Dutch Civil Code

Book 3 Property law in general

Title 3.10 Right of a creditor to take recourse against his debtor

Section 3.10.1 General provisions for a creditor’s right of recourse

Article 3:276 Right to foreclose on the entire property of the debtor
A creditor may recover his debt-claim from all assets belonging to his debtor, unless the law or an agreement provides otherwise.

Article 3:277 Equality of creditors
- 1. After the costs of foreclosure are paid, all creditors have, amongst each other, an equal right to be satisfied from the net sale proceeds of the foreclosed property of their debtor in proportion to the value of their debt-claims, except for rights of priority (preference) recognized by law.
- 2. The creditor and debtor may arrange by agreement that the debt-claim of the creditor in its relation towards the debt-claims of certain or all other creditors is ranked lower than it would be according to law.

Article 3:278 Grounds for priority and special and general privileges
- 1. A right of priority (preference) results from a pledge, a mortgage and a privilege and from other grounds for priority set by law.
- 2. Privileges arise only by operation of law [as soon as certain defined circumstances have occurred]. They are attached to specific assets (special privileges) or to the entire property (all assets) of a certain person (general privileges).

Article 3:279 Ranking order of pledges and mortgages in relation to privileges
A pledge and a mortgage are ranked above a privilege, unless the law provides otherwise.

Article 3:280 Ranking order of special privileges in relation to general privileges
Privileges attached to specific assets are ranked above privileges attached to the entire property (all assets) of a certain person, unless the law provides otherwise.

Article 3:281 Mutual ranking order of privileges
- 1. Special privileges which are attached to the same individual asset, are ranked equally, unless the law provides otherwise.
- 2. General privileges attached to the entire property (all assets) are exercised in the ranking order in which the law has placed them.

Article 3:282 Compensation for limited proprietors who have lost their limited property right due to a foreclosure
If a limited property right other than a pledge or a mortgage ceases to exist on account of a foreclosure because it cannot be invoked against a pledgee or mortgagee or a seizor of the sold asset, then the limited proprietor will be compensated for the damage he has suffered as a result of this loss, which compensation is to be paid with priority from the net proceeds of the sold asset, immediately after payment of the debt-claims of those against whom he could not invoke his limited property right. The compensation is fixed to the amount of the value that the ended limited property right would have had at the time of the foreclosure sale if it would not have ceased to exist as a result of this foreclosure.

Section 3.10.2 Privileges attached to specific assets

Article 3:283 Substitution of assets to which a privilege is attached
A privilege attached to a specific asset also covers the debt-claims for compensatory damages that have to be regarded as a substitution for that asset itself, including debt-claims resulting from a depreciation of the value of this asset.

Article 3:284 Privilege attached to a preserved asset (in relation to a debt-claim for costs of preservation)
- 1. A debt-claim for costs made to preserve an asset is secured by a privilege attached to the preserved asset.
- 2. The creditor with a privilege attached to the preserved asset may recover his debt-claim from that asset without being confronted with rights of third persons in or to that asset, unless these rights have been obtained after the moment on which the preservation costs were made. A pledge that is established in accordance with Article 3:237 after the moment on which the preservation costs were made, may only be invoked against the privilege of the creditor if the thing or, when it concerns a debt-claim to bearer, the negotiable document has been brought under control of the pledgee or of a third party appointed by the pledgee for this purpose. A right that is obtained in accordance with Article 3:90 after the moment on which the preservation costs were made, may only be invoked against the privilege of the creditor if the requirements of paragraph 2 of Article 3:90 are met as well.
- 3. A privilege as meant in paragraph 2 has priority over all other privileges attached to the preserved asset, unless the debt-claims which are secured by these other privileges, have come to existence after the moment on which the preservation costs were made.

Article 3:285 Privilege attached to constructed things (in relation to a debt-claim derived from a construction contract)
- 1. The debt-claim of a creditor who by virtue of a construction contract has performed work to a movable or immovable thing, is secured by a privilege attached to that thing, provided that the creditor usually participates in person in the performance of the work that has been accepted in pursuance of his business or that the creditor is a commercial partnership or a legal person of which one or more managing partners or directors usually participate in person in the performance of the work that has been accepted by this commercial partnership or legal person in pursuance of its business. The privilege expires due to a time-limit of two years after the privileged debt-claim has come to existence.
- 2. A privilege as meant in the previous paragraph, attached to a movable thing, gives priority above a pledge which is established in accordance with Article 3:237 on that movable thing, unless this pledge was established after the debt-claim of the privileged creditor had come to existence and the movable thing has been brought under control of the pledgee or of a third party appointed by the pledgee for this purpose.

Article 3:286 Privilege attached to an apartment right (in relation to a debt-claim on contribution against the owner of an apartment right)
- 1. The debt-claim for contribution of an Association of Apartment Owners (or belonging to all apartment owners jointly), to be exercised against the owner or usufructuary of an apartment right, is secured by a privilege attached to the involved apartment right as far as this debt-claim is or has fallen due in the calendar year in which it is enforced or in the preceding calendar year.
- 2. When a work has been performed to a building that is split up in apartment rights, the privilege of Article 3:285 is attached to each individual apartment right to the amount for which the owner of that apartment right is liable in person.
- 3. Where the privilege meant in paragraph 1 and that of Article 3:285 are simultaneously attached to one and the same apartment right, the privilege of Article 3:285 has priority.

Article 3:287 Privilege attached to an insurance debt-claim (in relation to a debt-claim for compensatory damages)
- 1. An debt-claim for compensatory damages is secured by a privilege attached to the debt-claim that the debtor might have against an insurance company on account of a liability insurance policy (third party insurance), as far as his insurance debt-claim covers his obligation to compensate this damage to the privileged creditor.
- 2. The privileged creditor meant in paragraph 1 may recover his debt-claim from the debtor’s insurance debt-claim to which the privilege is attached without being confronted with rights of third persons in or to that insurance debt-claim, except where it concerns the debt-claim of an insurance agent to demand remittance pursuant to Article 7:936 paragraph 2 of the Civil Code.

Section 3.10.3 Privileges attached to an entire property (to all assets belonging to a person)

Article 3:288 Privileges attached to an entire property (in relation to certain debt-claims)
The following debt-claims are secured by a privilege attached to the entire property (all assets) of a certain person:
a. debt-claims for costs made to lodge an application for bankruptcy, yet only to the point that the District Court indeed has proclaimed this bankruptcy on the basis of the lodged application, as well as for costs made by a creditor for reaching a settlement outside the bankruptcy of his debtor;
b. debt-claims for funeral costs and costs of disposal of the dead, as far as they are in agreement with the circumstances of the deceased;
c. debt-claims of an employee or former employee or of their surviving dependants against the employer to the point of already due and collectable pension payments, as far as the debt-claim is not older than one year;
d. debt-claims of an employee, not being the director who is employed by a legal person, or of a former employee or of their surviving dependants against the employer to the point of promised future pension payments;
e. debt-claims of an employee against his employer derived from an employment agreement to the point of the continued payment of wages in money over the running and previous calendar year, as well as to the point of amounts indebted by the employer to the employee on account of the ending of the employment pursuant to the statutory provisions of the Civil Code for employment agreements.

Article 3:289 Privilege attached to the entire property (in relation to debt-claims levied pursuant to the ECSC)
- 1. Debt-claims arisen pursuant to charges and supplementary fees as meant in Article 49 and 50 of the Treaty establishing the European Coal and Steel Community of 18 April 1951 (Trb. 1951, 82), that are levied because of a delay in payment.
- 2. This privilege has the same rank as the privilege securing a debt-claim pursuant to the levying VAT.

Section 3.10.4 Right of retention ('possessory lien')

Article 3:290 Definition of a 'right of retention'
A right of retention is the right of a creditor, granted to him in situations specified by law, to withhold the performance of his obligation to return a movable or immovable thing to his debtor until his debt-claim has been fully satisfied.

Article 3:291 Effect of a right of retention against third parties
- 1. The creditor may invoke his right of retention also against third persons who have obtained a right in or to the movable or immovable thing after the moment on which his debt-claim has come to existence and the thing has come under his control.
- 2. The creditor may invoke his right of retention only against third persons with an older right in or to the thing if his debt-claim results from a contract with the debtor was empowered to enter into in relation to the thing or if he had no reason to doubt that the debtor was empowered to enter into such contract.
- 3. The creditor cannot invoke his right of retention against the Minister of Education, Culture and Science who has filed a legal claim pursuant to Article 7 of the Act on the Return of Cultural Heritage originating from Occupied Territory.

Article 3:292 Recovery right with priority attached to a right of retention
The creditor with a right of retention may recover his debt-claim from the thing with priority over all persons against whom his right of retention can be invoked.

Article 3:293 Costs for taking care of the thing
A right of retention may be exercised as well for the costs which the creditor had to make in order to care for the thing in accordance with what has been ordered by statutory provisions to this point.

Article 3:294 End of a right of retention
A right of retention ends when the thing comes under control of the debtor or of the proprietor, unless the creditor regains control over it on account of the same legal relationship.

Article 3:295 Loss of control over the thing
The creditor with a retention right who loses control over the thing, may reclaim this thing under the same conditions as an owner.