What is Mortgage?

Mortgage is the kind of guarantee for loan that someone borrows from the bank or other financial institutions to buy immovable properties as their ownership, but the creditor requires that person to give the right over the immovable property for them to claim the sale of that immovable property in the court due to the deadline of the debt. However, creditor can not become the owner of the mortgaged property by the way of payment, but they can get their loan back through the purchase price. Mortgage can be several successive mortgages over the same property with different creditors. Therefore, when the owner of the property faces the financial problems and has no ability to pay back the loan upon the due date, each creditor may be able to   exercise their right for selling the immovable property to get loan money back according to their order of priority of the mortgage registration. Specifically, mortgage is considered only the immovable property that registered with the Land Registry and other immovable property that hasn’t been registered is not recognized as the mortgage. Furthermore, about the contract of mortgage there is the need for legally valid formula before the competent authority or a dully authorized lawyer. And this contract must register at the cadastral administrative body in order to make it legally. Additionally, the competent authorities to draft mortgage contracts and the registration formalities shall be determined by sub-decree. Finally, the mortgage contract must be clearly writing about the state of the property, its nature, the limited right of use of the property determined by any relevant regulations and its value.

By: POK Panhavuth