Civil law allows for the provision of obligations with a forfeit, a deposit, a guarantee and other measures. Another interim measure is a pledge. Its essence boils down to the fact that in case of violation of obligations, the creditor sells the subject of pledge and compensates for the losses incurred.
What not
The subject of the pledge may be only those things, objects and property that can be sold and which are allowed for sale on the territory of our country.
In particular, article 336 of the Civil Code provides a list of items that are prohibited from being used as collateral:
- withdrawn from civilian traffic;
- payment requirements inextricably linked with the identity of the creditor are not permissible;
- property rights and things, the assignment of which is expressly prohibited by regulatory enactments.
The first category is not very extensive. Those withdrawn from circulation are those things that belong exclusively to the state. For example, the resources of the continental shelf, products of the defense complex, nuclear weapons, protected areas, national parks and so on.
General concepts
To understand what things can be a subject of a pledge, you need to understand the term. The word "pledge" is understood as a means of securing obligations. If the debtor improperly fulfills or does not fulfill obligations at all, the creditor has the right to satisfy them at the expense of the collateral property.
Obtained mortgaged property in kind, called a mortgage, is possible only in cases directly specified in regulatory documents. In other situations, the collateral is sold through tendering, and the proceeds are transferred to the creditor.
Kinds
On the subject allocate a pledge of rights or property. According to the location of the property:
- solid, that is, without transferring things to the creditor, for example, a pledge of goods in circulation;
- a mortgage that ensures the transfer of the item to the creditor, for example, a pledge at a pawnshop.
There is a classification according to the degree of connection with the land:
- movable property;
- the property.
Grounds for occurrence
Legal relations in the field of collateral arise on the basis of an agreement. The Civil Code also provides for bail on the basis of law. The simplest example is buying a product in a store on credit. The buyer is the owner and pledgor, the subject of the pledge is the acquired item.
Another example: under an agreement on shared construction, a land plot and a property being built are pledged to equity holders. The same situation when buying municipal real estate in installments.
Subject of the contract
According to the provisions of Article 336 of the Civil Code, the subject of the pledge is any property, including property rights. The exception is those items for which foreclosure is not allowed. The simplest example is child support.
The subject of a pledge may even be rights or things that will be acquired in the future.
Extrajudicial Order
Most often, collateral agreements are found in legal relations with banks. To resort to an extrajudicial procedure, such a condition must be specified in the contract itself. However, in some cases, an extrajudicial order cannot be applied at all. In particular, they cannot take away the only housing, even if it is the subject of a pledge agreement.
In other cases, for the implementation of the extrajudicial order, several conditions must be met:
- the contract must contain the conditions for the sale of property;
- the value of the collateral is indicated;
- in the absence of a price, the procedure for its determination is described.
On the example of an agreement with a bank, the following stages of the implementation of extrajudicial collection of the subject of pledge can be distinguished:
- Written notification of the borrower and the pledgor (these parties may not coincide in one person). Normative acts do not contain requirements for such a document, therefore it is drawn up in free form. Typically, the notification contains the details of the contract, indicates the obligation, which is secured by a pledge, the chosen method of selling the property and its price. The borrower has 10 days to consider the notice, unless otherwise indicated in the document.
- The mortgagor transfers the property or documents to it to the bank. An act of acceptance must be compiled.
- The Bank sends a notification to the borrower about the planned date and place of bidding.
- Bids are held at which the subject of the pledge is sold. If the proceeds from the auction were not enough to cover the entire debt, the bank has the right to foreclose other property of the debtor. If the amount is greater, then the difference after the bidding is returned to the mortgagor.
The bank has the right to purchase a pledged item if the bidding did not take place. If the lender does not want to buy property or reserve it, then repeated tenders are held.
Court order
Foreclosure on the subject of pledge may be carried out in court, even if the contract provides for extrajudicial. In stages, everything looks as follows:
- The bank is suing. He has the right to demand that the claim be secured by seizing property.
- The outcome of the proceedings is a decision. The defendant has the right to request a deferment. If the application is satisfied, then during this period interest will still be charged.
- On the basis of the writ of execution, the bailiff enforces the decision of the court, or rather, seizes property for the further sale of the subject of pledge at auction.
The borrower has the right to repay debts and reimburse all costs of the lender at any stage of judicial and extrajudicial collection.
Contract requirements
Current legislation requires that a pledge agreement be drawn up according to certain rules. It must contain the necessary conditions:
- subject of pledge;
- obligation price or value calculation procedure;
- deadlines;
- obligations secured by property.
If the contract is complex, then several obligations are included in it. Collateral may relate not only to the underlying obligation, but also to expenses that are related to the maintenance of the property. In any case, such conditions should be stipulated in the agreement.
The pledged item may be any things that can be sold, if they are not prohibited for implementation by applicable law.
If the goods are in circulation
Legislation allows the provision of collateral in the form of goods that are in circulation. That is, the creditor does not take the property, and the debtor continues to use it. He retains the right to dispose of property, change its composition and make certain adjustments. In fact, we are talking about turning raw materials or inventories into finished products.
The main condition is that the value of the property should not be reduced in comparison with that indicated in the contract. After the sale of property, it ceases to be collateral.
Collateral Register
Since 2014, a registry of movable property held as collateral has been operating on the Internet. It is very popular with motorists, because there you can check the vehicle for restrictions.
All information is on the web. For example, you can find information about the car on a specific tab by entering the VIN of the car. You can also find out information on the data on the mortgagor or on the details of the notification on the pledge of movable property.
The service is paid, the price depends on the number of pages of the document requested by the interested person. For one sheet you will have to pay 40 rubles.
Pros and cons
Positive aspects of registration of a pledge:
- guarantees for the lender;
- the subject of the pledge may be both movable and immovable property, with the exception of those things that are prohibited for sale or withdrawn from civil circulation;
- first of all, claims that are secured by a pledge are satisfied, and only then are claims that are not secured by anything;
- disposition of property that is pledged, with the exception of property in circulation, is not allowed;
- the pledger may be not only the debtor, but also another person.
The main disadvantage is if the pledge holder does not receive the pledged movable property, that is, there is a huge risk that it will be alienated to the unscrupulous buyer. In the future, problems may arise with the establishment of a new owner.
The second minus is a very complex and time-consuming procedure for the sale of mortgaged property.