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LAW OF THE AZERBAIJAN REPUBLIC

of April 15, 2005 No. 883-IIG

About mortgage

(as amended on 25-05-2021)

This Law establishes bases of creation of the mortgage connected with ensuring obligation fulfillment, following from civil legal instruments, its state registration, rules of payment secure debt and other obligations of the civil law at the expense of mortgage, the right and the obligation of the parties, and also other relations in this area.

Chapter I. General provisions

Article 1. Basic concepts

1.0. The concepts used in this Law have the following values:

1.0.1. mortgage - being instrument for ensuring of obligation fulfillment, represents pledge of immovable, and also movable things, the property rights to which are registered in the state register;

1.0.2. mortgage leaf - the personalized security affirming mortgage right. The mortgage security affirming the mortgage right to the real estate is drawn up in the form of bank personalized security;

1.0.3. the legal owner of mortgage leaf - person which acquired right of possession mortgage leaf;

1.0.3-1. the owner of the mortgage security affirming the mortgage right to the real estate - person which drew up the property right to the mortgage security in electronic system (further - electronic system) the mortgage security;

1.0.4. ipotekodatel - person pawning the item which is mortgage subject as pledge. Can be Ipotekodatel both the debtor, and the third party;

1.0.5. the mortgage holder - the person having mortgage right, and also having right to claim of execution of primary obligation at the expense of mortgage subject in preferential procedure in comparison with other creditors-ipotekodatelyami including the legal owner (owner) of mortgage leaf.

1.0.6. the mortgage right - the right of the mortgage holder to the address of collection regarding mortgage in cases of availability of the bases provided in article 34 of this Law;

1.0.7. the agreement of mortgage - the bargain concluded between the mortgage holder and ipotekodatel for the purpose of ensuring execution of primary obligation;

1.0.8. primary obligation - debt and other obligations arising from the basic agreement and which execution is provided fully or partially;

1.0.9. starting selling price - the selling (liquid) price of subject of mortgage in the conditions of limited time of carrying out the corresponding marketing for determination of market value of subject of mortgage according to requirements of this Law.

Article 2. Legislation on mortgage

2.1. The relations connected with mortgage are regulated by this Law, the Civil code and other regulatory legal acts, and also international treaties which the Azerbaijan Republic joined.

2.2. The relations in the sphere of mortgage in the Alyatsky free economic zone are governed according to requirements of the Law of the Azerbaijan Republic "About the Alyatsky free economic zone".

Article 3. Mortgage scope

3.1. The valid requirements following from agreements on debt, purchase and sale, the contract and other civil agreements can be provided with mortgage.

3.2. For execution of requirements which can arise in the future the mortgage can be also concluded. In this case conditions, the stipulated in Article 10.5 these Laws shall be complied.

Article 4. Amount of the requirement provided with mortgage

4.1. If other procedure is not provided by the agreement on mortgage, requirements of the mortgage holder are provided in full, including the following:

4.1.1. principal debt;

4.1.2. percent;

4.1.3. non-execution or improper execution of the obligation, including payment of penalty fee and (or) compensation of damage caused as a result of delay;

4.1.4. attorney's fees and other expenses in connection with maintaining text about execution, the address of collection regarding mortgage.

4.2. Except for the requirements provided by articles 4.1.4 or 5 of this Law if in the agreement on mortgage the specific amount of primary obligation is specified (the requirements provided in Articles 4.1.1 - 4.1.3 presents of the Law), the specified obligation is considered unsecured only in the amount of this amount.

Article 5. Providing mortgage holder with mortgage of additional expenses

In accordance with the terms of the agreement on mortgage or this Law if the mortgage holder incurs the obligation on ensuring storage and safety of subject of mortgage, the reasonable expenses incurred by the mortgage holder on storage and safety of the specified subject, including taxes and utility costs are paid from mortgage subject cost.

Article 6. Mortgage subject

6.1. The immovable thing which is in property of ipotekodatel including immovable thing which construction is not complete, and also movable thing, the property rights to which are registered in the official register, can be mortgage subject, according to the law.

6.2. The mortgage of the thing withdrawn from civil circulation and also mortgage of thing on which under the law collection cannot be turned and which cannot be aloof is not allowed.

6.3. Indivisible items cannot be pawned as mortgage in parts.

6.4. The mortgage can be general. The general mortgage is mortgage which subject are several things and for satisfaction of the general requirement each of things is used. The requirement of the creditor for his desire can be met at the expense of any thing.

6.5. If the agreement on mortgage does not provide other procedure, the mortgage subject with the consent of the mortgage holder can be replaced.

Article 7. Features of mortgage

7.1. If the agreement on mortgage does not provide other procedure, the right of the mortgage holder concerning mortgage subject, extends also to its accessories. The mortgage right extends to the harvest, product and the income acquired owing to use of subject of mortgage in the cases provided by the agreement on mortgage.

7.2. Buildings, structures and installations or other items of the real estate are pawned in mortgage only with the parcel of land on which they are located or which provides their activities. If regarding the real estate collection addresses, person which acquired it acquires the right to the parcel of land on which the subject is located, belonging to the former owner of the specified real estate subject.

7.3. If other property of ipotekodatel is not enough for accomplishment of obligations to the third parties by it, the requirement of the third party regarding mortgage can be turned after satisfaction of requirements of the mortgage holder according to the procedure, established by this Law.

7.4. Concerning the personal estate which is accessory of real estate, the satisfaction of requirements of the mortgage holder of this real estate and the owner of encumbrance of personal estate is performed taking into account the right of the benefit established by the Law of the Azerbaijan Republic "About encumbrance of personal estate".

Article 8. Pledging in mortgage of the thing which is in common property

8.1. The thing which is in common property can be pledged in mortgage from the consent of all owners certified of notarial procedure.

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