On Real Estate Collateral Transfer And Balance Of Benefits Among The Parties

Real estate mortgage in guarantee system is of great importance in economic life and deemed to be"King of Guarantee", in that it not only fully meets the needs of the mortgagee but also frees the mortgagor from transferring the possession of real estate. However, every coin has two sides; disadvantages emerge following advantages. Real estate mortgagees fail to possess the collateral but merely obtain value realization right; hence, chances are that the mortgagee transfers the collateral to a third party during the mortgage period. The solution to the aforesaid dilemma involves balance of benefits among the parties and value judgment.Nevertheless, the relevant laws and regulations in China are far from rational concerning the transfer of the collateral, and the newly enacted Property Law makes little improvement. This thesis explores the current system design in China, reviews those in Germany, France, Japan and Taiwan Region of China, and makes comparisons in regulations, constitutive elements, legal impact as well as benefit balance, hoping to find a more appropriate solution and make certain contributions to the consummate legislation in China. This thesis consists of three chapters besides Introduction and Conclusion.The first chapter is an analysis of current legal solution in China mainly includes an introduction, contemplation and personal view of relevant legislations. The author argues that the legislations remain indecisive regarding whether the collateral can be transferred, and that restriction of transfer violates the essential concept, infracts balance of benefits among the parties and then causes internal conflicts in the legal system. Furthermore, the current legal solution can hardly find legitimate backup out of the value concept of mortgage, transaction notion and economy efficiency.The second chapter is an observation from a comparison perspective and constitutes the pivot of this thesis. The comparison methodology is not confined within legislations in different countries and regions; instead, it focuses on the commonness and discrepancies. As for the commonness, the author figures out that almost all the legislations in the involved countries acknowledge the force of recourse of mortgage and make complementary relief concerning balance of benefits among the parties. The common aforesaid relief manner lies in the law of obligation, i.e. liability incurred by defects of right and subrogation liquidation. As for the discrepancies, the civil laws in Germany and Taiwan Region of China merely rest on relief in the law of obligation with no further stipulation in property law; the civil laws in France and Japan additionally has elimination right, i.e. claim of eliminating mortgage, and Japan goes further in cost liquidation by the transferee system and subrogation system.Through the comparison, this thesis holds that the force of recourse accompanied with liability incurred by defects of right and subrogation liquidation functions preferably in balance of benefits among the parties, accords with the essential concepts in civil laws and thus serves as an appropriate legal system in solution to the problems incurred by collateral transfer. Accordingly, elimination right, cost liquidation by the transferee system or subrogation system is not a must in legislation, for the three systems have their particular lawmaking backgrounds, function barely or limitedly, and suffer criticism from domestic scholars.The third chapter proposes five legislation suggestions based on the above analysis, which include allowing real estate collateral transfer, establishing force of recourse, introducing liability incurred by defects of right, confirming subrogation liquidation of assignee and strengthening registration system. The thesis holds that, through constructing the aforesaid system, benefits of the parties can be rationally balanced and the essential concept in civil law, i.e. autonomy of private law is taken well into consideration together with secure transaction concept, facilitating circulating goods and advancing value, as well as liability sharing concept.