Civil Code

If a third party acquirer of a mortgaged immovables has incurred necessary or beneficial expenses with respect to the mortgaged immovables, that third party may obtain reimbursement of the same out of the proceeds of the mortgaged immovables before other obligees, in accordance with the distinctions in Article 196.

If an obligee holds mortgages on several immovable properties to secure the same claim, and the proceeds of those immovable properties are to be distributed simultaneously, the burden of the claim is divided in proportion to the value of each of the immovable properties.

If an obligee holds mortgages on several immovable properties to secure the same claim, and the proceeds from only one of the immovable properties are to be distributed, the mortgagee may receive the payment of the entire claim out of those proceeds. In this case, subordinated mortgagees may exercise their mortgages in subrogation of that mortgagee, up to the amount that that mortgagee that receives payment would otherwise be entitled to receive from the proceeds of other immovables, in accordance with the provisions of the preceding paragraph.

A person that exercises a mortgage by way of subrogation pursuant to the provisions of the second sentence of paragraph (2) of the preceding Article may note that subrogation in the registration of that mortgage.

A mortgagee may receive payment from assets other than the mortgaged immovables only for the portion of that mortgagee's claim that is not paid from the proceeds of the relevant mortgaged immovables.

The provisions of the preceding paragraph do not apply if the proceeds of other assets are to be distributed before the proceeds of the mortgaged immovables. In these cases, each other obligee may demand that the amount to be distributed to the mortgagee be deposited in order to have the mortgagee receive payment under the provisions of that paragraph.

A person that uses or profits from a building subject to a mortgage by virtue of a lease that cannot be duly asserted against the mortgagee, and that is stated as follows (in the following paragraph referred to as "mortgaged building user") is not required to deliver that building to the purchaser of that building until six months have passed from the time when the purchaser purchased that building at auction:

a person that has been using or profiting from the building since before the commencement of auction procedures; or

a person that is using or profiting from the building by virtue of a lease given after the commencement of auction procedures by the administrator of compulsory administration or enforcement against earnings from secured immovable property.

The provisions of the preceding paragraph do not apply if the purchaser, specifying a reasonable period of time, issues a notice to the mortgaged building user demanding payment of consideration for a period of one month or more with respect to the use of the building referred to in that paragraph that has been made after the time of purchase by the purchaser, and no payment is made within that reasonable period of time.

No mortgage is extinguished by prescription in relation to obligors and mortgagors unless it is extinguished simultaneously with the claim the mortgage secures.

If a person that is neither an obligor nor a mortgagor has possessed the mortgaged immovables in complete conformity with the requirements for acquisitive prescription, the mortgage is extinguished thereby.

Even if a holder of superficies or a farming right holder that created mortgage on that holder's superficies or farming right renounces the relevant rights, the renunciation may not be duly asserted against the mortgagee.

Mortgages may be created, by an establishing act, in order to secure unspecified claims of a certain scope, up to the limit of a maximum amount.

The scope of the unspecified claims to be secured by the mortgage under the provisions of the preceding paragraph (referred to as "revolving mortgage" below) must be prescribed by limiting the scope to claims arising from specific contracts with the obligor for continuous transactions or other claims arising from certain kinds of transactions with the obligor.

Claims that arise continuously with the obligor pursuant to a specific cause, claims under negotiable instruments or checks, or electronically recorded monetary claims (meaning electronically recorded monetary claims prescribed in Article 2, paragraph (1) of the Electronically Recorded Monetary Claims Act (Act No. 102 of 2007); the same applies in paragraph (2) of the following Article) may be treated as claims that are to be secured by a revolving mortgage, notwithstanding the provisions of the preceding paragraph.

A revolving mortgagee may exercise the relevant revolving mortgage up to the maximum amount with respect to all of fixed principal as well as periodic payments including interest and compensation for damage resulting from failure to perform obligations.

If a claim under a negotiable instrument or check or electronically recorded monetary claim acquired from causes other than the transactions with the obligor is agreed to be treated as a claim to be secured by a revolving mortgage, and any of the following grounds exist, that revolving mortgage may be exercised only with respect to claims acquired before those grounds arose; provided, however, that even with respect to claims acquired after the grounds arose, the exercise of the revolving mortgage is not precluded as far as the claims were acquired without knowledge of those grounds:

the suspension of payments by the obligor;

a petition to commence bankruptcy proceedings, the commencement of rehabilitation proceedings, the commencement of reorganization proceedings or the commencement for special liquidation with respect to the obligor; or

a petition for auction in relation to mortgaged immovables or seizure for disposition of delinquency.

The scope of the claims to be secured by a revolving mortgage may be changed if the change is effected before the principal is fixed. The same applies with respect to change of obligors.

In order to effect the changes referred to in the preceding paragraph, it is not required that the approval of third parties including subordinated mortgagee be obtained.

If the change under paragraph (1) is not registered before the principal is fixed, it is deemed that the change was not effected.

Changes in the maximum amount of a revolving mortgage may not be made unless the consent of the interested parties is obtained.

With respect to the principal secured by a revolving mortgage, the date when the principal is to be fixed may be specified or changed.

The provisions of Article 398-4, paragraph (2) apply mutatis mutandis to the cases referred to in the preceding paragraph.

The date under paragraph (1) must be within five years of the day when the date was prescribed or changed.

If registration with respect to a change in the date under paragraph (1) is not effected before the old date, the principal secured is fixed on that old date.

A person that acquires a claim from a revolving mortgagee before the principal is fixed may not exercise the revolving mortgage with respect to that claim. The same applies to a person that made payment for or on behalf of an obligor before the principal was fixed.

If an obligation is assumed before the principal is fixed, the revolving mortgagee may not exercise the revolving mortgage with respect to the obligation of the person that assumes the obligation.

If the discharging assumption of an obligation is effected before the principal is fixed, the obligee may not transfer the revolving mortgage to the obligation assumed by the new obligor, notwithstanding the provisions of Article 472-4, paragraph (1).

If any novation due to the substitution of the obligee is effected before the principal is fixed, the obligee before the novation may not transfer the revolving mortgage to the obligations after the novation, notwithstanding the provisions of Article 518, paragraph (1). The same applies to the obligee in the case of novation due to the substitution of the obligor before the principal is fixed.

If succession involving a revolving mortgagee commences before the principal is fixed, the revolving mortgage secures the claims that exist at the time of the commencement of succession and otherwise secures claims that were agreed upon by the heirs and the mortgagor of the revolving mortgage and that an heir acquires after the commencement of succession.

If succession involving an obligor commences before the principal is fixed, the revolving mortgage secures the obligations that exist at the time of the commencement of succession and otherwise secures the claims that were agreed upon by the revolving mortgagee and the mortgagor of the revolving mortgage and that an heir assumes after the commencement of succession.

The provisions of Article 398-4, paragraph (2) apply mutatis mutandis if an agreement referred to in the preceding two paragraphs is reached.

If the agreements referred to in paragraph (1) and paragraph (2) are not registered within six months of the commencement of succession, the principal secured is deemed to have been fixed at the time of the commencement of succession.