Description of registration advices

Description of registration advices

The initial mortgage advice.

It is defined by law as the advice of setting up the mortgage and of registering the other legal deeds stipulated by law in regard to the priority order, publicity and execution; it is the advice by which is performed the initial publicity of the said legal deeds.

We specify that by an initial mortgage advice is performed the publicity of one single security mortgage, not the publicity of several mortgages set up by different debtors to the benefit of the same creditor without any link among the obligations assumed by them. In such cases, operators/agents shall refuse to register the initial mortgage advice form with the Archive for Security Interests in Movable Property – AEGRM.

 
Advice to register the intent of setting up a  security mortgage.

In accordance with the law, the applicant who wants to register a document in order to publish his intent of setting up a security mortgage shall have to present for registration to an operator/agent of the Archive a registration advice form (initial mortgage advice form), filled in according to the legal requirements. 

The registration with the Archive for Security Interests in Movable Property - AEGRM of a registration advice for the intent to set up the mortgage does not suppose the payment of any fee to the State. 

The registration of the intent to set up the mortgage loses its effect by the lapse of a 2-month term after the registration date. 

If throughout the 2-month term is setup a security mortgage, it shall have the rank since the date of registering the intent.

We specify that from the point of view of the information that it has to comprise, there is no difference between the registration advice of the intent to set up the security mortgage and the initial mortgage advice that shall result from the transformation of the intent; at the moment of registering with the Archive for Security Interests in Movable Property - AEGRM the registration advice of the intent to set up the security mortgage, the asset that is the subject matter of the mortgage has to be precisely identified and adequately described.
The transformation of the registration advice of the intent to set up the mortgage into an initial mortgage advice is performed by using a transformation menu, without the possibility of amending the initially recorded data. 

The transformation operation is assimilated to the registration of an initial mortgage advice in view of the amount of the fee owed by the applicant of the registration.
 
Advice amending the initial mortgage advice.

It is defined by law as the advice by which are amended or supplemented the data registered with the Archive for Security Interests in Movable Property – AEGRM and it may target the description of the asset under the security mortgage, the name/firm of the debtor or creditor, the rectification of any occurring material error, as well as any other amendment regulated by law.

1. In case of creditor plurality, in accordance with the manner in which it impairs the creditors’ rights, amendments that are brought to a registration advice can be grouped into two categories:

 - amendments of interest to all creditors with active status specified in art. 38 par. 1 and par. 3 (the replacement of all creditors) from the Regulation and for the operation of which with the Archive for Security Interests in Movable Property – AEGRM, a joint will manifestation is necessary for such purpose;  

- amendments targeting the identification attributes or status of one of the creditors, specified in art. 38 par. 2 and 3 from the Regulation that can be performed only on the request of the interested direct creditor.

2. The applicant of the registration will be permitted to choose only one single type of amendment from the 13 provided in the amending registration advice form. 
This rule shall remain valid even when the amendment/supplementation of the asset in the security mortgage is also desired in order to update the information comprised in the registration advice.

The Order of the Minister of Justice no. 2034/C from 10 October 2011 for the approval of the registration advice forms regarding the registrations performed with the Archive for Security Interests in Movable Property - AEGRM and of the instructions to fill in such forms published in the Official Gazette of Romania, Part I, no. 731 from 18 October 2011 by which was ordered the replacement of the forms comprised in Appendixes 1 - 9 to the Regulation with the forms comprised in Appendixes 1 - 26 to the said Order, enabled the parties to choose the updating of the information comprised in the registration advice that shall be amended, because in several cases, in the column regarding the asset subject to the security mortgage, the parties provided also data that do not concern the description of the asset itself, such as, e.g. the name/firm of the parties to the registration advice.  
In order to clearly understand the notion of updating the information comprised in the registration advice, we shall present an example below.  

Example: with the Archive for Security Interests in Movable Property - AEGRM is registered an initial mortgage advice, having as a creditor C1, debtor D1 and the asset subject to the security mortgage B1. The description of the asset subject to the security mortgage is made, as follows: the receivable that debtor D1 has to collect from the third party T1.
After registering the initial mortgage advice, debtor D1 changes his name/firm into D2 and creditor C1 addresses the request of registering an amending advice concerning the change of the debtor’s name/firm. 

Having regard to the fact that in the column regarding the description of the asset subject to the security mortgage remained to be provided the former name of the debtor, the creditor will be able to tick on the form also an amendment regarding the supplementation/amendment of the description of the asset subject to the security mortgage, in order to replace the former name of the debtor with the current one (information update).

If the applicant also wants to update the information from the security mortgage advice to which the amendment is related, according to the provisions stipulated in the amending form, the operator/agent performing the registration shall verify by comparing the filled in form to the initial registration advice that is to be amended, whether this is indeed an update of the information according to the model presented before, or other amendments or other registration advices (another amendment, reduction, extension ), for which a separate form had to be filled in, a case in which he shall refuse the performance of the registration.
The update may also concern the providing of the new value of a cash amount (expressed in RON) recorded in the column on the description of the asset subject to the security mortgage according to the conversion report stipulated in art. 1 par. (1) from Law no. 348/2004 on the denomination of the national currency (ROL 10,000 = RON 1).

3. Amendments targeting directly the status or identification attributes of the creditors should be individually subscribed by each of such creditors.
For example in case there are three creditors with the active status C1, C2 and C3, and the first two were paid by the debtor, C1 and C2 shall separately subscribe each an amending advice form targeting their deregistration from the registration advice (amendment regarding the deregistration of a creditor), not together; if the file is not correctly subscribed, the operator/agent shall refuse to perform the registration.     

(1) Amendments regarding the rectification of occurring material errors.

The law does not define the notion of a material error. 

In the absence of other specifications, but motivated also by practical considerations, the advice may be used both in the hypothesis of an error occurring further to erroneously filling in the registration advice form by the applicant and the improper registration with the Archive for Security Interests in Movable Property - AEGRM of the data from the form by the operator/agent. 
If in regard to the remedy of the material errors produced due to the fault of the operator/agent, by this advice may be remedied all inconsistencies between the form and the proper registration advice, for errors due to the erroneous filling in of the form, the notion of material error should be established on a case-to-case basis by reporting the data initially recorded in the form; in any case, the applicant cannot rectify by this advice “errors” such as the omission of a creditor or of an asset subject to the security mortgage.
Returning to material errors caused by the default of the operator/agent, it was established jointly with the representatives of the operators that the remedy thereof should be able to be performed also ex officio by the concerned operator/agent, even on basis of the information recorded in the remitted form, motivated by the fact of the reception by the operator/agent of a firm application for the registration with the Archive for Security Interests in Movable Property - AEGRM from the creditor/debtor, but with the notification of the applicant. As this is about an improper default registration, the operator/agent shall have to cover the payment of the fees for the registration with the Archive for Security Interests in Movable Property - AEGRM for the concerned advice.

 (2) Amendment/supplementation of the description of the asset under the security mortgage.

The amending advice by which is amended/supplemented the description of the asset under the security mortgage supposes that the asset initially subject to the security mortgage should remain the same and the amendment targets the revision of certain issues specified in the description or supplementation of the asset description. 

It may be used, for example, in case the description of the asset subject to the security mortgage is incomplete, when the asset subject to the security mortgage is not precisely identified, as essential elements for the individualization thereof are missing from the description.

It is also used in the case regulated by art. 2.412 from the New Civil Code “Preservation of the rank of the mortgage (1) If the description of the burdened asset that was initially registered with the Archive does not cover the type of the resulting products, the mortgage maintains its rank upon such products only if the creditor registers with the Archive an amending advice within a term of 15 days as of the date on which the author of the mortgage obtained such products. (2) When the products of the mortgaged asset are amounts of cash the origin of which may be established, the mortgage preserves its rank thereupon and it shall not be necessary to register an amending advice”, for the case in which products result (i.e. any asset received by the debtor further to the sale, exchange, results and products, as well as the amounts collected from the insurance or another form of management or disposal thereof, inclusively amounts obtained from any other subsequent operations), and the description of the asset initially registered with the Archive is not comprehensive enough to cover the type of resulting products.

In this case, the priority degree established by the registration with the Archive shall be extended upon all products, if within a term of 15 days as of obtaining such, the creditor shows his interest towards them by amending the registration advice form that should describe them.

If they want to supplement products in the security mortgage, the applicant shall clearly record in the amending advice form a note of the type “supplementation of products according to art. 2.412 from the New Civil Code and he shall describe the new assets by using the columns from item III from the amending registration advice form. 
 
(3) Amendments of the name/firm of the parties and/or their address/registered office.

It shall be recorded with the Archive for Security Interests in Movable Property - AEGRM in cases such as the change of the name and/or address of individuals by marriage, the change of the name of the individual by administrative means, the change of the name in case of legal entities, of the registered office, etc.

(4) Adding a creditor/ creditors to the already existing ones.

It is registered on the request of all creditors with active status and, as it results also from its name, its subject matter is strictly the adding of one or more creditors to the creditors with active status.

(5) Adding a subscribing debtor accompanied by his subjecting of assets to the security mortgage.

This type of amending advice enables that by one single registration advice should be performed both the adding of a subscribing debtor and of the assets subject by him to the security mortgage; the contrary solution would have imposed that in such case should be recorded two registration advices: an amending advice by which is registered the new debtor, as well as an advice for the extension of the security mortgage, the subject matter of which is represented by assets subject to the security mortgage by such debtor.
 
(6) The full or partial replacement of the assets subject to the security mortgage, in the conditions in which the debtor/creditor remains the same.

It enables the updating of the information on the security mortgage by one single operation; the contrary solution would have imposed to record in this case two registration advices: one advice of extending the security mortgage, having as a subject matter the new assets, followed by an advice of reducing the security mortgage, by which were discharged the replaced assets.

There are three conditions necessary to register such advice: a) at least one of the initially subject assets should be discharged; b) concurrently with the discharge should be subject to the security mortgage one or more new assets; c) the parties to the registration advice should remain unchanged.

(7) Maintaining the name/firm of the new debtor, in case there is a transfer of the former debtor’s patrimony.

There is a registration advice targeting the updating of the data initially registered for the case when, for example, the debtor’s usage capacity ceases; we can include here the case of the individual debtor’s decease, when his inheritors shall be registered with the Archive for Security Interests in Movable Property - AEGRM, as debtors of the merger, absorption or total division of a legal entity, when the absorbing legal entity shall be registered with the Archive for Security Interests in Movable Property - AEGRM as a debtor, the legal entity that was incorporated by merger or such taking over the patrimony of the former debtor.
 
(8) Deregistration of a creditor.

It clearly results from its very name that the registration of this type of advice supposes the existence of several creditors, as in contrary case, the advice that would be registered is a cancellation advice. It may be recorded, for example, when the debtor fulfills his obligation towards one of the creditors, the paid creditor going to be deregistered on his request. 
As we specified above, if it is necessary to deregister several creditors, as this is an amendment directly targeting the status or identification attributes of the creditors, it should be individually subscribed by each of such creditors; if the form is not correctly subscribed, the operator/agent shall refuse to perform the registration.              
 
(9) Deregistration of one or several debtors accompanied by the discharge of the assets subjected by him to the security mortgage.

Likewise, the registration of this type of advice supposes the existence of several debtors, as otherwise the advice is registered as a cancellation advice.  
The operation to deregister the debtor is accompanied by the discharge of the assets subject to the security mortgage; the contrary solution would have imposed the registration of two security mortgage advices: one advice targeting the deregistration of the debtor and one advice the reduction of the security mortgage.  

(10) Replacement of all creditors (other than by a receivable assignment). Replacement of a creditor (other than by a receivable assignment).

It is necessary that the replacement should be the consequence of a legal operation other than the receivable assignment – for example a novation by changing the creditor, a subrogation in the rights of the creditor, etc.

As this is an amendment targeting directly the status or identification attributes of the creditors, it should be individually subscribed by each of these creditors, except the case of replacing all creditors, when by a joint will manifestation materialized in one single form, they may request their replacement by one or more new creditors.

For the case in which several creditors remitted their amount from the receivable right to a third party, if the registration application is requested by the third party, he shall proceed to separately inactivate each creditor by separate registration advices. 
The “block” inactivation of the creditors on the request of the third party (new creditor) is possible only in case of transmitting the entire receivable.   
In case of infringing this requirement, the operator/agent shall refuse to perform the registration.
       
Advice to assign the receivable secured with the assets specified in the registration advice.

The receivable assignment is a legal deed by which is alienated with onerous or free title a receivable right and as an accessory effect of the receivable assignment is also remitted the accessory security mortgage.

The receivable assignment advice is a registration advice that is registered with the Archive for Security Interests in Movable Property - AEGRM in the hypothesis in which the receivable guaranteed with the security mortgage registered with the Archive for Security Interests in Movable Property - AEGRM is assigned and as an accessory effect of the receivable assignment operates also the assignment of the security mortgage. 
At the moment of registering an assignment advice, the assigning creditor shall gain the inactive status (he shall be discharged) and the gainer of the receivable (assignee) shall gain the active status of a creditor.

As this an advice impairing the status of the creditor in case of a plurality of creditors, it should be registered individually by each of such creditors, except the case when all creditors by a joint manifestation of will materialized in one single form request the registration of an assignment of the entire receivable.

When several creditors remitted by receivable assignment their amount from the receivable right of a third party, if the registration application is requested by a third party (assignee), he shall proceed to separately inactivate each creditor, by the registration of separate advices.  
The “block” inactivation of creditors on the request of the third party (assignee) is possible only in case of remitting the entire receivable
In case of failing to observe this requirement, the operator/agent shall refuse to perform the registration.
Example: an initial mortgage advice is registered with the Archive for Security Interests in Movable Property - AEGRM having three creditors C1, C2 and C3, and each creditor holds 1/3 from this receivable.

Subsequently, creditors C1 and C2 alienate by assigning the receivable right or by another legal operation their part of the receivable to a third party (C4). 
All these amendments may be performed by registering an advice, either on the request of the creditors with the active status (C1 si C2), each going to separately subscribe a registration advice form (advice for the assignment of the receivable or amending advice), or on the request of C4, a case in which such will present the declaration on own liability on the legal grounds of gaining the receivable. In this last case, the inactivation of the status of creditors C1 and C2 shall be also performed by the registration of separate registration advices.      
Nota: We mention that sometimes, in case of advices with the registration of a plurality of creditors, the registration of a receivable assignment advice or of an amending advice replacing the creditor actually supposes only an operation for the deregistration of the assigning or replaced creditor, not also by adding a new creditor, as the new creditor is already recorded in the advice as a creditor with active status. 
This situation may occur, for example, in case of a receivable assignment advice or an amending advice targeting the replacement of the creditor, when one of the creditors with active status alienates his part of the receivable to another creditor with active status.
A similar situation may occur in case of the advice with a plurality of debtors provided in an amending advice by which is provided the name/firm of the new debtor, in case there is a transmission of the patrimony of the former debtor.  

     
 The advice of reducing the mortgage to a part of the assets subject to it by the initial mortgage advice. The advice to extend the mortgage upon other assets.

In regard to these two advices should be performed the specification that the notions of reducing and extending the mortgage supposes the discharge and adding to the security mortgage of certain independent assets with own individuality; this is not about an amendment of certain data comprised in the description of the asset subject to the mortgage, a case in which may be used the amending advice on the amendment/supplementation of the description of the asset subject to the mortgage. 
It is also not to be mistaken with the case in which products result, regulated by art. 2.412 from the New Civil Code “Preservation of the rank of the mortgage (1) If the description of the burdened asset that was initially registered with the Archive does not cover the type of resulting products, the mortgage maintains the rank upon such products only if the creditor registers with the Archive an amending advice within a term of 15 days after the date when the author of the mortgage obtained such products. (2) When the products of the mortgaged asset are amounts of cash the origin of which may be established, the mortgage preserves its rank thereupon and it shall not be necessary to register an amending advice.”, when the priority rank established by the registration with the Archive (initial registration) is extended upon all products, if within a term of 15 days as of procuring such, the creditor shows his interest towards them by modifying his interest towards the amending of the registration advice form that should be described.

Having regard to the existence of the amending advice by which can be operated the total or partial replacement of the assets subject to the security mortgage, the reduction advice appears as an advice by which is operated a simple discharge of an asset(s) from such initially subject to the security mortgage and the one of extension as an advice by which is operated strictly an addition of an asset(s) to the initial ones.
 
Advice of relinquishing the initial mortgage advice.

In accordance with the law is registered with the Archive for Security Interests in Movable Property - AEGRM in case the debtor executes the secured obligation or in case the creditor waives the mortgage. 

The relinquishment advice may be registered besides the two situations specified by law whenever one of the methods of relinquishing the obligations occurs, such as the  compensation, confusion (the same person fulfills both the capacity of a creditor and such of the debtor), etc.

We reiterate the specification made above, i.e. that the registration with the Archive for Security Interests in Movable Property - AEGRM of a relinquishment advice determines the inactivation of the status of the registration advice. 

Advice of annulling the initial mortgage advice.

It is registered with the Archive for Security Interests in Movable Property - AEGRM if by an irrevocable court decision was assessed the fact that the security mortgage contract (or the main contract) was concluded by infringing the legal provisions issued for its valid conclusion and its annulment was ordered.

As in case of the cancellation advice, the registration of an annulment advice determines the inactivation of the status of the registration advice. 

Advice to extend the initial mortgage advice.

The extension advice may be theoretically registered at any moment during the time interval spanning between the moment of registering the advice for the registration with the Archive for Security Interests in Movable Property - AEGRM and the date on which the 5-year validity term of a registration expires.

The extension shall start to produce effects only after the expiry of the validity term of the registration to which the extension was related and it shall extend the validity of the registration for other 5 years.

Although according to the Regulation, the new validity term of the registration may be of 5 years or shorter, according to the creditor’s will, due to certain considerations of technical nature, the new IT application enables only the renewal of the validity of the registration by other 5 years and we believe this does not impair in any way the creditor’s rights. 
The Regulation enables one single creditor from the creditors with active status, in case of advices for the registration with a plurality of creditors, to subscribe alone the renewal advice form and of the effects of the renewal may benefit only the creditor that subscribed alone the extension of the validity of the registration advice. 

However this does not mean that the status of the other creditors is inactive; at any moment during the validity period of the registration, they may formulate in their turn the application to register a renewal advice.

We specify that after the moment a renewal advice is subscribed by one single creditor/by a part of the creditors, it is no longer possible until the regularization of the advice or the expiry of the initial validity of the registration, to operate other registrations that should be related to the first renewal advice to the application only of creditors that have subscribed to the renewal advice. 

The exception is given by the possibility to register a renewal advice by creditors that have not done this by that moment. 

The validity term specified in the subsequent renewal advices shall be the same (5 years) with the one specified in the first renewal advice.

The renewal advice exclusively concerns the status of the registration advice, not the elements of the security mortgage itself, impaired by a term, for the revision of which is used the amending advice targeting to amend/supplement the description of the asset brought to the security mortgage.

The section “Description of registration advices” is in progress of being updated in view of describing the new forms.

AEGREM.ro Team

Archive for Security Interests in Movable Property