The main mortgage is a contract whereby the creditor gets a residential or commercial property devoted to the satisfaction of his/her financial obligation in kind, whereby she or he might apply to regular creditors and the following creditors in order to get the right of the price of that residential or commercial property in any hand.

The mortgage is an agreement concluded between the mortgagor and the mortgagee creditor which gives the mortgagee right in rem in the residential or commercial property, with all benefits and real security over the home loan product. Additionally, the mortgagor has the right to follow the mortgaged residential or commercial property if it is transferred to a 3rd party. The mortgagor keeps ownership and ownership of the mortgaged residential or commercial property but is restricted in their disposal rights to guarantee the mortgagee's interests are secured.

The difference in between the main mortgage and the possessory home mortgage

The main home loan is produced through a main contract, that must be notarized in a notary public office.

While the right of possessory mortgage is developed 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 possession in the possessory home loan is transferred to the creditor.

The official home loan is limited to property, while the possessory home mortgage can cover both properties and movable residential or commercial properties.

The responsibilities of the mortgagor and the mortgagee financial institution in the main mortgage

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

The Mortgager's obligations:

The mortgagor is bound to deliver the mortgaged residential or commercial property to the lender or to a designated agent chosen by both Parties in the agreement.

The legal requirement for a seller to deliver an offered item will be used to the mortgagor's obligation to deliver the home loan item to the mortgagee.
If the mortgaged residential or commercial property is gone back to the mortgager's ownership, the mortgage will be ended, unless the mortgagee shows that the residential or commercial property has been returned for a factor not planned to end the mortgage.

The mortgagor ensures the integrity and enforceability of the mortgage, and the mortgagor will not take any action that reduces the value of the mortgage or impedes the financial institution's exercise of his rights under the agreement. In case of urgency, the mortgagee creditor may take all essential steps at the mortgager's cost, to maintain the home mortgage item. The mortgagor will be responsible for the loss or damage of the home loan product if such loss or damage is because of his fault or occurs from force majeure act.

The arrangements of Articles No. 1048 and No. 1049 relating to the loss or damage of the mortgaged residential or commercial property under a main home mortgage, and the transfer of the financial institution's right from the mortgage item to any substituted rights shall use to the possessory home loan.

The Mortgagee's commitment:

Upon getting the mortgaged residential or commercial property, the mortgagee is obliged to work out the exact same level of care and upkeep in its preservation as would a sensible individual. and he is liable for the loss or damage of the mortgage item unless it is shown that such loss or damage was brought on by an external element beyond his control.

The mortgagee is not allowed to obtain any advantage from the home mortgage item without compensation, he must invest it totally unless otherwise agreed Any net income or benefit obtained by the creditor from the use of the home mortgage product shall be deducted from the quantity protected by the home loan, even if the due date has not yet come, offered that the deduction will be made from the cost of preserving and fixing the residential or commercial property and its repair work, then from expenditures and interest, and then from the principal of the financial obligation.

If the home mortgage product produces earnings and the parties concur that all or part of the income will be utilized to offset the interest, in, this contract shall be legitimate within the maximum limitations of lawfully allowable legal interest.

The mortgagee will presume the management of the mortgaged residential or commercial property, and he should exercise because the care of a sensible person. The mortgagee can not modify the mortgage product's use without the mortgager's approval. He should without delay alert the mortgagor of any matter requiring his intervention.

If the mortgagee abuses this right, mis-manages the residential or commercial property, or devotes gross carelessness, the mortgagor has the right to request that the item be placed under custody or to recover it upon payment of the exceptional financial obligation. if the quantity protected by the home loan does not bear interest and has actually not yet become due, the mortgagee is entitled just to remaining quantity after subtracting the value of interest calculated at the legal rate for the period between the day of payment and the due date of the debt.

The mortgagee will return the mortgaged item to the mortgagor after the mortgagor has actually totally released their commitment including all expenses and payment related to the right.

Effects of the official mortgage in the Egyptian law

The result of the mortgage between the contracting parties:

Firstly: The mortgager:

The mortgagor may get rid of the mortgaged residential or commercial property as long as such actions do not impair the mortgagee's right.

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

However, if the lease was not notarized in this method, or it was concluded after notarizing the notice and the rent was not paid in advance, so it will not work unless it can be thought about part of the excellent management work. If the lease term prior to notarizing the mortgage notification surpasses 9 years, it will not work versus the mortgagee lender except for a period of nine years only unless it was signed up before the home loan was signed up.

The mortgagor is accountable for guaranteeing the security of the mortgage residential or commercial property. The mortgagee creditor can challenge any actions or neglect by the mortgagor that could significantly lessen the worth or safety of the residential or commercial property, and in urgent cases the mortgagee may take necessary protective measures and seek repayment from the mortgagor, from any expenses incurred.

If the mortgagor negligently causes the destruction or damage of the mortgaged residential or commercial property, the mortgagee lender has the choice to demand appropriate insurance to cover the loss or to instantly collect the full impressive financial obligation.

When the destruction or damage to the mortgaged residential or commercial property is brought on by an external element and the mortgagee contradicts the debt without insurance coverage, the mortgagor has the alternative to offer appropriate insurance or settle the debt instantly before the due date. If the debt has no interest, the mortgagee is only entitled to the principal quantity without legal interest for the period in between the real payment date and the initial due date.

Secondly: The mortgagee lender:

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 outstanding financial obligation, the mortgagee deserves to foreclose on the mortgaged residential or commercial property and demands its sale in accordance with the treatments and timelines stipulated in code of Civil Procedures. If the mortgagor is a 3rd party besides the debtor, he can prevent any foreclosure procedures by willingly giving up the mortgaged residential or commercial property according to the procedures and guidelines governing residential or commercial property surrender.

Any agreement that approves the mortgagee the right to take ownership of the mortgaged residential or commercial property at a predetermined cost upon financial obligation default or to offer it without following the lawfully mandated treatments is void, even if gotten in into after the home mortgage arrangement. However, after the debt or a portion of it has grown, the debtor and mortgagee can concur that the debtor will transfer the mortgaged residential or commercial property to the mortgagee in satisfaction of his financial obligation.

The official home mortgage and its impact to the third party:

An official mortgage is just enforceable versus 3rd parties if the home mortgage contract or judgment developing the home mortgage is signed up before the 3rd party acquires a right in rapid eye movement in the residential or commercial property. This is without bias to the arrangements of bankruptcy laws.

Additionally, 3rd parties can not assert claims based upon an unregistered protected right, the replacement of one financial institution for another in this right, or the assignment of registration concern 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 home mortgage, along with the results thereof, are governed by the arrangements of the Real Estate Registration Law. The expenses of registration, renewal, and cancellation of an official home mortgage are borne by the mortgagor unless otherwise agreed upon.

The termination of the main mortgage:

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

If foreclosure procedures are completed, the main mortgage is definitively snuffed out, even if the residential or commercial property ownership modifications hands. When the mortgaged residential or commercial property is sold through a forced auction, the mortgage rights expire upon the deposit of the auction proceeds or their payment to eligible registered financial institutions.