On The Transference Of Real Estate Mortgage As The Creditor’s Rights Assigned

As a typical real right granted by way of security,mortgage rights are widely used in trading activity.Mortgage rights is set to guarantee the implement of the creditor’s rights and subordinated to the creditor’s rights.The creditor’s rights are established and the mortgage can be created.When the creditor’s rights are assigned to another people,the mortgage should be transferred together in principle.And the mortgage rights eliminate as creditor’s right does.According to Article 192 of The Chinese Property Law,which provides that the mortgage has subordination to the creditor’s right,on the time of the creditor’s rights are assigned,the mortgage right should be transferred along as the creditor’s rights assigned if there is a mortgage right.If the transferred mortgage is a real estate mortgage,according to the Article 9 of The Chinese Property Law,which provides a rule on the principle of public summon to the change of real property rights,that is when the real property changes,it must be registered in principle or it should be invalid,unless the law has stipulated additionally.Here rises a question: When the real estate mortgage is transferred as the creditor’s rights assigned,should the registration to be done ?In the case of Hunan Lvxingyuan Co.,Ltd.v.Huaihua Hecheng Co.,Ltd.in 2015,the Supreme Court determined that the real estate mortgage,appurtenant to the creditor’s rights,is transferred effectively,according to the provisions of Article 192 of The Chinese Property Law,and it is not a new mortgage.So there is no need to reregister.However,the subordinate courts have different opinions from the Supreme court on such cases.For example,in the case of Xingguo Lianhe Electronic Technology Watch Co.,Ltd.v.China Merchants Bank Changzheng Avenue Sub-branch the Xingguo in 2016,the xingguo county court in accordance with Article 187 of The Chinese Property Law,determined that If the building or other land attachments are mortgaged,a registration should be made.So that the plaintiff(assignee)is not allowed to enjoy the mortgage without registration.This paper did a research on 223 relevant cases collected by the website named China Judgements Online,and summarized the norms of decision and the reasons of findings by the courts with different opinions.It can be conclude from the final data that although there are differences in subordinate courts,nearly 90% of the courts believe that there is no need to register when the transfer of real estate mortgage is transferred as the creditor’s rights assigned.Only a few courts insist on have-to-register opinion.All these have-to-register opinion courts are concentrated in the county courts and Superior courts.The reasons of findings of the have-to-register courts can be summarized as six points:1.The transfer of the real estate mortgage right as the creditor’s rights assigned,is caused by the law and becomes effective without registration;2.Article 37 of The Administrative Measures for Urban Real Estate Mortgage provides that real estate mortgage shall be registered when it transfers as the creditor’s rights assigned.But The Administrative Measures is a management-type norm,and it cannot be opposed to the provisions of The Chinese Property Law;3.The unerring parties of the transaction through the transfer of real estate mortgage with creditor’s right,as they have already pay the consideration,should be protected instead of losing the mortgage for not handling the registration;4.It is considered that while original acquisition to the real estate mortgage requires registration,derivative acquisition do not require;5.It is considered that Article 192 of The Property Law is open to the registration,and it should be considered according to the legislative purpose.No registration required;6.In consideration to the transaction efficiency.And the reasons of findings by need-not-register courts can be summarized as four points: 1.According to Article 9 of The Chinese Property Law,the transfer of the real estate mortgage as the creditor’s rights assigned must be registered;2.The Article 37 of The Administrative Measures for Urban Real Estate Mortgage requires registration;3.The courts determine the subject of the lawsuit according to the real estate registration book;4.Some courts mistakenly apply the creation registration of the real estate mortgage to the case where the real estate mortgage are transferred as the creditor’s rights assigned.The change of real estate rights must have a certain legal basis.According to Article 9 of The Chinese Property Law,The legal basis can be divided into legal acts and non-legal acts according to the basis of changes in real estate rights.In principle,changes in real estate rights arising from legal acts require registration as effective requirements,and changes in real estate rights that are not based on legal acts are directly effective according to law without registration.Before solving the problem of whether the transfer of real estate mortgage rights requires a registration,it is necessary to clarify the basis for the transfer of the real estate mortgage with creditor’s rights.The understanding of the basis of the transfer of real estate mortgage with creditor’s rights should be considered as non-legal acts.First,according to the interpretation of Article 9 of The Chinese Property Law by the legislator,the content of the article other stipulations of the law shall include,but is not limited to,the natural resources of the PRC,the three special categories of Section 3 of Chapter 2 of The Chinese Property Law and the change of real estate caused by actual conduct.It can be seen from the text that the legislators do not fully enumerate the situation of other stipulations of the law in the interpretation.There are other changes of property rights caused by non-legal basis in the law.Such property rights changes can be directly effective without registration.According to the purpose of the legislator,the public summons are aimed to protect the transaction security.The exclusiveness of the property right requires the public to show the status of its rights.Since the real estate mortgage as the creditor’s rights assigned has been registered before the transfer when it is created,and it has publicity effect,so it is impossible to make the third person unaware of the status of this right after the transfer.Secondly,compared to the exceptions of the three types of “legal provisions” enumerated by the legislators,they are similar to the transfer of real estate mortgage as the creditor’s rights assigned in the perspective of publicity effectiveness and legal policy.So the latter should be interpreted in a same way to the former.Finally,using the method of counter-evidence for demonstration.Specifically,it is assumed that transfer of the real estate mortgage as the creditor’s rights assigned are based on legal acts,and then the changes in property rights based on legal acts are analyzed.The core of legal acts is the declaration of will,but the legal acts in transfer of creditor’s rights do not have the intent of changing the property rights,and the intent of it is only to transfer the creditor’s rights.After analyzing the basis of the transfer of real estate mortgage as the creditor’s rights assigned,this paper next clarifies that the type of this registration type for the transfer of real estate mortgage rights is “transfer registration of the real estate mortgage” by overviewing the relevant legislation of it.In the theoretical jurisprudence,the views of the scholars who argue about the issue of “necessity of transfer registration of real estate mortgage rights with creditor’s rights assigned” are divided into two theories:As for the registration-necessary scholar,it should be registered when the transfer of the real estate mortgage right as the creditor’s rights assigned takes place,else the transfer will not take effect : First,the transfer of the real estate mortgage is a type of the change of property rights caused by legal acts basis,and does not belong to proviso of Article 9 of The Chinese Property Law.However,the scope of the proviso is limited,so such change of property rights must be registered before it can take effect.Second,Article 37 of the Measures for the Administration of Urban Real Estate Mortgage has clearly clarified this issue,that is,the transfer of real estate mortgage rights as the creditor’s rights assigned should be registered.Third,if the change of the real estate right does not require registration to take effect,it will disobey be the principle of public summons and public notice and affect the order and security of the transaction.Fourth,mortgage rights are of great importance to transactions and should be protected by registration.Fifth,the provisions of The Real Estate Registration Procedure Law negates the real estate mortgage transfer registration is a kind of declaration registration which should be a kind of disciplinary registration.As for the registration-unnecessary scholar,it is considered that the real estate mortgage right is transferred directly as the creditor’s right assigned,and there is no need to apply for transfer registration.The arguments of registration-unnecessary scholars can be divided into five aspects: First,the transfer of the mortgage of real estate as creditor’s rights assigned is based on the provisions of the law,and registration is not a requirement to effective the transfer.Second,the registration-necessary opinion may destroy the real estate mortgage by violating the subordination of the real estate mortgage.Third,the transfer registration of the transfer of real estate mortgage rights,is actually a declaration of registration,the role of it is only to record the changes to the real estate register in property rights,which have occurred in accordance with the law.Fourth,both The Chinese Security Law and The Chinese Property Law do not clarify the necessity of transfer registration of the transfer of real estate mortgage as the creditor’s right assigned.But Article 9 of The Supreme Court’s Several Issues Concerning the Trial of Financial Assets Management Companies’ Acquisition,Management,and Disposal Of Assets Formed By State-Owned Banks’ Non-Performing Loans.has expressly stated that this kind of original registration of mortgage will continue to be valid as the creditor’s rights assigned,which means that no separate registration is required.Fifth,if the transfer of the real estate mortgage as creditor’s right assigned requires register,it is difficult to complete it in practice,which is not conducive to the protection of the rights of the transferee.Based on the empirical research and the theory research,this paper analyzes and proves the rationality of registration-unnecessary views: First,starting from the subordination of the mortgage.According to the registration-necessary view,during the time between creditor’s right has been transferred to the transferee and the transfer of the real estate mortgage as the creditor’s rights assigned,the real estate mortgage is still recorded under the name of the transferor,making the mortgage lacking creditor’s right that it can subordinate and the real estate mortgage thus ultimately destroyed.This fundamentally negates the rationality of the registration-necessary view,and proves that only the registration-unnecessary view can meet the requirements of the subordination of mortgage provided by The Chinese Property Law.Secondly,the transfer of the real estate mortgage as the creditor’s right assigned is based on the legal provisions,so it does not need to apply for registration and can take effect directly.This is discussed in detail in the analysis of the transfer basis.Thirdly,using the analogy applicable technology,the provisions on easements of The Chinese Property Law can be extended to the transfer of real estate mortgage as the creditor’s rights assigned,and the former can be used to fill the blank of Article 192 of The Chinese Property Law.That is,as long as the parties reach a consensus,it is not necessary to register the change of property rights to take effect.By using the legal loopholes filling method of the legal methodology,this paper enhance the demonstration of the reasonability of registrationunnecessary views.Fourthly,the paper analyzes the transaction security issues proposed by registration-necessary scholars.It is necessary to look at the issue of “ whether the real estate mortgage will be obtained in good faith by a third party because of the non-registration” in two dimensions: the chief problem need to be solved first is “Whether the creditor’s rights can be obtained in good faith”,if the answer is yes,then we should further discuss the issue of “whether the real estate mortgage can be obtained in good faith”.However,because the creditor’s rights do not have typical social openness,the creditor’s rights without securitization are not applicable to the rules of good faith acquisition.Therefore,even if the registration is not processed,the real estate mortgage will not be obtained by the third party in good faith.It does no harm to the legal rights of the transferee and will not have negative effects on the security of the transaction.Finally,the nature of transfer registration of the real estate mortgage is analyzed to prove that it is actually a declaration registration,which has no influence on the effective of transfer of real estate mortgage,and in the process of argumentation analysis,this paper refers to the function of real estate mortgage transfer registration.