Issues And Suggestions For Improvement Regarding The Rules On Transfer Of Mortgage Property In The Chinese Civil Code

The rules governing the transfer of collateral in China have gone through several decades of exploration,from the "Opinions on Several Issues concerning the Implementation of the General Principles of the Civil Law of the People’s Republic of China"(hereinafter referred to as the "General Principles Opinion"),to the "Guarantee Law of the People’s Republic of China"(hereinafter referred to as the "Guarantee Law"),to the "Judicial Interpretation on the Application of the Guarantee Law of the People’s Republic of China"(hereinafter referred to as the "Guarantee Law Interpretation"),to the "Property Rights Law," and finally to Article 406 of the "Civil Code," experiencing several rounds of restrictions and free transfer models.Due to the changes in the rules,there have been many academic questions and difficulties,and there are many contradictions or unclear areas in connection with other laws in the system.Disputes that occur in practice are not uncommon.This article mainly analyzes and discusses the collateral transfer system under Article 406 of the Civil Code and its application issues.This article thoroughly reshapes the rules of collateral transfer,establishes the system of free transfer and enforcement of collateral property,and makes several innovations.However,there are still many legal gaps in this new legislative model,which may constrain its application.Therefore,it is necessary to examine and summarize the problems in our legislation and judiciary objectively,conduct legal reasoning,and explore practical and feasible solutions that are in line with our current reality,combining domestic and foreign experiences.Through methods such as literature analysis,comparative analysis,value analysis,case study,and system interpretation,this article analyzes the collateral transfer system.The mortgagee’s right to the mortgage is not affected by the transfer of the mortgaged property,and the buyer can also invoke the seller’s rights,including the right to contest the mortgage.However,there are exceptions to the enforceability of the mortgage.The regulations do not provide for procedural issues,so the disposal procedure of the mortgaged property,such as auction,agreement transfer,and sale,as well as the sequence and standards of the disposal procedure,should be specified,and issues such as the quality,quantity,and condition of the mortgaged property should be clarified.In addition,enforcing the mortgage increases the mortgagee’s enforcement costs and risks to varying degrees,which can be addressed by enhancing the public disclosure system,establishing a mortgaged property disposal procedure,promoting mortgage insurance,and increasing mortgage collateral to protect the interests of the mortgagee and the buyer.Starting from the core rights of the subject of "mortgagee," this article reveals the legislative gap in the nature of the notification obligation,the legal consequences of violating the notification obligation,and the vague standards that may harm the mortgagee’s rights,and puts forward improvement and application suggestions.Violating the notification obligation is a breach of the contract’s ancillary obligation and should bear the responsibility of compensating for losses or taking remedial measures.If the mortgagor fails to fulfill the notification obligation and causes damage to the mortgagee’s interests,it also involves tort liability.By comparing foreign rules,effective measures for the legislative improvement and practical application of China’s mortgage property transfer rules are proposed,providing theoretical support for protecting the rights and remedies of buyers and realizing the principal claim.