ACT ON MORTGAGE ON MOTOR VEHICLES AND OTHER SPECIFIC MOVABLES
Act No. 9525, Mar. 25, 2009
Amended by Act No. 13287, May 18, 2015
Act No. 14116, Mar. 29, 2016
The purpose of this Act is to equitably protect the interests of mortgagees, mortgagers, and owners and to make secured financing easier by providing for matters concerning mortgages on movables subject to compulsory registration, such as construction machinery, ships to which the Ship Registry Act is not applicable, automobiles, and aircraft.
The definitions of the terms used in this Act shall be as follows: <Amended by Act No. 13287, May 18, 2015>
| 1. | The term "specific movables" means construction machinery, small ships, automobiles, aircraft and light aircraft subject to compulsory registration; |
| 2. | The term "registration office" means a government office responsible for the registration of creation, alteration, transfer, and cancellation of mortgages on specific movables. |
| Article 3 (Subject Matters of Mortgage) |
The following movables may be the subject matter of a mortgage: <Amended by Act No. 13287, May 18, 2015; Act No. 14116, Mar. 29, 2016>
| 2. | The following ships, to which the Ship Registry Act is not applicable (hereinafter referred to as "small ships"): |
| Article 4 (Nature of Mortgage) |
Any mortgagee shall have a priority over any other creditor in the satisfaction of claims for the specific movable that an obligor or a third party has provided as security without necessarily transferring the possession thereof.
| Article 5 (Effects of Registration of Mortgage) |
| (1) | Any alteration in connection with the acquisition or forfeiture of a mortgage shall become effective only when such change is registered in the register relevant to the mortgaged property as specified below: <Amended by Act No. 13287, May 18, 2015; Act No. 14116, Mar. 29, 2016> |
| 2. | The original ship register under the Ship Act; |
| (2) | The registration of a mortgage on a specific movable shall be classified into registration of creation, registration of alteration, registration of transfer, and registration of cancellation. |
| (3) | Necessary matters concerning the procedure and method for the registration of a mortgage on a specific movable shall be prescribed by Presidential Decree. |
| Article 6 (Notification of Cancellation of Registration) |
A registration office shall, if a specific movable on which a mortgage was created falls under any of the following categories, notify the mortgagee in advance of its intention to cancel the registration: Provided, That this shall not apply if the mortgagee has consented to the cancellation of the registration for the specific movable: <Amended by Act No. 13287, May 18, 2015; Act No. 14116, Mar. 29, 2016>
| 4. | Aircraft and light aircraft: |
| (b) | Where it intends to cancel the registration ex officio because the owner of an aircraft or a light aircraft fails to file an application for the registration of cancellation within a prescribed period even after a peremptory notice was issued under Article 15 (2) of the Aviation Safety Act (including the cases to which the said provision shall apply mutatis mutandis pursuant to Article 121 (1) of the same Act). |
| Article 7 (Exercise of Mortgage Options) |
| (1) | Any mortgagee may exercise his/her options to the specific movable mortgaged immediately after the receipt of a notice under Article 6. |
| (2) | Any mortgagee who intends to exercise his/her mortgage options in accordance with paragraph (1) shall commence proceedings for the exercise of mortgage options by the deadline set for each category in the following subparagraphs from the date on which a notice under Article 6 is delivered: <Amended by Act No. 13287, May 18, 2015> |
| 1. | Automobiles: One month; |
| 2. | Small ships: Two months; |
| 3. | Construction machinery: Three months; |
| 4. | Aircraft and light aircraft: Three months. |
| (3) | A registration office may, if proceedings for the exercise of mortgage options are not commenced within the deadline set for the commencement of the exercise of mortgage options under paragraph (2), register cancellation for the specific movable involved: Provided, That if a mortgagee has commenced such proceedings by the deadline, the cancellation shall not be registered until such proceedings are concluded. |
| (4) | No registration office shall register cancellation for any specific movable, if a successful bidder at the auction held for the mortgagee's exercise of mortgage options acquires the ownership of the specific movable. |
| Article 8 (Special Cases concerning Means of Realization Following Transfer Order) |
| (1) | A court may, if it is deemed reasonable in connection with auction proceedings for the satisfaction of a mortgage on a movable (excluding aircraft and light aircraft; the same shall apply hereafter in this Article), liquidate the movable by issuing a transfer order that permits the sale of the mortgaged and seized movable to the mortgagee, upon receiving an application for purchase from the mortgagee. <Amended by Act No. 13287, May 18, 2015> |
| (2) | Necessary matters concerning the procedures for the transfer order under paragraph (1) shall be prescribed by Rule of the Supreme Court. |
| Article 9 (Ban on Creation of Pledge Right) |
Specific movables shall not be subject to a pledge right.
| Article 10 (Delivery of Documents for Registration of Cancellation, etc. of Mortgage) |
If cancellation or transfer of a mortgage on a specific movable needs to be registered because all obligations have been performed or obligations arising from the mortgage have been discharged on any other ground, the mortgagee shall deliver without delay the documents required for such registration to the holder of the right to the registration.
| (1) | Any person who desires to have a mortgage registered shall pay a fee to the competent registration office, as prescribed by Presidential Decree. |
| (2) | Necessary matters regarding the criteria for the imposition of and exemption from fees under paragraph (1) shall be prescribed by Presidential Decree. |
| Article 12 (Provisions Applicable Mutatis Mutandis) |
Except as otherwise provided for in this Act, the provisions governing mortgages in the Civil Act shall apply mutatis mutandis to mortgages on specific movables.
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Article 2 (Repeal of Other Acts)
The following Acts shall be hereby repealed:
| 3. | The Motor Vehicle Mortgage Act; |
Article 3 (Transitional Measures)
| (1) | Notwithstanding Article 9, any pledge right already created on a small ship before the Small Ship Mortgage Act (Act No. 8622) enters into force shall be deemed effective only during the valid term of the agreement on the creation of the pledge right. |
| (2) | Any mortgage already created on a passenger car before the amended Automobile Mortgage Act (Act No. 4646) enters into force shall be deemed to have been created in accordance with this Act until the cancellation of the mortgage is registered. |
Article 4 Omitted.
Article 5 (Relationship with Other Statutes)
A citation of the former Construction Machinery Mortgage Act, the former Small Ship Mortgage Act, the former Motor Vehicle Mortgage Act, or the former Aircraft Mortgage Act, or any provision thereof by any other statute enforceable at the time when this Act enters into force shall be deemed to be a citation of this Act or the corresponding provisions hereof in lieu of the previous provisions, if such corresponding provisions exist herein.
ADDENDA <Act No. 13287, May 18, 2015>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Article 2 Omitted.
ADDENDA <Act No. 14116, Mar. 29, 2016>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 55 Omitted.