Debt Secured by Mortgage - Indonesia
October 24, 2011 By Leks & Co
Background
Referring to Law Number 4 of 1996 on Mortgage of Land along with Properties Related to the Land (“Law 4/96”), particularly Article 10 paragraph (1), it is stated that the granting of mortgage is preceded by a covenant to provide mortgage as the security for settlement of certain debts, which is set out in and as an integral part of the debt (loan) agreement concerned or other agreement which causes such debt.
Referring to Law Number 4 of 1996 on Mortgage of Land along with Properties Related to the Land (“Law 4/96”), particularly Article 10 paragraph (1), it is stated that the granting of mortgage is preceded by a covenant to provide mortgage as the security for settlement of certain debts, which is set out in and as an integral part of the debt (loan) agreement concerned or other agreement which causes such debt.
Mortgage is accessory, which means that the granting of a mortgage should be a follow-up of the principal agreements i.e. agreement that gives rise a legal relation of such debt in which its settlement is secured. Therefore, it can be said that the existence of a mortgage is always agreed upon and follow (accessory) the principal agreement.
Settlement of Certain Debt
According to Article 3 paragraph (1) of Law 4/96, the debts, in which its settlement can be secured are as follows:
Debt which is already existed at the time of the granting of the Mortgage; and
Debt which has not yet been existed but has been agreed.
Furthermore, it is also regulated that the amount of the debt which its settlement is secured with the mortgage can be determined at the time agreed (agreed in the related agreement) or determined at the time of the execution petition is filed, under the debt (loan) agreement or other agreement that give rise to the related debt relation.
Article 3 paragraph (2) of Law 4/96 states that the mortgage can be encumbered upon a debt due to a legal relation or upon one or more debts due to several legal relations. Based on that, Rachmadi Usman, S, H., M.H. interprets that the granting of a mortgage is possible upon:
Several creditors who combine in providing loan to a debtor under a legal relation (loan agreement); and
Several creditors who provide loan to a debtor under several and different legal relations (loan agreement) for each creditors.
ABOUT THE AUTHOR: Ivan Setiady
Leks & Co are law offices specialized in the real estate law, filled by young, energetic, creative lawyers, providing premium legal services with competitive price plus 7 amazing added values, and delivering our services based on definite core values.
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More information about Leks & Co
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
Settlement of Certain Debt
According to Article 3 paragraph (1) of Law 4/96, the debts, in which its settlement can be secured are as follows:
Debt which is already existed at the time of the granting of the Mortgage; and
Debt which has not yet been existed but has been agreed.
Furthermore, it is also regulated that the amount of the debt which its settlement is secured with the mortgage can be determined at the time agreed (agreed in the related agreement) or determined at the time of the execution petition is filed, under the debt (loan) agreement or other agreement that give rise to the related debt relation.
Article 3 paragraph (2) of Law 4/96 states that the mortgage can be encumbered upon a debt due to a legal relation or upon one or more debts due to several legal relations. Based on that, Rachmadi Usman, S, H., M.H. interprets that the granting of a mortgage is possible upon:
Several creditors who combine in providing loan to a debtor under a legal relation (loan agreement); and
Several creditors who provide loan to a debtor under several and different legal relations (loan agreement) for each creditors.
ABOUT THE AUTHOR: Ivan Setiady
Leks & Co are law offices specialized in the real estate law, filled by young, energetic, creative lawyers, providing premium legal services with competitive price plus 7 amazing added values, and delivering our services based on definite core values.
Copyright Leks & Co
More information about Leks & Co
View all articles published by Leks & Co
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
