Necessity of Creation of Law
Article 1:
This law is created to regulate the affairs relating to mortgage of immovable property in
banking transactions and to determine the rights and obligations of the parties.
Purpose
Article 2:
The objectives of this law are as follows:
- Secure debt and contracts through mortgage of immovable property
- Facilitate access to negotiable bank credits through the mortgage of immovable
property - Ensure mutual trust among individuals involved in banking transaction
- Expand trade and credit, attract investment and promote the economic growth.
Terms
Article 3:
The following terms in this law denote the following meanings: - Debt: The sum of money owed by Debtor (mortgagor) due to financing of the
mortgage. Debt could be subject to financing, penalties, indemnities and other related
liabilities. - Debtor: A Person who owes a debt
- Lender: A Person who in accordance with the provisions of De Afghanistan Bank Law
and Banking Law is engaged in banking affairs inside or outside the country and has due
financial rights and enforceable obligations over another Person . - Execution creditor: A Person who has obtained the court order for seizure or Lien on
mortgaged property. - Loan Agreement: A written agreement between the Mortgagor and the Mortgagee to
secure one or more transactions - Mortgage of immovable property: The registered right to immovable property that is
transferred by its owner to the Mortgagee for their use to secure the debt. - Mortgagor: A Person that owns the Mortgaged Property and, most of the time, owes
Debt subject to a Mortgage. If the owner of the Mortgaged Property and the Debtor are
not the same then the Mortgagor is the owner of the Mortgaged Property and the Debtor
refers to the Person who owes the debt. - Mortgagee: The Lender for whom the mortgage instrument has been written to secure
the Debt - Another mortgagee: Another Person who has also obtained the right to the mortgaged
property - Subordinate mortgagee: The Person whose right to the mortgage is Subordinate to
that of the preferred mortgagee. - Mortgaged property: Immovable property that is mortgaged to secure the debt
- Non- possessory mortgage: Agreement between the parties that Mortgagor or Debtor
has the right to release the Mortgaged Property from the Debt when the Debt has been
repaid. - Mortgage deed: A written signed document by the Mortgagor and Mortgagee that
describes the features of mortgaged property, terms of the mortgage, and obligations of
the parties. - Property: Items capable of ownership and it include movable and immovable
property.
15.Movable Property : Property that could be moved without any change in substance
and form and include the tangible (goods) and the intangible such as documents of title,
securities, accounts, copyrights, trademarks and patents. - Immovable property: Property that could not be moved without change in shape and
substance and include house, building, land and fixed assets. - Registry: An office that registers the Document of Title, mortgage transactions and its
relevant documents and keeps the records. - Notice of registration: Paper (form) that is drawn up in accordance with the
- procedures of registration of mortgage rights
- Document of Title: A written document that is drawn up in accordance with the
provisions of the law and substantiates the ownership of immovable property - Financing of Funds: Relates to expenses from:
- An assistance or facility provided by the Mortgagee or his partner for sharing in profit
and loss, increase or decrease in prices, employment, purchase, investing capital, lease,
rent- sharing, licensing, dues or fees and purchase and sale of immovable property. The
assistance and facility also include the participation in financing agreements, morabaha,
mosawama, istisnah or modaraba kinds of Financing - Guarantee, letter of credit or other financial commitments that are made by the Lender
on behalf of the mortgagor or Debtor. - A credit, loan, an overdraft, a bill of exchange discounted and purchased, and other
financial commitments that are made by the Mortgagee to the Mortgagor or the Debtor. - Default on payment: Failure to pay the Debt or the installments when due as set out in
the Loan Agreement. - Default on performance: Failure to perform the obligations when due as set out in the
Loan Agreement. - Transferee : Person to whom the mortgage has been transferred or assigned
- Transferor: Person to whom money is owed, and who transfers the rights deriving
from mortgage and its relevant documents to the Transferee - Lien: Charge against Mortgaged Property making it security for performance of
obligations. - Power of sale: Right of Mortgagee to collect the amount of Debt from the sale of the
Mortgaged Property. - Notice: Written information relating to specific subject that is sent to the address of
central office, and or place of residence or activity of the Person in question and its
receipt has been ensured. - Fixed assets: Movable goods that have been affixed permanently or constructively
into the immovable property.
