Procedure to Appy for a Registration of a Provisional Legal Mortgage as Security for Payment

The provisional mortgage is one of the main legal instrument that have the creditor to guarantee the credit in case of default from debtor. In this article we explain the procedure to obtain this security.

Legal Ground.

Article 54 of Dominican Civil Procedure Code: “The First Instance Judge could equally, in same conditions and ways provided in Article 48 authorised the creditor to take a provisional registration of a legal mortgage on some or in all real estates of his debtor. This registration is provisional, and shall only produce effect for three years; but could be renewed for equal period of time ad infinitum, by submitting the judicial order which authorized the first registration. The creditor should request on the merits on the case in the term indicated in the judicial order which authorizes the mortgage registration, under penalty of nullity of registration. Within the two month term from the date the sentence on the merits of the case has acquired the force of res judicata, the creditor shall convert the provisional registration into a final registration, which shall produce its effects retroactively from de date of the first registration and shall be for free. The creditor shall pay the right and expenses once. When a final registration is missing within the two month term, the final registration shall be without effect retroactively and its cancellation could be requested by any interested individual, to the account of the individual who has taken the registration and in virtue of the judicial order passed by the judge who has authorised it.

Article 55 of Dominican Civil Procedure Code: “When the value of the real estate affected by the provisional registration, which is authorised according with the foregoing article, is noticeably greater than the registered amount, the debtor could make to limit its effects, at any time, by the presiding judge or the judge who considers the merit of the case, by notifying that the real estates which are to be reserved have at least the double in value than the amount of the capital of the credit, interest and expenses”.

Procedure. Doctrine And Jurisprudence.

Competent Court. The President Judge of the relevant Civil and Commercial Courtroom of the First Instance Court is the only competent to this matter. Subject to the territory, the relevant court is which located at the debtor domicile or the place where the real estates which registrations are to be taken are located.

1. – Request submitted to relevant court to ask for that by the Judicial Order authorises the provisional registration of legal mortgage on some or all debtor real estates. Such provision can affect either the current properties as well as to futures properties, by enforcing the Article 2123 of Civil Code, which reads: “(…) the legal mortgage can be enforced on the current real states of the debtor, and also on those that can be acquired”. As well as the real estates considered as real estates by designation[1].

For this purposes the plaintiff should demonstrate the urgency and danger in collecting the credit. “The credit shall be considered in danger and therefore it will have urgency when the evidence is given which allow supposing or being afraid of the imminent insolvency by the debtor, who shall be included in the judicial order to be passed by the judge”[2].

The judicial order which authorizes the mortgage registration shall indicate:

1. The urgency.
2. The amount of the seizure.
3. The term within which the creditor shall request to the relevant judge about the merits of the case, under penalty of nullity.

The judge could request to the creditor a previous justification to prove enough solvencies or to present a guarantor or a bond, which shall be done before the secretary or a receiver.

The judicial order shall be performed according with the proceedings and despite any appeal.

2. – Registration of the Provisional Legal Mortgage in the National District Deed Registration Office, with two bills as referred in Article 2148 of Civil Code. Since the provisional nature of the mortgage, the validity of such registrations is for three years, but can be renewed for equal period of time ad infinitum, by submitting the judicial order which authorizes the first registration.

3. – Notification of the Judicial Order which authorises the Legal Mortgage Provisional Registration within fifteen days from its registration, with domicile chosen within the jurisdiction of Deed Registration Office where the registration has been done.[3].

4. – Request the merits of the case within the term indicated in the judicial order which authorised the mortgage registration, under penalty of nullity of the registration.

5.-Once the final and irrevocable sentence on the merit of the case is obtained, the creditor shall be bound, in two month term, based on such sentence to convert the provisional registration into a final registration, which shall have retroactive effect from the first registration date.

Concerning the conversion of the Provisional Legal Mortgage into a Final Legal Mortgage by a judge, our Supreme Court of Justice has set forth: “In order a provisional mortgage, taken with a judge authorisation, be converted into a final mortgage, is not enough that the creditor have a document to prove his credit existence, but is necessary a sentence with the force of res judicata which condemn the debtor to pay the obligation, or that the credit is included in an enforceable authentic act”[4].

If the final registration is missing within the two month term, the provisional registration shall be invalid retroactively and its cancelation could be request by any interested individual, on the account of the individual who has taken the registration and in virtue of the judicial order passed by the judge who has authorised it.

The registration shall be for free, since the creditor pays the fiscal taxes once. The status acquired by the creditor because of the first registration shall be conserved once the final mortgage registration is obtained.

In the other hand, the debtor can obtain the reduction or limitation of registration effects, at any time, by the power of the Presiding Judge, or the judge who passed the judicial order, when the value of such real estates affected by the provisional mortgage, be notoriously greater than the amount of the registration subject matter. In this case, the debtor shall notify that the real estates reserved as the guarantee at least have a value equivalent twice the capital of the credit, interest and expenses.

If the credit is not recognised by the sentence which decides on the merits of the case, the provisional mortgage registration shall be done when such sentence has the force of res judicata, by itself or by decision of the judge who authorised the provisional registration.

Registration Effects.

According with Article 57 of Civil Procedure Code, after registering the mortgage subject to Articles 54 and 55, the debtor could not lease without judicial authorisation, nor constitute real rights enforceable to the prosecuting creditor, nor receive in advance or assign incomes, for more than three month under penalty of nullity. The disposal is not only non-enforceable to creditor registered, but is affected by nullity.

Rodolfo Mesa Chavez

Mesa & Mesa | Abogados

[1] Artagnan Pérez Méndez, Civil Procedure, Tomo III, pág. 91

[2] Art. 48 of Civil Procedure Code.

[3] Art. 56 of Civil Procedure Code.

[4] Civ. Case January 12th 2000, B.J. 1070, pages 94-98.