Construction in the mortgage and deal with competing priorities for projects

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Real estate development enterprises in real estate during development, to raise funds, might in construction mortgage to the bank, in order to obtain bank loans. However, in judicial practice, the bank advocated priority for repayment period of collateral, there is often a lot of controversy, such as construction in the construction side advocated in construction have priority for repayment of funds, real estate purchaser of home ownership housing advocate. When there is a priority for projects competing with the mortgage, how to deal with? Contract Law Article 286 stipulates that the construction contractor in the case of the developer fails to pay for projects, the views of the construction of priority for repayment, called for projects priority. Mortgage means that the debtor or a third person does not transfer possession of the property, the property as a secured creditor when the debtor fails to fulfill obligations, the creditors in accordance with the procedures prescribed by law in respect of the property has the right to first refusal. Both the law as a priority, when the two competing, who disputed the priority?

The legal property project loan preference rights, mainly of immovable property lien that legal mortgage that said three statutory priority. According to Contract Law Article 286 and the Supreme People's Court "on the construction project approved Priority of Compensation issues" (hereinafter referred to as "approved"), the provisions of Article, I believe that the project is a priority for repayment of the purchase price kind of "special ownership right of retention." Civil law theory, take ownership of the divided original acquisition and successors to acquire, construct a way to produce the original made. Following that acquisition, is defined according to the meaning of the original owner to accept ownership, transfer of ownership depends largely on the trading behavior. In the construction process of the construction project, the contract between the Contractor and the Employer, often require the contractor to advance their own funds to buy raw materials for construction of the building, under construction by the contractor built the production of construction. Construction contractor in the construction of behavior during a system for attaching behavior. Accretion mainly mixed, with a combined processing in three ways, construction is echoed by a movable and immovable property, the two sides agreed through a contract, the contractor will own raw materials by certain technology attachment to the developer all the land, by the Employer to pay a certain price to the contractor, namely enjoyment of accretion product ownership. If the developer fails to pay the price of raw materials contractor transfer the ownership does not of course, by the contractor himself enjoys. Because of the accretion of the product have not be removed, it will damage the value of the appended material after removal. In our judicial practice, movable and immovable echoed, take ownership of the real estate complex by everyone, but everyone should be given the original chattel to compensate. Take ownership of people and loss of balance of interests between people by intervening "gains refund" to achieve. The nature of this relationship, to "pay the price" from the French civil law is used (Article 554), "reimbursement, the cost of materials, labor costs" (555 3), "pay the price of gold" (Article 566 ), "hand-cost reimbursement" (p. 570), to "pay the price of gold material" (p. 571,574 pieces), etc., the similar nature of the ownership of the mandatory retention trading. Country by mandatory provisions of law protection project loan preference right, resulting in a legal retention of title.

According to the "Property Law" Article 181, 185 and "security law" Article 33, 38-43 provides that the Department of the mortgage collateral desirable by the parties set. The parties are free to the mortgaged property, mortgage term, collateral scope and the parties agreed to consider other matters were agreed upon, and be clear in the mortgage contract or mortgage principal debt contract terms, mortgage security interests rather than the agreed tenure statutory security interest. Content mortgage there are two: First, the price changes dispose of the mortgaged property; the second is to sell the mortgaged property in priority for repayment of the price of gold. Annexed collateral due to mixing or processing so that ownership of the collateral for all, the effectiveness of third-party mortgage and to compensation; collateral owner is attached to the compound, mixture or workpiece all, mortgage effectiveness and to attach the compound, mixture or processing thereof; a third person with the mortgage owner is attached to the compound, the effectiveness of the mortgagee to the mortgagor and the share is entitled to a mixture of shared or co-owner of the workpiece. Because mortgage ownership agreement rather than statutory security interest in the security interest, and legal property project loan preference for the statutory right of retention of title, so when competing at both, project loan preference should precede the right mortgage guaranteed.
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