Point of view... Whether the registration of mortgage advance notice has the effect of priority payment.
Published:
2020-06-05
When the buyer pre-purchases the commercial house from the developer, he applies for a mortgage loan from the bank with the pre-purchase. In view of the fact that the pre-purchased commercial house has not yet been delivered and has not yet met the conditions for handling the real estate ownership certificate, the buyer and the bank go to the real estate management department for mortgage advance notice registration. After the mortgagor receives the real estate ownership certificate, he will re-register the real estate mortgage. In practice, when the buyer defaults, the bank can claim the priority of compensation for the commercial housing according to the advance registration of the mortgage of the commercial housing.
Relevant Laws and Judicial Interpretation
Article 67 of the "Housing Registration Measures": "In any of the following circumstances, the parties may apply for advance registration: (1) Pre-purchased commercial housing; (II) set up mortgages with pre-purchased commercial housing; (III) the transfer or mortgage of house ownership; (IV) laws, Other circumstances stipulated by regulations."
Article 20 of the "Property Law": "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."
Article 30, paragraph 2, of the Measures for the Administration of Urban Real Estate Mortgage of the Ministry of Construction: Where the mortgage of commercial housing is purchased in advance, the registration authority shall record in the mortgage contract that if the mortgaged real estate is completed during the mortgage period, the parties concerned shall re-register the real estate mortgage after the mortgagor receives the certificate of real estate ownership.
Article 47 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the the People's Republic of China Guarantee Law stipulates: "If a house or other building that has not yet been built or is under construction is mortgaged according to law, the party concerned has registered the mortgage, and the people's court may determine that the mortgage is valid."
Prior to 2017, the tendentious opinion was that advance registration could not exercise the right of priority compensation, and at present, the decisions of courts vary from place to place, with some courts supporting the right of priority compensation.
Related Cases
Case 1: Shanghai Qingpu Sub-branch of China Everbright Bank Co., Ltd. v. Shanghai Donghe Real Estate Co., Ltd. and Chen Siqi's Guarantee Contract Dispute "Supreme People's Court Bulletin" No. 9, 2014
The focus of the dispute: the appellant Everbright Bank can exercise the mortgage on the property involved.
The Court of the Second Intermediate People's Court of Shanghai held that the registration of the mortgage advance notice set on the disputed property has a different legal nature and legal effect from the registration of the establishment of the mortgage right. The appellant Everbright Bank, as the obligee of the advance notice registration of the mortgage right of the disputed house, before the registration of the establishment of the mortgage right of the house, enjoys the right to request the registration of the mortgage right of the disputed house when the mortgage registration conditions are fulfilled or the agreed period expires, and can exclusively resist the disposition of the disputed house by others, but does not enjoy the actual mortgage right of the disputed house.
Case 2: Anhui Higher People's Court judged in the "Appeal Case of Loan Contract Dispute between Bank of China Limited Hefei Nancheng Sub-branch and Liu Zhongfa, Liu Juan, etc." ((2014) Wan Min Er Zhong Zi No. 00780) that "when the creditor's rights have reached the end and the property right registration and mortgage registration have not been completed, if the mortgagee is required to wait for the housing property right certificate and formal mortgage registration before exercising the mortgage registration, obviously does not conform to the original intent of the legislation and the original intent of the parties to sign the Mortgage Guarantee Contract", and accordingly the right holder of the advance mortgage registration can exercise the priority right of payment in respect of the subject matter on the basis of the advance mortgage registration.
Case 3: Trial and Supervision of Disputes over Financial Loan Contracts between Jinan Tianyi Real Estate Co., Ltd. and Pingyin Sub-branch of Industrial and Commercial Bank of China Co., Ltd. [Jinan Intermediate People's Court (2017) Lu 01 Min Zai No. 37]].
The court of first instance held that the plaintiff, Pingyin Sub-branch of Industrial and Commercial Bank of China Limited, had the right to give priority to the realization value of the mortgaged house recorded in No. 13696 of the "House Other Rights Certificate" in the first and second judgments above.
The court of first instance retrial held that: 1, the purpose of advance mortgage registration is only to prevent the presale party from selling real estate to a third party, can not be concluded that the right holder of advance registration has the right of priority compensation. In this case, ICBC Pingyin Sub-branch only in accordance with the relevant legal provisions of the Property Law for the advance mortgage registration procedures, the procedures can only ensure that the borrower late lock wind, Li Xingzheng may not dispose of the role of the house without authorization. If the borrower disposes of the house without authorization, no property effect will occur. 2. The property to be mortgaged must be owned by the mortgagor. In this case, the mortgage of the property set in the debt, although the mortgage registration certificate, but at that time the property was under construction in Tianyi Company, did not yet have the conditions for the registration of ownership of the house, the registration for the advance mortgage registration. According to the provisions of the Property Law, real estate needs to be registered to obtain ownership. Since Chi Suofeng and Li Xingzheng purchased auction houses, they do not have complete real rights for such unbuilt houses. Naturally, they cannot register their ownership. Chi Suofeng and Li Xingzheng did not obtain the ownership of the purchased house. In fact, they are not the owners of the house, and they cannot establish a mortgage on this house, ICBC Pingyin Branch is also unable to become a qualified mortgagee and cannot enjoy the right of priority compensation. Therefore, only after the completion of the house, late lock wind, Li Xingzheng obtained the certificate of ownership of the house and handled the formal mortgage registration, ICBC Pingyin Branch has the right to dispose of the house under the contract when late lock wind, Li Xingzheng does not perform the debt, and enjoy the right of priority compensation for its price. Therefore, ICBC Pingyin Branch's claim of priority compensation for the collateral involved in this case cannot be established. During the second instance, the court held that Article 47 of the interpretation of the Supreme People's Court on Several Issues concerning the application of the the People's Republic of China guarantee law stipulates: "if a house or other building that has not yet been built or is under construction is mortgaged according to law, the parties concerned shall register the mortgage, and the people's court may determine that the mortgage is valid." After receiving the key to the house purchased, Li Xingzheng and Chi Suo Feng handled the "Certificate of Other Rights of the House" and handed it over to the Pingyin Sub-branch of ICBC, which met the formal requirements for the mortgage to take effect. The House Other Title Certificate states that the other title of the house is ICBC Pingyin Sub-branch, and therefore, ICBC Pingyin Sub-branch is qualified as a mortgagee. ICBC Pingyin Branch's claim to give priority to the realization value of the property mortgaged by Late Lock Wind and Li Xingzheng is in accordance with the law.
The plaintiff, Pingyin Sub-branch of Industrial and Commercial Bank of China Limited, has the right to give priority to the realization value of the mortgaged house recorded in the "House Other Rights Certificate" No. 13696 of the flat house, within the scope of the principal and interest specified in the first and second judgments above.
Viewpoint
The purpose of the mortgagee to set up the pre-mortgage is to guarantee the future realization of the real right when the presale commercial housing does not have the conditions for the mortgage. If it is not possible to register the mortgage for reasons other than the mortgagee, the mortgagee should not bear this adverse consequence. If we blindly deny the reasonable rights and interests of the mortgagee, it will be detrimental to the stability and development of the entire financial industry. Therefore, in the case of no fault of the right holder of advance notice registration, the right holder can enjoy the right of priority compensation in line with the original meaning of the notice registration system.
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