The Eurohypothec and the English Mortgage
| Author | Gary Watt |
| DOI | 10.1177/1023263X0601300202 |
| Date | 01 June 2006 |
| Published date | 01 June 2006 |
| Subject Matter | Article |
THE EUROHYPOTHEC AND THE
ENGLISH MORTGAGE
GARY WATT*
ABSTRACT
The recent Green Paper on Mortgage Credit in the EU (Brussels: European Commission,
2005) confirms that the European Commission is giving serious consideration to ‘the
feasibility and desirability’ of a pan-European mortgage (‘Euromortgage’ or ‘Eurohypothec’)
to facilitate the integration of cross-border financing of real estate investments. The purpose
of this paper is two-fold. First, to examine the proposed Eurohypothec as a central case in the
larger project of attaining cross-border commonality in European private laws of immovable
property. Second, to consider whether the prevailing model for the Eurohypothec can be
accommodated in England and Wales. It is argued that doctrinal indeterminacy or
‘shapelessness’ in national property institutions of EU Member States assists in the reception
of pan-European institutions alongside national laws, and thereby advances the project to
achieve ius commune Europaeum in property law. It will be demonstrated that the
mortgage law of England and Wales exemplifies the necessary doctrinal indeterminacy and
therefore provides fertile ground for the reception of the Eurohypothec.
Keywords: Eurohypothec, Mortgage, European private law, Harmonization
§1. INTRODUCTION
Forty years have passed since the Segre
´Report on The Development of a European Capital
Market
1
first promoted the idea of a common form of mortgage for Member States of the
European Economic Community (EEC) on the ground that it would help to ‘fuse the
Member States’ capital markets’.
2
Since then, the common law jurisdiction of England
13 MJ 2 (2006) 173
* Senior Lecturer, Faculty of Law, University of Warwick. Joint editor (with C. van der Merwe and F.
Fiorentina) of Security Rights In Immovable Property In European Private Law, Common Core Project,
Universiti di studi di Trento.
1
C. Segre
´(chair), The Development of a European Capital Market (European Commission, 1966).
2
Ibid, 153 (para.16), 169 (para.14 n 1) and, generally, 153-158.
174 13 MJ 2 (2006)
and Wales has joined the EEC and the latter has become the European Union (EU), but
support for a pan-European mortgage is as strong as ever. In June 2005, the European
Commission Green Paper on Mortgage Credit in the EU confirmed that it is giving serious
consideration to ‘the feasibility and desirability’ of the Euromortgage.
3
This was in
response to the December 2004 report of the Forum Group on Mortgage Credit,
4
which
had concluded that a pan-European mortgage is likely to bring major benefits to the
European financial services industry.
5
The Forum Group on Mortgage Credit
recommended, as had the Segre
´Report before it, that the Commission should ‘explore
the concept of the Euromortgage, for example by way of a study, to assess its potential to
promote EU mortgage credit markets integration’.
6
In fact, during the last two decades a
great many studies have been established to ‘explore the concept’ of the Euromortgage
(or the Eurohypothec, as it is more usually known)
7
– the majority of which have
focussed upon the implications of the Eurohypothec for EU Member States on the
continental mainland. The present paper is the first to take as its particular focus the
challenge of accommodating the Eurohypothec within the property regime of England
and Wales.
8
In addition to the 2004 Report and the 2005 Green Paper mentioned above, another
significant development in the life of the Eurohypothec has prompted this paper at this
time. It is the publication in May 2005 of the Eurohypothec Research Group’s Basic
Guidelines for a Eurohypothec (hereafter the ‘Guidelines’).
9
The Eurohypothec Research
Group comprises academic and practicing jurists in association with members of a
Gary Watt
3
Green Paper on Mortgage Credit in the EU (European Commission, 17 June 2005) para 48.
4
Part of the European Commission’s Internal Market Directorate General.
5
The Integration of the EU Mortgage Credit Markets (European Commission, 2004), 30, para 117.
6
Ibid, 7 (recommendation 38). On the integration of European securities markets, generally, see E. Ferran,
Building an EU Securities Market (CUP, 2004); N. Moloney, EC Securities Regulation (OUP, 2002), 22–
25; and, specifically in relation to real securities, S. Nasarre-Aznar Securitisation & mortgage bonds: Legal
aspects and harmonisation in Europe (Gostick Hall, 2004).
7
See www.eurohypothec.com. For a survey of papers by German, French and Dutch authors see H. G.
Wehrens, ‘Real Security Regarding Immovable Objects: Reflections on a Euro-Mortgage’ in A.S.
Hartkamp et al. (eds), Towards a European Civil Code (Martinus Nijhoff, 1994), 391. Significant early
studies include l’Union Internationale du Notariat Latin (UINL), La Ce
´dule hypothe
´caire Suisse et la dette
foncie
`re Allemande – E
´tudes comparative, base d’une future Euro-hypothe
`que (Stichting tot bevordering
der notarie
¨le wetenschap, 1988) and l’Union Internationale du Notariat Latin (UINL), L’Eurohypothe
`que
(Stichting tot bevordering der notarie
¨le wetenschap, 1992). Books on the subject include O. Sto
¨cker, Die
‘Eurohypothek’ – Zur Bedeutung eines einheitlichen nicht-akzessorischen Grundpfandrechts fu
¨r den Aufbau
eines ‘Europa
¨ischen Binnenmarktes fu
¨r den Hypothekarkredit’ (Duncker und Humblot, 1992) and E.
Mun
˜iz Espada, Bases para una propuesta de Eurohipoteca (Tirant lo Blanch, 2004).
8
The author is indebted to Professor Sergio Nasarre-Aznar, a colleague in the mortgage group of the
‘Trento’ Common Core Project, whose work on the Eurohypothec was the first to appear in the English
academic literature. (S. Nasarre-Aznar, ‘The Eurohypothec: A Common Mortgage for Europe’ (2005) 69
The Conveyancer and Property Lawyer 32.)
9
A. Drewicz-Tułodziecka (ed.), Mortgage Bulletin 21: Basic Guidelines for a Eurohypothec, (Mortgage
Credit Foundation, 2005).
To continue reading
Request your trial