Key amendments to the Registered Pledges Act

With effect as of December 30th 2016 there entered into force the amendments to the Registered (Non-Possessory) Pledges Act. The amendments concern several aspects and are aimed at legal security, smoother commercial turnover and more accessible administrative services. Some of the more essential changes are the following:

• The Central Register of Non-Possessory Pledges will continue to exist as an electronic database, which will be maintained by the Registry Agency;
• Having regard thereto that the Central Register of Non-Possessory Pledges will be public, then everyone will be able to request and make inquiries as well as to request the issuance of a certificate for absence or existing of registered circumstance and the documents, on the basis of which the registration have been made;
• The registry of the pledge agreement in the Central Register of Non-Possessory Pledges has constitutive force, i.e. in order for the contract to take effect it has to be registered;
• Pledgers can already be legal entities established by persons practicing liberal professions and non-profit legal entities– for the business activity carried out by these entities;
• The transactions of sale of the pledged property carried out by the pledger will take effect only after an approval of the transaction by the pledgee. This rule will not apply only if it is established that the subsequent purchaser was not aware of the pledge on the property;
• After the registry of the proceeding to enforcement all transactions of sale of the property subject to pledge or injunction carried out by the debtor will be null and void;
• The registry of a subsequent pledge on a property, on which already exists a registered pledge, will require the consent of the previous pledgees;
• The agreement of pledge of commercial enterprise will be opposable to third parties acquiring rights in particular assets of the pledged enterprise when the pledge is registered in the commercial register on the file of the pledger and the corresponding register where this asset is kept;
• Subsequent pledgee can proceed with enforcement and can sell pledged property according to the Registered Pledges Act if there is a consent of the previous pledgee ;
• The repayment of the mortgage will be a result only from a public sale according to the order of the Civil Code of Procedure, however, not from enforcement according to the Registered Pledges Act;
• It is introduced a requirement for the announcement of a number of circumstances related to an extrajudicial sale of pledged property according to the order of the Registered Pledges Act;
• Only lawyers and registered auditors have the right to be depositaries.

The main purpose of the amendments to the Registered Pledges Act is to achieve greater clarity on the registered pledge in order to avoid contradictions and gaps in the legal framework in force and effect.