October 21, 2021
Order No. 2021-1192 of 15 September 2021 reforming the law on security interests replaces special property charges, and in particular the lender’s charge (PPD), with statutory mortgages.
The aim of the legislature is to strengthen legal certainty and enhance the economic attractiveness of French law by putting an end to the retroactive effect of the registration of a charge on immovable property.
From now on, the statutory mortgage of a lender will take effect from the date of its registration with the Land Registry, rather than retroactively from the date the deed of sale was signed.
Liens already registered will continue to benefit from the retroactive effect provided for under the previous law, as will those arising before the entry into force of the Order, provided they were registered within the two-month period from the date of the sale, as previously required.
It should be noted that the tax regime and formal requirements of the former PPD remain unchanged and will continue to apply as at present. The PPD may be implemented where the conditions set out in Article 2375 of the Civil Code are met, and the borrower will not be required to pay the land registry fee.
These new provisions, set out in the new Article 2402 of the Civil Code, will come into force on 1 January 2022. Privileges previously registered will remain subject to the provisions of the old law.
Read the order