denotes an impediment to the title of the property, that is, when the charge is created in an asset, it is not allowed to sell or transfer the asset. Basically, there are three ways in which a charge is created on the property, which is classified according to the mobility of the asset, that is, in movable property, the charge is created by pledge or mortgage, while when the charge it is created in a fixed asset, then it is known as mortgage .
The basic purpose of creating a position is to obtain financial assistance from the credit institution. There are many students, who juxtapose charges and mortgages, but they are different. The first is only a guarantee, for the payment of the amount owed, while the second is the transfer of interest in the asset, as a guarantee. To know a more important difference between the charge and the mortgage, you should consult the article presented below.
|Sense||The mortgage implies the transfer of the interest of property in a particular real estate asset.||The charge refers to security to secure the debt, through pledge, mortgage and mortgage.|
|Creation||The mortgage is the result of the act of the parties.||The charge is created either by the operation of the law or by the act of the interested parties.|
|Registry||Must be registered under the Property Transfer Act, 1882.||When the charge is a result of the act of the parties, registration is mandatory otherwise no.|
|Personal responsibility||In general, the mortgage carries personal responsibility, except when it is excluded by an express contract.||No personal responsibility is created, however, when it becomes effective due to a contract, personal responsibility can be created.|
The mortgage can be defined as the transfer of interests, in a particular real estate asset, such as a building, plant and machinery, etc., to guarantee the payment of the borrowed or requested funds, an existing or future debt of the bank or financial entity . Institution, which translates into increased pecuniary responsibility.
It is something in which the mortgagee transfers a special interest in the mortgaged property in favor of the mortgagee, in order to ensure the payment of the advance money. The ownership of the property remains with the mortgage debtor (borrower / assignor), but possession is transferred to the mortgagee (lender / assignee). When the mortgage debtor does not make the payment on time, the mortgage creditor can sell the asset, after notifying the mortgage debtor.
Types of mortgage
By the term "charge" we mean a right created by the borrower on the property to guarantee the payment of the debt (capital and interest), in favor of the lender, that is, the bank or the financial institution, which has contributed funds to the enterprise. In one position, there are two parties, that is, the creator of the position (borrower) and the holder of the position (lender). It can be carried out in two ways, that is, by the act of the interested parties or by the operation of the law.
When a charge on the securities is created, the title is transferred from the borrower to the lender, who has the right to take possession of the asset and make the debt through the legal course. The charge on several assets is created according to its nature, such as:
- On personal property: pledge and mortgage.
- In real estate: mortgage
- About life as the insurance policy: Assignment
- Deposits: Lien
There are two types of cargo:
- Fixed charge : the charge that is created in verifiable assets, that is, assets that do not change their form such as land and construction, plant and machinery, etc. It is known as a fixed charge.
- Floating charge : when the charge is created on unreachable assets, that is, assets that change their form as debtors, shares, etc. They are called floating charge.
Key differences between the burden and the mortgage
The difference between the charge and the mortgage can be clearly established on the following grounds:
- The term mortgage refers to a form of charge, in which the participation in the ownership of a particular property is transferred. On the other hand, the Charge is used to mean the creation of rights over assets in favor of the lender, to ensure repayment of the loan.
- The mortgage is created from the act of the interested parties, while the charge is created either by the operation of the law or by the act of the holder of the shipper and the creator of the charge.
- A mortgage requires mandatory registration under the Property Transfer Act of 1882. On the contrary, when the charge is created as a result of the act of the interested parties, registration is mandatory, but when the charge is created in accordance with the law, there is no such record. It is necessary at all.
- The mortgage is for a certain term. Unlike the load, it continues forever.
- A mortgage carries personal responsibility, except when specifically excluded by an express contract. Against this, no personal responsibility is created. However, when the position becomes effective due to a contract, a personal responsibility can be created.
In general, the creation of charges provides assurance to the lender that the amount loaned to the borrower will be reimbursed. On the other hand, in the mortgage, the borrower is obliged to pay the mortgage money or, otherwise, the amount will be made through the sale of the asset, mortgaged, but only by order of the Court, in a lawsuit.