A lien is a limited right given to the bank or other creditor to sell what is pledged if the interest or principal is not paid. It is therefore very similar to the mortgage right, which gives the same power with registered property.
A lien can basically be established on anything transferable.
Generally, a mortgage deed also establishes a lien on benefits from building insurance, rent payments and movable property permanently assigned to the property. But in many cases, life insurance is also pledged.
How the pledge should be established depends on the property on which the pledge is to be established. There are different types of pledge. With goods (inventory, a car) we talk about:
- non-possessory pledge, when the pledged goods remain with the pledgor;
- possessory pledge, as soon as the pledgee retains the goods (this provides the most security).
For receivables (life insurance, receivables portfolio), we talk about:
- silent pledge, when the debtor of the claim does not know it is pledged;
- public pledge, when the debtor of the pledged claim has been notified that it has been pledged.
A silent pledge can be established by notarial deed or private deed registered with the tax authorities. With an undisclosed pledge on a future claim, it is important to register pledges with the tax authorities on a regular basis.
For more information on liens, please contact us. We will be happy to help.
pkooijman@kooijmanautar.nl
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