Maintaining Hypothec on Restitution Obligation

Extract

[...] The Court of Cassation found itself faced with the following problem: Is it possible to maintain a mortgage despite the annulment of the loan contract, to guarantee the obligation of restitution? The Court responds positively, it cancels and annuls the judgment rendered by the Court of Appeal of Poitiers. In fact, the request for maintenance of guarantees on immovable property should not be rejected. This judgment brings an innovation, it is possible to report the mortgage on the obligation of restitutionI). However, this solution faces many criticismsII). [...]

[...] A transfer based on the obligation of restitution When obtaining a loan, an obligation of restitution arises, which is only extinguished when it has been executed. This concept of restitution allows for guarantees to ensure this restitution. This is why maintaining the guarantees with which the loan was granted makes it possible to guarantee restitution. This solution was first rendered by the first civil chamber of the Cour de cassation on July regarding a suretyship following the nullity of a loan agreement. In this case, maintaining the hypothec until the extinction of this obligation ensures that the bank's money will be returned to it. [...]

[...] The possibility of reporting the hypothec on the obligation of restitution, an important guarantee for the creditor The maintenance of reporting the hypothec on the obligation of restitution, however, encounters difficulties in implementation In addition, this ruling has allowed the legal consecration of the principle of reporting the hypothec on the obligation of restitution A. The difficulties of implementing the hypothec by the creditor To write B. The legal consecration of the reporting of the hypothec on the obligation of restitution Thanks to this ruling, it is possible to say that jurisprudence is a source of law since in this case, the Court of Cassation will affirm the principle that the hypothec subsists until there is restitution. [...]

[...] The hypothec cannot exist independently of the claim. In this case, following the developer's default, the resolution of the sales and loan agreements was pronounced and the repayment of the sums lent by the bank was also requested. Since this resolution has retroactive effect, the court of appeal ruled that it was not possible to grant the bank's request to maintain the guarantees on the real estate because this would mean that the hypothec still exists and independently of the loan, whereas this hypothec was agreed as an accessory security for the contracted loan. [...]

[...] III, n° 167 Traditionally, the retroactive effect attached to the nullity or resolution of a sale makes the securities registered on the property in question ineffective, which must be cancelled without the creditors being able to rely on them. Nevertheless, an exception has been admitted by the jurisprudence in a decision of the third civil chamber dated 5 November 2008. In this case, a loan contract had been concluded with a bank to finance the acquisition of real estate lots. A mortgage had been registered on the properties to secure the repayment of the loan. [...]