Last Lender Privilege : What is it?

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As part of the implementation of a real estate contract, such as mortgage lending for the purchase of a property or a combination of real estate credit with your bank or a specialized body, it is important, even essential to have solid guarantees to ensure buyer and seller / lessee and lessor against the maximum risk. The assumption is one of those guarantees that can sometimes be confused with what is called the ” lender of money ” privilege (or PPD).

What exactly is this guarantee different from the hypothesis? What are the major differences between these two legal guarantees? All the answers to these questions in the rest of this article.

The lender privilege of money in a few words

The lender privilege of money in a few words

In order to understand the difference between the hypothesis and the lender’s privilege , it is important to understand exactly what this notion consists of.

This privilege of lender of money is therefore “a right that the nature of the debt” offers directly to a creditor and this in order to be preferred to other creditors, like that provided for in Article 2324 of the Civil Code . In real estate matters in particular, the use of this privilege can be invoked when, among several privileged creditors, it is possible to distinguish the creditors “who provided the funds for the acquisition of a building” in the context of a relationship real estate, but also and especially so that the final sum is intended for the initial use, as agreed between the parties involved.

Borrower must make the promise, in a deed of loan

Borrower must make the promise, in a deed of loan

More simply, and to understand the peculiarity of this privilege of lender of money: a borrower must make the promise, in a deed of loan, to use all or part of the funds having been borrowed to a specific purchase. At the same time, the seller must also recognize this, directly in the deed of sale. From the moment the two parties take note, the lender directly obtains the lender’s privilege by becoming a party to the contract.

As you will have understood, this privilege differs greatly from the assumption which is, for its part, a specific guarantee that does not engage a particular privilege throughout the performance of the contract. For any additional questions, do not hesitate to contact the specialist closest to you. It will be even simpler after identifying the benefits you can have by resorting to the lender privilege of money.

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