Study On The Recovery And Effect Of Mortgaged Property Transfer

A mortgage is a security right created in specific property provided by the debtor or a third party,which is not subject to transfer of possession.The transfer of mortgaged property involves the coordination of transaction security and the relationship between transaction security and efficiency,as well as the balance of interests between the mortgagor,the mortgagee and the transferee.Before the implementation of the Civil Code,China adopted the legislative model of restricting the transfer of mortgaged property in order to maximize the protection of the interests of the mortgagee.However,this model restricted the mortgagee’s right to dispose of the property.The Civil Code adopted the legislative model of free transfer,allowing the free transfer of the mortgaged property and recognizing the retroactive effect of the mortgage,while granting the assignee the right to perform on behalf of the assignee in order to achieve the balance of interests of all parties.If the mortgaged property is transferred,the mortgage is not affected.Article 406 of the Civil Code does not specifically distinguish between movable and immovable property in the application of the rule on the retroactive effect of the transfer of mortgaged property,and therefore the rule should be applied to both as one.If a mortgage on movable property is not registered,it cannot be used against a bona fide third party,and its retroactive effect is inferior to the ownership effect of the transferee of the movable property,but this does not constitute an exception to the application of the retroactive effect of the mortgage.The application of the rule of retroactive effect is subject to the condition that the mortgagee transfers the mortgaged property,and only then the transfer has the space for retroactive effect.At the same time,the Civil Code provides for the obligation of timely notification of the transfer of the mortgaged property by the mortgagee,but the notification is not a prerequisite for the transfer of the mortgaged property,but facilitates the mortgagee to be informed of the specific flow of the mortgaged property based on the notification,so as to achieve the retroactive effect on the mortgaged property.Under the free transfer legislation model,although the mortgagor has the right to transfer the mortgaged property,the Civil Code allows the mortgagee and the mortgagor to make a prohibited or restrictive agreement on the transfer of the mortgaged property in order to prevent the mortgagee from causing damage to the mortgagee by transferring the mortgaged property without authorization.After the parties have made the agreement,they can choose whether to register the agreement or not.However,whether the agreement is registered or not does not affect the validity of the contract of transfer signed between the mortgagor and the transferee of the mortgaged property,but rather has an impact on the validity in rem of the transfer of the mortgaged property,which in turn has a certain impact on the application of the rule of retroactive effect after the transfer.Article 406 of the Civil Code expressly recognizes the retroactive effect of mortgage rights to protect the interests of mortgagees.However,in certain circumstances,the law imposes certain restrictions on the application of the recovery effect of mortgages.In the transfer of mortgaged property of immovable property,the application of the mortgage recovery and validity rules shall be limited by the priority protection rules for consumers of commercial housing;In the case of a transfer of a movable mortgage,the application of the retrospective effect rule is subject to the registration adversarial rule and the business-as-usual buyer rule.In the above cases,the law clearly stipulates that priority is given to the protection of the ownership interests of the buyer of the mortgaged property,in which case certain concessions are required for the application of the recovery effect of the mortgage.