Guidance on extrajudicial sale of mortgaged property

venta extrajudicial bienes hipotecados

What is the extrajudicial sale of property mortgaged?

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The extrajudicial sale of real estate is an act of voluntary jurisdiction by which the parties exercise the right of the creditor to sell the mortgaged property.

The purpose of this action is that the creditor obtains the full satisfaction of their right credit.

Regulation

Extrajudicial sale of mortgaged property are regulated by our legal system and in particular, in Art. 129 of the Mortgage Law, in Art. 1858 of the Civil Code and the arts. 234 et seq of the Mortgage Regulation.

Specifically, Article. 1858 of the Civil Code provides that, in the mortgage contract, “…defeated the principal obligation, they can be disposed things that is the pledge or mortgage to pay the creditor”. It is empowering to exercise such action by the creditor when the payment obligation of the debtor has expired and failed.

For his part, the art. 129 of the Mortgage Law (LH) regulates the procedure extrajudicial sale of mortgaged property.

It is important to mention the Law 1/2013, of 14 May, of measures to strengthen protection for mortgage borrowers, debt restructuring and social rent that was born as a response to the situation of economic crisis facing society, trying to minimize the consequences of social exclusion.

The Act modified the art. 129 LH, making significant changes.

The aforementioned Art. 129, It provides in its second paragraph, that letter h, the Civil Procedure Act will supplementary nature in everything that is not regulated in the Law and the Mortgage Regulations. And, in any case shall apply Article 579.2 of the Civil Procedure Act.

Requirements determining the extrajudicial sale of mortgaged property

The art. 129, amended by Law 1/2013, of 14 May, fixed, along with art. 234 of the Mortgage Regulations, as requirements for bringing the extrajudicial sale the following:

Need to express and separate agreement

In order to attend this procedure extrajudicial sale, this is required the existence of an express agreement submission.

So, It is relevant to quote the respect the judgment of the Supreme Court, Civil Division, of 25 April 2017, No.. 251/2017, which states that "Article. 129 LH, regulating the procedure of extrajudicial sale, It not "is an imperative but dispositive norm and subject (…) to the principle of autonomy».

But, also, Article. 129.2. b) lh adds "the stipulation under which the grantors Executed subject to the procedure of extrajudicial sale of the mortgage It shall state separately from the remaining provisions of writing. The art. 234.2 Regulation of the mortgage makes the same assessment.

Notary

mandatorily, extrajudicial sale will be held before a Notary.

And, notary will be competent to conduct proceedings, according to art. 236 RH, the notary of the where they file the mortgaged property, and if there are several, the corresponding per shift.

 “If there are several farms and settle in different places, Scripture can determine which attorney will determine the competition. Failing, it will be that wholesale value priced auction”.

Here it is where become particularly relevant modifications, as we have mentioned, Act introduced 1/2013, of 14 May, conferring broad powers to the figure of the notary.

Specifically, the law introduced the possibility that Notary court can suspend the sale when proving that the parties have asked the court competent, in the manner provided by Article 129 of the Mortgage Law, issued resolution decreeing inappropriateness of such sale, for existing unfair terms in the mortgage loan contract, or its continuation without the application of unfair terms. Also, expressly authorizes the notary to advise the parties of any provision of the contract may be abusive. Such amendments were adopted following the judgment of the Court of Justice of the European Union of 14 March 2013, in Case on the question posed it is solved by the Commercial Court No. 3 Barcelona concerning the interpretation of Directive 93/13 / EEC of the Council, of 5 April 1993.

Mortgage rate applicable

Extra-judicial sale may only apply to mortgages as collateral for obligations whose amount appears initially determined, their regular interest and liquidated delay in accordance with the provisions of the title and limitations are outlined in Article 114 de la LH. Namely, may only apply to cases of non-payment of the principal or interest of the guaranteed amount with mortgage (art. 129.2.c LH and 235.1 RH).

In the event that the amount borrowed is initially determined but the secured loan agreement provides for the gradual repayment of capital, the request must be accompanied extrajudicial sale:

  • a document stating the redemptions and dates,
  • the authentic document attesting that settlement have been practiced in the manner agreed by the parties to the deed of mortgage.

And, if they had agreed variable interest, the request for extrajudicial sale, It should accompany the authentic document attesting the settlement have been practiced in the manner agreed by the parties to the deed of mortgage (art. 129.2.c).

Appraised value of the property

In writing it shall state the value at which the property concerned priced to serve in the auction type.

It may not be different from that, if, It has been fixed for direct judicial execution procedure.

Also, in no case be less than the 75% of the value indicated in the appraisal made under the Act 2/1981, of 25 March, Regulation of the Mortgage Market (art. 129.2.a y 234.1.1º LH RH, with it RELATIONSHIP to Article 682 LEC).

Procedure

The art. 129.2.d) LH determines that the sale will be made by electronic auction one character.

The auction will take place at the auction site for that purpose shall provide the State Agency Official Bulletin of the State.

Start

The procedure shall be initiated by the creditor of the mortgage in the Land Registry by request addressed to the competent notary (art. 236-RH).

If there are several creditors, you can start the procedure any of them.

the applicant, in order to initiate the procedure, will deliver to the Notary the following documents:

  • The deed of the mortgage note of enrollment.
  • The document or documents to determine accurately the interest either directly, and by simple arithmetic, in cases of mortgage credit guarantee with variable interest.

Then the notary examine the request and accompanying documents and, if you satisfied all requirements, will request from the Land Registry certification understanding of the following measures (art. 236-b.1 RH):

1.º literal insertion of the last domain registration has been practiced and remains in force.

2.º literal Inserting the registration of the mortgage in the terms in effect.

3.º List of all censuses, mortgages, liens and real and annotations that are affections goods.

If certification registration not obtained obstacles for the realization of the mortgage requested by the creditor, Notary perform a for payment to the debtor (art. 236-c RH).

The requirement:

1º Indicate the cause and date of maturity of the loan and the amount claimed for each item.

2No. It will be noted to the debtor of not paying in term of 10 days It will proceed to implementation of the mortgaged property He is responsible for the costs incurred in this.

The requirement It will be performed by the Notary to the debtor is to be required, or to the next of kin, family member or dependent over fourteen which were in the address record in the register.

Now, may occur at this point two situations:

  • The requirement can not be performed in any of the ways: The notary will terminate his performance and the minutes conclusa, being expedited judicial proceedings corresponding.
  • The request is made, but this is not taken care of within 10 days: The notary shall notify the initiation of proceedings the person to whom resulting practiced the last domain registration.

Auction

Finally, after 30 days of the request for payment took place, It will proceed to auction of the property before the Notary (art. 236-f RH).

Notary communicate by certified mail to the holder of the domain the last entry place, Day and hour set for auction.

The auction will be announced with a advance of at least 20 days with respect to that in which is to be held, y se fijará en el tablón de anuncios del Ayuntamiento y del Registro de la Propiedad y se insertarán en elBoletín Oficialde la provincia o de la Comunidad Autónoma en que se practique la ejecución y en el de aquélla o aquéllas en que radiquen las fincas.

In the ads will be expressed, concisely:

  • Identifying the farm,
  • The place, day and time when the auction is held,
  • Type as a basis to it and,
  • The following circumstances: The documentation and certification of the Register referred to Articles 236-a and 236-b are available on the Notaría; which means that any tenderer accepted as quite the degree; and loads, prior liens and mortgage seats to continue running subsisting.

On the day of holding the first auction, if there were no bidder or this proves unsuccessful, place will be indicated, day and time for holding the second, by another term of twenty days.

End of the procedure

Held the auction and awarded, the price will go without delay payment of the creditor who has urged the guaranteed execution measured by mortgage.

The Notary shall issue certificate evidencing the auction price and the outstanding debt for all items, with distinction from the corresponding to principal, remunerative interests, to default interest and costs.

Any controversy on outstanding amounts determined by the Notary It shall be decided by the parties Juicy verbal.

Si la auction held remained deserted and creditor fails to make use of the right to be awarded the assets executed, the Notary will terminate execution and close and protocolizará the minutes, being expedited judicial proceedings corresponding.

Duration of the procedure

The procedure of extrajudicial sale of mortgaged property before a notary has a duration of approximately two months.

Namely, we talk about brief periods of time which is a great advantage over ordinary judicial process that would be more costly and could last about 12 months.

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