Encumbrances (Section C)

MORTGAGE

Original name: HÜPOTEEK

Definition of this right: 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 (Article 325, Law of Property Act).

Type of right according to national classification: “Guarantee rights”

1.1. With respect to the mortgage liability, the Estonian mortgage system prepares in general two options:

a) Extracts include the global amount including all liabilities due to the loan (loan, interests or other debts). [E.g. The loan is 100,000 € and interest at 20,000 € is agreed. LR extracts indicate that the secured debt is the sum of both concepts, i.e. 120,000€]. (A land register entry concerning establishment of a mortgage shall set out the mortgagee and the monetary amount of the mortgage -sum of mortgage-.

The sum of mortgage is not the sum of actual loan or claim. Usually creditors require that the sum of mortgage is at least 1,3 times bigger than the amount of the guaranteed obligations. So the sum of mortgage consists all liabilities).

1.2. Regular LR information in this system also comprises ordinarily:

1. Contract or basis of obligation guaranteed by a mortgage (e.g. a loan)
2. Name of the mortgagee or creditor

However, there should not be expected any information about deadline of the loan or credit or other contract which is basis of the mortgage, the deadline of the mortgage or name of the mortgagor or debtor, or deed whereby mortgage was constituted or awarded.

1.3. With respect to the mortgage rank (preference of the mortgage in comparison with other mortgages or encumbrances), this LR system has the following criteria:

1. Mortgage rank depends on date of registration of the mortgage, so whoever may ascertain mortgage rank taking into consideration the information on the date of registration of the mortgage.
2. Information may indicate mortgage rank upon request of the interested parties.

In this LR system these are the following:

REAL SERVITUDE

Original name: REAALSERVITUUT

Definition of this right: A real servitude encumbers a servient immovable for the benefit of a dominant immovable such that the actual owner of the dominant immovable is entitled to use the servient immovable in a particular manner or that the actual owner of the servient immovable is required to refrain to a particular extent from the exercise of the owner’s right of ownership for the benefit of the dominant immovable. A real servitude shall not require the owner of the servient immovable to perform any acts except acts which assist in the exercise of the real servitude (Article 172, Law of Property Act) .

Type of right according to national classification: Servitude – rights of use.

Observations: Servitudes are classified as real servitudes and personal servitudes depending wheter the easement encumbers a certain immovable or is set in favor of the person.

REAL ENCUMBRANCE

Original name: REAALKOORMATIS

Definition of this right: An immovable may be encumbered such that the actual owner of the immovable must pay periodic payments in money or in kind to the person for whose benefit the real encumbrance is established, or perform particular acts. A real encumbrance may also be established for the benefit of the actual owner of another immovable (Article 229).

Type of right according to national classification: Security right?

USUFRUCT

Original name: KASUTUSVALDUS

Definition of this right: A usufruct encumbers an immovable in such a way that the person for whose benefit the usufruct is established is entitled to use the immovable and to acquire the fruits thereof. A usufruct may be restricted by the exclusion of a particular manner of use (Article 201).

Type of right according to national classification: Personal servitude – rights of use.

Observations: Personal servitudes are classified as usufructs and personal rights of use.

RIGHT OF PRE-EMPTION

Original name: OSTUEESÕIGUS

Definition of this right: An immovable may be encumbered with a right of pre-emption relating to real rights. A right of pre-emption may be established for the benefit of a particular person or the actual owner of another immovable (Article 256).

Type of right according to national classification: Pre-emption right.

Observations: Right of pre-emption entered in the land register has the same legal force with regard to third persons as a preliminary notation securing a claim for the transfer of ownership. Right of pre-emption with respect to an immovable which is created pursuant to law and with regard to which a notation has been entered in the land register, and the right of pre-emption of a co-owner of an immovable have the same legal force.

SUPERFICIES

Original name: HOONESTUSÕIGUS

Definition of this right: An immovable may be encumbered such that the person for whose benefit a right of superficies is constituted has a transferable and inheritable right for a specified term to own a construction permanently attached to the immovable. Only one right of superficies may be established on an immovable (Article 241).

PERSONAL RIGHT OF USE

Original name: ISIKLIK KASUTUSOIGUS

Definition of this right: A personal right of use encumbers an immovable such that the person for whose benefit it is established is entitled to use the immovable in a particular manner or to exercise with respect to the immovable a particular right which in substance corresponds to a real servitude. In the case of doubt, the extent of personal right of use shall be determined according to the needs of the entitled person (Article 225).

Type of right according to national classification: Personal servitude – rights of use.

RIGHT OF SECURITY

Original name: PANDIÕIGUS

Definition of this right: A thing may be encumbered with a pledge (right of security) such that the person for whose benefit the pledge is established has the right to satisfaction of the claim secured by the pledge out of the pledged property, unless the claim is appropriately performed (Article 276).

Type of right according to national classification: Right of security.

Observations: A pledge is security over movables or real security.

This information includes LR entries or notices related to restrictions decreed by judicial orders which mean either a claim on the property, or a challenge on the registered title, or an attachment of the property to debts as a result of judicial procedures, etc.

In this system:

a. Information on judicial restrictions or charges forms part of the regular land register extracts
b. Means of formal publicity ordinarily contains information about the judicial order that leads to the registration of notices or caveats.

For purposes of the information, orders of attachment or seizure decreed by administrative authorities lead to notices or caveats.

LR information does not include tax liabilities (fiscal burdens).