Legal Literacy - This article discusses the definition, characteristics, nature, and procedures for registering mortgage rights, specifically electronically, up to the removal of the Mortgage Right.

What is Material Guarantee?

Article 1131 of the Civil Code regulates goods that can be used as material collateral, namely all movable and immovable property belonging to the debtor, both existing and future, which becomes collateral for the debtor's personal agreements with the creditor if in the future the debtor cannot pay his debt to the creditor.

Regarding movable goods, they can be guaranteed with pawn and fiduciary, while immovable goods, especially land and objects related to land, are 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 Law”). Regarding immovable goods other than land, for example, seagoing vessels weighing 20 cubic meters or more, airplanes and helicopters are subject to hypothec rights.

Definition of Mortgage Rights

Mortgage Rights as regulated in Article 1 number 1 of the Mortgage Law explains that: “Mortgage rights on land and objects related to land, hereinafter referred to as mortgage rights, are security rights encumbered on land rights as referred to in Law Number 5 of 1960 concerning Basic Regulations on Agrarian Principles, with or without other objects that are an integral part of the land, for the repayment of certain debts, which gives a preferred position to certain creditors over other creditors.”

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 land or only the land itself, security rights for debt repayment, debts guaranteed in a certain amount, the object of the Mortgage Right is land rights according to the UUPA (Ownership Rights, Building Use Rights, Cultivation Use Rights, and Use Rights), mortgage rights provide preferential rights or priority rights to certain creditors over other creditors.