Also known as: hipotecas · hipotecario · hipotecaria · hipotecados · mortgage · hypothec · hipotecary
Written by attorneys · grounded in primary & secondary sources — see below
A security device by which real property is pledged to secure payment of a debt or performance of an obligation. The grantor retains possession and an equitable right to redeem. Upon default the grantee may foreclose to satisfy the obligation.
Summit Tech Institute grants a hipoteca on its campus buildings to Heritage Capital to fund new dormitories. After enrollment falls, Summit defaults on payments. Heritage sends written notice of default and a thirty-day cure period, after which the full balance accelerates. When the cure period expires without payment, Heritage may foreclose on the hipoteca to recover the accelerated debt.
Hyperion Systems, a Delaware corporation, executes a hipoteca on land located in State A to secure a loan from a foreign bank. When the bank seeks to enforce the hipoteca after default, the court applies the local law of State A to determine the nature of the interest created and the parties' rights under the hipoteca.
Select any source to read its text and confirm it supports the definition.
During a severe economic downturn, State A enacts a temporary moratorium on foreclosure of hipotecas securing residential loans. A lender holding a hipoteca on Holly Hayes's home challenges the statute under the Contract Clause. The court upholds the moratorium because it serves an important public purpose and is narrowly tailored to the emergency.
Helix Biotech's board authorizes a hipoteca on the company's laboratory building to secure a bank loan for equipment purchases. The transaction occurs outside the ordinary course of business. Under the governing statute the board may grant the hipoteca without shareholder approval.
Hunter Hughes signs a note and hipoteca on his ranch to secure repayment of a loan from Highland Farms. The underlying note is later declared void for illegality. Because no valid obligation remains, the hipoteca is extinguished and unenforceable.
Harmony Retail's directors approve a hipoteca on a warehouse to secure a line of credit. The action is taken under the corporation's statutory power to mortgage its property. The hipoteca is valid even though the warehouse is not being sold.
Yes. A hipoteca is valid only when it secures a debt or other obligation. If the underlying obligation is void or discharged, the hipoteca is extinguished.
The law of the situs of the land determines whether a hipoteca creates an interest in land and the nature of that interest.
Yes. A temporary moratorium on foreclosure may be upheld under the Contract Clause when it serves an important public purpose and is reasonable and narrowly tailored to the emergency.
Yes. A corporation may mortgage or otherwise encumber any or all of its assets regardless of whether the transaction occurs in the usual and regular course of business.
The lender must send written notice of default after the default occurs and must specify when the full balance will become due. Acceleration is ineffective without clear, dated notice identifying the correct obligation.
Supporting sources
…Such are cases commenced by attachment against the property of debtors, or instituted to partition real estate, foreclose a mortgage, or enforce a lien. So far as they affect property in the State, they are substantially proceedings in rem in the broader sense which we have mentioned. It is hardly necessary to observe,…