¹ A mort­gage may be cre­ated on im­mov­able prop­erty in the form of a mort­gage con­tract or a mort­gage cer­ti­fic­ate.⁶⁶³

² No oth­er types of mort­gage are per­mit­ted.

¹ Whenev­er a mort­gage is cre­ated, a spe­cif­ic amount de­nom­in­ated in Swiss cur­rency must be in­dic­ated as the debt.

² If the amount of the debt is un­spe­cified, a max­im­um amount must be in­dic­ated up to which the prop­erty is li­able for all claims of the cred­it­or.

¹ The in­terest pay­able may be set at any level at the parties’ dis­cre­tion with­in the leg­al lim­its im­posed to pre­vent ab­us­ive in­terest rates.

² Can­ton­al law may provide for a max­im­um per­miss­ible in­terest rate for debts se­cured by mort­gages.

¹ A mort­gage may be cre­ated only on im­mov­able prop­erty re­cor­ded in the land re­gister.

² The can­tons may pro­hib­it or en­act spe­cial pro­vi­sions to reg­u­late the cre­ation of mort­gages over pub­licly owned land or over com­mon land and pas­tures owned by cor­por­a­tions, and over any as­so­ci­ated rights of use.

¹ Where a mort­gage is cre­ated, the im­mov­able prop­erty that it en­cum­bers must be clearly spe­cified.

² Parts of a prop­erty may not be made sub­ject to a mort­gage un­less the di­vi­sion of the prop­erty has been re­cor­ded in the land re­gister.

¹ A mort­gage right may be cre­ated on two or more prop­er­ties for a single debt provided the prop­er­ties are all owned by the same per­son or by debt­ors who are jointly and sev­er­ally li­able.

² In all oth­er cases where more than one prop­erty is made sub­ject to a mort­gage as se­cur­ity for a single debt, each of the prop­er­ties shall be en­cumbered for a spe­cified por­tion of the total debt.

³ Un­less oth­er­wise agreed, the total amount se­cured by the mort­gage is di­vided in pro­por­tion to the val­ues of the prop­er­ties.

The Fed­er­al Act of 4 Oc­to­ber 1991⁶⁶⁵ on Rur­al Land Rights ap­plies to the es­tab­lish­ment of mort­gages over ag­ri­cul­tur­al prop­er­ties.

¹ Sub­ject to ex­cep­tions provided by law, a mort­gage is cre­ated by its re­cord­ing in the land re­gister.

² A leg­al trans­ac­tion cre­at­ing a mort­gage is val­id only if done as a pub­lic deed.⁶⁶⁶

¹ In the case of joint own­er­ship of a prop­erty, each joint own­er may cre­ate a mort­gage over his or her share.

² In the case of col­lect­ive own­er­ship, the prop­erty may be made sub­ject to a mort­gage only as a whole and in the name of all co-own­ers.

¹A mort­gage is ex­tin­guished on de­le­tion of the entry or the com­plete loss of the prop­erty.

² Ex­tinc­tion as a res­ult of com­puls­ory pur­chase is gov­erned by fed­er­al and can­ton­al com­puls­ory pur­chase law.

¹ In the case of land con­sol­id­a­tion pro­ced­ures car­ried out with the as­sist­ance or un­der the su­per­vi­sion of the pub­lic au­thor­it­ies, the mort­gage rights as­signed are trans­ferred with the same rank­ing to the land al­lot­ted by way of re­place­ment.

² Where one par­cel of land re­places sev­er­al par­cels which are sub­ject to a mort­gage as se­cur­ity for dif­fer­ent debts, or not all of which are sub­ject to a mort­gage, the li­ens will be ap­plied to the single par­cel of land and their rank­ing pre­served wherever pos­sible.

The debt­or is en­titled to re­deem li­ens on par­cels of land in­volved in a land con­sol­id­a­tion pro­ced­ure by giv­ing three months’ no­tice ex­pir­ing on the date on which such con­sol­id­a­tion takes ef­fect.

¹ Where mon­et­ary com­pens­a­tion is re­ceived in con­nec­tion with the con­sol­id­a­tion of par­cels of land sub­ject to mort­gages, such funds are dis­trib­uted among the cred­it­ors ac­cord­ing to their rank or, if of equal rank, in pro­por­tion to the size of their claims.

² Such com­pens­a­tion must not be paid to the debt­or without the cred­it­ors’ con­sent if it ex­ceeds one-twen­ti­eth of the se­cured debt, or if the new par­cel of land no longer provides suf­fi­cient se­cur­ity.

¹ A mort­gage right en­cum­bers the en­tire prop­erty in­clud­ing all its con­stitu­ent parts and ac­cessor­ies.

² If ac­cessor­ies, such as ma­chines or hotel fur­nish­ings, are ex­pressly lis­ted in the mort­gage agree­ment and noted as such in the land re­gister, they are treated ac­cord­ingly un­less it is shown that the law pre­cludes their qual­i­fic­a­tion as ac­cessor­ies.

³ Rights of third parties to the ac­cessor­ies are re­served.

¹ If the mort­gaged prop­erty is let, the mort­gage cov­ers the rent claims which ac­crue between the date on which fore­clos­ure pro­ceed­ings are com­menced or the date on which the debt­or is de­clared bank­rupt and the date of real­isa­tion.

² Ten­ants and less­ees are bound by the mort­gage only once they have been in­formed of the en­force­ment pro­ceed­ings or the bank­ruptcy has been pub­lished.

³ Trans­ac­tions by the prop­erty own­er in­volving claims for un­ma­tured rent and any ac­tions of dis­traint by oth­er cred­it­ors are in­val­id in re­spect of any mort­gage cred­it­or who ini­ti­ated fore­clos­ure pro­ceed­ings be­fore the rent claims ma­tured.

Claims for which a mort­gage has been re­cor­ded in the land re­gister are not sub­ject to pre­scrip­tion.

¹ If the own­er re­duces the value of the mort­gaged prop­erty, the cred­it­or may re­quest that the court pro­hib­it any fur­ther det­ri­ment­al ac­tion.

² The cred­it­or may be au­thor­ised by the court to take ap­pro­pri­ate meas­ures and may do so even without au­thor­isa­tion if there is risk in delay.

³ He or she may re­quest com­pens­a­tion for the costs of such meas­ures from the own­er and shall ac­quire a li­en on the prop­erty for the cor­res­pond­ing amount. This li­en does not re­quire to be re­cor­ded in the land re­gister and takes pre­ced­ence over all oth­er re­gistered en­cum­brances.⁶⁶⁷

⁴ If the amount of the li­en ex­ceeds 1000 francs and the li­en is not re­cor­ded in the land re­gister with­in four months of com­ple­tion of the meas­ures, it may not cited in op­pos­i­tion to third parties who rely on the land re­gister in good faith.⁶⁶⁸

¹ If the prop­erty has de­pre­ci­ated, the cred­it­or has the right to re­quest that the debt­or se­cure his or her debts or re­store the prop­erty to its pre­vi­ous state.

² He or she may also de­mand se­cur­ity in the case of im­min­ent de­pre­ci­ation.

³ If the debt­or does not com­ply with­in the time lim­it set by the court, the cred­it­or may re­quest re­demp­tion of such por­tion of the debt as is ap­pro­pri­ate to com­pensate for the re­duced de­gree of se­cur­ity.

¹ In the event of de­pre­ci­ation without fault on the own­er’s part, the cred­it­or has a right to se­cur­ity or re­demp­tion only if the own­er is in­dem­ni­fied for the dam­age.

² However, the cred­it­or is en­titled to take meas­ures to pre­vent or elim­in­ate the de­pre­ci­ation. He or she shall ac­quire a li­en on the prop­erty for his or her costs which does not render the own­er per­son­ally li­able. This li­en does not re­quire to be re­cor­ded in the land re­gister and takes pre­ced­ence over all oth­er re­gistered en­cum­brances.⁶⁶⁹

³ If the amount of the li­en ex­ceeds 1000 francs and the li­en is not re­cor­ded in the land re­gister with­in four months of com­ple­tion of the meas­ures, it may not be cited in op­pos­i­tion to third parties who rely on the land re­gister in good faith.⁶⁷⁰

If a part of the prop­erty worth less than one-twen­ti­eth of the se­cured debt is dis­posed of, the cred­it­or may not re­fuse to re­lease this por­tion from li­ab­il­ity un­der the li­en provided a pro­por­tion­ate re­pay­ment of the debt is made or the rest of the prop­erty provides him or her with suf­fi­cient se­cur­ity.

¹ Any waiver by the own­er of right to cre­ate fur­ther charges over the ser­vi­ent prop­erty is non-bind­ing.

² If, after the mort­gage right has been cre­ated, the im­mov­able prop­erty is en­cumbered with an ease­ment or a real bur­den without the mort­gage cred­it­or’s con­sent, the mort­gage right takes pre­ced­ence over the later en­cum­brances, which will be de­leted if, in the event of en­force­ment pro­ceed­ings, their ex­ist­ence is pre­ju­di­cial to the mort­gage cred­it­or.

³ However, the be­ne­fi­ciary of the ease­ment or real bur­den has a claim for pay­ment of the value of his or her right out of the en­force­ment pro­ceeds, such claim tak­ing pre­ced­ence over the be­ne­fi­ciar­ies of en­cum­brances sub­sequently re­cor­ded in the land re­gister.

¹ A mort­gage is con­fined to the rank in­dic­ated in the entry.

² Mort­gage rights may be es­tab­lished in a second or any lower rank provided the amount tak­ing pre­ced­ence is spe­cified in the entry.

¹ If mort­gage rights of dif­fer­ent rank are cre­ated on an im­mov­able prop­erty, any de­le­tion does not en­title the be­ne­fi­ciar­ies of lower-rank­ing mort­gage to ad­vance in rank.

² The own­er may cre­ate an­oth­er mort­gage in place of one which has been de­leted.

³ An agree­ment provid­ing for mort­gage cred­it­ors to ad­vance in rank only has in rem ef­fect where it is re­cor­ded as a pri­or­ity no­tice in the land re­gister.

If a sub­or­din­ate mort­gage right is cre­ated and no high­er-rank­ing mort­gage ex­ists, or if the debt­or has not yet made use of an ex­ist­ing high­er-rank­ing right to cre­ate a mort­gage, or if a pre­ced­ent claim is worth less than the amount re­cor­ded in the land re­gister, in the event of fore­clos­ure, the pro­ceeds are dis­trib­uted among the ac­tu­al mort­gage cred­it­ors ac­cord­ing to their rank and ir­re­spect­ive of va­cant ranks.

¹ In the event of de­fault on the part of the debt­or, the cred­it­or has the right to pay­ment out of the pro­ceeds of the sale of the prop­erty.

² Any agree­ment stip­u­lat­ing that the prop­erty sub­ject to the mort­gage will be­come the prop­erty of the cred­it­or in the event of de­fault on the part of the debt­or is in­val­id.

³ Where sev­er­al prop­er­ties are made sub­ject to a mort­gage as se­cur­ity for a single claim, fore­clos­ure pro­ceed­ings must be brought sim­ul­tan­eously against all such prop­er­ties, while in­di­vidu­al prop­er­ties are sold only if deemed ne­ces­sary by the debt en­force­ment of­fice.

¹ The pro­ceeds from the sale of the prop­erty are dis­trib­uted among the mort­gage cred­it­ors ac­cord­ing to their rank.

² Cred­it­ors of the same rank are en­titled to equal sat­is­fac­tion.

¹ A mort­gage right se­cures the cred­it­or:

1.

for the prin­cip­al;

2.

for the costs of debt en­force­ment and de­fault in­terest;

3.⁶⁷¹

for three years’ ac­crued an­nu­al in­terest due on the date of the ap­plic­a­tion for fore­clos­ure or the debt­or is de­clared bank­rupt, plus the in­terest due since the last ma­tur­ity date; in the case of a mort­gage cer­ti­fic­ate only the in­terest ac­tu­ally due is se­cured by the mort­gage.

² The in­terest rate ori­gin­ally agreed must not ex­ceed five per cent to the det­ri­ment of sub­or­din­ate mort­gage cred­it­ors.

¹ If a cred­it­or has in­curred ex­penses ne­ces­sary for the main­ten­ance of the prop­erty, in par­tic­u­lar by pay­ing in­sur­ance premi­ums owed by the own­er, such ex­penses are se­cured by a li­en over the prop­erty. This li­en does not re­quire to be re­cor­ded in the land re­gister and takes pre­ced­ence over all oth­er re­gistered en­cum­brances.

² If the amount of the li­en ex­ceeds 1000 francs and the li­en is not re­cor­ded in the land re­gister with­in four months of the com­pens­at­ory act be­ing car­ried out, it may not be cited in op­pos­i­tion to third parties who rely on the land re­gister in good faith.

¹ If a rur­al prop­erty in­creases in value due to im­prove­ments car­ried out with the help of the pub­lic au­thor­it­ies, the own­er may re­cord a li­en in the land re­gister as se­cur­ity for his or her share of the costs which takes pre­ced­ence over all oth­er re­gistered en­cum­brances on the prop­erty.

² If such land im­prove­ment is made without state sub­sidy, the own­er may enter the li­en for a max­im­um of two-thirds of his or her costs.

¹ If a land im­prove­ment is made without state sub­sidy, the debt in re­la­tion to the li­en must be re­paid in an­nu­al pay­ments of at least five per cent of the re­gistered amount of the li­en.

² The li­en is ex­tin­guished for the claim and for each an­nu­al pay­ment three years after ma­tur­ity, and any lower-rank­ing mort­gage cred­it­ors ad­vance in rank.

¹ A pay­ment un­der in­sur­ance policy may be made to the own­er of the in­sured prop­erty only with the con­sent of all the charge cred­it­ors.

² However, it may be made to the own­er for the pur­poses of restor­ing the prop­erty sub­ject to the charge provided ad­equate se­cur­ity is fur­nished.

³ In oth­er re­spects, the can­ton­al pro­vi­sions gov­ern­ing fire in­sur­ance are re­served.

Where the name or place of res­id­ence of the cred­it­or is un­known, the court may, at the re­quest of the debt­or or oth­er in­ter­ested parties, or­der the ne­ces­sary meas­ures in cases where the law re­quires that a cred­it­or take per­son­al ac­tion as a mat­ter of ur­gency.

¹ A mort­gage con­tract may se­cure any kind of debt, be it cur­rent, fu­ture or con­tin­gent.

² The mort­gaged prop­erty need not be owned by the debt­or.

¹ A mort­gage con­tract is cre­ated in a spe­cif­ic rank even if the se­cured amount is in­de­term­in­ate or vari­able, and it re­tains such rank not­with­stand­ing any fluc­tu­ations in the se­cured amount.

² The cred­it­or may re­quest that the land re­gis­trar provide him or her with an ex­tract con­cern­ing the mort­gage con­tract. Such an ex­tract has only evid­en­tial status and does not con­sti­tute a ne­go­ti­able in­stru­ment.

³ In lieu of such evid­ence, a cer­ti­fic­ate of re­gis­tra­tion may be ap­pen­ded to the mort­gage con­tract deed.

If the debt is ex­tin­guished, the own­er of the mort­gaged prop­erty may re­quest the cred­it­or to au­thor­ise the de­le­tion of the entry from the land re­gister.

¹ If the prop­erty own­er is not the debt­or of the se­cured debt, he or she may re­deem the mort­gage on the same con­di­tions as the debt­or may re­pay the debt.

² If he or she sat­is­fies the cred­it­or, the claim passes to him or her.

¹ Where a prop­erty is mort­gaged for more than its value in re­spect of debts for which the ac­quirer is not per­son­ally li­able, and provid­ing no debt en­force­ment pro­ceed­ings are pending, can­ton­al law may au­thor­ise the ac­quirer to re­deem the mort­gage rights either by pay­ing the pur­chase price to the cred­it­ors or, where the prop­erty was ac­quired without pay­ment, the amount at which he or she val­ues the prop­erty.

² He or she must give the cred­it­ors six months’ no­tice in writ­ing of his or her in­ten­tion to re­deem the mort­gage.

³ The re­demp­tion amount is dis­trib­uted among the cred­it­ors ac­cord­ing to their rank.

¹ With­in one month of the ac­quirer’s no­ti­fic­a­tion, the cred­it­ors are en­titled to re­quest that the mort­gaged prop­erty be sold at pub­lic auc­tion provided that they ad­vance the costs, such auc­tion to be an­nounced pub­licly and held with­in one month of the date on which it was re­ques­ted.

² If a high­er price than the one offered is ob­tained at auc­tion, the mort­gage is re­deemed at that high­er price.

³ The costs of the pub­lic auc­tion are borne by the ac­quirer if a high­er price is ob­tained, or oth­er­wise by the cred­it­or who re­ques­ted the auc­tion.

Can­ton­al law may provide that the re­demp­tion amount be de­term­ined by an of­fi­cial valu­ation rather than by sale at pub­lic auc­tion.

Where the own­er of the mort­gaged prop­erty is not also the debt­or, no­tice giv­en by the cred­it­or to ter­min­ate his or her claim is bind­ing on the own­er only if it is served on both him or her and the debt­or.

¹ The ali­en­a­tion of a mort­gaged prop­erty does not af­fect li­ab­il­ity un­der the mort­gage con­tract and of the debt­or un­less oth­er­wise agreed.

² However, if the new own­er has as­sumed li­ab­il­ity for the se­cured debt, the pre­vi­ous debt­or is dis­charged un­less the cred­it­or no­ti­fies him or her in writ­ing with­in one year that he or she in­tends to re­tain him or her as debt­or.

¹ If part of a mort­gaged prop­erty or one of two or more mort­gaged prop­er­ties be­long­ing to the same own­er is ali­en­ated or if the mort­gaged prop­erty is di­vided, un­less oth­er­wise agreed, li­ab­il­ity un­der the mort­gage will be real­loc­ated in pro­por­tion to the value of the dif­fer­ent parts.

² If the cred­it­or does not wish to ac­cept such real­loc­a­tion, with­in one month of its be­com­ing fi­nal he or she may re­quest re­pay­ment of his or her debt with­in one year.

³ Where the new own­ers have as­sumed li­ab­il­ity for the debts se­cured by their prop­er­ties, the pre­vi­ous debt­or is dis­charged un­less the cred­it­or no­ti­fies him or her in writ­ing with­in one year that he or she in­tends to re­tain him or her as debt­or.

¹ If the new own­er as­sumes the debt, the land re­gis­trar no­ti­fies the cred­it­or ac­cord­ingly.

² The one-year time lim­it for the cred­it­or’s de­clar­a­tion runs as of such no­tice.

The as­sign­ment of a debt se­cured by a mort­gage con­tract is val­id without entry in the land re­gister.

¹ Where can­ton­al law grants the cred­it­or the right to a li­en in re­spect of debts that are dir­ectly re­lated to the ser­vi­ent prop­erty, the li­en is cre­ated when it is re­cor­ded in the land re­gister.

² Where stat­utory li­ens amount­ing to over 1000 francs are cre­ated un­der can­ton­al law without be­ing re­cor­ded in the land re­gister and if they are not re­cor­ded in the land re­gister with­in four months of the un­der­ly­ing debt be­com­ing due, or at the latest with­in two years of the debt arising, on ex­piry of the peri­od al­lowed for re­gis­tra­tion they may no longer be cited in op­pos­i­tion to third parties who rely on the land re­gister in good faith.

³ More re­strict­ive reg­u­la­tions un­der can­ton­al law are re­served.

¹ The right to es­tab­lish a stat­utory mort­gage right ap­plies to:

1.

the vendor’s claim to the sale price;

2.

the claims of co-heirs and oth­er co-own­ers in un­di­vided shares arising from the di­vi­sion of im­mov­able prop­erty which be­longed to the com­munity;

3.

the claims of trades­men and build­ing con­tract­ors who have sup­plied la­bour and ma­ter­i­als, or la­bour alone, for con­struc­tion or oth­er works, for de­moli­tion work, scaf­fold­ing work or for se­cur­ing the con­struc­tion pit or sim­il­ar on the prop­erty wheth­er the debt­or is the own­er of the prop­erty, trades­man or build­ing con­tract­or, ten­ant or any oth­er per­son with rights to the prop­erty.

² If a ten­ant or oth­er per­son with rights to the prop­erty is li­able for debts due to trades­men or build­ing con­tract­ors, the claim is val­id only if the prop­erty own­er has con­sen­ted to the work be­ing done.

³ The be­ne­fi­ciary may not waive such stat­utory mort­gage rights in ad­vance.

A li­en in fa­vour of the vendor, co-heirs or co-own­ers in un­di­vided shares must be re­gistered with­in three months of trans­fer of own­er­ship.

¹ A trades­man's or build­ing con­tract­or’s li­en may be re­cor­ded in the land re­gister as of the date of his or her un­der­tak­ing to per­form work.

² Ap­plic­a­tion for such entry must be made with­in four months of com­ple­tion of the work.

³ The li­en is entered only if the claim has been ac­know­ledged by the own­er or con­firmed in a court judg­ment and may not be re­ques­ted if the own­er provides the claimant with ad­equate se­cur­ity.

⁴ If the prop­erty is in­dis­put­ably ad­min­is­trat­ive as­sets and if the own­er's li­ab­il­ity for the debt is not based on con­trac­tu­al ob­lig­a­tions, the own­er shall be li­able to the trades­men or build­ing con­tract­or for debts that are ac­know­ledged or de­term­ined by a court in ac­cord­ance with the pro­vi­sions on a debt sub­ject to a simple surety, provided a writ­ten claim for the debt mak­ing ref­er­ence to the stat­utory surety was made against the own­er no later than four months after com­ple­tion of the work.

⁵ If there is a dis­pute as to wheth­er im­mov­able prop­erty con­sti­tutes ad­min­is­trat­ive as­sets, the trades­man or build­ing con­tract­or may ap­ply for the pro­vi­sion­al re­cord­ing of the li­en in the land re­gister no later than four months after com­ple­tion of the work.

⁶ If it is held in a court judg­ment that the im­mov­able prop­erty con­sti­tutes ad­min­is­trat­ive as­sets, the pro­vi­sion­al re­cord­ing of the li­en must be de­leted. It shall be re­placed by the stat­utory surety provided the re­quire­ments of para­graph 4 are met. The dead­line is met with the pro­vi­sion­al re­cord­ing of the li­en.

If more than one stat­utory build­ing con­tract­or’s li­en is re­cor­ded in the land re­gister, such li­ens con­fer an equal en­ti­tle­ment to sat­is­fac­tion from the mort­gaged prop­erty even if the entries were made on dif­fer­ent dates.

¹ Where the claims of trades­men and build­ing con­tract­ors are not wholly sat­is­fied by fore­clos­ure, the short­fall must be com­pensated for by the high­er-rank­ing cred­it­ors out of such por­tion of the pro­ceeds as ex­ceeds the land value, provided it is ap­par­ent to such cred­it­ors that their li­ens have en­cumbered the prop­erty to the det­ri­ment of the trades­men and build­ing con­tract­ors.

² If the high­er-rank­ing cred­it­or ali­en­ates his or her mort­gage se­cur­ity, he or she must com­pensate the trades­men and build­ing con­tract­ors for any sum of which they are de­prived by such ali­en­a­tion.

³ Once an in­ter­ested party has had the be­gin­ning of the work noted in the land re­gister, un­til the time lim­it for re­gis­tra­tion has ex­pired, li­ens may only be re­gistered in the form of mort­gage con­tracts.

¹ A mort­gage cer­ti­fic­ate gives rise to a per­son­al debt se­cured by a mort­gage.

² In the ab­sence of an agree­ment to the con­trary, the mort­gage cer­ti­fic­ate, where ap­plic­able, co-ex­ists with the debt to be se­cured that arises from the ba­sic re­la­tion­ship between the cred­it­or and the debt­or

³ The debt­or may raise the per­son­al ob­jec­tions arising from the ba­sic re­la­tion­ship against the cred­it­or and his or her leg­al suc­cessors where they do not act in good faith.

The mort­gage cer­ti­fic­ate takes the form of either a re­gister mort­gage cer­ti­fic­ate or a mort­gage cer­ti­fic­ate on pa­per.

¹ The own­er of a mort­gaged prop­erty who is not also the debt­or un­der the mort­gage cer­ti­fic­ate is sub­ject to the pro­vi­sions gov­ern­ing mort­gage con­tracts.

² In the case of a mort­gage cer­ti­fic­ate, the own­er of the mort­gaged prop­erty may raise the same ob­jec­tions as the debt­or.

The con­sequences of the sale and the di­vi­sion of the prop­erty are gov­erned by the pro­vi­sions on mort­gage con­tracts.

¹ The mort­gage cer­ti­fic­ate debt must neither re­late to the ba­sic re­la­tion­ship nor in­clude con­di­tions or con­sid­er­a­tions in re­turn.

² The mort­gage cer­ti­fic­ate may in­clude debt-re­lated an­cil­lary agree­ments on the rate of in­terest, re­pay­ment in­stal­ments and dis­charge as well as oth­er an­cil­lary pro­vi­sions re­lat­ing to the mort­gage cer­ti­fic­ate debt. A ref­er­ence to a sep­ar­ate agree­ment is per­mit­ted.

¹ The mort­gage cer­ti­fic­ate may be dis­charged by the cred­it­or or the debt­or at six months no­tice at the end of any month un­less oth­er­wise agreed.

² Any agree­ment may not al­low the cred­it­or a short­er peri­od of no­tice than three months, un­less the debt­or de­faults in mak­ing the re­pay­ments or pay­ing the in­terest.

For any per­son re­ly­ing on the land re­gister in good faith, the de­tails of the mort­gage cer­ti­fic­ate debt and the li­en ac­cord with the entry.

¹ The debt­or may raise only such ob­jec­tions as arise from the entry in the land re­gister or to which he or she is per­son­ally en­titled with re­gard to the cred­it­or or to doc­u­ment of title in the case of a mort­gage cer­ti­fic­ate on pa­per.

² Agree­ments in­clud­ing an­cil­lary pro­vi­sions on the mort­gage cer­ti­fic­ate debt may only be cited in op­pos­i­tion to an ac­quirer of the mort­gage cer­ti­fic­ate act­ing in good faith if they are re­ferred to in the land re­gister and on the doc­u­ment of title in the case of a mort­gage cer­ti­fic­ate on pa­per.

On the is­sue of a mort­gage cer­ti­fic­ate, a per­son may be gran­ted a power of at­tor­ney. This per­son must make and re­ceive pay­ments, re­ceive no­tices, con­sent to re­leases from li­ab­il­ity un­der the mort­gage and in gen­er­al safe­guard the rights of the cred­it­ors, debt­or and own­er with all due care and im­par­ti­al­ity

² The name of the au­thor­ised per­son must be re­cor­ded in the land re­gister and on the doc­u­ment of title.

³ If the power of at­tor­ney lapses and the per­sons in­volved are un­able to agree, the court shall make the ne­ces­sary ar­range­ments.

¹ The debt­or must make all pay­ments at the dom­i­cile of the cred­it­or un­less oth­er­wise agreed.

² If the cred­it­or’s dom­i­cile is un­known or has changed to the det­ri­ment of the debt­or, the lat­ter may dis­charge his or her ob­lig­a­tion by de­pos­it­ing pay­ment with the com­pet­ent au­thor­ity at his or her own dom­i­cile or at the cred­it­or’s former dom­i­cile

¹ Where the leg­al re­la­tion­ship changes to the ad­vant­age of the debt­or, in par­tic­u­lar through the re­pay­ment of the debt, the debt­or may re­quest the cred­it­or to agree to an amend­ment be­ing re­cor­ded in the land re­gister.

² In the case of a mort­gage cer­ti­fic­ate on pa­per, the land re­gister of­fice shall note the amend­ment on the doc­u­ment of title.

³ In the ab­sence of such an entry or the note on the doc­u­ment of title, the ef­fect of the change in the leg­al re­la­tion­ship has no ef­fect on an ac­quirer of the mort­gage cer­ti­fic­ate act­ing in good faith.

If the mort­gage cer­ti­fic­ate debt is dis­charged, the debt­or may re­quest the cred­it­or:

1.

to agree to trans­fer the re­gister mort­gage cer­ti­fic­ate in­to the name of the debt­or; or

2.

to hand over the doc­u­ment of title to the pa­per mort­gage cer­ti­fic­ate without can­cel­ling the same.

¹ If there is no longer a cred­it­or, or if the cred­it­or waives his or her li­en, the debt­or has the op­tion of either hav­ing the entry de­leted or al­low­ing it to re­main in the land re­gister.

² The debt­or also has the right to con­tin­ue to use the mort­gage cer­ti­fic­ate.

A mort­gage cer­ti­fic­ate on pa­per may not be de­leted from the land re­gister be­fore the doc­u­ment of title has been can­celled or de­clared void by the court.

¹ If the cred­it­or un­der a mort­gage cer­ti­fic­ate has not come for­ward for ten years and if no de­mand has been made for in­terest dur­ing that peri­od, the own­er of the mort­gaged prop­erty may ask the court to make a pub­lic call for the cred­it­or to come for­ward with­in six months

² If the cred­it­or fails to come for­ward with­in this peri­od and if an in­vest­ig­a­tion con­cludes that there is a high prob­ab­il­ity that a val­id claim no longer ex­ists, the court shall:

1.

in the case of a re­gister mort­gage cer­ti­fic­ate, de­lete the li­en from the land re­gister; or

2.

can­cel the mort­gage cer­ti­fic­ate on pa­per and de­lete the li­en from the land re­gister.

¹ A re­gister mort­gage cer­ti­fic­ate is cre­ated when it is re­cor­ded in the land re­gister.

² It is re­cor­ded in the name of the cred­it­or or of the landown­er.

¹ The trans­fer of a re­gister mort­gage cer­ti­fic­ate is achieved by re­cord­ing the new cred­it­or in the land re­gister based on a writ­ten de­clar­a­tion from the pre­vi­ous cred­it­or.

² Pay­ments by the debt­or only have a dis­char­ging ef­fect if they are made to the per­son who at the time of pay­ment is re­cor­ded as the cred­it­or in the land re­gister.

¹ The pledging of the re­gister mort­gage cer­ti­fic­ate is achieved by re­cord­ing the cred­it­or of a charge on chat­tels in the land re­gister based on a writ­ten de­clar­a­tion from the cred­it­or re­cor­ded in the land re­gister.

² A dis­traint or­der is ex­ecuted by re­cord­ing the re­stric­tion on power of dis­pos­al in the land re­gister.

³ The usu­fruct is cre­ated by its re­cord­ing in the land re­gister.

¹ The cre­ation of a mort­gage cer­ti­fic­ate on pa­per al­ways re­quires an entry in the land re­gister and a doc­u­ment of title

² The bear­er or a spe­cif­ic per­son, in par­tic­u­lar the landown­er, may be named as the cred­it­or un­der the pa­per mort­gage cer­ti­fic­ate.

³ The mort­gage cer­ti­fic­ate shall take ef­fect on re­gis­tra­tion even if the doc­u­ment of title has not yet been is­sued.

¹ The mort­gage cer­ti­fic­ate on pa­per is is­sued by the land re­gister of­fice.

² It must be signed by the land re­gis­trar in or­der to be val­id. Oth­er re­quire­ments as to form shall be im­posed by the Fed­er­al Coun­cil.

³ It may be de­livered to the cred­it­or or his or her au­thor­ised agent only with the ex­press con­sent of the debt­or and of the own­er of the ser­vi­ent prop­erty.

¹ For any per­son re­ly­ing on the land re­gister in good faith, the rights stated in the doc­u­ment of title duly is­sued as a mort­gage cer­ti­fic­ate on pa­per ap­ply.

² If the word­ing of the doc­u­ment of title does not cor­res­pond to the entry or if there is no entry, the land re­gister is au­thor­it­at­ive.

³ A per­son who has ac­quired a doc­u­ment of title in good faith is en­titled to dam­ages in ac­cord­ance with the pro­vi­sions gov­ern­ing the land re­gister.

¹ A claim arising from a mort­gage cer­ti­fic­ate may not be ali­en­ated, pledged or oth­er­wise as­ser­ted un­less the claimant is in pos­ses­sion of the doc­u­ment.

² This does not ap­ply to the as­ser­tion of a claim in cases where the doc­u­ment of title has been can­celled or not yet is­sued

¹ The as­sign­ment of a mort­gage cer­ti­fic­ate debt re­quires the de­liv­ery of the doc­u­ment of title to the as­sign­ee.

² If the title is in the names of a per­son, the title must also be en­dorsed and the name of the as­sign­ee giv­en.

¹ Where a doc­u­ment of title has been lost or des­troyed without the in­ten­tion of re­pay­ing the debt, the cred­it­or may re­quest the court to can­cel the doc­u­ment of title and or­der the debt­or to make pay­ment or that a new doc­u­ment of title be is­sued for as yet un­ma­tured claims

² The can­cel­la­tion is made in ac­cord­ance with the pro­vi­sions gov­ern­ing the can­cel­la­tion of bear­er se­cur­it­ies but sub­ject to a no­tice peri­od of six months

³ Like­wise, the debt­or may re­quest that a lost cer­ti­fic­ate which has already been re­deemed be can­celled.

Re­pealed

Re­gistered or bear­er bonds may be se­cured by a mort­gage:

1.

by is­su­ing a mort­gage con­tract or a mort­gage cer­ti­fic­ate for the en­tire series and ap­point­ing an agent for the cred­it­ors and the bor­row­er;

2.

by es­tab­lish­ing a mort­gage right for the en­tire bond is­sue in fa­vour of the is­suer and es­tab­lish­ing a mort­gage on that debt in fa­vour of the bond hold­ers.

¹ Ex­cept where oth­er­wise provided by law, chat­tels may be pledged only by the trans­fer of pos­ses­sion of the chat­tel to the pledgee.

² Any per­son who in good faith takes a chat­tel in pledge ac­quires a gen­er­al li­en over it, provided that third parties do not have rights over the chat­tel as a res­ult of pri­or pos­ses­sion, even if the pledger had no au­thor­ity to ali­en­ate it.

³ The gen­er­al li­en is not es­tab­lished as long as the pledger re­tains ex­clus­ive pos­ses­sion of the chat­tel.

¹ A gen­er­al li­en on live­stock to se­cure the claims of lend­ing in­sti­tu­tions and co-op­er­at­ives au­thor­ised to carry out such trans­ac­tions by the com­pet­ent au­thor­ity of the can­ton in which they have their seat may be es­tab­lished without trans­fer of pos­ses­sion by entry in a pub­lic re­gister and no­ti­fic­a­tion to the debt en­force­ment of­fice.

² The Fed­er­al Coun­cil reg­u­lates the keep­ing of the re­gister.⁶⁷⁹

³ The can­tons may levy fees for entries in the re­gister and the as­so­ci­ated ad­min­is­tra­tion; they de­term­ine the re­gister dis­tricts and the re­spons­ible of­fi­cials.⁶⁸⁰

A sub­or­din­ate pledge is es­tab­lished by no­ti­fy­ing the pledgee in writ­ing and in­struct­ing him or her to de­liv­er the pledged chat­tel to the sub­or­din­ate pledgee after his or her claim has been sat­is­fied.

The pledgee may only give the pledged chat­tel in fur­ther pledge with the pledger’s con­sent.

¹ The gen­er­al li­en is ex­tin­guished once the pledgee no longer pos­sesses the pledged chat­tel and is un­able to de­mand its re­turn from third parties.

² The ef­fects of the li­en are sus­pen­ded as long as the pledger has ex­clus­ive pos­ses­sion of the pledged chat­tel with the pledgee’s con­sent.

¹ The pledgee must re­turn the pledged chat­tel to the en­titled party where the pledge is ex­tin­guished due to pay­ment of the debt or for some oth­er reas­on.

² He or she is not ob­liged to re­turn the pledged chat­tel, in whole or in part, un­til his or her claim has been fully sat­is­fied.

¹ The pledgee is li­able for the de­pre­ci­ation or loss of the pledged chat­tel, un­less he or she shows that he or she is not at fault.

² If the pledgee has ali­en­ated the pledged chat­tel or giv­en it in fur­ther pledge without au­thor­ity, he or she is li­able for any res­ult­ing dam­age.

¹ If the debt­or is in de­fault the cred­it­or has the right to sat­is­fy his or her claim from the pro­ceeds of the pledge.

² The gen­er­al li­en provides the cred­it­or with se­cur­ity for his or her claim, in­clud­ing con­trac­tu­al in­terest, debt en­force­ment costs and de­fault in­terest.

¹ The gen­er­al li­en en­cum­bers the pledged chat­tel in­clud­ing its ac­cessor­ies.

² Un­less oth­er­wise agreed, the pledgee must de­liv­er the nat­ur­al fruits of the pledged chat­tel to the own­er once they are no longer a con­stitu­ent part there­of.

³ Fruits which are a con­stitu­ent part of the pledged chat­tel at the time of its real­isa­tion are in­cluded in it.

¹ Where there are sev­er­al pledges on the same chat­tel, the pledgees are sat­is­fied ac­cord­ing to their rank.

² Rank is de­term­ined by the date on which the pledges were es­tab­lished.

Any agree­ment stip­u­lat­ing that the pledged chat­tel will be­come the prop­erty of the pledgee in the event of de­fault on the part of the debt­or is in­val­id.

¹ A cred­it­or has the right to re­tain chat­tels and se­cur­it­ies which have come in­to his or her pos­ses­sion with the debt­or’s con­sent un­til his or her claim has been sat­is­fied, provid­ing such claim is due and in­trins­ic­ally con­nec­ted with the re­tained ob­jects.

² Between per­sons en­gaged in com­merce, an in­trins­ic con­nec­tion ex­ists where both the claim and the re­tained ob­jects re­late to their com­mer­cial deal­ings.

³ The cred­it­or has a spe­cial li­en provided that third parties do not have rights as a res­ult of pri­or pos­ses­sion, even if the chat­tel which he or she has re­ceived in good faith does not be­long to the debt­or.

¹ No spe­cial li­en may be as­ser­ted over chat­tels which by their nature are not real­is­able.

² Equally, no spe­cial li­en may be as­ser­ted where to do so would be in­com­pat­ible with an ob­lig­a­tion as­sumed by the cred­it­or or with in­struc­tions is­sued by the debt­or pri­or to or upon trans­fer of the chat­tel or with pub­lic policy.

¹ In the event of the debt­or’s in­solv­ency, the cred­it­or has a spe­cial li­en even if his or her claim is not yet due.

² If the in­solv­ency did not oc­cur or be­come known to the cred­it­or un­til after trans­fer of the chat­tel, the spe­cial li­en may be ex­er­cised even if in­com­pat­ible with a pri­or ob­lig­a­tion or with a spe­cial in­struc­tion is­sued by the debt­or.

¹ If the debt­or is in de­fault and fails to provide suf­fi­cient se­cur­ity, the cred­it­or is en­titled to real­ise the re­tained ob­ject in the same man­ner as a pledged chat­tel after no­ti­fy­ing the debt­or.

² Where re­tained re­gistered se­cur­it­ies are to be real­ised, the debt en­force­ment or bank­ruptcy of­fi­cial must take the ne­ces­sary steps on the debt­or’s be­half.