If a debt is threatened, there are two ways for creditors to deal with the situation: seizure or judicial security.
The first freezes the debtor's assets and makes them unavailable. The second, less restrictive but just as effective, allows a preferential right to be registered over certain assets without tying them up.
This preventive protection deserves to be examined in detail.
1. Why choose a court-ordered surety rather than a seizure?
The major advantage of a court security is that it does not prevent the debtor from disposing of his property. Article L. 531-2 of the Code of Civil Enforcement Procedures is clear: "Assets subject to a court-ordered security interest may still be disposed of"..
Conversely, article L. 521-1 of the same code states that protective attachments render assets unavailable. This difference changes everything.
For a creditor, a court-ordered surety offers protection without blocking the debtor's economic activity. It allows the creditor to rank on the date of provisional registration, a considerable advantage in the event of competition with other creditors or the opening of collective proceedings.
The mechanism works in two stages: first, provisional publicity, then confirmation by definitive publicity once an enforcement order has been obtained.
2. Assets covered by judicial sureties
Article L. 531-1 of the Code of Civil Enforcement Procedures strictly limits the scope of judicial security to four categories of assets.
Buildings
Judicial conservatory mortgages can be applied to all immovable property and its accessories deemed to be immovable property. This may include bare land, a house, a flat or a commercial building.
However, there are some restrictions, in particular for :
- The family home: although the registration of a mortgage is not considered to be an act of disposal within the meaning of article 215 of the Civil Code (Civ. 1re, 8 January 1985, Bull. civ. I, no. 7)
- Undivided property: only the debtor's undivided share is registered
- Joint property under a matrimonial property regime: beware of article 1415 of the Civil Code, which excludes certain commitments
Business assets
Judicial pledging of a business covers the essential intangible elements: business name, trade name, customer base, goodwill and leasehold rights.
Material items (equipment, tools) may be included by means of an express declaration. Goods, on the other hand, are excluded because their immobilisation would be detrimental to the business.
Shares and securities
A major innovation of the Law of 9 July 1991, these pledges make it possible to seize financial assets.
Shares mainly concern partnerships (SNC, SCS, SCI), while securities include shares in joint-stock companies, as well as a whole range of negotiable securities (bonds, SICAVs, investment certificates, etc.).
This extension reflects an adaptation to modern economic realities, where financial assets often represent the bulk of wealth.
3. Provisional advertising
The different formalities depending on the nature of the property
The formalities vary depending on the property concerned, reflecting the fragmentation of French advertising law.
Article R. 532-1 of the Code des procédures civiles d'exécution (French Code of Civil Enforcement Procedures) stipulates that two forms must be filed with the Land Registry for the judicial mortgage. These slips mention :
- Designating the creditor
- Election of domicile
- Designation of the debtor
- Indication of authorisation or title
- Indication of the claim and its accessories
- The designation of the property
For pledges of business assets, registration is made at the commercial court registry in accordance with article R. 532-2 of the same code.
The pledging of company shares requires a document to be served on the company and, for registered non-trading companies, publication in the Trade and Companies Register.
Pledges of securities are made by notifying the issuing legal entity, its agent or an authorised intermediary.
In all cases, the registration must be made within three months of the court authorisation and retains the security for three years, with the possibility of renewal.
Informing the debtor
As the measure is taken without the debtor's knowledge, article R. 532-5 requires that information be provided within eight days of provisional publication.
This notification, on pain of lapse, must contain :
- A copy of the prescription or title
- Indication of the right to request release
- Reproduction of articles R. 511-1 to R. 512-3 and R. 532-6 of the Code of Civil Enforcement Procedures
The Court of Cassation strictly applies this obligation (Civ. 2e, 4 January 2012, no. 11-12.308).
4. The debtor's rights
Request for release
The debtor may contest the court-ordered security by requesting that it be discharged. Article R. 512-1 paragraph 2 reverses the burden of proof: it is up to the creditor to prove that the conditions of the security have been met.
This action is possible as long as the provisional registration remains in force. If the creditor already has a writ of execution, article R. 532-6 imposes a minimum period of one month before a definitive registration can be made, precisely to allow for this challenge.
Discharge may be total or partial. It results in the cancellation of the registration. The creditor may even be ordered to pay damages if the measure proves to be abusive (article L. 512-2).
Reducing the tax base
When the value of the encumbered assets clearly exceeds the amount of the sums secured, article R. 532-9 authorises the debtor to request a limitation of the effects of the security.
This reduction is only granted if the value of the remaining encumbered assets is double the amount of the sums secured. Case law defines this value as that of real estate not encumbered by other security interests (Civ. 3e, 7 July 2004, no. 03-13.533).
Guarantee substitution
Article L. 512-1 paragraph 2 allows another measure to be substituted for a court order to protect the interests of the parties.
Paragraph 3 even provides for an automatic release: the provision of an irrevocable bank guarantee in line with the requested measure.
Although this option is theoretically less useful than for protective attachments (since the property remains alienable), it is of considerable practical interest. It enables the debtor to free up a strategic asset by offering alternative security.
5. Final advertising
Deadlines and formalities
Article R. 533-4 sets a deadline of two months for final advertising, starting from :
- From the date on which the title becomes res judicata
- The expiry of a period of one month following notification of provisional registration
- From the date of the decision rejecting the challenge
Failure to comply with this time limit will result in the provisional advertisement lapsing (article R. 533-6).
The formalities for final publication are similar to those for the corresponding conventional securities. For mortgages, they follow article 2428 of the Civil Code. For pledges of business assets, they are governed by articles L. 143-16 and R. 143-6 of the French Commercial Code.
Effects: maintaining rank on the date of provisional publication
The main effect of definitive publicity lies in article R. 533-1 : "Final publication gives the security a ranking on the date of the initial formality, within the limit of the sums retained by the security..
Maintaining this initial ranking is a decisive advantage, particularly in the event of insolvency proceedings being initiated.
Article L. 622-30 of the French Commercial Code prohibits registrations after the opening judgment. However, case law allows definitive publicity after the opening if the provisional publicity is prior (Com. 3 May 2016, no. 14-21.556).
Similarly, Article L. 632-1, 7° rules out the nullity of the suspect period if the provisional registration is made prior to the date of cessation of payments.
This retroactivity gives court-ordered securities an inestimable strategic value in the race for payment.
Sources
- Code des procédures civiles d'exécution, in particular articles L. 511-1 to L. 531-2 and R. 511-1 to R. 533-6
- Commercial Code, articles L. 622-30, L. 632-1, L. 143-16, R. 143-6
- Civil Code, articles 215, 1415, 2428, 2434
- Court of Cassation, Civil Division 1, 8 January 1985, Bull. civ. I, no. 7
- Court of Cassation, Civil Division 2e, 4 January 2012, no. 11-12.308
- Court of Cassation, Civil Division 3rd, 7 July 2004, no. 03-13.533
- Court of Cassation, Commercial Division, 3 May 2016, no. 14-21.556
- PIÉDELIÈVRE Stéphane, GUERCHOUN Frédéric, "Saisies et mesures conservatoires", Répertoire de procédure civile, June 2021
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