Obtaining a favourable court ruling is a decisive step for a creditor. However, obtaining a judgment does not always guarantee that it will be enforced. Between the time when the judgment is handed down and the time when payment is made, the debtor can organise his or her insolvency. To counter this risk, French law has provided powerful guarantee tools, including the legal mortgage attached to sentencing judgments. Although created by a court decision, this security derives its force directly from the law. It makes it possible to secure a debt by backing it up with the debtor's real estate assets. Its mechanism is a strategic asset in recovery of secured receivablesIt gives the creditor a preferential right and a right of resale over the convicted person's property. Although it is part of the family of mortgages, the king of real estate securitiesIts legal nature and the conditions under which it is implemented give it a specific regime that it is essential to master.
Introduction to the mortgage attached to judgments of conviction: a legal security by nature
A mortgage resulting from a judgement is a guarantee that the law automatically attaches to a court decision. It allows the successful creditor to take security over the debtor's property without the judge having to expressly order it. It is a measure designed to ensure the effectiveness of court rulings.
Definition and legal basis: an automatic right
Despite its common name of "judicial" mortgage, this security is actually a legal mortgage. It is not based on the will of the judge, but directly on the law. Article 2401 of the Civil Code states that legal mortgages are attached to judgments of conviction. This means that the right to take out this mortgage arises by operation of law from the mere existence of a judgment ordering the debtor to pay. The creditor does not have to request it, and the judge does not have to grant it; it is an automatic consequence of the judgment. This classification as a legal mortgage is a correction of a historical terminological anomaly, with the former article 2412 of the Civil Code classifying it as a judicial mortgage, even though its granting was totally beyond the power of the judge.
Distinction from judicial conservatory mortgage
It is important not to confuse this mortgage with its cousin, the judicial conservatory mortgage. The latter is a preventive measure, applied for by a creditor to a judge *before* obtaining a final sentence. Its purpose is to prevent the debtor from organising his insolvency during the legal proceedings. It is therefore granted by the judge on a provisional basis, on proof that the claim appears to be well-founded and that there is a risk to its recovery. In contrast, legal mortgages on judgments of conviction are only granted *after* the court decision. It is not a provisional measure but a genuine right to create a definitive guarantee, which is added to the other mortgages resulting from a court decision.
Non-public nature and private interests at stake
Although it exists by law, this mortgage is not a matter of public policy. It is a right made available to the creditor, who remains free to exercise it or not. The law merely protects private interests, those of the creditor who has obtained a conviction and is seeking to enforce it. The winner of a lawsuit therefore has the option, but not the obligation, to register a mortgage on the property of the losing party. This flexibility allows them to adapt their collection strategy to the debtor's financial situation and the circumstances of the case.
Conditions for the existence of a mortgage on judgments of conviction
In order for a creditor to benefit from this legal mortgage, three cumulative conditions must be met: there must be a judgement, the judgement must entail a sentence, and the sentence must relate to a debt. The combination of these elements automatically opens up the right to registration.
Judgment: any French court, whatever its nature
The nature of the court that handed down the decision is irrelevant. The mortgage may result from a judgement issued by any French court. This includes judicial courts (tribunal judiciaire, cour d'appel, conseil de prud'hommes, tribunal de commerce), administrative courts (tribunal administratif, cour administrative d'appel), or even an arbitration award, provided that the award has been made enforceable by a judicial decision (exequatur). Judgments handed down by criminal courts awarding damages to a civil party also give rise to this right. On the other hand, a foreign judgment will only have this effect in France once it has been the subject of an exequatur procedure giving it enforceability on French territory.
Conviction: need for a contentious decision establishing a claim
The judgment must contain an order to pay. A judgment that merely declares a right or annuls an act, without imposing an obligation to pay, would not be sufficient. The judgment must establish the existence of a claim in favour of the claimant, i.e. an obligation on the debtor to pay a sum of money. It must be a contentious decision. Case law specifies that it is not necessary for the judgment to be final or res judicata. A provisionally enforceable decision may be sufficient grounds for registering a mortgage, even if it is subject to appeal. The creditor then acts at his or her own risk, because if the decision is overturned on appeal, the mortgage will have to be cancelled.
Payability of the claim and its link with the mortgage
The sentence imposed by the judgment makes the debt payable, at least provisionally if the decision is not final. It is this exigibility that justifies the use of a security measure such as a mortgage. The creditor, as the holder of a claim for which payment can be demanded immediately, has a legitimate interest in securing it. The mortgage comes into existence with the judgment establishing the claim and ordering its payment. Even if enforcement of the guarantee (i.e. the sale of the property) can only take place once the judgment has become final, the guarantee can be taken out immediately. This makes it possible to establish a date and secure one's ranking in relation to the debtor's other creditors.
Scope and basis of the mortgage
Once the conditions for the existence of a mortgage have been met, it is necessary to determine the assets on which this security can be exercised. One of the major advantages of this mortgage is its general nature in terms of the assets concerned, even if its practical implementation is subject to a rule of speciality.
Properties concerned: all of the debtor's property assets
The legal mortgage attached to judgments of conviction is a general mortgage. This means that it can encumber all real estate, present and future, belonging to the convicted debtor. It is not limited to a specific property identified at the time of the judgment. Any immovable property that becomes part of the debtor's estate after the conviction can potentially serve as the basis for this guarantee. This generality offers considerable security to the creditor, whose chances of recovery are extended to the debtor's entire property portfolio.
The principle of speciality in mortgage registrations
While mortgages are general in principle, their registration is special. The French land registration system requires that any mortgage registration be made on one or more specific properties and for a specific amount. Consequently, the creditor cannot simply register a "general mortgage". They must choose which of their debtor's properties they wish to secure. The creditor must file a registration form with the land registry office, specifically identifying each property (address, cadastral references) and quantifying the amount of the secured debt (principal, interest and costs). This procedure transforms the general right arising from the judgment into a special and effective security interest in identified property.
The effects of the mortgage attached to sentencing judgments
The registration of a legal mortgage produces powerful legal effects that form the core of the protection offered to the creditor. It confers rank, enforceability and rights of preference and succession.
The date of registration: ranking and enforceability against third parties
It is the date of registration with the Land Registry that determines the ranking of the mortgage. Rank determines the order of priority between different creditors who may have a mortgage on the same property. The principle is simple: first come, first served. A creditor who registers his mortgage first will be paid before those who register it after him from the proceeds of the sale of the property. This publication makes the security enforceable against all third parties, whether other creditors, the purchaser of the property or the liquidator in the event of insolvency proceedings. A third party purchasing the property after the mortgage has been registered could not be unaware of its existence and would be obliged to respect it.
Taking into account the date of the judgment for the suspect period
A considerable advantage of this mortgage lies in its treatment in the event of the debtor's insolvency proceedings. Normally, deeds entered into during the "suspect period" (the period between the date of cessation of payments and the judgment opening the proceedings) can be cancelled. However, in the case of a mortgage arising from a judgment of condemnation, the legality of the registration is assessed in relation to the date of the judgment, and not the date of the registration itself. Thus, if the judgment of condemnation is prior to the date of cessation of payments, the creditor may validly register his mortgage during the suspect period, or even after the opening judgment, without risking nullity. This exception provides valuable security for diligent creditors who have obtained a court order before their debtor's default.
Preferential and resale rights of mortgagees
Like all mortgages, a mortgage resulting from a judgment of condemnation confers two essential prerogatives on the creditor. The preferential right allows the creditor to be paid before unsecured creditors (those who have no security) and before lower-ranking mortgagees, from the sale price of the property. The resale right is the corollary of this preferential right. It authorises the creditor to seize and sell the mortgaged property, even if it has already been sold by the debtor. The creditor can "follow" the property through any number of hands in order to assert his rights. This is what ensures the effectiveness of the guarantee, regardless of any acts of disposal that the debtor may carry out.
Publication and extinction of the mortgage
The legal mortgage on judgments is not eternal. Its effective implementation depends on precise publicity formalities, and its existence comes to an end for various reasons, mainly linked to the fate of the claim that it guarantees.
Publication procedures: registration at the land registry office
For the mortgage to be effective against third parties, the creditor must register it with the Land Registry (formerly the Mortgage Registry) in the place where the property is located. This active step is essential. The creditor must present the enforceable copy of the judgment and complete a standard registration form. This act of publication is crucial: without it, the mortgage remains a latent right, ineffective against other creditors or potential purchasers of the property. The speed of registration is therefore a key factor in ensuring a useful ranking.
Causes of extinction: accessory to the claim, lapse, cancellation
Mortgages can be extinguished in several ways. The most common cause is the extinction of the principal obligation. As the mortgage is an accessory to the debt, it disappears when the debt is paid in full. The creditor must then discharge the registration. Registration also has a limited period of validity, set by law. If it is not renewed before it expires, it lapses and loses all its effects retroactively. The creditor must therefore be vigilant and renew the registration if the claim has still not been settled. Finally, extinction takes the form of cancellation, which is the act by which the entry is formally deleted from the land registry. This deletion may be voluntary, following an agreement with the creditor (release), or judicial, ordered by a court when the registration is no longer justified.
The legal mortgage attached to a conviction is an effective recovery tool, but its implementation requires precise knowledge of its conditions and effects. To secure your rights following a court decision, it is essential to be assisted by a lawyer. If you are in this situation, contact our firm for an analysis of your options.
Sources
- Civil Code: articles 2401, 2412 (old), 2418, 2426
- French Commercial Code: Article L. 632-1
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