Book 3 Property law in general
Title 3.9 Real security rights: pledge and mortgage
Section 3.9.1 General provisions for real security rights
Article 3:227 A 'pledge' and a 'mortgage' are real
- 1. A pledge and a mortgage are both real
security rights on an asset of someone else, granting their proprietor
('pledgee' and 'mortgagee') the title to recover his financial debt-claim from
the sale proceeds of the encumbered asset prior to all other creditors
of the person to whom the encumbered asset belongs. When such a real security
right is established on immovable property or on a registered ship or
airplane, it is called a mortgage; when it is established on any other
property, it is called a pledge.
- 2. A pledge or mortgage on a thing is vested on all that is covered
by the right of ownership of that thing.
Article 3:228 Possibilities to establish a real security
All transferable assets can be encumbered with a pledge or a mortgage.
Article 3:229 Substitution of pledged or mortgaged
- 1. A pledge or
a mortgage includes by operation of law a pledge on all debt-claims
for compensatory damages that have to be regarded as a substitution for
the encumbered property itself, including debt-claims resulting
from a depreciation of the value of that property.
- 2. This pledge ranks above all other pledges
that are vested on such debt-claims.
Article 3:230 Indivisible real security rights
A pledge or mortgage is indivisible, even when the obligation for which
security it serves, has two or more creditors or debtors and this obligation
has been divided and apportioned between them later on.
Article 3:231 Security for existing and future debt-claims
- 1. A pledge or a mortgage may be established as security for existing
and for future debt-claims. The debt-claim for which security
is given, may be to name, to order or to bearer. It may be a debt-claim against the pledgor or mortgagor himself or a debt-claim
against someone else.
- 2. The debt-claim that is secured by a pledge or a mortgage has
to be defined sufficiently.
Article 3:232 [repealed]
Article 3:233 Liability of the pledgor or mortgagor
who himself is not the debtor
- 1. The pledgor or mortgagor who himself is not the debtor of the debt-claim for which the pledge or mortgage serves as security, is liable for
a depreciation of the encumbered asset insofar the security of the creditor
is endangered as a result and the pledgor or mortgagor or someone for
whom he is responsible, is to blame for the depreciation.
- 2. The costs which the pledgor or mortgagor has made on behalf of the
encumbered asset other than for its maintenance, may be reclaimed from
the pledgee or mortgagee, but only if the pledgee or mortgagee has recovered
his debt-claim from the sale proceeds of the encumbered asset and
insofar these costs have contributed to obtain higher sale proceeds.
Article 3:234 Encumbered asset of the debtor must
be first sold by foreclosure
- 1. If the same debt-claim is secured by a pledge or a mortgage
on an asset of the debtor as well as by a pledge or mortgage on an asset
belonging to another person, then this other person may demand, when the
creditor of the secured debt-claim starts a foreclosure procedure, that the
encumbered asset of the debtor is sold off first.
- 2. If the same debt-claim is secured by a pledge or mortgage on
two or more assets and one of these assets is encumbered with another
limited property right which the creditor may ignore when it comes to
a foreclosure sale, then the limited proprietor has a corresponding right
as the one mentioned in paragraph 1.
- 3. If the creditor of the secured debt-claim refuses to comply with a demand
that is based on paragraph 1 or paragraph 2, then the provisional relief
judge of the District Court may, upon the request of the most appropriate
party or, in case of a mortgage, upon the request of the notary before
whom the sale by foreclosure will take place, decide on the refusal of
the creditor. The request suspends the sale by foreclosure. No appeal
to a higher court and no other legal provisions are open against a judicial
decision that is passed by virtue of this paragraph.
Article 3:235 Prohibition of appropriation
Each clause or condition which gives the pledgee or mortgagee the right
to appropriate the pledged or mortgaged asset is null and void.
Section 3.9.2 Pledge
Article 3:236 Establishment of an ordinary pledge ('possessory pledge')
- 1. A pledge on a movable thing, on a debt-claim to order or to bearer or
on a usufruct of such a thing or debt-claim is established by bringing the
thing or, respectively, the negotiable document under control of the pledgee
or of a third party appointed for this purpose by the parties. The establishment
of a pledge on a debt-claim to order or on the usufruct of such a claim requires
also that the negotiable document is endorsed by adding the name of the
pledgee to it.
- 2. A pledge on other property is established in the way as determined
by law for the delivery of the to be pledged assets.
Article 3:237 Establishment of a 'non-possessory pledge'
- 1. A pledge on a movable thing, on a debt-claim to bearer or on the usufruct
of such a thing or debt-claim may be established also by means of a notarial
deed or of registered private deed, in both cases without the need to
bring the thing or negotiable document under control of the pledgee or
of a third party (‘non-possessory pledge’).
- 2. The pledgor must declare in the notarial deed or in the registered
private deed that he has the power of disposition over the to be pledged
asset and that he is free to burden it with a pledge, and also that this
asset is not encumbered with another limited property right or, if it
is, which limited property rights already are vested on it.
- 3. When the pledgor or debtor does not properly perform his obligations
towards the pledgee or when one of them gives the pledgee good reasons
to fear that one of these obligations will not be performed in time or
correctly, then the pledgee, who has acquired a non-possessory pledge,
may demand that the thing or negotiable document is brought under his
control or under control of a third party. If the pledged asset is burdened
with two or more non-possessory pledges, then each pledgee, towards whom
the pledgor or debtor fails to perform in time or correctly, is entitled
to exercise this right, on the understanding that every other pledgee
than the one who is ranked first may only demand that the thing or negotiable
document is handed over to the pledgee or a third party who is appointed
for this purpose either by an agreement between all involved pledgees
or by a decision of the court.
- 4. When the pledgor or debtor does not properly perform his obligations
towards a pledgee who has acquired a non-possessory pledge that is established
in advance on fruits or crops that in future will be separated from the
field, then the Subdistrict Court may authorize the pledgee to harvest
these fruits or crops himself on the field. When the pledgor is the owner
of the field or when he is entitled to its fruits or crops by virtue of
a limited property right on that field, then the judicial decision of
the court in which the request of the pledgee has been awarded may be
registered in the public registers for registered property.
- 5. No appeal to a higher court and no other legal provisions are open
against a judicial decision which is passed by virtue of the previous
Article 3:238 Pledgor lacking power of disposition when establishing a (second) pledge
- 1. Despite the fact that the pledgor, after the establishment of a non-possessory
pledge on a movable thing, a debt-claim to bearer, a debt-claim to order or on the
usufruct of such a thing or debt-claim, no longer has any power of disposition
over this asset, a second pledge, established by him on that same asset,
is nevertheless valid if the second pledgee acted in good faith at the
moment on which the involved thing or negotiable document was brought
under his control or under control of a third party who had been appointed
by him for this purpose.
- 2. If an asset as meant in paragraph 1 already was encumbered with a
limited property right at the moment on which a pledge was established
on it, then this pledge will rank higher than that limited property right
if the pledgee was not aware nor should have been aware of the existence
of that limited property right at the moment referred to in paragraph
1 [this is the moment on which the involved thing or negotiable document
is brought under control of the pledgee or under control of a third party
who has been appointed by him for this purpose].
- 3. Where a pledge is established on a movable thing of which the owner
involuntarily has lost possession because it was stolen from him or when
a pledge is established on the usufruct of such a movable thing, Article
3:86 paragraph 3, openings words and under point (b) and paragraph 4,
- 4. The present Article cannot be invoked
against someone who reclaims a thing as his own property when it would
have been impossible as well to invoke Article 3:86 against him because
this possibility is excluded by Article 3:86a paragraph 1 and 2 or Article 3:86b, paragraph 1, or
Article 7 of the Act on the Return of Cultural Heritage originating from
Article 3:239 'Undisclosed pledge' on a debt-claim to name
- 1. A pledge on a property right which is to be exercised only against
one or more specific persons, not being a debt-claim to order or to bearer,
or a pledge on the usufruct of such a property right, can be established
as well by means of a notarial deed or a registered private deed, drawn
up for this purpose between the pledgor and pledgee, in both cases without
notifying the person or persons against whom the property right is to
be exercised, provided that this property right already exists at the
moment on which the pledge is established or that it will be obtained
directly on the basis of an at that moment already existing legal relationship.
- 2. The second paragraph of Article 3:237 applies accordingly to the
establishment of such an undisclosed pledge.
- 3. When the pledgor or debtor does not properly perform his obligations
towards the pledgee or when one of them gives the pledgee good reasons
to fear that one of these obligations will not be performed in time or
correctly, then the pledgee is entitled to notify the persons meant in
paragraph 1 of the existence of the pledge. The pledgor and pledgee may
agree that this right also arises in other situations.
- 4. Where a pledge has been established in accordance with paragraph
1, Article 3:88 only applies to the pledgee if he acted in good faith
at the moment of notification as meant in paragraph 3.
Article 3:240 Pledge on a share in a community asset
A pledge on a share in a community asset is established in the same way
and with the same effects as provided for with respect to the establishment
of a pledge on that asset itself.
Article 3:241 Declaration of the pledgee about the
nature and amount of the secured debt-claim
When asked for, the pledgee must hand over to the pledgor a written declaration
indicating the nature and, as far as possible, the amount of the debt-claim for which the pledge serves as security.
Article 3:242 The pledgee may not establish a pledge
on an asset pledged to him
The pledgee is not entitled to encumber the asset, that is pledged to
him, with another pledge, unless this right was granted to him unambiguously.
Article 3:243 Obligation to take care of the pledged
- 1. The pledgee or third party, who has a
thing in his keeping on account of a pledge, must care for it as a prudent
- 2. Costs that the pledgee has made for the
preservation and maintenance of the pledged asset, including property
charges that are linked to it, must be reimbursed to him by the pledgor;
these costs are secured by the pledge as well. Other costs that the pledgee
has made on behalf of the pledged asset may only be reclaimed from the
pledgor if they were made with his approval, without prejudice to the
liability of the pledgor on the basis of a benevolent intervention in
another’s affairs ('negotiorum gestio') or an unjustified enrichment.
Article 3:244 Pledge as security for accrued interest
Unless the contrary has been stipulated, a pledge that is established
as security for one or more specific debt-claims serves also as
security for three years of interest accrued on these debt-claims pursuant
to law or agreement.
Article 3:245 Right of action to be exercised by the
pledgee or pledgor against third persons
The pledgor and pledgee are both independently entitled to file lawsuits
or to lodge applications against someone else in order to protect the
pledged property, provided that he ensures that the other is called to
the legal proceedings in time.
Article 3:246 Right to collect debt-claims that
are encumbered with a pledge
- 1. When a pledge is vested on a debt-claim, then the pledgee
is entitled to demand satisfaction in and out of court and to collect
the performance that is chargeable by the debtor of the pledged debt-claim.
This right, however, stays with the pledgor as long as the debtor of the
pledged debt-claim is not notified of the existence of the pledge.
- 2. Where the pledged debt-claim is not yet exigible (due and demandable), but
it could be made exigible (due and demandable) by means of a termination, the person
who is entitled to the rights as referred to in paragraph 1, also has
this right of termination. He is compelled towards the other not to exercise
this right needlessly.
- 3. If a debt-claim is encumbered with more than one pledge, then
the rights which are granted to the pledgee under the previous paragraphs
only belong to the pledgee who is ranked first.
- 4. After the debtor of the pledged debt-claim has been notified
of the existence of the pledge, the pledgor may only exercise these rights
with approval of the pledgee or with authorisation of the Subdistrict
- 5. When a pledged debt-claim is collected by the pledgee or by
the pledgor with authorisation of the Subdistrict Court, then all pledges
with which that debt-claim was burdened, are automatically vested on the collected
performance in accordance with their original ranking order.
Article 3:247 Voting right attached to the pledged asset
Except in situations as specified in Article 2:89 and 2:198 of the Civil
Code, the pledgor is still the only one to exercise the voting rights
which are linked to a pledged asset, unless the contrary has been stipulated.
Article 3:248 Foreclosure without recourse to the
- 1. When the debtor is in default with the observance of an obligation
for which the pledge serves as security, the pledgee is entitled, without
the necessity to obtain any approval in advance of the court for doing
so, to proceed to a public sale by foreclosure of the pledged asset (at
an auction) and to recover the secured debt-claim from the sale proceeds.
- 2. Parties may stipulate that a sale by foreclosure of the pledged asset
is only allowed after the court has determined, upon the request of the
pledgor, that the debtor is in default.
- 3. When a lower ranked pledgee or seizor proceeds to a sale by foreclosure
of the pledged asset, the higher ranked pledges on that asset remain in
Article 3:249 Notification of the start of the foreclosure
procedure (release from a foreclosure of pledged assets)
- 1. Unless the contrary has been stipulated, a pledgee who wants to start
a foreclosure sale must give notice of his intention to the debtor and
pledgor as well as to persons with a limited property right on the pledged
asset and to persons who have seized the pledged asset; this notification
must be given, as far as this is reasonably possible, at least three days
before the intended day of the foreclosure sale, with announcement of
the place and time of the auction and in accordance with the provisions
issued to this end by Order of Council.
- 2. The notification must indicate as accurate as possible the sum for
which the pledge may be discharged. A discharge (releaese from foreclosure) may take place until the
moment of sale, provided that also the costs of foreclosure, already made,
Article 3:250 Foreclosure sale is to be held in public
- 1. The foreclosure sale is held in public in accordance with local practice
and on the usual terms and conditions.
- 2. Where the pledged asset is marketable on a commodity market or exchange,
the public sale may take place on that market with assistance of an intermediary
who is active on this market or exchange, under conditions and usages
that apply to an ordinary sale on that market or exchange.
- 3. The pledgor is allowed to bid too.
Article 3:251 Alternative way to accomplish a sale
- 1. Unless the contrary has been stipulated, the provisional relief judge
of the District Court may, upon the request of the pledgee or pledgor,
order that the pledged asset is sold by foreclosure in a different way
than the one meant in the previous Article, or he may order, upon the
request of the pledgee, that the pledged asset will be transferred to
the pledgee, as being the buyer, for a purchase price that is determined
by this judge.
- 2. After the pledgee has become entitled to start a foreclosure procedure,
the pledgee and pledgor may agree to sell the pledged property in another
way than the one mentioned in the previous Article. When the pledged asset
is burdened with a limited property right or when it has been seized by
another creditor, then also the limited proprietor or, respectively, the
seizor needs to co-operate in this agreed alternative sale by foreclosure.
Article 3:252 Notification that the sale by foreclosure
has been completed
Unless the contrary has been stipulated, the pledgee must notify the debtor
and pledgor as well as persons with a limited property right on the sold
asset and those who have seized this asset of the completion of the sale
by foreclosure, this at the latest - as far as reasonably possible - one
day after the foreclosure sale has taken place and in accordance with
the regulations issued to this end by Order of Council.
Article 3:253 Distribution of the proceeds of the
- 1. After payment of the costs of foreclosure, the pledgee subtracts
from the net sale proceeds the amount that is chargeable to him and that
is secured by his pledge. The surplus is paid to the pledgor. In the event
that there are more pledgees or limited proprietors whose rights have
ended as a result of the foreclosure or when creditors have seized the
proceeds of the sold off asset, the pledgee shall act in accordance with
the provisions of Article 490b of the Code of Civil Procedure.
- 2. The surplus of the net sale proceeds meant in the preceding paragraph
may not be distributed by the pledgee to the before-mentioned interested
parties by means of a sett off of what he should have paid to them with
what he may claim from them, unless it concerns a payment to the pledgor
and this payment does not take place during his bankruptcy nor during
an official moratorium on the payment of debts applicable to him, nor
during the application on his behalf of the Debt Repayment Scheme for
Natural Persons, nor during the winding up of his heritage. If the Debt
Repayment Scheme for Natural Persons applies to the pledgor, then a payment
by means of a setoff is still possible if the pledge is established after
the court order in which the Debt Repayment Scheme was pronounced applicable
to the pledgor and both, the debt-claim and debt, have come to existence after
this judicial decision.
Article 3:254 Foreclosure sale of pledged assets in
accordance with the rules for the foreclosure on a mortgage
- 1. When a pledge is established on movable
things which, according to generally accepted views (common opinion),
are intended to serve a specific immovable property for a long time and
which are recognizable as such by their appearance or when a pledge is
established on machinery or equipment that is especially installed to
run a business in a to this end arranged factory or production plant and,
in both situations, this pledge is established in conformity with Article
3:237 as security for a debt-claim which is secured as well either
by a mortgage on that specific immovable property, factory or production
plant or by a mortgage on a limited property right on one of these last
mentioned assets, then it is possible to stipulate that the creditor is
entitled to sell under foreclosure the pledged and mortgaged assets together
in accordance with the rules for the foreclosure on a mortgage.
- 2. If the pledged and mortgaged assets are
sold jointly by the creditor pursuant to a stipulation as referred to
in paragraph 1, then Articles 3:268 up to and including 3:273 shall apply
accordingly to the pledge, whereas the application of Articles 3:248 up
to and including 3:253 shall be excluded.
- 3. A stipulation as meant in paragraph 1,
mentioning as well the pledges to which it is related, may be registered
in the public registers for registered property in which also the mortgage
Article 3:255 A pledge on money
- 1. When money is encumbered with a pledge, the pledgee is entitled to
recover his debt-claim from the pledged money in accordance with
Article 3:253 as soon as his debt-claim has become exigible (past due), without
the need of a preceding notification or letter of formal notice. The pledgee
is compelled to satisfy his debt-claim out of the pledged money
if the pledgor demands so, provided that the pledgor is entitled to pay
off his debt in the same currency as that of the pledged money.
- 2. Article 3:252 shall apply accordingly.
Article 3:256 Ending of a pledge
When a pledge has ceased to exist, the pledgee must perform what is necessary
for his part to ensure that the pledgor regains the pledged asset under
his control and he must, when asked for, give a written piece of evidence
to the pledgor that the pledge no longer exists. If the debt-claim
for which the pledge served as security, is burdened itself with a limited
property right, then a corresponding obligation has to be fulfilled by
the limited proprietor.
Article 3:257 Failure to take care properly for the
If the person, who has a thing in his keeping on account of a pledge,
seriously fails to comply with his obligation to care for it properly,
then the court may, upon the request of the pledgor or pledgee, order
that this thing is handed over to one of them or that it is put in custody
of a depository.
Article 3:258 End of the pledge and waiver by the
- 1. A pledge ends as soon as the pledged asset as meant in Article 3:236
paragraph 1 comes under control of the pledgor, unless it has been established
on the basis of Article 3:237 paragraph 1.
- 2. A pledge may be waived by agreement, provided that the approval of
the pledgee is expressed in a written or electronic declaration. As far
as the approval shows from an electronic declaration, Article 6:227a paragraph
1 of Civil Code applies accordingly.
Section 3.9.3 Pledges established on behalf of
Article 3:259 A pledge established by operation of law on behalf of specific certificate holders
- 1. When someone through the issuance of certificates makes it possible
for others to share in the profits of stocks and debt-claims that are
gained by him in his own name, then these others - the certificate holders
- have towards him a debt-claim to obtain a payment of what has been promised
- 2. Where the original stocks or debt-claims were put to name and the
certificates have been issued in co-operation with the one who has issued
the original stocks or debt-claims, then the certificate holders also
acquire jointly a pledge on these stocks or debt-claims. If the certificates
are issued for debt-claims to name, without the co-operation of the debtor,
then the certificate holders acquire such a pledge by notifying the debtor
that such certificates are issued. If the certificates are issued for
stocks or debt-claims to bearer, then the certificate holders acquire
such a pledge without the need of bringing the negotiable document under
control of the certificate holders or a third party.
- 3. A pledge as referred to in paragraph 2 gives the certificate holders
only the right to hold a foreclosure sale when the chargeable payment,
that was promised to them, is not paid off. This right only gives them
the right to sell the pledged stocks and pledged debt-claims at a foreclosure
sale and to recover their debt-claims from the sale proceeds with due observance
of the following rules. A certificate holder who wants to proceed to such
a sale by foreclosure has to turn to the provisional relief judge of the
District Court in whose district the supplier of the certificates resides,
with the request to appoint a legal administrator for the pledged stocks
and pledged debt-claims who will carry out the sale by foreclosure and
the distribution of the sale proceeds. If not all certificate holders
agree with such a sale, then only the part of the pledged assets of the
certificate holders that have agreed to it, is sold by foreclosure. The
rights of these certificate holders cease to exist when the sale proceeds
have been distributed and paid out to them. The provisional relief judge
may, upon the request of each certificate holder or of his own motion,
order appropriate measures in the interest of the certificate holders
who have not agreed with the sale, and stipulate that such a sale must
be approved by him to be valid.
Section 3.9.4 Mortgage
Article 3:260 Establishing a mortgage
- 1. A mortgage is established by means of a notarial deed between the
mortgagor and mortgagee, drawn up for this purpose by a notary, in which
the mortgagor grants a mortgage on his registered property to the mortgagee,
followed by the registration of this deed in the appropriate public registers.
The notarial deed must contain an indication of the debt-claim for
which the mortgage serves as security or describe the facts with which
this debt-claim can be determined. Also the amount of the debt-claim for which the
mortgage is established must be mentioned in the notarial deed or, when
this amount is not yet certain, the maximum amount that may be recovered
on account of the mortgage from the sale proceeds of the mortgaged property.
In the notarial deed the mortgagee must choose his residence in the Netherlands.
- 2. The costs of establishing a mortgage are for account of the debtor,
unless the contrary has been stipulated.
- 3. At the occasion of the drawing up of the notarial deed as meant in
paragraph 1, a person may only act as the representative of the mortgagor
by virtue of a procuration (authority for representation) which is granted
to him in a notarial deed.
- 4. Other than that, the establishment of a mortgage is subject to the
general statutory provisions for the establishment of limited property
rights on immovable property.
Article 3:261 A mortgage as security for an unpaid
- 1. When in a sale agreement a mortgage has been stipulated that is to
be vested on the sold registered property after the transfer as security
for the unpaid purchase price, and when this clause is mentioned as well
in the notarial deed of transfer, then this mortgage, provided that the
notarial deed for establishing the mortgage and the notarial deed of transfer
of the sold registered property are registered at the same moment, is
ranked above all other rights which are derived from the buyer on account
of a simultaneous registration in the public registers.
- 2. Paragraph 1 applies accordingly to a mortgage that has been stipulated
at the division and apportionment of a community of property and that
is to be vested on one of the apportioned registered assets as security
for what the person to whom this asset has been apportioned, is or will
be indebted to the other co-proprietors as a consequence of the apportionment.
Article 3:262 Changed mutual ranking order of mortgages
and other limited property rights
- 1. It is possible to stipulate in a notarial deed which is to be registered
in the public registers that a specific mortgage, in its relation to one
or more other mortgages on the same registered asset, will be ranked higher
than it would have been according to its time of registration, provided
that this notarial deed shows that the mortgagees who are entitled to
these other mortgages have consented in this.
- 2. It is also possible to stipulate with corresponding application of
the first paragraph that a mortgage and another limited property right
in their mutual relation are considered to be established in another ranking
order than they actually are according to their time of registration.
Article 3:263 A mortgage as security for accrued interest on the secured debt-claim
- 1. Unless the contrary has been stipulated in the mortgage deed, a mortgage
established as security for one or more specific debt-claims serves
also as security for three years of interest accrued on these debt-claims pursuant
- 2. A clause indicating that a mortgage, which has been established as
security for one or more specific debt-claims, also serves as security
for interest accrued over a period of more than three years, without reference
to a maximum amount, is null and void.
Article 3:264 'Lease clause' in a mortgage deed
- 1. If the mortgage deed contains an explicit clause which limits the
right of the mortgager:
- to lease out the mortgaged property without authorisation of the mortgagee;
- with respect to the way in which or for the time during which the mortgaged
property may be leased out;
- with respect to a payment in advance of the rent or;
- to transfer the debt-claim on the rent or to encumber it with
then the mortgagee may not only invoke this clause against parties who
have acquired the mortgaged property from the original mortgagor, but
also against the lessee (tenant) and against the person who has acquired
the debt-claim on the rent or a pledge on that claim. After the
mortgaged property is sold by foreclosure its buyer may also invoke such
a lease clause against the before mentioned persons, in the same way and
with the same effect as the mortgagee could, provided that the mortgagee
himself still has this right at the moment of the public sale and he has
granted it to the buyer in accordance with the sale conditions applicable
to the foreclosure.
- 2. A lease clause as meant in the previous paragraph cannot be invoked
prior to the moment on which a bailiff's writ, as referred to in Article
544 of the Code of Civil Procedure, has been served upon the mortgagor.
The provisions for a nullification are applicable to the annulment of
the juridical act that has been performed in violation of such a lease
clause, on the understanding that the period as mentioned in Article 3:52
paragraph 1 runs from the moment on which the before-mentioned writ has
been served and that the juridical act in conflict with the lease clause
may be nullified only on behalf of the person who invokes it and not further
than in conformity with his right.
- 3. Where a lease clause has been stipulated in relation to farm buildings
or farmland, it only has effect as far as it is not in conflict with a
mandatory rule of law for farm lease agreements. Such a lease clause has
no effect as far as the Farm Lease Court (Agricultural Tenancies Chambers
of the Subdistrict Court) has determined the content of the farm lease
agreement, and this in deviation of the lease clause, or as far as the
lease clause could not be observed because the Farm Lease Court (Agricultural
Tenancies Chambers of the Subdistrict Court) has nullified an amending
agreement that was similar to the lease clause. A lease clause which forces
the mortgager, when he enters into an agreement to lease out farm building
or farmland, to stipulate a lease period shorter than twelve years (farm
building) respectively than six years (farmland), is null and void.
- 4. Where a lease clause has been stipulated in relation to the lease
of a residential space or a retail building, it only has effect as far
as it is not in conflict with a mandatory rule of law for lease agreements
of this type of immovable property. A lease clause excluding the right
to lease out a residential space or a retail building cannot be invoked
against a lessee (tenant) as far as the involved residential space or
retail building was already leased out at the moment on which the mortgage
was established and the new lease agreement does not contain unusual and
more difficult conditions for the mortgagee.
- 5. As far as an appeal to a lease clause would have the result that
the lessee (tenant) of a residential space, subject to Article 7:271 up
to and including 7:277 of the Civil Code, has to evict the property, this
lease clause may only be invoked after the provisional relief judge of
the District Court has granted the mortgagee, upon a request to this end,
permission to clear the property. Such permission is not required when
the lessee (tenant) has consented in writing with the nullification of
the lease agreement nor when the lease agreement was entered into after
the announcement referred to in Article 516 of the Code of Civil Procedure.
- 6. The provisional relief judge shall grant the requested permission,
unless the mortgaged property will obviously, even with due observance
of the lease agreement, generate sufficient sale proceeds to satisfy all
mortgagees who have stipulated a lease clause and who may invoke it against
the lessee (tenant). If the provisional relief judge grants the requested
permission, he will also order the summoned or appeared lessees (tenants)
and sublessees (subtenants) to evict the mortgaged property and he will
set a time during which an eviction will be impossible of at the most
one year after a bailiff's writ of that court order has been served upon
the involved lessees and sublessees.
- 7. Where the lessee (tenant) has lost his
lease rights or farm lease rights due to a nullification as referred to
in paragraph 2, he is entitled to a compensation to the amount of the
damage he has suffered as a result of the nullification. This compensation
is paid with priority from the net sale proceeds of the foreclosure sale
of the mortgaged property, immediately after the mortgagees against whom
the lessee (tenant) could not uphold his lease rights are satisfied. If
the buyer, who has bought the mortgaged property at a foreclosure sale,
is entitled to invoke the lease clause too, then a sum is reserved - from
the part of the net sale proceeds that remain - for the lower ranked creditors
to the amount of the estimated damage suffered by the lessee (tenant),
until it is ascertained that the buyer will not use his right to invoke
the lease clause against the lessee (tenant).
- 8. A lessee (tenant) in the sense of the
present Article includes a person who is a co-lessee (co-tenant) pursuant
to Article 7:266 paragraph 1 or Article 7:267 paragraph 1 of the Civil
Article 3:265 Non-alteration clause
If the mortgage deed encloses an explicit clause according to which the
mortgagor may not alter the constructions or state of the mortgaged property
or he may not do so without permission of the mortgagee, then it is not
possible to invoke this clause when the Subdistrict Court or the Farm
Lease Court (Agricultural Tenancies Chambers of the Subdistrict Court)
has authorized the lessee (tenant) to make certain changes on the basis
of the rules of law for lease agreements or, respectively, farm lease
Article 3:266 The right of removal ('ius tollendi')
When the mortgager, after the mortgage has been established, has made
improvements or alterations to the mortgaged thing, while he was not obliged
to bring in such additives and changes as security for the debt-claim, then he is entitled to remove these additives and changes, provided
that he restores the immovable thing to its original condition and, if
requested so, provides security for the depreciation of the property as
long as it has not yet been restored as such. The person who is entitled
to the fruits and crops on a mortgaged field, has the right to harvest
these fruits and crops; if he was unable to harvest these fruits and crops
before the sale by foreclosure of the mortgaged field, then he and the
person who has bought that field at the sale by foreclosure are compelled
towards each other to behave in accordance with the obligations that old
and new lessees have to observe towards each other on the basis of the
law for farm lease agreements.
Article 3:267 Administration clause (right of the
mortgagee to take over the administration of the mortgaged asset)
It is possible to stipulate in the mortgage deed that the mortgagee has
the right to take over the administration and management of the mortgaged
property when the mortgagor in a serious degree fails to observe his obligations
towards him and the provisional relief judge of the District Court has
authorized him to proceed to such a take over. It is also possible to
stipulate in the mortgage deed that the mortgagee has the right to bring
the mortgaged property under his control if this is necessary in view
of the foreclosure sale. Without such explicit clauses the mortgagee misses
Article 3:268 Foreclosure without recourse to the
courts (public or private foreclosure sale)
- 1. When the debtor is in default with the
observance of an obligation for which the mortgage serves as security,
the mortgagee is entitled, without the necessity to obtain any approval
in advance of the court for doing so, to instruct a notary to sell the
mortgaged property in public by auction and to recover the secured debt-claim
from the sale proceeds.
- 2. Upon the request of either the mortgagee
or mortgagor the provisional relief judge of the District Court may order
that the foreclosure sale will take place by means of a negotiated private
sale on the basis of an agreement that has been presented to the judge
for approval, together with the lodged request. The mortgagor or a mortgagee,
a seizor or a limited proprietor for whom it is important that the sale
proceeds will be higher than the purchase price that is to be obtained
according to the presented agreement, may present to the provisional relief
judge a more favourable offer to sell the mortgaged property. As long
as the provisional relief judge has not given his decision on the request
meant in the first sentence, he may order that the foreclosure sale will
take place on the basis of this more favourable offer.
- 3. The request meant in paragraph 2 has to
be lodged within the period as mentioned in the Code of Civil Procedure
for such type of legal actions. Against a court order, passed under paragraph
2, no appeal to a higher court and no other legal provisions are open.
- 4. A foreclosure sale as meant in the previous
paragraphs has to be carried out with due observance of the formalities
which the Code of Civil Procedure provides for this purpose.
- 5. The mortgagee cannot recover his debt-claim
in another way from the mortgaged property than through a public or private
foreclosure sale. Every clause or condition that implies that, in spite
of the previous sentence, he does have other possibilities to recover
his secured debt-claim from the mortgaged property, is null and void.
Article 3:269 Getting released from an intended foreclosure
on a mortgage
Until the moment that the mortgaged property has been assigned by auction
(public foreclosure sale) or that the provisional relief judge has approved
the requested private foreclosure sale, the foreclosure of the mortgaged
property may be prevented by payment of the debt to the amount for which
the mortgage serves as security, provided that the costs of execution,
already made, are paid as well.
Article 3:270 Payment of the purchase price by a buyer
by a buyer who has bought mortgaged property at a foreclosure sale
- 1. A buyer who has bought mortgaged property
at a public or private foreclosure sale must pay the agreed purchase price
to the notary before whom the public sale has taken place or, respectively,
who has executed the deed of transfer after a private foreclosure sale.
The costs of foreclosure are also satisfied from the purchase price.
- 2. When no mortgages of other persons than
the selling mortgagee are registered and there are no creditors who have
seized the sold property or its purchase price or who have derived their
debt-claim pursuant to Article 3:264 paragraph 7, whereas the foreclosure sale
has not lead to the end of a limited property right nor to the end of
the lease rights or farm lease rights of a lessee (tenant), then the notary
will pay from the net sale proceeds to the selling mortgagee what belongs
to him according to a declaration, handed over by him to the notary, in
which is stated which debt-claims are secured by his mortgage. The
surplus is paid out by the notary to the person whose property was sold
- 3. When there are more mortgagees or when
there are creditors or limited proprietors as referred to in the previous
paragraph, then the notary immediately transfers the net sale proceeds
of the foreclosure sale to a depository who meets the requirements of
Article 445 of the Civil Code of Procedure and who has been appointed
by the notary for this purpose. This transfer does not take place when
the mortgaged property was sold by the first ranked mortgagee who, before
or at the payday, has handed over to the notary a declaration in which
is specified which part of the net sale proceeds belong to him by virtue
of a debt-claim which is secured by his first ranked mortgage or by other debt-claims
that are secured as well on his behalf by one or more mortgages that are
ranked immediately after his first ranked mortgage, mentioning also the
creditors whose debt-claims are ranked above his debt-claims. In that case the notary
pays out directly to the first mortgagee what belongs to him according
to the before-mentioned declaration. This declaration must contain a note
of the provisional relief judge of the District Court in whose district
the mortgaged property is located or is located for the most part, implying
that he has briefly (‘prima facie’) examined the correctness
of this declaration and has approved it. No appeal to a higher court and
no other legal provisions are open against such an approval.
- 4. Where the notary has serious reasons to
suspect that the declaration, handed over to him pursuant to paragraph
2 or 3, is incorrect, he may postpone the payment which is due to the
mortgagee until the provisional relief judge meant in paragraph 3 has
given a decision upon the request of the most appropriate party or upon
the request of the involved notary himself.
- 5. When all mortgagees and all creditors
who have seized the sold property or its purchase price or who have derived
their debt-claims from Article 3:264 paragraph 7, as well as all limited proprietors
whose limited property right have ended as a result of the foreclosure
and the person whose property has been sold, have mutually – before
the payday - come to an agreement on the distribution of the sale proceeds,
then the transfer of this sum to a depository is omitted and the notary
will pay to each of them the part that belongs to each of them individually.
- 6. As far as the obligations incumbent upon
the notary pursuant to the present Article are not complied with, the
Government of the Netherlands is, together with this notary, joint and
several liable towards the interested parties who have suffered damages
as a result of this non-performance.
- 7. It is not possible to derogate in the sale conditions from the provisions
of the present Article.
Article 3:271 Establishing the ranking order (distribution of the net sale proceeds)
- 1. After the purchase price has been received by the notary, all interested
parties mentioned in paragraph 5 of the previous Article may request the
court to make a ranking order for the distribution of the sale proceeds
in accordance with the formalities which the Code of Civil Procedure provides
for this purpose.
- 2. If these interested parties themselves come to an agreement on the
distribution of the sale proceeds and this agreement is laid down in a
notarial deed which is presented to the depository in whose custody the
sale proceeds remain, then the depository will pay to each of them the
part that belongs to each of them individually.
Article 3:272 Rendering account by the selling mortgagee
- 1. The selling mortgagee who has received payment from the notary, is
obliged, when asked for, to render account within one month after this
payment to the debtor and to the person whose property has been sold by
- 2. All mortgagees, creditors and limited proprietors who are mentioned
in the court's ranking order, may demand, within one month after its closing,
that the selling mortgagee renders account, provided they have an immediate
Article 3:273 Ending of mortgages, seizures and limited
property rights after a foreclosure
- 1. After the foreclosed asset has been delivered to the buyer who acquired
it at a sale by foreclosure and after the purchase price has been paid
by him to the notary, all mortgages on this asset and all registered seizures
cease to exist, as well as all limited property rights that could not
be invoked by the limited proprietor against the selling mortgagee.
- 2. When the buyer of a foreclosed asset presents evidence to the president
of the court that the foreclosure has been carried out with due observance
of all legal requirements and that the notary has received the purchase
price, a declaration is handed over to him indicating that all mortgages,
seizures and limited property rights as referred to in the previous paragraph
have ceased to exist. To obtain such a declaration the buyer must lodge
an application with the District Court within whose district the foreclosed
asset is located or is located for the most part. No appeal to a higher
court and no other legal provisions are open against a court order providing
such a declaration.
- 3. The declaration meant in the previous paragraph may be registered
in the public registers for registered property either simultaneously
with the registration of the delivery of the foreclosed asset or at a
later date. It empowers the keeper of the public registers to cross-out
the registrations of the ended mortgages, seizures and limited property
Article 3:274 Crossing-out a registered mortgage
- 1. When a mortgage has ended, the creditor must, upon the request of
the proprietor of the encumbered property and at his expense, make clear
through a declaration in a notarial deed that this mortgage no longer
exists. If the debt-claim for which the mortgage served as security
is encumbered itself with a limited property right, then a corresponding
obligation is incumbent upon the limited proprietor.
- 2. These declarations can be registered in the public registers for
registered property. In that event these declarations together will empower
the keeper of the public registers to cross-out the mortgage.
- 3. If the required declarations are not supplied, then Article 3:29
- 4. Where a mortgage has ceased to exist due to an intermixture (the
mortgagee has become the proprietor of the mortgaged asset), the keeper
of the public registers is empowered to cross-out this mortgage on the
basis of a confirming declaration of the person to whom the encumbered
asset belongs, documented for this purpose in a notarial deed, unless
the debt-claim is encumbered with a limited property right.
Article 3:275 Procuration (authority for representation) for crossing-out a mortgage
A procuration (authority for representation) to make a declaration as
meant in previous Article must be granted in writing.