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Subsections
§ 325. Definition of mortgage
- (1)
- An immovable may be encumbered with a mortgage such that the person for whose benefit the mortgage is established (mortgagee) has the right to satisfaction of a claim secured by the mortgage out of the pledged immovable.
- (2)
- A legal share of an immovable may be encumbered with a mortgage only if it is the share of a co-owner.
- (3)
- A mortgage shall not be established only on a physical share of an immovable or a part of the legal share of a co-owner.
- (4)
- A mortgage does not presume the existence of a claim to be secured.
§ 326. Creation of mortgage
- (1)
- A mortgage is created by the making of an entry in the land register unless otherwise provided by law.
- (2)
- The provisions concerning acquisition of immovables apply to establishment of a mortgage unless otherwise provided by law.
§ 327. Entry of mortgage
A land register entry concerning establishment of a mortgage shall set out the mortgagee, the monetary amount of the mortgage (sum of mortgage), and upon the existence of interest and other collateral claims, the interest rate and the monetary amount of the collateral claims. A reference concerning the collateral claims may be made in the document which is the basis for the entry.
§ 328. Original owner mortgage
- (1)
- The owner of an immovable may establish a mortgage for the owner's benefit.
(17.02.99 entered into force 01.04.99 - RT I 1999, 27, 380)
- (2)
- The establishment of an owner mortgage is effected by making an entry in the land register on the basis of a notarised application of the owner.
§ 329. Discharge of mortgage by mortgagee
- (1)
- If a mortgagee discharges the mortgage , the owner of the encumbered immovable acquires the mortgage. For discharge, an entry shall be made in the land register on the basis of a notarised application of the mortgagee.
- (2)
- If a mortgagee partly discharges a claim secured by the mortgage, the provisions of subsection 349 (2) apply.
§ 330. Extinguishment of mortgage
A mortgage extinguishes by deletion of the entry from the land register.
§ 331. Extinguishment of mortgage on demand of owner
- (1)
- If the location of a mortgagee is not known, the owner of the encumbered immovable may demand deletion of the mortgage by a court proceeding if the owner has the right to satisfaction of the claim and the owner deposits the entire sum of the mortgage.
- (2)
- Interest shall be deposited if the interest rate is entered in the land register but not more than three years interest from the date the owner of an immovable submits an application to the court for deletion of the mortgage.
- (3)
- The claims of the mortgagee shall be deemed satisfied to the extent of the sum of the mortgage upon entry into force of a court judgment concerning deletion of the mortgage.
- (4)
- The mortgagee has the right to receive the deposited money within thirty years after the date of announcement of the deletion of the mortgage. If the mortgagee does not withdraw the money within this period, the owner of the immovable has the right to get it back.
§ 332. Deletion of owner mortgage on demand of mortgagee
- (1)
- If one and the same person becomes the owner of a mortgage and the encumbered immovable, the same or a lower ranking mortgagee may demand deletion of such mortgage.
- (2)
- The provisions of subsection (1) of this section are not valid concerning a mortgage created pursuant to section 328.
- (3)
- The demand provided for in subsection (1) of this section is not valid with respect to the mortgage if the entry shows its invalidity with respect to the given mortgage.
§ 333. Rights of owner of encumbered immovable
The owner of an immovable encumbered with a mortgage has the right to possess, use and dispose of the encumbered immovable if thereby the owner does not decrease the value of the encumbered immovable or damage the rights of the mortgagee in any other manner except if this occurs as a result of regular management.
§ 334. Rights of mortgagee to prevent decrease in value of immovable
- (1)
- If the value of an encumbered immovable decreases as a result of the activities of the owner, the mortgagee has the right to demand that the owner of the immovable terminate further harmful activity.
- (2)
- A mortgagee may perform acts necessary for prevention of a decrease in value of an encumbered immovable pursuant to a court judgment. The mortgagee may also perform such acts without a court judgment if a delay would significantly reduce the value of the encumbered immovable.
- (3)
- The mortgagee has the right to demand reimbursement of expenses relating to the acts specified in subsection (2) of this section. In order to secure reimbursement of the expenses relating to the specified acts, a mortgage which is not entered in the land register and which has the same ranking as the mortgage of the mortgagee belongs to the mortgagee.
§ 335. Rights of mortgagee upon decrease in value of immovable
- (1)
- If a decrease in value of an encumbered immovable can be presumed or if it has already occurred, the mortgagee may demand restoration of the former state or additional security from the owner of the immovable.
- (2)
- If the owner of an immovable does not restore the former state or give additional security on the demand of the mortgagee, the mortgagee may demand satisfaction of a claim secured by the mortgage to the extent by which the value of the encumbered immovable has decreased. Notice of the demand for satisfaction shall be given one month in advance.
- (3)
- If the value of an encumbered immovable decreases by no fault of the owner, the mortgagee may demand additional security or partial payment of the debt to the extent the owner of the immovable is compensated for the decrease in value.
§ 336. Reduction in value of accessories
Reduction in value or severance from the immovable in breach of the demands of regular management of accessories of an encumbered immovable grants a mortgagee the same rights as upon decrease in value of the immovable.
§ 337. Disposal of encumbered immovable
- (1)
- Waiver by an owner of the right to transfer or additionally encumber an immovable encumbered with a mortgage is invalid.
- (2)
- If after establishment of a mortgage a servitude or real encumbrance is established on the same immovable without the consent of the entitled person, the mortgage is preferred to the servitude or real encumbrance established later. Such servitude or real encumbrance shall be deleted to the extent it damages exercise of the mortgage.
§ 338. Disposal of mortgage
- (1)
- A mortgage may be disposed of, pledged or transferred only by the mortgagee who is entered in the land register and for whom the mortgage is established.
- (2)
- An agreement between the mortgagee and the acquirer of the mortgage bearing notarised signatures and the making of an entry in the land register are required for transfer of a mortgage.
(17.02.99 entered into force 01.04.99 - RT I 1999, 27, 380)
- (3)
- A mortgage is pledged as a whole. A notation concerning the pledgee is made in the land register with regard to pledging.
(17.02.99 entered into force 01.04.99 - RT I 1999, 27, 380)
§ 339. Rights arising from entry of mortgage
A mortgage entered in the land register grants the mortgagee in good faith all the rights arising from the text of the entry.
§ 340. Determination of ranking
- (1)
- A mortgage receives a ranking upon entry in the land register.
- (2)
- Upon encumbrance of an immovable with a mortgage, the owner of the immovable may reserve for themself one or several rankings for entry of a mortgage of a specified extent ahead of the mortgage to be entered in the land register.
- (3)
- An agreement on a change of ranking of mortgages is only valid if it is entered in the land register.
§ 341. Acquisition and surrender of owner mortgage
- (1)
- If a mortgage is acquired by the owner and there is no basis to apply the provisions of subsection 332 (1), the other mortgages do not move forward in ranking.
- (2)
- An owner mortgage may be surrendered to the mortgagee by the owner of the immovable.
§ 342. Continuation of mortgage
Upon transfer of the right of ownership in an encumbered immovable, a mortgage continues unless otherwise provided by law.
§ 343. Extent of mortgage to immovables
- (1)
- A mortgage extends to the essential parts, accessories and fruits of an immovable.
- (2)
- A mortgage does not extend to accessories, essential parts and natural fruits which before seizure of the immovable are transferred according to regular management or permanently severed from the immovable.
§ 344. Extension of mortgage to commercial and residential lease claims
If an immovable encumbered with a mortgage is leased commercially or residentially, the mortgage also extends to a claim under the commercial or residential lease which is created within the period between seizure of the immovable or declaration of insolvency of the debtor and sale of the immovable, or which is created within one year before seizure of the immovable or declaration of insolvency of the debtor and is uncollected.
§ 345. Extent of mortgage to insurance proceeds
- (1)
- If an immovable encumbered with a mortgage is insured, the mortgage also extends to a claim for insurance proceeds.
- (2)
- A mortgage on a claim for insurance proceeds extinguishes if the thing is restored or replaced by a thing of equal value.
- (3)
- Payable insurance proceeds may be paid to the owner, wholly or partly, with the written consent of all mortgagees whose claims are secured by the mortgage.
- (4)
- Insurance proceeds designated for restoration of a destroyed thing or replacement by a thing of equal value are paid to the owner of the immovable regardless of the consent of the mortgagees if the owner provides additional security to the extent of the insurance proceeds.
§ 346. Extent of claims
A mortgage secures a claim, the unpaid interest on the claim within three years before sale of the immovable by compulsory auction or declaration of bankruptcy, the fine for delay and expenses for the collection of the debt, the insurance premiums paid by the mortgagee on behalf of the owner of the immovable, and other collateral claims.
§ 347. Satisfaction of claim secured by mortgage
- (1)
- A mortgagee may demand satisfaction of a claim secured by a mortgage, and the owner of the encumbered immovable may pay the debt after the due date of the claim.
- (2)
- A mortgagee may demand satisfaction of a claim without a due date secured by a mortgage, and the owner of the immovable may pay the debt after the term provided by law for advance notice to the owner of the immovable or to the mortgagee has passed. The advance notice may be given by either the owner or the mortgagee. They may agree otherwise with respect to the specified term. The agreement shall be entered in the land register.
- (3)
- The claim specified in subsections (1) and (2) of this section may be satisfied by the deposit of money or set-off.
§ 348. Place of payment
Unless otherwise provided by the entry in the land register, the debt, interest and other collateral claims shall be performed at the location of the land registry of the encumbered immovable.
§ 349. Transfer of mortgage to owner
- (1)
- If a claim secured by a mortgage is satisfied or a claim is not created, the actual owner of the encumbered immovable may demand entry of the mortgage in the name of the owner or its deletion.
- (2)
- If a claim secured by a mortgage is partially satisfied, the actual owner of the encumbered immovable may demand entry of a partial mortgage in the land register for the owner's benefit to the extent the claim was satisfied, or deletion of the mortgage.
- (3)
- If a debt is paid by the owner of an immovable encumbered with a mortgage and the owner is not the debtor, the claim transfers to the owner to the extent that it was satisfied. In this case, the provisions concerning surety apply.
§ 350. Right of other persons to satisfy claim of mortgagee
- (1)
- If a mortgagee demands a compulsory auction of the immovable on the basis of the mortgage, the claim of the mortgagee may be satisfied by any person who would lose a real right in the immovable in the case of compulsory auction.
- (2)
- The provisions of § 349 apply to a person who satisfies the claim of a mortgagee.
§ 351. Objections of owner of immovable
- (1)
- The owner of an immovable may only present objections against a mortgagee which are based on a land register entry or which the owner has on the basis of the law of obligations against the creditor who presented a claim for payment.
- (2)
- The owner of an immovable may also present objections specified in subsection (1) of this section to a legal successor of the creditor or a person to whom the mortgagee transferred the mortgage (section 338).
- (3)
- The owner of an immovable encumbered with a mortgage who is not the debtor may present the same objections against a claim secured by the mortgage which may be presented by the debtor or a surety. The owner may also present objections if the debtor does not contest the claim.
§ 352. Compulsory execution
- (1)
- If a claim secured by a mortgage is not performed, the mortgagee has the right to demand compulsory execution either by compulsory auction or compulsory administration.
- (2)
- An agreement according to which a mortgagee acquires an immovable encumbered with a mortgage for satisfaction of the claim secured by the mortgage is invalid.
- (3)
- An immovable encumbered with a mortgage is sold by public auction on the basis of a court judgment.
- (4)
- The procedures for compulsory auction and compulsory administration shall be provided by law.
§ 353. Order of satisfaction of claims of mortgagees
- (1)
- The claims of mortgagees secured by a mortgage for the satisfaction of which a compulsory execution is carried out are satisfied from the money received from the compulsory execution of the immovable according to the ranking of the mortgages.
- (2)
- A claim of a subsequent ranking secured by a mortgage is satisfied after satisfaction of the claim of the preceding ranking secured by a mortgage.
(17.02.99 entered into force 01.04.99 - RT I 1999, 27, 380)
- (3)
- Claims which have one and the same ranking and are secured by mortgages are satisfied concurrently and in proportion to the amount of the claims.
(17.02.99 entered into force 01.04.99 - RT I 1999, 27, 380)
- (4)
- (Repealed - 17.02.99 entered into force 01.04.99 - RT I 1999, 27, 380)
§ 354. Particulars of owner mortgage upon compulsory execution
- (1)
- In the case of an owner mortgage, the owner of an encumbered immovable shall not demand compulsory execution for satisfaction of the claim of the owner.
- (2)
- An owner has the right to receive interest on a claim secured by a mortgage only if the immovable is in compulsory administration and only during the compulsory administration period.
§ 355. Partial mortgage
- (1)
- A mortgage may be divided into parts.
- (2)
- The consent of the owner is not required for division of a mortgage into parts or for an exchange of ranking among partial mortgages.
- (3)
- Partial mortgages assume the ranking of the current mortgage.
§ 356. Division of immovable encumbered with mortgage
- (1)
- If an immovable encumbered with a mortgage is divided, and the owner of the immovable being divided and the mortgagee have not agreed otherwise, each part of the immovable is encumbered with a partial mortgage according to its value.
- (2)
- If as a result of the division specified in subsection (1) of this section the value of the parts decreases below a level which ensures satisfaction of the claim secured by the mortgage, the mortgagee may prohibit the division.
§ 357. Extension of mortgage to merged immovable
- (1)
- If an immovable is merged with another immovable, the mortgage also extends to the merged immovable.
- (2)
- If both immovables are encumbered with restricted real rights, subsection 54 (3) of this Act applies.
§ 358. Transfer of mortgage
- (1)
- In the case of land readjustment or replanning by the state or a local government, mortgages which encumber immovables to be surrendered are transferred in their current rankings to the immovables to be granted in replacement.
- (2)
- If upon expropriation of an immovable encumbered with a mortgage (section 171) the immovable is replaced by another, the mortgages which encumbered the expropriated immovable are established on the replaced immovable according to their current rankings.
- (3)
- If several immovables which are encumbered with several mortgages or of which some are not encumbered with mortgages are merged into one immovable, the mortgages are transferred to the merged immovable and their current rankings are preserved as much as possible.
§ 359. Definition of combined mortgage
- (1)
- One mortgage may encumber several immovables. In this case, the owner of each immovable is liable for the entire claim secured by the mortgage.
- (1)
- With regard to a combined mortgage, the legal share of a co-owner in an immovable is deemed to be an immovable
(17.02.99 entered into force 01.04.99 - RT I 1999, 27, 380)
- (2)
- Upon establishment of a combined mortgage, the land register shall indicate with respect to each immovable being encumbered the other immovables encumbered with the combined mortgage.
§ 360. Satisfaction of claim secured by combined mortgage
- (1)
- A mortgagee has the right to complete or partial satisfaction of a claim out of any immovable encumbered with a combined mortgage.
- (2)
- A mortgagee may divide the sum of the mortgage between the encumbered immovables and shall determine the extent to which each immovable is liable for the mortgage. In this case, the provisions concerning division of an immovable encumbered with a mortgage apply (section 356).
§ 361. Satisfaction of claim by owner of one immovable
- (1)
- If the owner of an immovable encumbered with a combined mortgage satisfies the claim of the mortgagee, the owner may demand entry of the combined mortgage which encumbers the owner's immovable in the name of the owner. Combined mortgages on the other immovables shall be deleted.
- (2)
- If the owner of an immovable who satisfied the claim of the mortgagee may demand compensation from the owners of the other immovables encumbered with the combined mortgage, the owner may also demand entry of the combined mortgages which encumber the other immovables in the name of the owner to the extent of the compensation.
§ 362. Combined mortgage of owner
- (1)
- If a claim for the securing of which a combined mortgage is established is not created or terminates or if the mortgagee discharges the combined mortgage, the owners of the immovables encumbered with the combined mortgage may demand entry of the combined mortgage in the land register in their names jointly.
- (2)
- In the case specified in subsection (1) of this section, each owner of an immovable encumbered with the combined mortgage may demand that the immovable of the owner be encumbered with an owner mortgage in proportion to the value of the immovable of the owner, unless otherwise agreed (section 356).
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