The Role of Mortgage in the Real Estate Trade

Abstract

The paper analyses mortgage as a right in rem and a real security used for securing of monetary claims or claims that can be expressed in monetary value. Subject to closer analysis is the contractual mortgage that, as research has shown, is the most commonly used real security by creditors that provide financial support in Macedonian real estate market. The analysis of contractual mortgage includes the legal requirements for acquisition of mortgage as prescribed by the Law for Contractual Pledge, types of immovable property that can be mortgaged in Macedonian legal system and the effects attributed to the termination of contractual mortgage when the legal conditions for termination have been fulfilled. Main objective of this paper is to demonstrate the possibilities that the legislation provides for mortgage creditors and mortgage debtor in securing of claims by contractual mortgage in the area where such a security is most commonly used – the real estate market. The paper examines the effectiveness in exercise of the rights of mortgage creditors and mortgage debtors and the challenges that they face in the process, the level of legal security that the legislation provides and what it lacks in the existing regulation. This paper also focuses on in identifying the main reasons for disputes between mortgage creditor and mortgage debtor with respect to mortgage rights and offers possible solution on how such disputes can be overcome.