Property Law, Security Interests and Land Registration
What to know
Book 3 of the Civil Code covers ownership, co-ownership, usufruct, servitudes, and possession. Book 4 (2022) modernised security interests: pledge, mortgage, and the new movable security agent regime. Know the distinction between ownership and possession, the rules on accession, co-ownership and its dissolution, and the creation and opposability of servitudes. For security: the mortgage (hypothèque) requires a notarial deed and registration; the pledge over a business (gage sur fonds de commerce) has its own formalities. Understand land registration (the mortgage registry) and the role of the notary in publicity.
Traps
- Opposability vs validity: a mortgage is valid between parties on deed, but opposable to third parties only on registration; questions test the gap.
- Servitudes: must be apparent and permanent for acquisitive prescription; destination of the owner is not a servitude.
- Co-ownership: majority rules and the unanimous acts; test the boundary.
- Security ranking: first registered, first ranked; subrogation and recharging rules are tested.
- Possession: good faith and the effect on fruits; distinguish from title.
Rule of thumb
For any security question, run a three-step check: (1) valid creation (deed, capacity, causa); (2) publicity (registration or possession); (3) priority (date and rank). A security failing step 2 is valid but vulnerable in insolvency.
Worked example: A grants a mortgage to Bank 1, registered 1 March, and to Bank 2, registered 1 April. On default, Bank 1 ranks first regardless of the loan amounts, unless a legal subrogation applies.