Result and Discussions
1.
Mortgage Right
Mortgage Law
defined that mortgage rights are collateral/ security in the form of land and
objects related to land provided to certain prioritized creditors for repayment
of debts as referred to in Law Number 5 Year 1960 concerning Basic Regulations
on Agrarian Principles (hereafter referred to as �Basic Agrarian Law�). Mortgage rights that are imposed
on land rights becomes an integral part of the land; it is secured for
repayment to certain debts. Book II of the ICC previously regulated on hypotheek, and other laws and
regulations such as Staatsblad 1908-542 as amended by the Staatsblad 1937-190
stipulated on Credietverband, but
with the development of the Indonesian economic system based on the Basic
Agrarian Law especially Article 57, they have been deemed no longer in
accordance with the needs and developments of credit activities. These
provisions led to differing views and interpretations in various issues and the
implementation of land security law, such as in matters of execution,
executorial title, and others.
The implementation of the Basic Agrarian Law which
regulates various new matters related to mortgage institutions has been
adjusted in scope through the Mortgage Law in accordance with the development
of the following circumstances:
1.
concerning
the object of Mortgage;
2.
concerning the giver and holder of
Mortgage;
3.
concerning procedures for granting,
registering, transferring, and canceling Mortgage Rights;
4.
concerning the execution of Mortgage
Rights;
5.
concerning the deletion of Mortgage
Rights; and
6.
concerning administrative sanctions.
The right to use as an object of mortgage was not initially
designated in the Basic Agrarian Law, because at the time of its enactment, land
rights that must be registered were not considered as collateral and did not
qualify as debt security as the publicity requirements were not met. However in
recent development, the right to use is granted to transferable State land,
such as those used for apartment buildings; these must be registered yet can be
used as collateral. In addition to realizing the unification of national land
law, the appointment of rights to use as potential objects of collateral greatly
assist the holders who mostly are of economically weak groups without the
ability to own land with building rights and rights of ownership by opening up
opportunities to obtain credit.
The advantage of mortgage
is that it protects the creditor through the right to execute the object of the
guarantee if it turns out that the debtor is in breach of contract, therefore
the creditor should not ignore the importance of guarantee through mortgage.
This does not mean that there is ease in the execution of the object of
collateral for the creditor.
Article 20 of the Mortgage Law states that:
(1)
If
the debtor is found to be in breach of contract:
a.
the right of the first Mortgage
holder to sell the Mortgage object as referred to in Article 6, or
b.
the executorial title contained in
the Mortgage certificate as referred to in Article 14 paragraph (2), the Mortgage
object is sold through a public auction according to the procedures specified
in the laws and regulations for the settlement of the Mortgage holder's
receivables with priority rights over other creditors.
(2)
Under the agreement of the grantor
and the holder of the Mortgage, the sale of the object of Mortgage can be
carried out under-handedly if in this way the highest price can be obtained
that benefits all parties.
The execution of
sale of the mortgaged object can be done within 1 (one) month after the written
notification is delivered by the creditor as the holder of the mortgage to the
debtor. Notifications to interested parties are delivered through announcement
in at least 2 (two) local newspapers distributed around the area concerned or in
the local media to ensure there will not be any objections from another
parties.
2.
Subrogation
Subrogation
in Article 1400 of the ICC is stated as a replacement of rights by a third
party for his own interests who pays off the former creditors whose nature of
debt precedes his own. Subrogation occurs either by agreement or because it is
regulated by law. It is different from debt relief, in that a third party directly
or indirectly known by the debtor pays debts to creditors with the aim of not
releasing the debtor from his obligation to pay the debt but replacing the
position of the former creditor. In subrogation, debt payments made by third
parties to creditors are carried out through the debtor who entered into an
agreement with the creditor.
Subrogation that
occurs because of an agreement is regulated in Article 1401 of the ICC and the
one that occurs because of the law is regulated in Article 1402 of the ICC.
According to the law, subrogation occurs without the need for
approval/agreement between a third party and the former creditor nor between a
third party and the debtor.
Article 1401 of the
ICC regulates third party agreements to replace the position of the debtor,
with the following approval or agreement:
a.
If the creditor receives payment
from a third party. It is stipulated that the third party will replace its (special)
rights and claims against the debtor. In sub-order the time of payment must be
precisely and expressly stated;
b.
If the debtor borrows a sum of money
to fulfill his obligations to repay due debt, then he declares that the person
who helps paying off said debt will replace the rights of the former creditor.
This subrogation is valid as long as it is made in an authentic deed which
contains a loan agreement to pay off the debt and an explanation that the debt
is repaid by the lender/new creditor in the form of money.
Article 1402 of the
ICC stipulates that subrogations occur because of the law:
a.
For a person who pays off another
creditor who, based on his privileges or a mortgage, has a higher right;
b.
To buy an immovable object, which
has used the money of the price to pay off the debtors, to whom the object is
tied up in a mortgage;
c.
For a person who together with
another person or for another person is required to pay a debt with an interest
entailed in paying off that debt;
d.
For an heir who is receiving an
inheritance and has paid the inheritance debts with his own money.
In Article 1403 of
the ICC, it is determined that the subrogation stipulated in the previous
articles occurred both against third parties and against debtors. Subrogation
cannot reduce the rights of the creditor if he only receives partial payment;
in the event that he is able to exercise his rights regarding what is accrued
to him earlier than the person from whom he receives only a partial payment.
Subrogation of creditor transfer is
carried out and occurs due to payment of debts from third parties, either in
whole or in part, resulting in the debtor being replaced by third parties.
In order for a
contractual subrogation to be considered valid, the procedure due is as
follows:
a.
An authentic deed is established for
a loan of money;
b.
The act must contain detailed
information about the loan to pay off the debtor's debt, and the amount of the
loan;
c.
A statement that the money used for
payment to creditors was sourced from a third party stated in the debt
settlement signing.
3.
Settlement
of Credit Agreements
Through Subrogation When the Debtor is in Default
Any agreement
regarding indebtedness/borrowing relationship between the parties (creditor and
debtor) must be based on a written agreement. The debt agreement is
specifically stated in Article 1754 of the ICC, as follows:
�Lending-used
consumables are an agreement that stipulates that the first party delivers a
number of consumables to the second party on the condition that the second
party will return similar goods to the first party in the same amount and
condition.�
In another article of the ICC,
namely Article 1131, it is stated that:
"All movable
and immovable property belonging to the debtor, both existing and future, shall
serve as collateral for the debtor's individual engagements."
�����������
Based on the
aforementioned articles, it is stated that collateral agreement is an agreement
where the debtor owning certain object, both material and immaterial, gives it
to the creditor as collateral for the credit agreement. Collateral in material form
is a guarantee in the form of material rights, such as guarantees for movable
objects. Meanwhile non-material guarantees are immaterial in nature. While the
applicable guarantees are:
a.
Pledge Guarantee;
b.
Mortgage guarantee;
c.
Fiduciary guarantee;
d.
Mortgage guarantees on ships and
aircraft;
e.
Borg guarantee or guarantee
f.
Liability guarantee; and
g.
Warranty agreement.
The scope of
guarantees is divided into 2 (two) i.e., special and general guarantees.
Special guarantee are further divided into 2 (two) types, namely material and
personal guarantees. Material guarantees include guarantees for immovable
objects (including mortgage) and guarantees for movable objects.
Guarantee in the
form of mortgages are clearly regulated in the Mortgage Law, which in Article 1
(1) explained as follows:
�Mortgage rights to land and
objects related to land, hereinafter referred to as mortgage rights, are
security rights imposed on land rights as referred to in Law Number 5 of 1960
concerning Basic Regulations on Agrarian Principles, including or not along
with other objects which are an integral part of the land, for the settlement
of certain debts which give priority to certain creditors over other
creditors.�
Mortgage holders
are creditors, namely individuals or legal entities providing credit or debts.
Meanwhile, those who provide mortgage rights are debtors, individuals or legal
entities having the authority to take legal actions against the dependent
object in question. Any third party who will pay off the debt due to the
debtor's default will be the new creditor, and this transfer of creditor is
referred to as subrogation. Based on Article 1400 of the ICC, it is explained
that the subrogation or the transfer of creditor rights to a third party who
pays to the creditor can and is possible due to approval in the law.
As
previously explained, subrogation according to the law means that it occurs
without the need for approval between a third party and the former creditor, as
well as agreement between the debtor and a third party. In addition, it is also
stated that: "if the receivables guaranteed by mortgage are transferred
due to cessie, subrogation, inheritance or other reasons, the mortgage will
also be legally valid to the new creditor." Therefore, if the receivables
guaranteed with mortgages are transferred due to subrogation, then the
mortgages will also be transferred by law to third parties as new creditors.
With the transfer
of the creditor�s rights, the next
step is that the mortgage must be registered by a third party as a new creditor
to the land office. The transfer of mortgage rights to the new creditors takes
effect from the date and day of recording in the land book, namely the date and
seventh day after the documents required for the registration of mortgage
rights transfer are completed.
In the explanation
of Article 16 (1) of the Mortgage Law, the transfer of mortgage rights occurs
by law. The recording can be done based on a deed that proves that the
guaranteed receivables have been transferred from the former creditor to the
new creditor, so it does not need to be proven by a deed by the official making
the land deed.
Thus, if there has
been a transfer of receivables through subrogation between the first creditor
and a third party, the debtor is going to need:
a.
The deed used as evidence of the
transfer of money from the new creditor;
b.
Copies of the mortgage certificate
and certificate of land title and the land register with notes from the land office
about the mortgaged object.
The next step is to
confirm about the transfer of former creditor�s
receivables to the first creditor, then inform the registration official at the
land office about the transfer of mortgage rights.
One of the reasons
for the annulment of a debt agreement is the renewal of debt which is regulated
in Article 1381 of the ICC in 3 (three) types of debt renewal methods as
follows:
a.
If
a debtor makes a new debt agreement for the benefit of the creditor who
replaces the old debt, which is written off because of it;
b.
If
a new debtor is appointed to replace the old debtor who was released by the
creditor and the agreement.
c.
If
as a result of a new agreement a new creditor is appointed to replace the
former creditor against which the debtor is released and the agreement.
So based on the
article above, it can be concluded that subrogation is the reason for the
renewal of debt between creditors and debtors so that their debt agreement is
canceled, and so is the mortgage used as collateral. Therefore, it is now a new
debt agreement and the deadline for payment of obligations in the new agreement
between the new creditor and the debtor does not keep up the previously
payment�s deadline.
The renewal of the
debt agreement and the deadline in the new agreement means that the former
creditor cannot execute the Mortgage object directly, but with deal from both
to make a new agreement regarding the payment of the debt, completely with a
new time limit. If the former creditor takes action to occupied the guarantee
without the debtor known, then the action is included in the category of
unlawful act as stated in Article 1365 of the ICC, as follows;
"Every
act that violates the law and causes harm to another person obliges the person
who caused the loss because of his fault to compensate for the loss."
That the acts that
are against the law are:
a.
Violate applicable laws;
b.
Violating the rights of others
guaranteed by law;
c.
which is contrary to the legal
obligations of the perpetrator;
d.
Contrary to decency; or
e.
Contrary to good attitude in society
to care for others.
In the event that
the former creditor takes action to occupy the collateral, it can be
categorized as an unlawful act if the registration regarding the status of the
mortgage at the land office has not been carried out between the debtor and the
former creditor but the former creditor has occupied the collateral which is
the Mortgage object. If it is in default as regulated in article 1234 jo.
Article 1238 of the ICC and the debt agreement between the debtor and the
former creditor does not state a clause on obligations regarding the terms of
transfer of mortgage, then the deed needs to be amended. The debt agreement
must have a clause that mention of the transfer of mortgage if it is to occur
without the knowledge and or without permission of the debtor.
4.
Mortgage Assigned on Credit Guarantee
After Subrogation
The position of the grantor of the mortgage remains as the
owner, who also retains the authority to take legal actions against the object that is
burdened with the mortgage. In Article 14 paragraph 3 of Mortgage Law, it is
stated that:
"The mortgage certificate as referred to in paragraph
(2) has the same executorial power as a court decision that has obtained
permanent legal force and is valid as a substitute for the grosse acte
Hypotheek as long as it concerns land rights.
Parate Executie is the authority possessed by the
creditor to bid on his own power the goods that are the object of collateral if
the debtor cannot fulfill his obligations without having to seek approval from
the chairman of the court (fiat). As
an embodiment of the position that is prioritized and owned by the mortgage in
the case of the debtor broke his agreement, the mortgage can execute through parate executie which is a convenience
provided by law. The Mortgage Law explains that it must include clearly and
unequivocally the agreement relating to the execution of the parate executie when the debtor is unable to fulfill his obligations/breach
of contract. However, the validity/ application must be further reaffirmed with
a promise that must be stated clearly and unequivocally in the deed of
encumbrance of the mortgage that was made when the agreement was started.
In Article 1400 of
the ICC, as previously stated, subrogation can occur because of the law and
because of an agreement. In relation to the subrogation that occurs because of
the agreement in Article 1401 of the ICC, the subrogation is distinguished as
follows:
a.
Creditor-initiated subrogation:
occurs when a third party as a new creditor pays the former creditor. The new
creditor will replace his privileges, mortgages, claims, and rights held
against the debtor. In the event that the creditor initiates a subrogation when
the new creditor makes a payment, it must be stated explicitly;
b.
Debtor-initiated subrogation: occurs
when the debtor borrows money from a third party (new creditor) to fulfill its
obligations to pay debts to former creditors. The new creditor will replace the
rights owned by the former creditor. Subrogation initiated by the debtor must
be stated in an authentic deed to ensure its validity. In the authentic deed of
agreement there must be a statement that the money borrowed by the debtor from
the new creditor will be used to pay off the debtor's debt to the former
creditor.
In the subrogation
initiated by the debtor, there are 2 (two) different legal relationships,
namely lending and borrowing money between the debtor and the new creditor and
paying off the debtor's debt to the former creditor.
Subrogation due to law occurs
because a third party as a new creditor pays the debtor's debt to the former creditor
without making an agreement. Based on rticle 1402 of the ICC this happens if:
a.
A creditor pays off another debtor
who by virtue of a privilege or mortgage has a higher right;
b.
A buyer of a fixed object who has
used the money for the price of the object to pay off a debtor to whom the
object is bound by a mortgage;
c.
A person who together with another
person or for another person is obliged to pay a debt, has an interest in
paying off the debt, as in the payment by one of the creditors on a debt with
several responsibilities or payments made by the guarantor;
d.
An heir who receives with
privileges, but has paid the entire debt of the testator.
Repayment of debt
by a third party or a new creditor is a subrogation that occurs because of the
law, in this case a third party or a new creditor pays off the debtor's debts
because there is an interest in carrying out the settlement without requiring
approval between a third party as a new creditor and the old creditor. As
stated in Article 1402 (3) of the ICC: "that for a person who, together
with other people or for other people, is obliged to pay a debt, has an
interest in paying off a debt."
Subrogation carried
out by third parties or new creditors in this case needs to be emphasized that
it is not intended to free the debtor from his debts and obligations but the
third party will replace the position of the former creditor with the new
creditor. Debtors still have an obligation to settle their obligations, namely
paying debts to third parties as the new creditors.
From
what has been said above, it is clear that both subrogation due to agreement
and subrogation due to law, related to mortgage rights as objects of collateral
in debt and loan agreements, if the debtor does not change the object of
collateral as agreed in the initial agreement, then the mortgage will remain
and be accepted by the new creditor.
Execution of
Mortgage which will be carried out by the new creditor if the debtor is later
broke, then the execution based on Article 20 paragraph 1 letter a and b of the
Mortgage Law can be carried out in three (3) ways, namely:
a.
Title Execution
Creditors
who already hold mortgage certificates can collect receivables from debtors.
Creditors can also execute mortgage rights without going through a lawsuit process.
b.
Parate Execution
Creditors
take what they are entitled to without an intermediary judge. The sale of
mortgage rights is carried out in the manner as regulated in Article 1211 of
the ICC, with direct assistance by the state auction office without going
through fiat from the head of the district court.
c.
Selling Under-handedly
The
sale of mortgage is carried out after notification from the creditor to the
debtor. The sale of the mortgage object will get the highest price in order to
benefit all parties. If after notification there are no objections, then by
agreement a sale of the object of collateral is made with a power of attorney
from the mortgage.
Conclusions
In the event that
certain debtor is in default and unable to fulfil his obligations to the
creditor, then subrogation can be considered, namely through the reimbursement
of the creditors� rights for payment by a third party. Subrogation occurs
either by agreement or because it is regulated by law. It is different from
debt relief in that it involves a third party who pays debts to creditors with
the aim of not releasing the debtor from his obligation to pay the debt, but
simply replacing the position of the former creditor. With regards to mortgages
as objects of collateral in debt and loan agreements, if the debtor does not
change the object of collateral as agreed in the initial agreement, then the
same mortgage will be received by the new creditor as the security of his
debts.
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Copyright holder: Hardianto Candra, Benny Djaja (2022) |
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