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Understanding Real Estate Mortgages

This document defines and describes key aspects of real estate mortgages under Philippine law. It discusses the definition of a mortgage, its characteristics of being real, accessory, subsidiary and unilateral. It outlines the requisites for valid constitution including covering immovable property, appearing in a public instrument, and requiring registration. It also describes the forms of mortgage contracts, kinds of mortgages, objects that can be mortgaged, effects of mortgages, and various clauses that may be included like dragnet, acceleration, and upset price clauses.

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Sittie Ain
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72 views14 pages

Understanding Real Estate Mortgages

This document defines and describes key aspects of real estate mortgages under Philippine law. It discusses the definition of a mortgage, its characteristics of being real, accessory, subsidiary and unilateral. It outlines the requisites for valid constitution including covering immovable property, appearing in a public instrument, and requiring registration. It also describes the forms of mortgage contracts, kinds of mortgages, objects that can be mortgaged, effects of mortgages, and various clauses that may be included like dragnet, acceleration, and upset price clauses.

Uploaded by

Sittie Ain
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

REAL ESTATE

MORTGAGE
Otherwise known as “Mortgage” or “Real Mortgage”
Definition
A contract whereby the debtor secures to the
creditor the fulfillment of a principal obligation,
specially subjecting to such security immovable
property or real rights over immovable property
which obligation shall be satisfied with the
proceeds of the sale of said property or rights in
case the said obligation is not complied with at
the time stipulated.
Characteristics of Mortgage

• Real
• Accessory
• Subsidiary
• Unilateral
Requisites for valid constitution of a
real mortgage
1. It covers only immovable property and
alienable real rights imposed upon
immovables
2. It must appear in a public instrument
3. Registration in the registry of property is
necessary to bind 3rd persons
Form of a Mortgage Contract
It is a written contract. It is indispensable that
the document in which the mortgage appears to be
recorded in the Registry of Property for it to be
enforceable.
Kinds of real mortgages

• Voluntary
• Legal
• Equitable
Object of a contract of mortgage

(1)Immovables;

(2) Alienable real rights in accordance with the laws,


imposed upon immovables.
Stipulation in mortgage contract including
after-acquired properties

• This kind of stipulation is common and indeed,


logical, in all cases where the properties given as
collateral are perishable or subject to inevitable
wear and tear or were intended to be sold or to
be used but with the understanding, express or
implied, that they shall be replaced with others to
be thereafter acquired by the mortgagor.

• Purpose: Its obvious purpose being to maintain, to


the extent allowed by the circumstances, the
original value of the properties given as security.
Effect of mortgage
1. Creates real right
Article 2126 means, in other words, that a
registered mortgage creates right in rem, a real right,
a lien inseparable from the property mortgaged,
which is enforceable against the whole world,
affording specific security for the satisfaction of a
debt.
2. Creates merely on encumbrance
A mortgage is merely a security for a debt, an
encumbrance upon the property and does not
extinguish the title of the debtor who does not lose
his principal attribute as owner, that is, the right to
dispose.
Art. 2127 Extent of mortgage

> A Real Mortgage constituted on an


immovable property is not limited to the
property itself but also extends to all its
accessions, improvements, growing fruits,
and rents.

> To exclude them, it is necessary that there


be an express stipulation to that effect
Cause or consideration in mortgage

As mortgage is an accessory contract, its consideration is


the same as of the principal contract from which it receives
its life, and without which it cannot exist as an independent
contract, although the obligation thereby secured is incurred
by a third person and, therefore, it will be valid if the
principal obligation is valid, and cannot be avoided on the
ground of lack of consideration.
Dragnet Clause
It is a mortgage provision which is specifically
phrased to subsume all debts of past or future
origin.
Acceleration clause
A mortgage contract may contain an acceleration
clause which is a stipulation stating that, on the
occasion of the mortgagor’s default, the whole sum
remaining unpaid automatically becomes due and
payable.
Upset Price
A stipulation in a mortgage of real property fixing a
“tipo” or upset price, i.e., the minimum price at which
the property shall be sold, to become operative in the
event of a foreclosure sale at public auction, is null and
void for the property must be sold to the highest
bidder.

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