Legal Environment and historical issues of Registration on Immovable Property Pledge of Mongolia

Abstract

Summarizing the total amount of notary activities between 1997 -2011, provided from the NCM, including the percentage of verification of the contract (not less than 30% of total amount of contracts are pledge An unofficial statistics provided by the Notary Chamber of Mongolia: it is not available to present data regarding amount of pledge agreements among the total amount of contracts verified by all notaries. ) and complaints arise regarding this and relevant court decisions, disputes arise with respect to the immovable property contracts, or permission of the co-owner in case of pledge of immovable property that is a common property of the familymembers, legitimacy of the proxy for the pledge of the immovable property of the third party. The study of the reasons of these disputes and settlement process reveals the requirement undertake the following:1. On verifying of the statements of interests of the parties, the notary should develop and verify the contracts with differentiation between ordinary and guaranteed forms of hypothecs. 2. In case of verification of the pledge, the verification should be done in compliance with its purpose specified in the law. Law on Pledge for real estate/immovable property does not cover special types of the hypothecs and provides for the single model for all types of pledge regarding the immovable property, which constitutes uncertainty with respect to the concept of the “Program on source fund for the implementation of the Government Project on construction of apartment buildings for 40000 families”. The above fact implies that if the Law on Pledge for immovable property had not provided for the regulation of a pledge relation limited to the single model, but for precise regulations of different standard types of hypothecs and differences between these hypothecs and description of the legal consequences, then the legislation on regulations regarding relations of registration of the pledge for immovable property would have modified progressively becoming more accurate and complement to the interests of citizens and consumers.