Legal Application Practice. The priority of advance registration in banking business from the perspective of the Civil Code (above)

Article 20 of the "the People's Republic of China Property Law" stipulates that "The parties sign an agreement to buy and sell houses or other real property rights. In order to ensure the realization of real rights in the future, they may apply to the registration agency for advance registration in accordance with the agreement. After the advance notice is registered, if the real property is disposed of without the consent of the right holder of the advance notice registration, the effect of the real property shall not occur. After the advance notice registration, if the creditor's rights are extinguished or the registration is not applied for within three months from the date when the real estate registration can be carried out, the advance notice registration shall be invalid."

Since the interpretation of the original property law did not provide for the priority of advance registration, according to the traditional point of view, the above-mentioned provisions on advance registration are the right of the property law to grant the right holder of advance registration to request future mortgage registration, is the right to request future mortgage acquisition, belongs to the right of expectation. This means that the right holder does not enjoy the mortgage right in the strict sense at the time of the advance notice registration, and in view of the uncertainty of whether the right holder can finally obtain the mortgage right, its priority compensation right is also in an uncertain state. In previous jurisprudence, courts often do not support the claim of mortgage or priority over real estate through advance notice registration [such as:(2012) Hu Er Zhong Min Liu (Shang) Zhong Zi No. 138 (Supreme Law Gazette Case), Jiangsu Higher People's Court (2018) Su Min Re No. 100, Jilin Higher People's Court (2019) Ji Min Zhong No. 187, Sichuan Higher People's Court (2020) Chuan Min Re No. 318]].

Article 221 of the Civil Code continues the provisions of the Property Law on advance notice registration of real estate, and further clarifies the application time for advance notice registration: "The parties sign an agreement to buy and sell a house or sign an agreement to sign other real property rights, in order to ensure the realization of real rights in the future, In accordance with the agreement, you can apply to the registration agency for advance notice registration. After the advance notice is registered, if the real property is disposed of without the consent of the right holder of the advance notice registration, the effect of the real property shall not occur. After the advance registration, if the claim is extinguished or if the registration is not applied for within 90 days from the date on which the real estate can be registered, the advance registration shall be invalid."

At the same time, the Supreme People's Court issued the Supreme People's Court on December 31, 2020.<中华人民共和国民法典>Article 52 of the Interpretation of the Guarantee System (Fa Shi [2020] No. 28) stipulates: "After the parties go through the mortgage advance notice registration, the advance notice registration right holder requests that the mortgaged property be paid first. After examination, there are situations such as the property that has not been registered for the first time of building ownership, the property registered for the advance notice is inconsistent with the property when the building ownership is registered for the first time, and the mortgage advance notice registration has expired, if the conditions for mortgage registration are not met, the people's court shall not support it; if the first registration of the ownership of the building has been completed after examination, and there is no failure of the advance notice registration, the people's court shall support it, and shall determine that the mortgage right is established from the date of advance notice registration.

If the party concerned has gone through the mortgage advance notice registration and the mortgagor is bankrupt, and the mortgaged property belongs to the bankruptcy property after examination, and the obligee of the advance notice registration claims priority compensation for the mortgaged property, the people's court shall support it within the value range of the mortgaged property when accepting the bankruptcy application, except that the debtor establishes mortgage advance notice registration for debts without property guarantee within one year before the people's court accepts the bankruptcy application."

Thus, the Supreme Law, through judicial interpretation, affirms that the registration of advance notice of mortgage is equivalent to the effect of mortgage registration under certain conditions, and has the right to claim the right of priority compensation.

The interpretation of the security system does not further explain the expected ownership of advance registration as dealt with in the Civil Code and the original property law, but directly clarifies the effect of advance registration under certain conditions equivalent to mortgage registration, as follows:

According to the relevant provisions of the the People's Republic of China Civil Code and the Interim Regulations on Real Estate Registration, registration refers to the act of the real estate registration agency recording the ownership of real estate rights and other legal matters in the real estate register in accordance with the law, and the establishment, change, transfer and transfer of real estate rights The elimination takes effect when it is recorded in the real estate register. In practice, the "first registration" of a building refers to the act of registering the ownership of the whole building in the name of the developer after the completion and acceptance of the building, commonly known as "applying for a big certificate"; only the real estate of "applying for a big certificate" can register the real estate with the small owners, And this kind of real estate registration (that is, "applying for a small certificate") by the developer to the buyer is "transfer registration". After the transfer registration, the notice registration right holder can formally register the mortgage with the mortgagor (small owner). In terms of time, after the building is registered for the first time, it means that the building has the conditions for handover and the small owner as the mortgagor can exercise its right to use as the owner. It also means that the initiative to handle the mortgage is in the hands of the mortgagor, and the advance notice registration has the conditions for conversion to formal mortgage registration. At this time, the bank, as the right holder of advance registration, shall promptly urge the mortgagor to register the real estate mortgage.

According to the provisions of Article 52 of the interpretation of the guarantee system, if the first registration of the ownership of the building has been completed by the people's court within the validity period of the advance notice registration, the right holder of the advance notice registration shall have the right to claim priority. Since the first registration only makes the building have the conditions for mortgage registration, it does not mean that the mortgage right has been established. In practice, there may be cases where the real estate mortgage cannot be handled due to non-advance registration rights holders. At this time, consideration should be given to whether the advance registration rights holders are at fault. If the mortgage registration fails to be handled due to the fault of the advance registration rights holders, priority can be claimed.

The relevant cases are as follows:

(1) Qingdao Intermediate People's Court of Shandong Province (2021) Lu 02 Min Zhong No. 8922: Liu Xia, Qingdao Green City Huajing Real Estate Co., Ltd. and Industrial Bank Co., Ltd. Qingdao Branch Financial Loan Contract Dispute Civil Second Instance Civil Case Judgment [Case Involving Property Seized Causing Failure to Handle Mortgage Registration]]

"On the focus of the first issue, the case of the" individual purchase mortgage (guarantee) loan contract "is the true intention of the parties, legal and valid. The Supreme People's Court on the application<中华人民共和国民法典>According to the first paragraph of Article 52 of the interpretation of the relevant guarantee system, after the parties have registered the mortgage advance notice, the obligee of the advance notice registration requests priority compensation for the mortgaged property. After examination, the property that has not been registered for the first time, the property that has been registered in advance and the property that has been registered for the first time, and the mortgage advance notice registration has been invalid, The people's court will not support it; if the first registration of the ownership of the building has been completed after examination, and there is no such situation as the failure of the advance notice registration, the people's court shall support it and shall determine that the mortgage right is established from the date of the advance notice registration. The real estate located in Shinan District of Qingdao City has already met the conditions for property right registration, that is, formal mortgage registration. Because it was sealed up by the Huangdao District Supervision Committee of Qingdao City, formal mortgage registration cannot be handled. There is no evidence to prove that the appellee Industrial Bank Qingdao Branch is at fault, and there is no evidence to prove that Industrial Bank Qingdao Branch was not in good faith when signing the contract involved. Although Societe Generale Qingdao Branch did not appeal against the mortgage in this case, it dealt with the mortgage in this case because it involved the issue of the developer's phased guarantee liability."

(2) Guangzhou Intermediate People's Court of Guangdong Province (2021) Yue 01 Min Zhong No. 25138: Civil Judgment of Second Instance on Disputes over Financial Loan Contracts such as Guangzhou Agile Real Estate Development Co., Ltd. and Guangzhou Zengcheng Sub-branch of Bank of China Co., Ltd. [Case of Failure to Handle Transfer Registration due to Unauthorized Changes of Property by Owners after First Registration, Mortgage Registration Not Established]]

"Third, judging from the specific circumstances of this case, Zengcheng Sub-branch of Bank of China, as a creditor, went through the mortgage advance registration of the property involved in the case shortly after the loan was issued (September 12, 2008) in order to ensure the safety of its financial creditor's rights. However, due to the reasons of Yu Shaozhou and Tang Limei of the two borrowers, the property involved in the case still failed to go through the formalities of property transfer and mortgage registration. The occurrence of this situation is not the fault of the Bank of China Zengcheng Branch, nor is it his subjective will. Fourth, Article 52 of the newly promulgated Interpretation of the Supreme People's Court on the Application of the Relevant Guarantee System stipulates that after the parties have registered the mortgage advance notice, the advance notice registration obligee requests priority to be paid for the mortgaged property. After examination, there are cases where the building ownership has not been registered for the first time, the property registered in advance notice is inconsistent with the property when the building ownership is registered for the first time, and the mortgage advance notice registration has expired, if the conditions for mortgage registration are not met, the people's court shall not support it; if the first registration of the ownership of the building has been completed after examination, and there is no failure of the advance notice registration, the people's court shall support it, and shall determine that the mortgage right is established from the date of advance notice registration. According to Article 3 of the" Several Provisions of the Supreme People's Court on the Effect of Applicable Time "," Civil dispute cases caused by legal facts before the implementation of the Civil Code, where the laws and judicial interpretations at the time did not provide for but the Civil Code did, the Civil Code may apply. Provisions, except for those that obviously derogate from the legitimate rights and interests of the parties, increase the legal obligations of the parties, or deviate from the reasonable expectations of the parties, article 52 of the Interpretation of the Supreme People's Court on the Application of the Relevant Guarantee System is applicable to this case. In this case, the appellant has already registered the ownership of the house involved in the case for the first time, and Zengcheng Sub-branch of Bank of China has set up mortgage advance notice registration for the house involved in the case, and its rights do not have the failure circumstances stipulated in the second paragraph of Article 20 of the the People's Republic of China Property Law, and it has no fault for not registering the mortgage at present. Therefore, the court determines that the mortgage right of Zengcheng Sub-branch of Bank of Bank of Bank of Bank of Bank of China has been established from the bank of China since the mortgage notice notice registration, support the appellant's appeal that the Bank of China Zengcheng Branch has obtained the right to priority compensation for the property involved."

According to the provisions of Article 221 of the Civil Code, if the creditor's rights are extinguished or the registration is not applied for within 90 days from the date when the real estate registration can be carried out, the advance notice registration shall be invalid. From the point of view of the interpretation of the legislative purpose, the change of the notice registration to the increase of the time limit on the mortgage registration is conducive to the protection of the determination of the state of property rights, and urge the notice registration right holders to actively exercise their rights. If the right holder neglects the formal right, he loses the right of priority.

The relevant cases are as follows:

(1) Shandong Haiyang Municipal People's Court (2021) Lu 0687 Minchu No. 3734: Civil First Instance Civil Judgment on Disputes over Financial Loan Contracts such as Haiyang Sub-branch of Bank of China Limited and Qiao Zhehao [The obligee of advance notice registration failed to handle mortgage registration in time after the first registration of building ownership, resulting in the expiration of advance notice registration]]

Regarding the Bank of China Haiyang Branch on the pre-mortgage property involved in the case after the discount, auction, sale of the price whether to enjoy the priority of compensation. The Court believes that according to the relevant provisions of the "the People's Republic of China Property Law", because the house involved in the case has not gone through the formal mortgage registration, the Bank of China Haiyang Branch does not enjoy the priority of compensation. Article 52 of the Interpretation of the Supreme People's Court on the Application of the Guarantee System of the the People's Republic of China Civil Code stipulates that "after the parties have registered the advance notice of mortgage right, the obligee of the advance notice registration requests priority compensation for the mortgaged property. After examination, there are situations such as the first registration of building ownership, the inconsistency between the property registered in advance notice and the property registered in the first registration of building ownership, and the mortgage advance notice registration has expired, if the conditions for mortgage registration are not met, the people's court shall not support it; if the first registration of the ownership of the building has been completed after examination, and there is no failure of the advance notice registration, the people's court shall support it and shall determine that the mortgage right is established from the date of the advance notice registration." According to this regulation, two conditions must be met for the property that has been registered for the advance notice of mortgage to enjoy the priority of compensation, that is, the building has been registered for the first time, and there is no failure of the advance notice registration. At the same time, according to relevant regulations, after the advance notice registration, If the registration is not applied for within three months from the date when the creditor's rights are extinguished or the real estate registration can be carried out, the advance notice registration, the advance notice registration shall be invalid. Specific to this case, the house involved in the case went through the first registration of building ownership on April 20, 2020. So far, the conditions for handling the property right certificate and mortgage registration have been met. However, it has been more than three months since the time. The house involved in the case still has not gone through the mortgage registration, and the mortgage advance notice registration has expired. Therefore, the house does not meet the provisions of the Supreme People's Court on the application of the relevant guarantee system of the the People's Republic of China Civil Code of the People's Republic of China, and therefore does not meet the conditions for the right of priority compensation. For the Bank of China Haiyang Sub-branch of the request, the Court does not support.

(2) Shandong Jining Intermediate People's Court (2021) Lu 08 Min Zhong No. 4297: Shandong Huaruiyuan Real Estate Development Co., Ltd. and Zhang Hu, Zhang Chengkai and other financial loan contract disputes civil judgment of second instance [the obligee of advance notice registration failed to handle mortgage registration in time after the first registration of building ownership, resulting in the expiration of advance notice registration]]

On the question of whether the plaintiff has a priority right to pay the mortgaged property. The mortgage of real estate shall be registered, and the mortgage right shall be established at the time of registration. The second paragraph of Article 20 of the "the People's Republic of China Property Law" stipulates that after the advance notice registration, if the creditor's rights are extinguished or the registration is not applied for within three months from the date when the real estate registration can be carried out, the advance notice registration shall be invalid. In this case, the mortgaged property provided by the defendants Zhang Hu and Zhang Chengkai (No. 02-0102, Floor 1, Unit 02, Building 10, Shengjing Xiyuan Plot B, Southeast Huacheng) was registered only on June 6, 2019. After the defendant Huaruiyuan Real Estate Company registered the ownership of "Building 10, Shengjing Xiyuan Plot B, Southeast Huacheng" for the first time on November 27, 2019, 2019, the conditions for handling the property certificate and other certificates. Because both the plaintiff and the defendant failed to register the real estate mortgage within three months from the date when the real estate registration was able to be carried out, according to the above-mentioned legal provisions, the advance notice registration of the real estate mortgage involved in the case has become invalid. The Supreme People's Court on the application<中华人民共和国民法典>According to Article 52 of the interpretation of the relevant guarantee system, after the parties have gone through the mortgage advance notice registration, the obligee of the advance notice registration requests priority compensation for the mortgaged property. After examination, the property that has not been registered for the first time, the property registered in advance notice is inconsistent with the property at the time of the first registration of building ownership, and the mortgage advance notice registration has been invalid, The people's court will not support it. If the first registration of the ownership of the building has been completed after examination, and there is no such situation as the failure of the advance notice registration, the people's court shall support it and shall determine that the mortgage right is established from the date of the advance notice registration. Accordingly, because the advance registration of the mortgaged property involved in the case has lapsed, the plaintiff claims that the mortgaged property involved has the right of priority compensation, and the Court does not support it.

(3) Zhangzhou Intermediate People's Court of Fujian Province (2021) Min 06 Min Zhong No. 3123: Fujian Cross-Strait Agricultural Products Logistics City Development Co., Ltd., Industrial Bank Co., Ltd. Zhangzhou Branch and other financial loan contract disputes civil second-instance civil judgment [The building does not have the conditions for mortgage registration]]

The Court believes that the advance notice registration is a special registration handled by the parties to ensure the acquisition of property rights in the future when this registration is temporarily unavailable. The purpose of the parties to register the mortgage notice is that when they can register the mortgage, they can obtain a higher priority than other security interests. Therefore, in the case of a mortgage notice registration right holder requesting the exercise of the mortgage right, a review should be conducted as to whether the notice registration right holder has the conditions for mortgage registration. In this case, the real estate registered in advance of the mortgage in this case has not yet been registered for the first time (as to what causes the failure to register the ownership of the building for the first time in time, it has nothing to do with this case). According to the first paragraph of Article 52 of the Interpretation of the Supreme People's Court on the Application of the Guarantee System of the the People's Republic of China Civil Code, "After the parties have registered the mortgage advance notice, the advance notice registration obligee requests priority compensation for the mortgaged property. If the first registration of building ownership does not meet the conditions for mortgage registration, the people's court will not support it." The appeal request of the Zhangzhou branch of Industrial Bank lacks factual basis and will not be supported.

The conditions for the establishment of the mortgage right from the date of advance registration also include the property registered in advance and the property registered for the first time, which means that the property registered in advance needs to be the same as the property at the time of the first registration of the ownership of the building, and has the consent of the mortgagor and the right holder when signing the pre-mortgage contract.