Mortgages are most often seen as a tool for creditors, particularly banks, to guarantee repayment of a loan. However, legislators have also been able to use this mechanism to protect vulnerable individuals. Far from guaranteeing a commercial debt, some mortgages are created by law to preserve financial rights within the family or to secure the assets of people unable to manage them themselves. This is the case for specific legal mortgages granted to spouses and persons under guardianship, which are part of the large family of mortgages, the king of real estate securities. These systems, which are often little-known, are essential for restoring a balance when major financial interests are at stake. They raise technical issues that need to be clarified, because sound advice on property security law can make all the difference in safeguarding an estate.
Introduction to specific legal mortgages: tailor-made protection
Definition and principle of legal mortgages
A security interest is a mechanism that assigns an asset to the preferential payment of a creditor. Mortgages are the best-known form of security in property matters. While conventional mortgages arise from a contract, typically a loan agreement, legal mortgages arise directly from the law. It is granted by operation of law to a creditor by virtue of his or her special status, without the need for any agreement. The Civil Code defines a legal mortgage as "that which results from the law". This security therefore does not depend on the nature of the claim, but on the specific situation of the creditor that the law wishes to protect.
The protective role of the legislator
Why does the law intervene to create such a guarantee? The legislator's aim is to re-establish a balance in relationships where one party is structurally more vulnerable or exposed to a financial risk. This is the case in family relationships, where emotional ties can mask considerable financial stakes. In such cases, the legal mortgage acts as a shield. It guarantees the spouse or protected person that, in the event of mismanagement, concealment of assets or dissolution of matrimonial ties, their financial rights to the other person's property will not be wiped out. It is a preventive tool against the organisation of insolvency by a malicious spouse or guardian.
The legal hypothec of spouses: function and constitution
Objective of the spouses' legal hypothec: equality and guarantee of claims between spouses
During their life together, spouses often transfer value between their assets. One spouse may finance the acquisition or improvement of a property owned personally by the other. When the marriage is dissolved, particularly by divorce, the person who has contributed financially has a claim against his or her ex-spouse. The purpose of the spouses' legal mortgage is precisely to guarantee repayment of these claims. It ensures that the creditor spouse can obtain payment of what is owed to him or her, by having the former spouse's property seized and sold if necessary. Originally designed to protect married women, this mortgage is now an instrument of equality, designed to secure the accounts made when the matrimonial property regime is wound up.
Conditions for creation and registration (matrimonial property regimes, court decisions)
The existence of this mortgage depends closely on the matrimonial regime of the spouses. Since a major reform of security law, its scope has been considerably restricted. The legal mortgage between spouses, as set out in article 2394 of the Civil Code, now only applies to couples married under the regime of participation aux acquêts. Under this system, each spouse may, on his or her own initiative and without the intervention of a judge, register a mortgage on his or her spouse's immovable property to guarantee his or her participation claim. This registration can be made even before the marriage is dissolved, although it only takes effect from the date of dissolution.
For spouses married under other regimes, such as separation as to property or universal community, this specific legal mortgage is no longer applicable. A spouse who fears for the recovery of his or her debt would then have to turn to other mechanisms, such as the judicial conservatory mortgage, which requires authorisation from the judge. This development demonstrates the legislator's desire to reserve this automatic protection for a matrimonial regime where the calculation of claims at the end of the marriage is an essential component.
Effects and enforceability of the spouses' mortgage
Like all mortgages, spousal mortgages are not enforceable against third parties until they have been published with the Land Registry. Once registered, it gives the spouse creditor a preferential right and a right to follow. The preferential right entitles the creditor to priority payment of the sale price of the property, according to the rank of his or her registration. The resale right entitles him to have the property seized even if it has been sold to a third party. The date of registration is therefore decisive: if the registration is made quickly, the guarantee will rank higher and be more effective.
Legal mortgages for persons under guardianship: protecting the incapable
Function of mortgages for persons under guardianship: securing managed assets
Protecting vulnerable people is a major concern of the law. The legal mortgage of persons under guardianship is a concrete illustration of this. Its purpose is to ensure that the assets of an incapacitated person (minor or protected adult) are properly managed by their legal representative. It charges the personal property of the guardian or legal administrator. If, at the end of their assignment, the administrator is found to owe sums to the protected person, whether as a result of mismanagement, negligence or embezzlement, this mortgage provides the victim or their heirs with a means of recovering the funds. It is a guarantee against potential breaches of trust inherent in the management of other people's assets.
Scope (minors, protected adults) and debtors concerned (guardians, legal administrators)
This protection applies to all unemancipated minors, whether under guardianship or legal administration. It also applies to protected adults under guardianship. The debtors under this cover are the persons responsible for managing their property, i.e. the guardian or legal administrator. However, the subrogated guardian, whose role is to supervise the guardian's management without participating directly in it, is not covered by this mortgage. The guarantee covers all claims that the protected person may have against his or her manager, provided that they have arisen in connection with the administration of his or her property.
Constitution of the mortgage and registration procedures
Contrary to popular belief, registration of this mortgage is not automatic. It is a measure that must be decided when the interests of the protected person appear to be threatened. The decision to register the mortgage rests with the family council or, more frequently, the guardianship judge. The judge may act on his or her own initiative, or at the request of a close relative (parent, ally) or the public prosecutor. The judge then determines the amount for which the registration will be made and designates which of the guardian's or administrator's properties will be encumbered. This registration, made for the duration of the protection measure, provides preventive and tangible security for the assets of the vulnerable person.
Common effects and special features of specific legal mortgages
Publicity and ranking of the mortgage
To be effective, specific legal mortgages, like all mortgages, must be made public. This is done by registration with the Land Registry of the place where the property is located. It is this formality that makes the security enforceable against third parties, i.e. anyone other than the creditor and the debtor. The rank of the mortgage, which determines its order of priority in relation to other possible guarantees on the same property, is determined by the date of registration. The principle is simple: first registered, first served. Registering quickly is therefore a guarantee of security for the creditor.
Preferential and subsequent rights
Once registered, a legal mortgage confers two fundamental prerogatives on its holder. The first is the preferential right, which is the right to be paid before other creditors (known as unsecured creditors) from the proceeds of the sale of the mortgaged property. The second is the right of resale, which allows the creditor to seize the property and have it sold, regardless of who owns it. This means that even if the debtor has sold the property to a third party, the mortgagee retains the right to enforce its security over the property. These rights are at the heart of the effectiveness of the mortgage security and are directly affected by key changes concerning legal mortgages in recent years.
Expiry of specific legal mortgages
A mortgage is an accessory to a claim. Its raison d'être disappears with the debt it secures. The mortgage is therefore extinguished when the debt is repaid in full. The debtor may then require the creditor to discharge the registration, which will remove the entry from the land registry and free the property from all encumbrances. The mortgage may also be extinguished by the creditor's express waiver of his guarantee. Lastly, like any security interest, it may be purged in the event of the sale of the property in accordance with specific procedures, or disappear if the property itself is destroyed, although in this case the creditor's right may be transferred to the insurance indemnity.
The implementation of a legal mortgage, whether in a family context or for the protection of a vulnerable relative, is a complex procedure that requires precise legal analysis. To obtain advice on property security law and secure your rights, contact our firm.
Sources
- Civil Code
- Commercial code
EN 
FR