Security interests, legal mechanisms designed to guarantee payment of a debt, are a cornerstone of the security of economic transactions. For a long time, special liens on immovable property were a special category of security, directly attached to certain immovable assets of the debtor. Historically, they offered formidable protection to specific creditors because of the nature of their claim. However, the landscape of these guarantees has been profoundly reshaped by successive reforms, culminating in a major transformation in 2021. Understanding what these liens were and what they have become is essential for all economic players, whether sellers, lenders or entrepreneurs. This article is part of a general presentation of property security interests and aims to shed light on the nature and development of these specific guarantees. Navigating the intricacies of security law requires specialised expertise, an area in which our firm has developed a unique know-how. expertise in securities law.
Introduction to special property liens: protection for targeted assets
Definition and role before the reforms
Prior to the reforms, a special real estate lien was a legal security, i.e. a guarantee granted directly by law, without the need for a contract between the parties. Its distinctive feature was that it applied only to one or more specific properties owned by the debtor, hence the term "special". Unlike general liens, which encumber the whole of a debtor's assets, this lien targeted the very property that gave rise to the claim. The beneficiary creditor was thus granted a preferential right, enabling it to be paid in priority to other creditors, including mortgagees, from the sale price of this specific property.
The link with the idea of heritage enhancement
Most of these privileges were based on a simple and equitable idea: enrichment. The legislator considered that a creditor who, through his or her action, had introduced new value into the debtor's assets or had preserved their value, deserved special protection for that same asset. Whether it was a seller who contributed a property, a lender who financed the purchase, a joint owner who transferred his rights in a property or a contractor who added value through his work, they all contributed to a direct enrichment of the debtor's assets. The special lien therefore corrected the imbalance by ensuring that the value added was used first and foremost to pay off the person who had created it.
The real estate vendor's lien: conditions and effects
Basis of the vendor's lien
The real estate vendor's lien was the most emblematic guarantee in this category. It guaranteed payment of the sale price to a seller who had granted credit to the buyer. Its existence was justified by the fact that the seller had enriched the buyer's assets by adding a building to them, without having received full consideration. The basis of this lien, i.e. the property to which it related, was logically the property sold, as well as its accessories. This guarantee protected the seller against the risk of the buyer's insolvency.
Publicising liens and their consequences (retroactivity, degeneration)
To be enforceable against third parties (other creditors, successive purchasers), the vendor's lien had to be registered with the land registry. The key feature of this system was its retroactive effect. If the registration was made within two months of the deed of sale, the lien took effect not on the date of registration, but on the date of the sale itself. This retroactive effect gave the lien priority over any mortgages that the buyer might have granted between the sale and the registration. In the event of late registration, beyond the two-month period, the lien did not disappear but "degenerated" into a simple mortgage, losing its preferential rank and becoming enforceable only from the date of registration.
Resolutory action by unpaid vendor
In addition to his lien, the seller of an unpaid property had another weapon at his disposal: the resolutory action. Under article 1654 of the Civil Code, they could apply to the courts to have the sale annulled if the price was not paid. This action allowed the buyer to recover full ownership of the property, as if the sale had never taken place, thus avoiding any competition with the buyer's other creditors. However, the law linked the fate of this action to that of the vendor's lien: the resolutory action could not be brought after the vendor's lien had lapsed, particularly if it had not been published in time.
The lender's lien for the purchase of a building
Characteristics and similarities with the vendor's lien
Most property transactions are financed by a credit institution. To guarantee repayment of the loan, the law granted the lender a lien very similar to that of the vendor. The basis was identical: the lender, by providing the funds required for the purchase, allowed a value to be added to the borrower's assets. This lien was subject to the same publicity rules: it had to be registered within two months of the deed of sale to benefit from retroactivity. Late registration also transformed it into a mortgage. To be valid, the loan deeds and receipts (proof of payment by the seller) had to be notarised and state that the funds had been used to purchase the property.
Autonomy and notable differences (guaranteed interest, resolutory action)
Despite their strong similarities, the lender's lien was autonomous and had significant differences. Firstly, it guaranteed payment of the contractual interest on the loan for a period of three years, whereas the vendor's lien only covered interest at the legal rate. Secondly, and this is a fundamental difference, the moneylender did not benefit from the resolutory action. He could not seek annulment of the sale in the event of non-repayment of the loan. In practice, this distinction had important consequences. In order to secure their position, the banks almost systematically demanded that the vendor assign his first-ranking lien and waive his resolutory action, so as not to see their own guarantee wiped out by cancellation of the sale.
The co-partitioner's privilege: guaranteeing equal sharing
Basis and scope of application (balancing payment, licitation, recourse in warranty)
The purpose of this privilege was to ensure that the principle of equality was respected in the division of property, whether in a succession or at the end of an indivision. If one of the co-sharers (an heir, for example) received a lot worth more than his share, he had to pay financial compensation, known as the "balance", to the others. The co-sharer's lien guaranteed payment of this balance, by charging the immovable property allocated to the debtor of the balance. It also applied to the sale by auction of undivided property between the co-sharers. If one of the co-partitioners bought the property, the lien guaranteed payment of the price to the others. Lastly, it covered warranty claims between co-sharers, particularly in the event of eviction from an allocated property.
Publicity and effects of the co-partitioner's lien
As with other special liens, the co-sharer's lien had to be registered within two months of the deed of partition or auction to take effect retroactively to that date. This registration gave him a preferential right over the properties concerned. If it was registered late, it degenerated into a simple mortgage, taking effect on the date of its publication. The effects were classic: it allowed the creditor of the balance to be paid in priority from the sale price of the property allocated to his debtor.
The architects' and contractors' lien: a safety feature that has fallen into disuse
Based on the increase in value of the property
This lien, provided for in the former article 2374, 4° of the Civil Code, was also based on the idea of enrichment. Architects, contractors, masons and other workers involved in the construction, reconstruction or repair of buildings had their claims guaranteed by a lien on the building to which they had added value. The guarantee did not relate to the total value of the building, but specifically to the added value resulting from their work, as determined by an expert.
Causes of its current obsolescence
Despite its logical basis, this privilege was rarely used in practice, to the point where it was considered obsolete long before it was formally abolished. There are several reasons for this obsolescence. Firstly, the formalities involved (two expert reports, before and after the work) were cumbersome and perceived as conflictual at a time when the relationship of trust with the customer was paramount. On the other hand, professionals preferred simpler and more effective guarantees, in particular the judicial conservatory mortgage, which they could register quickly in the event of a dispute, without the constraints associated with recording an increase in value.
The impact of recent reforms (2006 and 2021) on special real estate liens
Conversion into special legal mortgages
The ordinance of 15 September 2021 reforming the law on sureties marked a decisive turning point. It abolished the category of special real estate liens in the Civil Code. However, this does not mean that they have disappeared altogether, but rather that they have been transformed. These former liens (vendor, moneylender, co-sharer) have been converted into special legal mortgages. This change completes a rapprochement that has been underway for decades. The rules governing these privileges, which are subject to publicity, were already very similar to those governing mortgages. The legislator considered that the complexity of the old system, and in particular the legal uncertainty created by the retroactive effect of registrations, was no longer justified in the era of computerised land registration services, which allow for virtually instantaneous publication. This reform is part of a wider movement to describe the revolution in property security and the disappearance of special liensand key changes in legal mortgages and real estate liens.
Consequences for rank and advertising
The main consequence of this transformation is the end of retroactivity. From now on, these guarantees, referred to as legal mortgages, will rank on the date of their registration with the Land Registry, and no longer on the date of the deed (sale, loan, division). This change puts an end to the uncertainty that could exist for other creditors during the two-month period during which a special lien could be registered and take precedence over rights published in the meantime. The system thus gains in clarity and legal certainty: the ranking of security interests is now determined in a transparent and predictable manner by the chronological order of publication, bringing the regime of these former exceptional security interests fully into line with the ordinary law on mortgages.
The management of real estate securities, whether under the old provisions or the new legal framework, remains a technical matter with considerable financial implications. To secure your transactions, guarantee payment of your debts or analyse the scope of your guarantees, the assistance of a lawyer is often essential. Our firm will be happy to assist you.
Sources
- Order no. 2021-1192 of 15 September 2021 reforming the law on securities
- Civil Code
- Commercial code
EN 
FR