Viewpoint... A review of mortgage issues in land expropriation.
Published:
2021-12-26
Brief of the case In September 2010, a bank and a company signed a maximum mortgage contract, a company to land and real estate for the loan to provide mortgage guarantee, for mortgage registration. In 2014, the land and real estate used for mortgage were demolished by the government because of municipal projects, and the mortgage was lost. A bank sued the court to confirm that the compensation for the demolition of the mortgaged property has the right of priority within the scope of the principal and interest. The court held that there was insufficient evidence in the claim of a certain bank, so it rejected the claim of a certain bank. case assessment The reason why the court in this case did not support a bank to receive priority compensation for demolition and relocation is: The land and real estate mortgaged in this case were demolished by the government due to municipal projects, and the collateral was lost. According to Article 80, paragraph 1, of the Interpretation of the Supreme People's Court on Certain Issues Concerning the Application of the the People's Republic of China Security Law, "in the event of loss, damage or expropriation of the mortgage, the mortgagee may give priority to the payment of insurance money, compensation or compensation for the mortgage". And Article 174 of the the People's Republic of China Property Law stipulates that "during the period of security, if the secured property is damaged, lost or expropriated, the security interest holder may give priority to the insurance money, compensation or compensation obtained". Therefore, a bank has a priority right to be paid for the mortgage demolition paid by the government department. However, a bank should bear the burden of proof whether the government compensates and how much it should compensate. However, none of the banks provided evidence, so the court held that "the priority compensation for demolition and relocation claimed by a bank will not be dealt with temporarily, and another claim can be made after the bank has corresponding evidence". Summary of practical experience Don't forget the past, the teacher of the future. To avoid similar failures in the future, the following recommendations are made: Based on the basic principle of "who claims who gives evidence" in the Civil Procedure Law, after the mortgage is levied, the mortgagee shall list the relevant evidence to prove whether the mortgagee has received compensation and the specific amount of compensation when the mortgagee claims priority compensation for the mortgage. For example, the mortgagee may collect the collection announcement of the mortgage and find information about the collection compensation.
Brief of the case
In September 2010, a bank and a company signed a maximum mortgage contract, a company to land and real estate for the loan to provide mortgage guarantee, for mortgage registration. In 2014, the land and real estate used for mortgage were demolished by the government because of municipal projects, and the mortgage was lost. A bank sued the court to confirm that the compensation for the demolition of the mortgaged property has the right of priority within the scope of the principal and interest. The court held that there was insufficient evidence in the claim of a certain bank, so it rejected the claim of a certain bank.
case assessment
The reason why the court in this case did not support a bank to receive priority compensation for demolition and relocation is:
The land and real estate mortgaged in this case were demolished by the government due to municipal projects, and the collateral was lost.According to Article 80, paragraph 1, of the Interpretation of the Supreme People's Court on Certain Issues Concerning the Application of the the People's Republic of China Security Law, "in the event of loss, damage or expropriation of the mortgage, the mortgagee may give priority to the payment of insurance money, compensation or compensation for the mortgage". And Article 174 of the the People's Republic of China Property Law stipulates that "during the period of security, if the secured property is damaged, lost or expropriated, the security interest holder may give priority to the insurance money, compensation or compensation obtained".Therefore, a bank has a priority right to be paid for the mortgage demolition paid by the government department.
However, a bank should bear the burden of proof whether the government compensates and how much it should compensate. However, none of the banks provided evidence, so the court held that "the priority compensation for demolition and relocation claimed by a bank will not be dealt with temporarily, and another claim can be made after the bank has corresponding evidence".
Summary of practical experience
Don't forget the past, the teacher of the future. To avoid similar failures in the future, the following recommendations are made:
Based on the basic principle of "who claims who gives evidence" in the Civil Procedure Law, after the mortgage is levied, the mortgagee shall list the relevant evidence to prove whether the mortgagee has received compensation and the specific amount of compensation when the mortgagee claims priority compensation for the mortgage. For example, the mortgagee may collect the collection announcement of the mortgage and find information about the collection compensation.
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