The official mortgage is a contract whereby the creditor acquires a residential or commercial property devoted to the satisfaction of his or her financial obligation in kind, whereby she or he might use to regular lenders and the following creditors in order to acquire the right of the rate of that residential or commercial property in any hand.

The home loan is an agreement concluded between the mortgagor and the mortgagee lender which approves the mortgagee right in rapid eye movement in the residential or commercial property, with all advantages and genuine security over the home mortgage item. Additionally, the mortgagor can follow the mortgaged residential or commercial property if it is moved to a 3rd party. The mortgagor maintains ownership and belongings of the mortgaged residential or commercial property however is limited in their disposal rights to ensure the mortgagee's interests are protected.

The distinction between the main mortgage and the possessory home mortgage

The official home loan is produced through an official contract, that should be notarized in a notary public office.

While the right of possessory mortgage is created through informal agreement. Whereas the ownership and ownership of the mortgaged residential or commercial property in the official mortgage right remains in the hand of the owner (debtor), and the belongings in the possessory mortgage is transferred to the financial institution.

The official home loan is restricted to genuine estate, while the possessory home loan can cover both properties and movable residential or commercial properties.

The commitments of the mortgagor and the mortgagee financial institution in the official home mortgage

The Egyptian Civil Law No. 131 of 1948 and its modifications manage the obligations of the mortgagor and mortgagee in Chapter Two as follows:

The Mortgager's responsibilities:

The mortgagor is obligated to provide the mortgaged residential or commercial property to the lender or to a designated representative chosen by both Parties in the contract.

The legal requirement for a seller to deliver an offered product will be used to the mortgagor's responsibility to deliver the home loan product to the mortgagee. If the mortgaged residential or commercial property is returned to the mortgager's ownership, the home loan will be expired, unless the mortgagee shows that the residential or commercial property has been returned for a reason not intended to end the home mortgage.

The mortgagor guarantees the stability and enforceability of the mortgage, and the mortgagor shall not take any action that decreases the value of the home mortgage or hampers the creditor's workout of his rights under the contract. In case of urgency, the mortgagee lender may take all necessary measures at the mortgager's expense, to preserve the home mortgage product. The mortgagor shall be responsible for the loss or damage of the home loan item if such loss or damage is because of his fault or occurs from force majeure act.

The provisions of Articles No. 1048 and No. 1049 relating to the loss or damage of the mortgaged residential or commercial property under an official home mortgage, and the transfer of the financial institution's right from the mortgage product to any replaced rights shall use to the possessory mortgage.

The Mortgagee's responsibility:

Upon getting the mortgaged residential or commercial property, the mortgagee is bound to exercise the exact same level of care and maintenance in its preservation as would a sensible person. and he is accountable for the loss or damage of the home loan item unless it is proven that such loss or damage was brought on by an external element beyond his control.

The mortgagee is not permitted to obtain any advantage from the mortgage product without settlement, he must invest it totally unless otherwise concurred Any net profits or advantage derived by the creditor from using the home loan product shall be subtracted from the quantity protected by the home mortgage, even if the due date has not yet come, supplied that the deduction will be made from the expense of preserving and repairing the residential or commercial property and its repairs, then from costs and interest, and after that from the principal of the debt.

If the home loan product produces income and the parties concur that all or part of the income will be used to offset the interest, in, this contract shall be legitimate within the maximum limits of lawfully allowable contractual interest.

The mortgagee shall presume the management of the mortgaged residential or commercial property, and he should work out because the care of a sensible individual. The mortgagee can not customize the home mortgage product's usage without the mortgager's approval. He needs to quickly alert the mortgagor of any matter needing his intervention.

If the mortgagee abuses this right, mis-manages the residential or commercial property, or dedicates gross neglect, the mortgagor can request that the product be positioned under custody or to recover it upon payment of the impressive financial obligation. if the quantity secured by the mortgage does not bear interest and has actually not yet become due, the mortgagee is entitled just to staying quantity after subtracting the value of interest computed at the legal rate for the period in between the day of payment and the due date of the financial obligation.

The mortgagee will return the mortgaged item to the mortgagor after the mortgagor has actually totally discharged their responsibility consisting of all expenditures and settlement related to the right.

Effects of the main home mortgage in the Egyptian law

The effect of the home mortgage in between the contracting parties:

Firstly: The mortgager:

The mortgagor might deal with the mortgaged residential or commercial property as long as such actions do not hinder the mortgagee's right.

The mortgagor keeps the right to manage the mortgaged residential or commercial property and to collect its returns and leases given by the mortgagor are not enforceable versus the mortgagee unless it was notarized before the registration of the expropriation notice.

However, if the lease was not notarized in this way, or it was concluded after notarizing the notice and the lease was not paid in advance, so it will not be reliable unless it can be considered part of the excellent management work. If the lease term prior to notarizing the mortgage notice surpasses nine years, it will not be reliable versus the mortgagee financial institution other than for a duration of 9 years only unless it was registered before the home loan was signed up.

The mortgagor is accountable for ensuring the security of the home loan residential or commercial property. The mortgagee financial institution has the right to challenge any actions or neglect by the mortgagor that might considerably decrease the worth or security of the residential or commercial property, and in immediate cases the mortgagee might take essential protective measures and seek compensation from the mortgagor, from any costs incurred.

If the mortgagor negligently triggers the damage or damage of the mortgaged residential or commercial property, the mortgagee financial institution has the option to demand sufficient insurance to cover the loss or to right away collect the complete outstanding debt.

When the destruction or damage to the mortgaged residential or commercial property is triggered by an external element and the mortgagee contradicts the financial obligation without insurance coverage, the mortgagor has the option to offer appropriate insurance or pay off the debt right away before the due date. If the debt has no interest, the mortgagee is only entitled to the principal amount without legal interest for the period between the real payment date and the original due date.

Secondly: The mortgagee financial institution:

A third-party mortgagor's personal possessions are exempt from seizure for the debtor's debt. The mortgagor can not replace payments for the debtor unless concurred upon.

Upon notifying the debtor of the arrearage, the mortgagee deserves to foreclose on the mortgaged residential or commercial property and requests its sale in accordance with the procedures and timelines specified in code of Civil Procedures. If the mortgagor is a third party aside from the debtor, he can prevent any foreclosure procedures by voluntarily surrendering the mortgaged residential or commercial property according to the treatments and rules governing residential or commercial property surrender.

Any agreement that grants the mortgagee the right to take ownership of the mortgaged residential or commercial property at an established price upon debt default or to offer it without following the lawfully mandated procedures is invalid, even if gotten in into after the home loan arrangement. However, after the financial obligation or a part of it has developed, the debtor and mortgagee can concur that the debtor will transfer the mortgaged residential or commercial property to the mortgagee in of his debt.

The main mortgage and its impact to the third party:

A main home mortgage is just enforceable versus third celebrations if the home loan agreement or judgment developing the home mortgage is signed up before the 3rd celebration acquires a right in rem in the residential or commercial property. This is without bias to the provisions of insolvency laws.

Additionally, 3rd parties can not assert claims based upon an unregistered guaranteed right, the replacement of one lender for another in this right, or the project of registration top priority to another financial institution unless such actions are noted in the margin of the original registration.

The treatments for registration, renewal, cancellation, and cancellation a main mortgage, as well as the results thereof, are governed by the arrangements of the Real Estate Registration Law. The costs of registration, renewal, and cancellation of an official mortgage are borne by the mortgagor unless otherwise concurred upon.

The termination of the official home loan:

An official home loan terminates upon the fulfillment of the secured debt or the nullification of the underlying cause for the debt. However, any bona fide rights gotten by 3rd parties during the duration between the mortgage's expiration and its possible reinstatement remain untouched.

If foreclosure procedures are finished, the official mortgage is definitively extinguished, even if the residential or commercial property ownership modifications hands. When the mortgaged residential or commercial property is offered through a forced auction, the mortgage rights expire upon the deposit of the auction continues or their payment to eligible registered creditors.