Features of Mortgage of Certain Types of Real Estate

A mortgage as an institution of civil law plays a key role in ensuring the fulfillment of obligations and the development of credit relations. The Law of the Republic of Uzbekistan “On Mortgage” dated October 4, 2006, No. ZRU-58, establishes the legal framework for the pledge of immovable property, its types, and the conditions for foreclosure. Particular importance lies in analyzing the features of mortgages on different types of real estate, as their legal regimes are not uniform.

According to the law, any immovable property may serve as the subject of a mortgage: buildings, structures, residential apartments, enterprises and property complexes, land plots, as well as other objects classified by law as real estate. At the same time, the mortgage retains its accessory nature, being inseparably linked with the secured obligation.

Mortgage of Residential Houses and Apartments

The most common form is the mortgage of housing. A residential house or apartment may be pledged provided it is duly registered with the state. A distinctive feature is that the mortgage does not restrict the owner’s right to use the dwelling but imposes an obligation to preserve it. The creditor has the right to demand early fulfillment of the obligation if the borrower misuses or damages the property. Furthermore, the law requires that residential property be insured against the risk of loss or damage.

Mortgage of Unfinished Construction Projects

The law allows for the pledge of property under construction, provided it is properly identified and registered. Two key aspects arise in this context:

1. The risk of loss or incomplete construction is borne by the mortgagor;
2. Upon completion of construction, the mortgage automatically extends to the newly created object.

Thus, an unfinished construction object represents a “dynamic subject of mortgage”, which transforms as its physical state changes.

Mortgage of Land Plots

A special legal regime applies to land plots. Only plots that are privately owned or granted for individual housing construction, farming, or dehkan (smallholder) activity may be mortgaged.

The following are prohibited from being mortgaged:

• agricultural land,
• plots not subject to privatization,
• and other land restricted from circulation for various reasons.

The law establishes the principle that the mortgage of land must always preserve its intended purpose.

Mortgage of Property Complexes and Enterprises

An enterprise’s property complex may serve as the subject of a mortgage. In this case, the mortgage extends to all constituent assets — buildings, structures, equipment, and receivables. However, restrictions apply to enterprises whose privatization is prohibited or limited by law.

The pledge of an enterprise as a whole requires a special procedure for valuation and accounting to preserve the integrity of the property complex.

Mortgage of Lease Rights

The law also provides for the possibility of mortgaging lease rights to land plots or other immovable property. This provision is particularly significant for business entities that use property under lease agreements.

However, the mortgage of lease rights is limited by the duration of the lease itself — the term of the mortgage cannot exceed the term of the lease. When the lease terminates, the mortgage is likewise terminated.

Restrictions Regarding Certain Objects

The following cannot be mortgaged:

• property withdrawn from civil circulation;
• objects of cultural, historical, or scientific value;
• enterprises whose privatization is mandatory under the law.

These restrictions reflect a balance between the creditor’s interests and the public interests of the state.

The features of mortgages on different types of immovable property in Uzbekistan are determined by the specific legal regimes and their socio-economic importance. Residential houses and apartments require mandatory insurance; land plots must maintain their designated purpose; and property complexes and enterprises necessitate consideration of state interests. These rules are aimed at protecting both creditors and society as a whole, ensuring the stability of the mortgage system.

Features of Mortgages on Different Types of Real Estate in Uzbekistan

Type of Real Estate	Possibility of Mortgage	Features of Legal Regime	Restrictions
Residential houses and apartments	Yes	Owner retains usage rights; mandatory insurance against loss/damage; creditor may demand early repayment for misuse	No special prohibitions other than general requirements for preservation and proper use
Unfinished construction projects	Yes	Mortgage extends to future object upon completion; risk of incompletion borne by mortgagor	Requires state registration and identification
Land plots	Yes, except agricultural	Allowed for private ownership, housing construction, farming/dehkan activity; must maintain intended use	Prohibited for agricultural lands, non-privatizable or restricted plots
Property complexes and enterprises	Yes	Covers all assets — buildings, equipment, receivables; requires complex valuation	Cannot pledge enterprises whose privatization is prohibited or restricted
Lease rights (land or real estate)	Yes	Mortgage limited to lease term; applies to both land and premises	Mortgage terminates upon lease termination
Historical, cultural, or scientific objects	No	Protected by the state; excluded from mortgage for public interest	Complete prohibition