The Court of Cassation, in its ruling no. 19123/2020, affirmed that the erroneous indication of cadastral data of a foreclosed property does not imply nullity of the deed as long as such error does not lead to absolute uncertainty as to the identification of the subject of the forced sale. Today, thanks to the recent statements of the Court of Verona in the first stage (ruling no. 695/2022), as later confirmed by the Court of Appeal of Venice (ruling no. 1156/2023), it is possible to finally draw the line on such "absolute uncertainty".

The mortgage, a fundamental guarantee instrument, has always enabled mortgage creditors, in the event of insolvency, to satisfy their claim with the profits arising from the sale of the mortgaged property, in preference to the debtor's other creditors. Having been created because of the need to protect the active party to the legal relationship from the possible inability of the debtor to fulfil its obligations, such institution is able to profoundly affect the debtor's legal sphere , since the power of disposal of the latter over the property is strongly limited, and the property will continue to be encumbered by the collateral even if it is transferred to another subject. But, above all, the property may be forcibly taken from the debtor and sold at auction, and the related profits will then be allocated to the creditors.

For these reasons, the legislator has created a complex regulatory framework that aims to balance the two opposing needs, that of the creditor and that of the debtor, by attempting, on the one hand, to ensure the satisfaction of an unpaid claim, and, on the other hand, to avoid overburdening the debtor's legal sphere, protecting his interests.

Let us start with a fact. In identifying the elements that must necessarily be indicated in the deed of constitution of the mortgage over a property, article 2826 of the civil code reveals a fundamental principle: the debtor's need to avoid having an indefinite number of his assets being subjected to mortgage. In other words, the legislator wished to limit the burden borne by the debtor to what is strictly necessary, in light of the above-mentioned balancing of interests. Besides, article 2841 of the civil code orders the nullity of the mortgage and the relevant registration in case of "uncertainty (...) on the identity of each asset encumbered" by the mortgage (which derives precisely from the lack of indication of the elements required by article 2826). However, if improvements of accessions are made to the property encumbered by the mortgage, the latter is automatically extended to such improvements and accessions, pursuant to article 2811 of the civil code, except in the cases provided for by law (in particular, in articles 2816 in the event of a mortgage on surface rights and 2873 in the event of reduction of a mortgage).

In this regulatory context, for the purpose of identifying the goods encumbered by the mortgage, cadastral data are given very broad prominence, given that they are the real focal point of article 2826 of the civil code. The Court of Verona focused precisely on such prominence and inferred the nullity of a mortgage and its relevant registration due to the uncertainty on the cadastral data referred to in the mortgage constitution deed.

In fact, whereas, on the one hand, it is true that the mere reference to cadastral data that are no longer current cannot automatically imply nullity, since the property's cadastral history can be easily traced by referring to the previous cadastral data in the transcription note, it is also true that in the case of buildings or other accessions prior to the constitution of the mortgage to which an autonomous cadastral identification has already been attributed, the manifestation of the property's autonomy is evident, so that it cannot be included in the subject matter of a mortgage that does not precisely indicate its cadastral data of reference. Moreover, in such a scenario it is not possible to apply the aforementioned rule of article 2811 of the civil code, since it applies only to improvements or accessions that were built after the mortgage was constituted and not also to those pre-existing at the time of the mortgage being set up.

In the present case, on the basis of the arguments set forth, the Court of Verona declared the partial nullity of the mortgage, limited to the parcels and sub-parcels not included in the specific cadastral data indicated in the deed of constitution of such mortgage. Such statement is correct because the attribution of an unambiguous cadastral datum to some of the constructions realised partially on the sub-parcel indicated in the deed, and partially outside it, would suggest their autonomy with respect to the property encumbered by the mortgage and, therefore, determines its exclusion from the group of properties subject to the lien.

Originally Published by 29 September 2023

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