This resolution contains an analysis of the possible entry of certain early repayment clauses in loan agreements in the Property Register, such as those for (i) the sale of the mortgaged asset, (ii) the death of the borrower, (iii) if the borrower stops living in the mortgaged property, or (iv) in the case of forceful expropriation, all of these are denied by the Property Registrar as he understands their lack of real estate legal significance.
Although, according to the DGRN doctrine, the principle of speciality imposes the exact determination of the nature and extension of the right has to be recorded, in matters of mortgages this aforesaid principle must lend itself to flexibility, with the aim of allowing credit, permitting, in those circumstances, the mortgage without the previous registral determination of every element of the obligation. However, it is necessary to identify, at the time of creating the mortgage, the basic legal relationship that is derived from the obligation that is to be secured, and, only if its effective creation produces independent obligations, display such effects in the mortgage guarantee.
In relation to the aforementioned early repayment clauses, the DGRN establishes that when it concerns a present contractual obligation, whose duration or expiry depends on various future facts, or the occurrence of some events, although uncertain as to when, and other uncertainties also during its existence such as the sale of the mortgaged property, the incompletion of the loan obligations or the lack of residence by the borrower, the last two circumstances needed to give full effect to the mortgage, at the moment of its execution they will require extraregistral proof of the concurring cause that renders demandable the return of the loaned amount, but that in some way hinders the entry of the guaranteed obligation as it is configured.
In this sense we must remember that the DGRN recognises the modulation by way of an agreement of the early repayment clauses stated in article 1129 of the Spanish Civil Code, in order to determine the grade of detriment to the value of the goods that consists of the decrease of the guarantee, in such a way that its protection can be set up as reasons for early repayment, stipulated as those of losses or reductions in value of the assets produced with independence to the existence or not of the blame on part of the debtor or owner, being facts that are admitted or circumstances that entail a risk for the “life “ or rank of the guarantee.
On the other hand, its interesting that, in analysing the case of forceful expropriation as a cause of early termination, bearing in mind that although it is certain that we will face a circumstance that involves unforeseeable overtones, entailing for the creditordisappearance of his guarantee, the opinion of the DGRN is that the entry as a clause of early termination should be rejected due to the lack of forseeability, in the current case upon which the referential resolution sets out the possibility, on behalf of the debtor, to substitute the guarantee of its disappeared form for other new ones that are equally secure, being equal in that the mortgage creditor safeguards against the greater value possible for the mortgaged property possible, the summons of whom being compulsory in the expropriation proceedings.
We must conclude by indicating that conformity with the Mortgage Law ("Ley Hipotecaria"), and general principle with respect to mortgages, the Property Registrar can only qualify the agreed interests, and in such way enter the clauses of significance in real estate and property law that are the total of the main debt, the agreed interest, or the maximum total of the mortgage liability, identifying the guaranteed obligations, whichever may be the essence of these and its duration. Nevertheless and as an exception to the aforesaid general principle, the recent Law 41/2007 amending article 12 of the Mortgage Law, establishes that with respects to mortgages created in favour of certain financial institutions, moreover they can put financial clauses on record on the register, including the clauses of early termination, even when they lack significance in real estate and property law and remain outside qualification. In this sense, we must clarify that in relation to these last financial clauses the function of the registrar must be limited to register these and no more, and only when the clauses of significance in real estate and property law have been qualified favourably.