Civil Code of the Russian Federation: pledge of immovable property

The rapid development of market relations in Russia allowed to gradually expand the scope of the operation, such as the pledge of real estate. What is this method? How to properly arrange it? The answers to these and other questions will be provided below.

Pledge of real estate: concept

Economic reforms are being carried out one after another on the territory of the Russian Federation. The market becomes unstable, and therefore more and more debtors are unable to meet their obligations in a timely manner. In this scenario, any lender would like to receive as many guarantees as possible. As a consequence, a logical question arises about what these can be for guarantees. How to arrange and secure them? There are a lot of options here. One of them should be told a bit more: it is a pledge of real estate.

Pledge of immovable property is the most important procedure in the market sphere. It helps to boost the investment activity of all aspects of entrepreneurship qualitatively. In addition, it effectively protects the interests of the creditor. At the same time, the mortgage of real estate is just a tool that helps to satisfy the basic requirements of the creditor.

Almost the entire civilized world has long been using and practicing a loan agreement with a pledge of real estate. Russia is not far behind, despite the fact that there is a high complexity and length of processing the procedure. At the same time creditors have a very good mortgage of real estate. Here are a few reasons:

• The price of real estate grows with time;
• The price of immovable property is very high, and there is a risk of its loss;
• Real estate can hardly disappear or get lost somewhere.

The concept of a mortgage

If it comes to the economic sphere, then a loan secured by real estate is called a mortgage. There are two main concepts of mortgage:

• Mortgage relationship. This is the pledge of real estate (land, house, apartment, etc.), the purpose of which is to take a loan from a lender (loan).
• Mortgage as a security. In this case we are talking about a special mortgage - a debt instrument that satisfies the creditor's rights to property that is collateralized.

At the moment in Russia, there are two bills regulating actions with mortgaged real estate. The first law is the Federal Law "On Pledge of Immovable Property", the second is the Law "On Mortgage". Both documents refer to the need to comply with a number of regulations prescribed in the loan agreement or on hiring. These facilities include rent, inadmissibility of causing damage to property, the procedure for purchase and sale, etc. The main elements that can be involved in the mortgage agreement are also indicated. This includes various businesses, land, apartments or houses, garages, as well as ships (sea or air).

It is worth mentioning about the main features of mortgage legal relations. The Civil Code of the Russian Federation, the Federal Law "On Pledge of Immovable Property", as well as the laws on mortgages, highlight the following points:

• It is recognized as a mortgage (as a legal relationship) a pledge of property.
• Loan for the mortgage system is issued for a clearly defined period - usually from 15 to 35 years.
• The pledge of immovable property by the debtor must exist throughout the mortgage period.
• The whole process of pledging property should be formalized only on the basis of the security right (Civil Code of the Russian Federation).
• The entire mortgage procedure is carried out by special banks specializing in mortgages.

Real estate pledge agreement

What should be included in a loan agreement with a pledge of real estate? The answer to this question can again be provided only by the Russian Civil Code.

The mortgage bank will coordinate the loan with the citizen. All necessary mortgage documentation is completed, including the most important document - a pledge of property. The first thing to note is the subject matter of the document. The subject may be any immovable property, legally issued and corresponding to all items of the Russian Civil Code. Pledge of real estate, among other things, involves special evaluation procedures. We are talking about objects entered in the contract, which must have a special financial assessment. Only because of this, the facilities will be liquid. The last thing worth noting here is the need for constant economic supervision of the borrower.

As soon as the contract is concluded and begins to act, it becomes impossible to make changes to it. A similar rule is established by the Law on Immovable Property Pledge, as well as by a special credit committee. At the same time, the document can still be slightly changed during the processing period. To do this, you need to draw up a special agreement (details will be provided by the credit committee itself).

The contract must be made in four copies: for the bank, notary, pledgor and other registration authorities. Finally, the content of the document should look like this:

• Information on the property that is under the security;
• Evaluation of the property;
• Terms, prices, performance sizes;
• Information about the debtor and the creditor;
• Information on the further use of the mortgaged object.

As soon as the registration of the contract is completed, mortgage legal relations will come into effect.

The law on pledge in the form of real estate

Today's Russian legislation defines all the necessary provisions, regulations and rules relating to the collateral system. All nuances are regulated both in the Civil Code and in various federal laws and by-laws. According to Part 4 of Article 15 of the Constitution of the Russian Federation, in the event of possible contradictions between Russian legislation and international treaties, international treaties will be the priority.

The law must necessarily contain an indication of the beginning of the operation of an obligation. In addition, the main property that is under collateral must be clearly listed. In the case of mortgage lending, this is, as a rule, any kind of property that can be alienated in accordance with current legislation. Property that is in group (common) ownership can be transferred on bail only with the consent of all its owners.

The Civil Code of the Russian Federation states that it is possible to satisfy the creditor's claims only by a court decision, as well as the full repayment of the debt at the entire value of the pledge. It should also be noted that with a shared pledge, recovery from the debtor can be carried out only in a judicial procedure. This also includes cases where the location of the debtor is not established: in this case, the creditor sends a notice to the court, and the relevant authorities begin the search operations.

The last thing that is worth noting here is the possibility of a trial for both sides of the treaty. The reasons for this can be very different: for example, if the term of the mortgage of immovable property has expired, there are problems with the documentation, etc.

Requirements for security

The conclusion of a real estate pledge agreement between individuals is always a special case of a mortgage contract. Such a document is to ensure the fulfillment of obligations under any transaction. Most often this is a loan agreement. What does this whole scheme look like? Most often this way:

• Two citizens enter into a loan agreement after receiving one of them a certain amount of money.
• The debtor gives the creditor a pledge in the form of real estate.
• In the end, the debt either returns, or the creditor draws a foreclosure on the mortgaged property.

If it comes to legal entities, then it is worth moving away from the mortgage "framework". Here, a financial transaction, a certain type of property, etc., can act as a source. It should immediately be noted that the real estate pledge agreement between legal entities always differs only in the value of state registration. Therefore, in 2017 an individual will give 2 thousand rubles. But the legal entity registration of a pledge of real estate (state duty) will cost almost 23 thousand rubles.

Requirements for mortgaged property that for physical, that for legal entities are almost always the same. Here are the following points:

• The property that is under collateral gives the creditor the right to receive in a timely manner the repayment of the debt from the revenues that are generated by selling the collateral.
• A pledge may be provided by a third party not directly involved in the contract. Nevertheless, this person must guarantee the performance of his obligations as a borrower.
• Ownership and use of the pledged property is carried out only by the borrower.

Recovery of mortgaged property

Information on the pledge of immovable property, mentioned above, already indicated the possibility of the mortgagor to recover the property under the security. Now it is worth illustrating this situation in more detail.

The first thing that is worth noting is the right of the creditor to recover through both judicial and extrajudicial methods. In any case, the grounds for collection in both cases will be the same. This includes the following situations:

• Failure by the debtor (mortgagor) of its obligations in the specified time or incomplete fulfillment of its obligations.
• If the debtor has not notified the pledgee of possession of the subject of the pledge of third parties (this is, for example, rent, lifelong or hereditary use, easement, etc.). In principle, if the debtor did not consider it necessary to notify an important creditor of something, concealed a moment, the pledgee is entitled to begin the process of legal recovery.
• If the debtor has violated any rule on the use of property, has not taken the necessary measures to preserve it; If there is a risk of loss of the subject of mortgaging relations - precisely because of the pledger.

As already mentioned, the pledgee can start recovery in an extrajudicial way. However, in this case we are talking about a real estate pledge agreement between legal entities. A physical person must apply to the courts (as a rule, to the district court at the location of the property). Only in this case the principle of exclusive jurisdiction, fixed in the Code of Civil Procedure of the Russian Federation, will be strictly observed.

Foreclosure proceedings

District court, taking the necessary documentation, makes an appropriate decision to recover the mortgaged property. The following points should be clearly reflected in this decision:

• The amount that the debtor owes to its pledgee.
• Full identification of immovable property given on bail, which is levied (this is the address, cadastral number, area, state registration of the real estate pledge agreement, etc.).
• The procedure for the implementation of mortgaged property.
• The minimum initial price of collection.
• A list of methods and measures that allow you to keep real estate or effectively conduct trading.

Can the court grant a debtor a reprieve? The answer is yes. The delay can be a maximum of one year. At the same time, the pledge should not be somehow connected with the entrepreneurial activity of the debtor. During the delay, the mortgagor will be able to fulfill all of his obligations as a debtor: repay the loan, interest and penalties (which, incidentally, will only accumulate over the grace period). Deferral can not be granted if the creditor is in a distressed financial situation or in the event that one of the parties to the contract has declared itself bankrupt.

It is worth mentioning the main reasons why a court can refuse to collect a pledge holder. This includes the following cases:

• The amount of the overdue obligation is less than five percent of the total value of the property pledged.
• The delay is less than three months.

And what is the extrajudicial process of foreclosure? Its use is possible only in the following cases:

• The parties signed a notarial pledge of real estate.
• The enforcement of the pledged property is carried out by the notary, not the court.

An extrajudicial process of foreclosure is not allowed in the following cases:

• The owner of the mortgaged property is an individual;
• No one can find a debtor;
• Several mortgage contracts have been drawn up;
• Real estate is mortgaged to several pawnbrokers;
• The subject of pledge is an agricultural land plot;
• The subject of pledge is a cultural asset.

Pledge of land

The laws of the Russian Federation state that absolutely any real estate - be it a house, a structure or a building - should be pledged only together with the land plot. It is necessary, of course, for the full ownership of the land by the creditor, in the event that the property does "leak" from the debtor. In this case, there is a right of so-called "limited use" of the mortgagor that part of the land that is given for servicing by the pledgee (creditor). But for this, the debtor is obliged to persuade the creditor to include in the contract only some land plots.

In this situation, do not have to worry and tenants: they will all have full ownership rights after the full transfer of mortgaged property to the lender.

Land mortgage

It is necessary, finally, to turn to the Federal Law No. 102 "On Mortgage", namely, to the ninth chapter. The information given in this draft law will help to create the most complete and complete picture of collateral legal relations.

Article 62 narrates about a number of territorial sites acting as a subject of mortgage legal relations. So, we are talking, in particular, about the plots owned by municipal or federal state authorities. Such territories are recognized as subjects of mortgage legal relations only with the permission of local self-government bodies.

And when granting a loan against real estate is impossible? Article 63 cites as an example a number of land plots that are not subject to mortgage relationships. These are any state or municipal territories (an exception is given in Article 62). In addition, the subjects of mortgage relationships can not act as areas whose area is less than the statutory minimum.

Article 65 regulates the possibility to erect a different kind of building, structure or building on the territory being pledged by the pledgor. So, the debtor has the right to do what he wants on the pledged territory, but only if the like is not prohibited by the concluded contract. But there is one important addition. So, if the mortgagor erects something in the mortgaged area that will significantly hinder the creditor, the latter will be entitled to demand changes in the mortgage agreement.

Receiving passive income

Above, the main points were already indicated, when with the help of mortgaged property citizens get the opportunity to receive passive income. Now it is worth illustrating such situations a little more.

The most popular option for profit from mortgaged property is rent. But it is extremely important to ensure that the resulting rent can fully cover the mortgage, taxes and maintenance costs. Do not forget that in the end there must still be a profit. How to develop in such conditions? Still, the situation is extremely difficult. The best option here is the registration of real estate. This method allows you to significantly increase the number of investments; In the same case, profits will also increase. If the cost of investment increases - then money is being borrowed on mortgages, additional property is being purchased. In the future, you can increase the size of your own deposits. The problem here can only be one - the opportunity to get carried away and "go too far." So, you need to competently calculate all options and risks. Still, the chance to go broke, investing in real estate, in such situations remains very large. Particularly bad are cases when the cost of mortgage investments is falling. In this case, the debts begin to grow significantly, and it is dangerous for them to exceed the value of the real estate pledged.

What conclusion can be drawn here? The work on obtaining passive income from mortgaged property is incredibly complex and voluminous. Only really enthusiastic, very disciplined and patient people can do this.