Suncheon Law Firm Assistance | Completion of the Mortgage Cancellation Procedure With the Suncheon Law Firm's Assistance

The client who came to the Suncheon law firm is a representative who owns a hotel in Suncheon.

The client had borrowed several billion won in total to operate the hotel.

In doing so, the client established a mortgage over the hotel in favor of the defendant, the creditor, using the hotel as security.

Thereafter, the defendant applied for an auction to enforce a security right over the hotel, and the hotel was sold, so that the claim underlying the mortgage and the execution costs were all repaid.

Because the secured debt of the mortgage had all been repaid and thus extinguished, the client sought assistance from the Suncheon attorney in order to file for cancellation of the mortgage.

The Suncheon attorney explained 🔗mortgages / mortgages to secure a maximum amount.

■ What is a 'mortgage'?

A mortgage refers to the right to receive preferential repayment of one's own claim, ahead of other creditors, out of the mortgaged property provided by the debtor as security for the debt in the event that the debt is not performed.

■ What is a 'mortgage to secure a maximum amount'?

A mortgage to secure a maximum amount, which is a type of mortgage, is security for claims that will arise in the future.

In other words, it is a mortgage established over real property in order to secure, up to a fixed maximum amount, the multiple claims arising from continuing transactions as of a future settlement date.

■ Cancellation registration of a mortgage to secure a maximum amount

This refers to a registration made for the purpose of legally extinguishing a registration where the registration of a mortgage to secure a maximum amount no longer corresponds to the substantive relationship, whether before the registration or for some reason afterward.

> A mortgage to secure a maximum amount is extinguished for the following reasons, among others, and once it is extinguished, a cancellation registration is made.

∙ Termination of the contract due to repayment of the debt (Article 364 of the 「Civil Act」)

∙ Extinguishment of the superficies and the chonsegwon that are the subject of the mortgage to secure a maximum amount (Article 288 of the 「Civil Act」)

∙ If the subject property is sold, such as through an auction (Article 91, paragraph 2 of the 「Civil Execution Act」)

∙ Merger (Article 191, paragraph 1 of the 「Civil Act」)

∙ Termination by agreement between the parties (Article 543 of the 「Civil Act」)

∙ Occurrence of an agreed ground for extinguishment (Article 54 of the 「Real Estate Registration Act」)

∙ If the mortgage to secure a maximum amount is waived as to part of the real property that is the subject of a joint mortgage securing the same claim

The defendant, the creditor, applied for an auction to enforce a security right based on the mortgage.

The Suncheon attorney argued that the hotel had been sold pursuant to the defendant's auction application.

Through the sale of the secured hotel, the defendant was repaid in full for the claim underlying the mortgage and the execution costs.

The Suncheon attorney argued that the secured debt of the mortgage in this case had already been repaid in full and extinguished.

The Suncheon attorney emphasized that, the secured debt of the mortgage having been repaid, the defendant has a duty to cancel the mortgage.

The client who visited Daeryun Law Firm was able to complete the mortgage cancellation procedure thanks to the prompt assistance of the Suncheon attorney.

Cancelling a mortgage requires satisfying several requirements, so having an attorney review the matter can be helpful.

Drawing on the results of extensive data analysis, Daeryun reviews the prospects of a client's case and assists the client.

If you are in a situation like the one above, please feel free to reach out at any time to a 🔗Suncheon attorney for help.