Is an important legal protection regulated by the Turkish Civil Code in order to secure the receivables of contractors, subcontractors and craftsmen who contribute to construction and repair activities . This right creates a direct collateral on the real estate and provides the creditor with the opportunity to collect his receivables primarily from the price arising from the sale of the real estate in case of non-payment of the debt. The legal mortgage right, which supports economic security and prevents victimization especially in the construction sector, both protects the rights of creditors and encourages debtors to fulfill their obligations. In this article, we will examine in detail the historical development, legal nature, registration, termination and relevant legal regulations of the legal mortgage right of the construction creditor.
Subheadings
- What is the Legal Mortgage Right of the Construction Creditor?
- Historical Development of the Legal Mortgage Right of the Building Creditor
- Reasons for the Emergence of Legal Mortgage Rights
- Legal Nature of the Legal Mortgage Right of the Building Creditor
- Parties to the Legal Mortgage Right of the Building Creditor
- Subject of the Legal Mortgage Right of the Building Creditor
- Registration of Legal Mortgage Right of the Building Creditor
- Order and Priority of Legal Mortgage Rights of the Building Creditor
- Termination of the Legal Mortgage Right of the Building Creditor
1. What is the Legal Mortgage Right of the Construction Creditor?
The legal mortgage right of the construction creditor is a type of security recognized in accordance with Article 893 of the Turkish Civil Code and ensures that the receivables of contractors, subcontractors and craftsmen engaged in construction activities are secured. This right provides security to the creditor against the risk of non-payment of the amount to be paid for the works performed within the scope of the work contract .
The legal mortgage right supports economic security in the sector by securing the payments of those who work on construction projects . Subcontractors and craftsmen in particular experience great hardship when they cannot receive compensation for their work on real estate. In order to alleviate this hardship, the legislator has allowed creditors to establish a mortgage on real estate .
Legal mortgage right of the building creditor:
- It is a right in rem .
- If the debt is not paid, the real estate is converted into cash and the creditor is paid.
- the creditor with a safer position compared to other creditors by granting priority rights .
This right is of great importance for construction creditors to continue their economic activities, considering the long-term and costly nature of construction activities.
2. Historical Development of the Legal Mortgage Right of the Building Creditor
The legal mortgage right of the construction creditor has a long history in legal systems. This right was developed to prevent economic losses of those who contributed to construction activities and to ensure that they benefit from the value of the real estate. The historical development process is built on similar foundations in both Roman law and modern legal systems.
2.1. Legal Mortgage Right in Roman Law
Roman law has developed a security mechanism for receivables arising from construction activities . In order for people engaged in construction activities to be able to secure their payments from the real estate owner:
- It is permitted to establish a lien on the real estate.
- This right provided an important guarantee, especially for the craftsmen and contractors who contributed to the construction of the real estate.
This system, which emerged in Roman law , became the basic reference point in various legal systems in later periods.
2.2. Mortgage Rights in the Ottoman Period
Mortgage-like collateral systems in the Ottoman period were based on the provisions of Islamic law regarding mortgage . However, this system did not fully meet the modern mortgage rights based on real estate ownership.
- With the Tanzimat period, the influence of Western law began to be seen in Ottoman law and real estate mortgage systems were accepted.
- Securing receivables arising from construction activities has been placed within a specific framework by the Mecelle .
2.3. Legal Mortgage Right in the Republic Period
With the proclamation of the Republic, radical reforms were carried out in the Turkish legal system and the right to legal mortgage was regulated in a modern sense. In particular:
- The provisions regarding mortgage rights on immovable properties were clarified with the Turkish Civil Code of 1926 .
- Contractors, subcontractors and craftsmen are granted the right to establish a mortgage on real estate for receivables arising from construction activities .
2. 4. Legal Mortgage Right Today
In Turkish law, the legal mortgage right of the creditors of the building is clearly regulated by Article 893 of the Turkish Civil Code No. 4721. Accordingly:
- have the right to establish a legal mortgage on the real estate in order to secure their receivables .
- Modern legal systems accept this right as a necessity to ensure the economic security of the construction sector.
The main purpose of the legal mortgage right today is:
- To ensure the payment of receivables arising from construction activities,
- To ensure that the real estate owner pays his debts on time,
- To protect the contractors, subcontractors and craftsmen who contributed.
The legal mortgage right of the construction creditor has developed throughout history from Roman law to the present day. In Turkish law, this right has been secured by the Civil Code , ensuring the protection of receivables arising from construction activities. This right, which has been a tool that has supported economic security throughout history, is of great importance in terms of the sustainability of the modern construction sector .
3. Reasons for the Emergence of Legal Mortgage Right
The legal mortgage right was created to protect the economic rights of contractors, subcontractors and craftsmen who contributed to construction activities. Creditors who contributed to the construction or repair of real estate needed this right to secure their payments. The reasons for the emergence of the legal mortgage right can be examined under three headings: legal , economic and practical reasons .
3.1 The Principle of Subject to the Upper Offering
One of the most important reasons for the emergence of legal mortgage rights is the principle of being subject to superior demand . According to this principle:
- Construction, repair or improvement works carried out on a real estate are considered as an integral part of that real estate .
- The contractor or craftsman increases the value of the real estate due to the operations he performs on the real estate.
In this case, even if the owner of the real estate has not paid for the work done, the construction becomes a part of the real estate . In order to prevent the labor and contribution of the creditor from being disregarded along with the real estate , a legal mortgage right has been granted.
3.2 Economic Reasons
Another important reason for a legal mortgage is to provide economic security . Especially in large capital and risky areas such as the construction sector:
- Protection of Creditors:
- Receivables arising from construction activities are directly related to the value of the real estate.
- Contractors and craftsmen can suffer significant economic losses if they are not paid for their labor and materials.
- Sustainability of the Sector:
- The legal mortgage right protects the rights of building creditors and creates an environment of trust in the sector.
- Thanks to secured receivables, contractors and craftsmen can continue working on new projects.
- Motivation of the Real Estate Owner to Pay His Debts:
- Since a mortgage can be established on the real estate through the legal mortgage right, the real estate owner attaches more importance to paying his debt.
3.3 Need for Legal Regulation
legal security in debt relations also plays an important role in the emergence of legal mortgage rights . In order to protect receivables arising from construction activities:
- Securing Receivables:
- In order to secure the receivables of the contractor and subcontractors, it is necessary to establish real rights such as mortgages.
- Creditors who have direct rights over the real estate can primarily benefit from the proceeds of the sale of the real estate in the event of non-payment of the debt.
- Dispute Prevention:
- The legal mortgage right provides a legal framework for resolving disputes in debt relations .
- Creditors can pursue their rights by relying directly on the mortgage and avoid lengthy litigation processes.
3.4 Right to Benefit from the Value of Real Estate
The legal mortgage right gives the creditor the right to benefit from the value of the real estate. Thanks to this right:
- If the owner of the real estate does not pay his debt, the creditor can sell the real estate through enforcement .
- The creditor's payment is primarily covered from the sale price of the real estate .
This situation provides great economic security for creditors and significantly reduces the risk of non-collection of their receivables.
The legal mortgage right arose from the need to protect receivables arising from construction activities. The principle of being subject to the upper supply , economic reasons , the need for legal security and the right of creditors to benefit from the value of the real estate constitute the basic foundations of this regulation. Thanks to this right, the rights of the contractor, subcontractor and craftsmen are protected, while the responsibility of the real estate owner to pay his debts is also secured.
4. Legal Nature of the Legal Mortgage Right of the Construction Creditor
The legal nature of the legal mortgage right of the construction creditor has long been a matter of debate in doctrine and practice. This right is accepted as an authority that the creditor has for the purpose of creating security over the immovable . However, different views have emerged on whether this authority is a strictly personal right or a real right . There are three main views in terms of legal nature:
4.1 Personal Rights Opinion
According to the personal right view, the legal mortgage right of the creditor of the building is accepted as a right arising from the receivable relationship . According to this view:
- The construction creditor only has the right to demand payment of the debt from the debtor, who is the owner of the real estate .
- The mortgage right does not create a direct real right over the real estate; it only arises as a result of the debt relationship.
Defended Points:
- The right of the construction creditor is a secondary right arising from the claim relationship .
- In case the real estate is converted into cash, the construction creditor can primarily benefit from the value of the real estate.
Criticism:
The personal rights view cannot fully protect the creditors of the building because this right may leave the creditor unprotected when the owner of the real estate changes or is transferred to third parties .
4.2 Real Rights Opinion
According to this view, the legal mortgage right of the building creditor is a real right . Real rights provide limited authority directly over the property and can be asserted against anyone.
Defended Points:
- The construction creditor has a direct mortgage on the real estate.
- Even if the ownership of the real estate changes hands, the mortgage right continues on the new owner .
- The right of mortgage ensures that the creditor's payment is collected first in case the real estate is converted into cash .
An Important Aspect: The legal mortgage right of the construction creditor
provides legal security against third parties in rem . Therefore, modern legal systems accept the mortgage right as a real right .
4.3 The view of debt related to goods
As a third view, it is argued that the legal mortgage right of the creditor of the building is a debt related to the goods . This view includes both personal and real right characteristics.
Key Features:
- is directly related to the right established on the real estate .
- Even if the real estate changes hands, the mortgage right passes to the new owner along with the real estate .
- Even though the mortgage right has a real nature, it is based on the receivable relationship .
Advantage: The view of debts related to property provides
a balancing solution for the rights of the creditors of the building, both in terms of claims arising from personal claims and in terms of providing real security on the real estate .
Supreme Court Opinion and Practice
In the Supreme Court and in practice, the legal mortgage right of the building creditor is generally accepted as a real right . Because:
- The mortgage established on the real estate can be asserted against third parties.
- In case of sale or change of hands of the real estate, the mortgage right continues on the new owner .
- The creditor's receivables are secured and collected with priority based on the value of the real estate.
Although the legal nature of the legal mortgage right of the construction creditor is subject to different opinions in the doctrine, it is accepted as a right in rem . Thanks to this right:
- Construction creditors secure their receivables regardless of who owns the real estate.
- In the sale of the real estate, the mortgage right continues and the creditor's payment is collected first.
prevents grievances by providing
legal and economic security for contractors, subcontractors and craftsmen working in the construction sector .
5. Parties to the Legal Mortgage Right of the Construction Creditor
The legal mortgage right of the construction creditor is based on a debt relationship established between two main parties. These parties are defined as the mortgage creditor (rightful owner) and the mortgage debtor (obligor). Both parties have certain obligations and rights within the scope of the legal mortgage right.
5.1 Mortgage Creditor
Mortgage creditor is the person who has contributed to the construction activities and has the right to request the establishment of a mortgage on the real estate. They are generally the parties operating within the scope of the work contract . Mortgage creditor includes:
- Contractor:
- He is the person who undertakes the construction or repair of the building and is the person who is paid for this work.
- The contractor may request a legal mortgage on the property to guarantee payment for the work he has done.
- Subcontractor:
- They are people who work under the main contractor and undertake certain works and a part of the construction.
- For example; works such as plastering, painting and plumbing can be done by subcontractors.
- Subcontractors may also claim legal lien rights for the work they have done.
- Craftsmen:
- Craftsmen, artisans and material suppliers who directly contribute to the construction or repair activities are considered mortgage creditors.
- These persons may use their right of lien to secure their receivables arising from the work they have done or the materials they have provided.
5.2 Mortgage Debtor
The mortgage debtor is the person who owns the real estate on which construction activities are carried out and who becomes liable in the event of the establishment of the mortgage right. The basic responsibilities of the mortgage debtor are as follows:
- Being a Real Estate Owner:
- Legal mortgage right can only be established on the person who owns the real estate . The owner is deemed to have assumed the debt as the mortgage debtor.
- Obligation to Pay the Debt:
- The debt that gives rise to the mortgage right is the payment debt of the real estate owner to the creditors of the building . When the debt is not paid, a mortgage right is established on the real estate.
- Real Estate Becoming a Liability:
- If the real estate owner does not fulfill his/her debt, the building creditors may request the sale of the real estate through enforcement . In this case, the rights of the creditors are met based on the price of the real estate.
Mutual Rights and Obligations of Mortgage Creditor and Debtor
- Rights of the Mortgage Creditor:
- It may request the establishment of a legal mortgage on the real estate.
- If the debt is not paid, the real estate may be sold through enforcement proceedings .
- collect its receivables with priority over the sales price of the real estate .
- Obligations of the Mortgage Debtor:
- It is responsible for ensuring the payment of the debt and preventing the victimization of the creditors of the construction company.
- It must not prevent the creditor from fulfilling his mortgage rights.
Multiple Creditor Situation
There may be more than one creditor in a construction activity . In this case:
- The order of priority among creditors is determined by the date of the mortgage establishment.
- The priority creditor shall first collect his right from the price of the real estate.
Considering that the contractor, subcontractor and craftsmen can all be creditors in construction activities, the legal lien right plays a critical role in securing receivables, especially in large projects.
The parties to the legal mortgage right of the construction creditor are determined as the mortgage creditor and the mortgage debtor . The contractor, subcontractor and craftsmen are entitled as creditors, while the real estate owner is liable as the debtor. This right both ensures the protection of receivables arising from construction activities and ensures that the debtor fulfills his/her responsibility.
6. Subject of the Legal Mortgage Right of the Building Creditor
the real estates on which rights can be established as a result of construction or repair activities . These real estates must be real estates affected by construction activities in accordance with the principle of “subject to superior supply”, which is the historical basis of the legal mortgage right . In addition, the conditions under which these real estates can be included in the scope of mortgage are also determined in the legal framework.
6.1 Real Estate on Which Legal Mortgage Rights Can Be Established
Legal mortgage right is established on real estates that can create legal security as a result of construction and repair activities . According to the Turkish Civil Code, these real estates are as follows:
- Title Deeded Properties:
- Mortgage rights can only be established on real estate registered in the land registry .
- These real estates may be plots of land, lands, apartments or detached buildings.
- Real Estates with Condominium Ownership Established:
- In real estates with condominiums, legal mortgage rights can be established on independent sections .
- For example, a building creditor who contributed to the construction of an apartment building may request a mortgage for each independent section.
- Unfinished Structures:
- Legal mortgage rights can also be requested for real estate that is under construction and is not yet registered as a building in the land registry.
- In this case, a mortgage is established on the real estate, which is an integral part of the construction activities.
- Activities on Lands:
- If a receivable arises due to a structure constructed on a plot of land or repairs made, this receivable creates a legal mortgage on the plot of land .
6.2 Disputed Properties
It may be a matter of debate whether a legal mortgage can be established on certain real estates. These real estates are as follows:
- Real Estate Without Title Deed:
- It is debatable whether a mortgage right can be established on real estate that is not recorded in the land registry.
- According to the generally accepted view, mortgage rights can only be established on real estate with title deeds .
- Public Real Estate:
- Legal mortgage rights cannot be established on real estate belonging to the state or public institutions.
- However, different legal methods are suggested to protect the rights of subcontractors or craftsmen in some public projects.
- Common Usage Areas:
- Whether a mortgage right can be established on common areas (car park, garden etc.) in buildings with condominium ownership can be evaluated depending on the common share of the independent sections.
Relation of Construction Activities to the Subject of the Real Estate
In order for a legal mortgage right to be established, the construction activities must be directly related to the real estate . This relationship occurs in the following ways:
- Construction Activities:
- Situations such as the construction of a new building or the expansion of an existing property are included in construction activities.
- Repair and Improvement Activities:
- If the value of the real estate increases as a result of maintenance, repair or renovation works, a mortgage right arises.
- Material Supply:
- Providing the materials required for the construction enables the construction creditor to exercise his legal mortgage right.
Opinion of the Supreme Court on the Subject of Legal Mortgage Right
The Supreme Court, in its decisions regarding the subject of legal mortgage right:
- Mortgage rights can only be established on real estates registered in the land registry,
- the construction or repair activities carried out on the real estate entitle the creditor.
For example: If expenses have been incurred during the foundation laying process of a building, the creditors of the building may claim a legal lien on the building that has not yet been completed.
The subject of the legal mortgage right of the construction creditor is limited to the real estates registered in the land registry and the structures that are part of the construction activities. The legal mortgage right provides protection for the receivables that become directly related to the real estate as a result of the construction activities. With some exceptions such as real estates without a title deed and public real estates, this right ensures the continuity of economic activities by securing the receivables of contractors and craftsmen .
7. Registration of the Legal Mortgage Right of the Building Creditor
In order for the legal mortgage right of the construction creditor to create security on the real estate, the registration process must be carried out. Registration means recording the mortgage right in the land registry and with this process, the mortgage right gains legal validity . The registration process enables the legal mortgage right to be asserted both between the parties and against third parties.
7.1 Registration Conditions
Certain conditions must be met for the legal mortgage right of the building creditor to be registered. These conditions are as follows:
- A Valid Receivable:
- The receivable must arise from a work contract . In other words, there must be a debt arising from the labor and materials of the contractor, subcontractor or craftsmen involved in the construction activity.
- Construction Activities on the Real Estate:
- Legal mortgage right is established to secure receivables arising from construction activities such as the construction, repair or expansion of real estate.
- Request Submission Period:
- According to Article 893 of the Turkish Civil Code, in order for the creditor of the building to register his legal mortgage right, he must make a request within three months from the date of the receivable .
- In case of expiry of the term, the creditor loses his legal mortgage right.
- Real Estate Being Registered in the Land Registry:
- Legal mortgage rights can only be established on real estates registered in the land registry . Registration cannot be carried out on real estates without a title deed.
7.2 Registration Process
The registration process of the legal mortgage right of the construction creditor takes place within the framework of certain steps:
- Preparing a Request Petition:
- The creditor of the building applies to the land registry office and requests the registration of the legal mortgage right .
- The petition must include the source of the receivable (contract for work), the amount of the receivable and the title deed information of the real estate.
- Documentation of Receivables:
- For registration, the creditor of the building must submit documents proving his receivable:
- Work contract,
- Invoices and delivery reports showing construction activities,
- Documents showing that the receivable has not yet been paid.
- Inspection of Land Registry Offices:
- The Land Registry Directorate evaluates the registration request by examining the documents submitted by the building creditor.
- If the documents are found to be appropriate, a legal mortgage note is recorded in the land registry of the real estate.
- Recording of Mortgage Note:
- After the registration process, a legal mortgage note is added to the title deed of the real estate for the receivables of the construction creditor.
- This annotation protects the rights of the creditor against both the real estate owner and third parties.
7.3 Legal Consequences of Registration
The legal consequences arising from the registration of the legal mortgage right are as follows:
- Gives the Creditor Real Rights:
- With the registration process, the construction creditor becomes the owner of a real right on the real estate . This right can be asserted against anyone.
- Priority Claim:
- The creditor shall collect his receivables with priority over other creditors in the sale of the real estate .
- Continuity in the Transfer of Real Estate:
- Even if the ownership of the real estate is transferred, the registered mortgage right continues on the new owner .
- Power of Sale through Execution:
- If the debt is not paid, the creditor of the building may request the sale of the real estate through enforcement proceedings and collect the receivable from the sales price.
Supreme Court Opinion and Practice
The Supreme Court, in its decisions regarding the registration of the legal mortgage rights of the building creditors:
- The three-month period for registration is definite,
- It emphasizes that the source of the receivables must be clearly documented.
- a mandatory procedure to secure the receivables of the building creditors .
Sample Supreme Court Decision:
“The legal mortgage right secures the right of the creditor on the real estate. However, this right arises with the registration process carried out in due time and becomes assertable against third parties.”
provides legal protection on the real estate by securing the rights of the creditors . The registration process must be completed within a certain period of time and with the necessary documents. With registration, the construction creditor gains a right in rem and has the right to collect his receivables with priority . This process is one of the basic foundations of economic security in the construction sector.
8. Order and Priority of the Legal Mortgage Right of the Construction Creditor
The legal mortgage rights of the construction creditors are evaluated in a priority order compared to the rights of other creditors on the real estate . This situation allows the construction creditors to collect their receivables more safely and quickly . The mortgage order and priority right are of great importance especially in cases where the real estate is sold through foreclosure or there is more than one mortgage right on it.
8.1 Conditions of Priority Right
the legal mortgage rights of the creditors of the building to constitute a priority right, certain legal conditions must be met:
- Registration in Time:
- The construction creditor must register the legal mortgage right in the land registry within three months from the date of origin of the receivable .
- Mortgage rights that are not registered in due time cannot gain priority over other creditors.
- Documentation of Receivables:
- The creditor must prove the existence of the debt arising from construction activities with documents such as contracts, invoices or delivery reports .
- Adding annotation to the Title Deed:
- must be annotated in the title deed of the real estate . This process protects the mortgage right against third parties.
8.2 Use of Priority Right
are in a certain order of priority compared to other mortgage rights on the real estate . The priority right comes into play in the following cases:
- In the Sale of Real Estate:
- When a real estate is put up for sale through enforcement proceedings, the creditors of the building collect their receivables primarily from the sales price.
- In this case, the mortgage rights of the building creditors are listed according to date and the first registered mortgage right is considered to have priority.
- Protection Against Other Creditors:
- If there is more than one mortgage right or claim on the real estate, the rights of the creditors of the construction are protected first due to their legal nature .
- This situation enables the construction creditors to obtain stronger legal security against third parties.
- Payment Order:
- When determining the mortgage order, the date of registration in the land registry is taken as basis. The mortgage right registered earliest is considered superior to other mortgage rights .
Right to Priority with Supreme Court Decisions
The Supreme Court has drawn attention to the following issues in its decisions regarding the order and priority of the legal mortgage rights of building creditors:
- The legal mortgage right takes precedence over other mortgage rights, provided that it is registered in the land registry .
- three months , the priority right of the creditors of the building will be lost.
- In the sale of a real estate, the receivables of the construction creditors are given priority over other creditors .
Sample Decision:
“Registration of a legal mortgage right provides the creditor with a priority claim from the sale price of the real estate. However, mortgage rights that are not registered in due time cannot be asserted against third parties.”
Status of More Than One Building Creditor
If more than one creditor has established a legal mortgage on the real estate, the order of priority among the right holders is determined according to the registration date:
- Early Registered Creditor: The first registered mortgagee gains the right to priority payment over other creditors .
- Registration on the Same Date: In mortgage rights registered on the same date, the principle of equality is applied among the creditors and the sales price is shared.
precedence over other mortgage rights on the real estate, depending on the registration condition . Thanks to this right:
- Creditors have the right to priority payment over the sales price of the real estate.
- can secure their rights in accordance with the title deed order through enforcement .
Especially in cases where there is more than one mortgage, the registration date is of great importance. In order to protect the rights of the creditors of the building, they must register the legal mortgage right within the prescribed period .
9. Termination of the Legal Mortgage Right of the Building Creditor
ends legally when certain conditions occur . The termination of the mortgage right indicates that the debt relationship between the creditor and the debtor has ended or that the mortgage right has lost its effect on the real estate. This situation allows the real estate to become free.
9.1 Payment of Debt
The most basic reason for the termination of the legal mortgage right is the payment of the debt . With the full payment of the debt:
- The legal mortgage right of the construction creditor has achieved its purpose .
- The creditor applies to the land registry office and requests the cancellation of the mortgage note.
Cancellation process:
- The mortgage entry registered in the land registry is deleted by the land registry office upon presentation of documents showing that the debt has been paid.
- The burden on the real estate is lifted and the owner regains his right of free disposal.
9.2 Agreement between Creditor and Debtor
may mutually agree to terminate the legal mortgage right of the construction creditor . Within the scope of this agreement:
- The debtor may request the removal of the mortgage by promising to pay a portion of the debt.
- The creditor may decide to terminate the mortgage by waiving his claim.
In this case, the mortgage note is deleted from the title deed with the consent of the creditor.
9.3 Expiration of Term
The legal mortgage right of the construction creditor may automatically expire after a certain period of time . These periods can be summarized as follows:
- Limitation of the Debt Relationship:
- a 10-year limitation period is foreseen for debts arising from construction activities .
- When the debt becomes time-barred, the legal mortgage right of the creditor also ends.
- Periods Based on Land Registry:
- If no action is taken within a certain period of time from the registration of the legal mortgage right , the mortgage right may be removed from the real estate.
9.4 Destruction of Real Estate
The legal mortgage right also ends in the event of the destruction of the real estate. These situations include:
- Complete destruction of the real estate: Complete destruction of the real estate as a result of construction or natural disaster.
- Expropriation: In case of expropriation of real estate by the state, the mortgage right is terminated and compensation is paid to the creditor.
9.5 Sale by Execution
In case of non-payment of the debt, the sale of the real estate through enforcement will cause the legal mortgage right to expire. In this case:
- The receivables of the construction creditor are collected first from the sales price of the real estate .
- The mortgage right on the real estate ends with the completion of the sale.
9.6 Disclaimer
may waive his legal mortgage right with his own consent . Waiver:
- a clear declaration that the creditor waives his right to mortgage .
- This declaration is recorded in the land registry and the mortgage right ends.
Supreme Court Opinion and Practice
emphasizes the cases of debt payment and sale through enforcement regarding the termination of legal mortgage rights . According to the Supreme Court decisions:
“With the payment of the debt, the legal mortgage right of the building creditor reaches its purpose and the obligation on the real estate ends. The land registry must be brought up to date with the cancellation process.”
The legal mortgage right of the construction creditor ends with the payment of the debt, the expiration of the term, the agreement of the parties or the destruction of the real estate. This right secures the receivables of the creditor and offers certain ways for the debtor to remove the mortgage burden on the real estate. In particular, payment of the debt or sale by execution are among the most common situations in which the legal mortgage right ends.