What is a registered pledge and how does it secure claims?


A registered pledge is one of the methods of securing claims resulting from contracts the subject of which is a pecuniary claim. The claim may be in both Polish and foreign currency. There are no restrictions or exclusions - it can be applied to any civil law contract that is concluded in trade. Its purpose is to secure the creditor for the debtor to fulfill his obligation.

What is the essence of a registered pledge?

A registered pledge is a variant of an ordinary pledge, regulated by the Act of 23 April 1964, the Civil Code (Civil Code). It is a limited right in rem, encumbering a movable property to secure a claim. Under it, the creditor has the opportunity to satisfy himself from the encumbered item regardless of changes in its ownership and with priority over the debtor's personal creditors (those who have not secured their receivables with a lien).

The difference between a registered pledge and an ordinary pledge is primarily that the parties to the pledge agreement may decide to leave the pledged object to the person who pledged it. Therefore, it has the possibility to use it, despite the fact that it secures the creditor's claim.

A registered pledge provides the entitled (creditor) with certain rights to things. Like a mortgage, it is an accessory right, i.e. it is closely related to the secured claim, and therefore it arises and expires together with it. The invalidity of a secured claim results in the invalidity of the pledge, nor can it be transferred without this claim.

The registered pledge is regulated in the Act on Registered Pledge and the Pledge Register of December 6, 1996. In matters not covered by the Act, the provisions of the Civil Code shall apply accordingly to the registered pledge.

A registered pledge may secure a cash claim denominated in Polish zlotys or in a foreign currency. It secures the claim up to the highest amount of security, i.e. up to a certain ceiling. In addition to the principal, it also secures interest and side claims, if such are indicated by the parties in the pledge agreement, and the costs of satisfying the pledgee in the sum specified in the pledge entry.

A registered pledge can secure two or more resulting claims

from contracts vested in the same creditor.

What may be the subject of a registered pledge?

A registered pledge may be imposed on movables and property rights, provided that they are transferable. The subject of a registered pledge may be, for example:

  • things marked as to their identity, e.g. a specific car;

  • items marked as to their species, e.g. goods in stock - however, their quantity and the method of distinguishing them from other items of the same type should be specified. This can be done by marking the packages;

  • a collection of movables or rights, constituting an economic whole, even if its composition undergoes changes, e.g. machines, vehicles. These can be things marked as to their identity or species;

  • transferable receivables, e.g. from shares in a limited liability company;

  • rights on intangible goods, transferable and proprietary, e.g. licenses, patents;

  • securities rights, e.g. stocks;

  • rights from non-securities financial instruments within the meaning of the Act of July 29, 2005 on Trading in Financial Instruments, e.g. participation units in collective investment institutions;

  • future things or rights to arise in the future, or which are not yet owned by the pledger - the registered pledge for such pledged object becomes effective upon its acquisition by the pledger.

Registered pledge always encumber the whole thing or right, even if the secured debt is lower than its value. The registered pledge covers the constituent parts of things and their belonging.

Who are the parties to the registered pledge agreement?

The parties to the registered pledge agreement are the pledgee and the pledgee.

The pledger, i.e. the person who establishes the registered pledge, may be a natural person, a legal person, as well as an organizational unit without legal personality. It must have the right to dispose of the right or object to be pledged. The pledger may be the bank's debtor - the borrower.

A pledgee is a creditor on whose behalf a pledge has been established. It may secure a claim due to every creditor. Until the effective date of the amendment to the registered pledge, ie January 11, 2009, a closed list of creditors entitled to secure their receivables with a registered pledge was in force.

How is a registered pledge established?

In order to effectively establish a registered pledge, an agreement for the establishment of a registered pledge must be concluded and the pledge must be entered in the pledge register. Both of these conditions must be met cumulatively.

An agreement on establishing a registered pledge must be made in writing, otherwise null and void. Failure to comply with it results in the invalidity of the contract - it is assumed that it has not been concluded at all. The contract should indicate:

  • the date and place of the conclusion of the contract;

  • parties - names, surnames, names, addresses of residence, registered offices;

  • the subject of the pledge;

  • a claim secured by a pledge (by reference to a legal relationship from which it arises or may arise);

  • the sum of the security;

  • signatures of the parties.

If the subject of the registered pledge is a motor vehicle that is subject to registration, the pledge should be indicated in the vehicle registration certificate. The lack of such annotation does not invalidate the pledge.

The entry in the pledge register is constitutive in nature, which means that the pledge arises only upon its making.

Application for entry of a registered pledge - where to file?

The register of pledges is kept by district courts. It discloses registered pledges. It is public - copies are issued after submitting an appropriate application.

The court having jurisdiction over the entry is the court in whose district the place of residence or the seat of the pledgee is located. The court makes an entry in the pledge register at the request of the pledgee or pledger. The application, completed on the official form, must be accompanied by a pledge agreement.

The application can also be submitted electronically, but remember to secure it with an electronic signature. The application fee is fixed and amounts to PLN 200.

What does the sale of the subject of the registered pledge involve?

As a rule, the disposal of the subject of the registered pledge does not expire the pledge.

The sale of the registered pledge will result in the expiry of the pledge only if:

  1. the buyer of the item did not know and, with due diligence, could not know that the item was encumbered with a registered pledge at the time of its release or the transfer to it of the right encumbered with a registered pledge;

  2. the item encumbered with a registered pledge is an item usually sold within the scope of the pledgee's business and has been delivered to the buyer, unless the buyer was aware that it is the subject of the pledge and acquired it to harm the pledgee - this point applies only to entrepreneurs.

Several registered pledges on one thing - which one has priority?

If the subject of the pledge is encumbered by more than one pledge (overlapping pledges), the priority rule applies. A right which arises later may not be exercised to the detriment of that which was established earlier. If the same object is encumbered with more than one registered pledge, their priority is determined by the date of submitting the application for entry in the pledge register. Priority will be given to the pledge entered on the basis of an earlier application. Applications received on the same day are considered to be submitted simultaneously and priority will be given to them.

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What are the ways of satisfaction from the registered pledge?

If a claim that has been secured by a registered pledge is not repaid, it is subject to satisfaction from the subject of the pledge with priority over other claims, unless they have priority under special provisions.

The pledgee is satisfied with the subject of the registered pledge on the basis of the enforcement procedure contained in the Code of Civil Procedure (CCP). However, its modifications are allowed and will be indicated in the pledge agreement by the parties.

Another way may be, for example, the pledgee taking over the property of the registered pledge.

The pledge agreement may also provide that the pledgee will be satisfied by selling the subject of the registered pledge by way of a public tender. Such a tender may be conducted by a notary or bailiff within 14 days from the date of submitting the application for sale by the pledgee. The sale of the subject of the pledge in this mode has the effects of sale in enforcement proceedings.

If the registered pledge was established on a set of things or rights constituting the economic whole, the pledge agreement may also allow the pledgee to be satisfied from the income of the pledgee's enterprise. The enterprise may be taken over into management - the requirements to be met by its manager should be specified in the pledge agreement. The management may also be performed by a pledgee.

A registered pledge is therefore a useful method of securing a claim - the debtor, not wanting to lose his movable property or right, has an additional incentive to satisfy the contractual claim against the creditor. What is more, they are often objects used for work and business activities and it is in his broad interest to delete the item or right from the pledge register as soon as possible in order to obtain the full right to dispose of and use it.