Study On The Effect Of Unregistered Real Estate Mortgage Contract

Mortgages on immovable property have become a common form of security in modern market economy transactions due to their stable security value and ease of transaction,and a mortgage can only be created by the registration of the immovable property.At the time of the application of the Security Law,an unregistered mortgage contract on the immovable property was not effective.The "principle of distinction" established by Property Law distinguishes the effectiveness of a mortgage contract on the immovable property from registration.The "principle of distinction" has become the basis for the validity of unregistered real estate mortgage contracts,as the failure to register does not affect the validity of the mortgage contract itself,which takes effect from the time of its creation.Unregistered real estate mortgages have been used more frequently in recent years,but as the validity of unregistered mortgages has not been clarified,the courts have not been uniform in their decisions regarding such disputes.The main categories are the mortgagee’s liability for security and the mortgagee’s liability for breach of contract,with very few courts ruling against the mortgagee.The widely divergent decisions represent unresolved issues of the validity of unregistered real estate mortgage contracts.A summary of the types of court decisions and a review of theoretical opinions,combined with China’s judicial practice and the existing research base,led to the conclusion that unregistered real estate mortgage contracts have a dual effect path: the unregistered real estate mortgage contract without the agreement of the two parties not to register has only the effect of mortgage contract debt law,the creditor has the right to request registration against the mortgagor,and the mortgagor shall be liable for breach of contract to the extent of the value of the mortgage due to the mortgagor’s reason for not registering,and the nature of liability is joint,and the creditor has the option for continued performance and damages;a contract concluded with the unregistered consent of the parties has the effect of an atypical guarantee,the guarantor has the obligation to guarantee and,in the absence of an express contractual agreement,the guarantor is liable to the extent of the collateral and the liability is supplementary.