Legal Literacy - This article discusses the definition, characteristics, nature, and procedures for registration mortgage rights specifically electronically, up to the extinguishment of HT
What is Security in Rem?
Article 1131 of the Civil Code regulates goods that can be used as security in rem, namely all movable and immovable property belonging to the debtor, both existing and future, which becomes collateral for the debtor's personal agreements to the creditor if in the future the debtor cannot pay his debt to the creditor.
Related to movable goods, security can be guaranteed by pledge and fiduciary transfer of ownership, while for immovable goods, especially land and objects related to land, it is encumbered with mortgage rights regulated in Law Number 4 of 1996 concerning Mortgage Rights on Land and Objects Related to Land (hereinafter referred to as “Mortgage Lawâ€). Related to immovable goods other than land, for example, seagoing vessels weighing 20 cubic meters or more, airplanes and helicopters are encumbered with hypothec rights.
Definition of Mortgage Rights
Mortgage Rights as regulated in Article 1 number 1 of the Mortgage Law explains that: “Mortgage right on land along with objects related to the land, hereinafter referred to as mortgage right, is a security right encumbered on land rights as intended in Law Number 5 of 1960 concerning Basic Agrarian Regulations, with or without other objects that constitute a unity with the land, for the repayment of certain debts, which gives a preferred position to certain creditors over other creditors.â€
From the definition mentioned in Article 1 number 1, the main elements of mortgage rights can be described, namely: mortgage rights can be encumbered on land and objects related to the land or only the land, security rights for debt repayment, debts guaranteed in a certain amount, the object of the Mortgage Right is land rights according to the Basic Agrarian Law (Ownership Rights, Building Use Rights, Cultivation Use Rights, and Use Rights), mortgage rights provide preferential rights to certain creditors over other creditors.
Characteristics of Mortgage Rights
Mortgage rights as a strong land security institution that is able to provide legal certainty for the parties, has the following characteristics:
- provides a preferred or prior position to the mortgage holder, namely certain creditors;
- can be used as collateral for debts that will exist and can guarantee more than one debt;
- always follows the object being guaranteed in whosoever's hands the object is (droit de suite/zaaksgevolg), thus the mortgage right will not end even if the object of the mortgage right is transferred to another party for any reason whatsoever;
- fulfills the principle of specialty with the making of the Deed of Granting Mortgage Rights (hereinafter referred to as “APHTâ€) and the principle of publicity which is applied at the time of registration of mortgage rights at the Land Office, so that it can bind third parties and provide legal certainty to interested parties;
- easy and certain execution of mortgage rights
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