeding the limitation of litigation and execution and the countermeasures.
The Property Law stipulates that the people’s court shall not protect the mortgagee who fails to exercise the mortgage right during the limitation of action for the principal creditor’s rights. The Judicial Interpretation of Civil Code Guarantee System further clarifies that the creditor’s rights that have exceeded the limitation of action and execution are no longer protected by law, and the related obligee can no longer claim the security right.
In order to prevent the risk that the principal creditor’s rights exceed the limitation of litigation and execution, and ensure the timeliness of the security interest, financial institutions should sort out the existing non-performing loans, make rational use of the interruption rules of the limitation of action, initiate legal proceedings as soon as possible for overdue customers, and regularly claim their rights by means of reminders, lawyers’ letters, re-reaching repayment agreements, etc. for customers who temporarily do not have the conditions to sue or do not want to sue, so that the limitation of action will be recalculated after the interruption of the limitation of action.
(3) Risks and countermeasures of missing items in the real estate register
If the records of the mortgaged property and the secured creditor’s rights in the real estate register are inconsistent with the stipulations in the mortgage contract, the contents registered in the real estate register shall prevail. However, in practice, if only the principal of the creditor’s rights is registered when the registration authority handles the mortgage and pledge procedures, and the secured creditor’s rights are not listed as including the principal, interest, liquidated damages, damages, expenses for keeping the secured property and expenses for realizing the creditor’s rights or security rights, the creditor will be compensated only for the registered principal of the creditor’s rights.
In order to prevent this risk, financial institutions should ensure that the registered contents (especially the secured creditor’s rights scope and secured property) are consistent with the mortgage contract when handling the mortgage registration of real estate and other real estate.
(4) Risks and countermeasures of unregistered chattel mortgage
The chattel mortgage was established when the mortgage contract came into effect, but the unregistered chattel mortgage has a low level of effectiveness, which can not only fight against bona fide buyers and lessees, but also against ordinary creditors in judicial proceedings, indicating that the chattel mortgage can not be fully protected by law without registration.
In order to guard against this risk, financial institutions should require mortgage registration in all businesses involving chattel mortgage. For example, in financial leasing business, business personnel should register within 10 days after the delivery of the leased property to ensure the realization of rent. In the business of financing the debtor’s purchase of movable property to pay the price, registration should be carried out within ten days after the delivery of movable property to ensure the super priority of creditor’s rights.
(V) Risks and countermeasures of the authenticity of pledged accounts receivable
If the existing accounts receivable are pledged, the authenticity of the accounts receivable shall be verified and confirmed to the debtor of the accounts receivable, and the debtor of the accounts receivable shall be notified to perform it to the pledgee. If the pledgee can’t prove that the accounts receivable really exist at the time of pledge registration, the court will not support such a claim only because the pledge registration has been completed.
In order to prevent this risk, financial institutions should conduct due diligence on accounts receivable, require debtors of accounts receivable to confirm the real existence of accounts receivable in writing, and notify them not to perform their debts to creditors of accounts receivable after pledge.
In addition, in handling future accounts receivable business, a special account should be set up for collecting accounts receivable, so as to improve the specificity of accounts receivable and facilitate the exercise of pledge rights in the future.
Editor: Chen Xia Ding Yuan
This article was first published on WeChat WeChat official account: Suning Financial Research Institute. The content of the article belongs to the author’s personal opinion and does not represent Hexun.com’s position. Investors should operate accordingly, at their own risk.