The mortgage is one of the oldest known institutions within Civil and Commercial Law; It has always been used to establish a security right on real estate, in order not to make the payment of an obligation illusory, and that, in case of non-compliance, the Creditor can auction the mortgaged property and thus make the payment of their credit, and depending on the case, there is a difference between a common mortgage and a legal mortgage.

The doctrine lists the common mortgage as an accessory real right that encumbers real estate, to guarantee the fulfillment of an obligation; that is, the payment of a debt. In addition, it is a contract by virtue of which a person, called the debtor, encumbers a real property in favor of another, called the Creditor, so that, if the debtor is unable or unwilling to comply with the insured obligation, payment can be made of the principal amount, plus interests and expenses related to the process of judicial collection.

Some characteristics of the common mortgage are:
● It is a real right since it is a real guarantee on real estate.
● It is considered an accessory because it depends on a main obligation to which it serves as a guarantee.
● It is indivisible because the mortgage weighs on all the parts that the property is constituted of.
● It is a right of pursuit since the creditor has the right to pursue the assets that are mortgaged.
● It has the right of first refusal since the privilege enjoyed by the Creditor is protected, for when the judicial sale of the mortgaged property is carried out.

Now, unlike the common mortgage, the legal mortgage is one that arises not from a contract between a Debtor and Creditor, but from the Law. It is the State and/or a Condominium, making use of its powers of empire to guarantee the adequate financing and provision of the services, which has created this privileged figure over any other that arises from third-party contracts. The legal mortgage arises thus, from the urgency or the need to protect through the Law, some obligations and rights considered vital for the administration.

Currently, some legal mortgages are recognized, such as those that come from debts for municipal, territorial and water services taxes. These mortgages are also called hidden, as they are not normally listed in the Real Estate Registry of the National Registry; However, once the right is exercised and registered, they have the same effects as ordinary mortgages, without requiring the direct and express intervention of the Debtor.

The characteristics of the legal mortgage are the following:
● Legal origin since they have been provided for and authorized by Costa Rican legislation.
● Exceptionality, since they imply a derogation of common law with a view to specific reasons, based on reasons of public utility.
● Accessority. The privilege is accessory to the respective credit.
● Indivisibility, since the privilege subsists regardless of the division of the credit or the thing.
● Privilege. In the event that there are previous liens, the legal mortgage will replace a first-degree mortgage for auction purposes.

If you require advice on this matter, ERP Lawyers puts at your disposal a team specialized in the matter. Do not hesitate to contact us!