LEGAL CHARACTERISTICS OF A MAXIMUM MORTGAGE WITH AN ANALYSIS OF THE LATEST CASE LAW

Abstract

The article examines the legal nature and transferability of the maximum mortgage under the Slovenian Law of Property Code (Stvarnopravni zakonik or in abbreviation SPZ), focusing on Article 146(4) and its interpretation in case law and theory. It first recalls the accessory nature of liens, which normally follow the secured claim as to creation, scope, transfer and extinction. Against this background, it shows how the maximum mortgage was designed to secure fluctuating or future claims arising from an ongoing creditor–debtor relationship, up to a registered ceiling amount. The authors reconstruct the prevailing Slovenian view that, in the case of a maximum mortgage, the accessory link exists not between individual claims and the mortgage but between the business relationship and the maximum mortgage as a protective right in rem. They contrast this functional understanding with the literal wording of Article 146(4) SPZ, which excludes the transfer of the mortgage when a secured claim is assigned, and with the conservative approach of the Supreme Court. According to its case law, an assigned claim secured by a maximum mortgage is transferred without security, which reduces its market value and narrows the practical usefulness of this instrument. Using German and Austrian law as key comparators, the article argues that the Slovenian solution is unnecessarily rigid and departs from models that allow, under certain conditions, the transfer or transformation of a maximum mortgage into a fixed mortgage when claims are assigned or when the credit relationship is reduced to a single outstanding claim. The authors endorse the more recent doctrinal position and the approach taken by the Higher Court of Ljubljana, under which individual “sub-mortgages” arise within the maximum mortgage and accompany the assigned claim to the new creditor, creating a community of mortgagees governed by general rules of the Obligations Code. The general view that a maximum mortgage is more flexible than a fixed mortgage is, in the Slovenian context, undermined by the current statutory wording and restrictive case law, which call for a systemic and functional reinterpretation of Article 146 SPZ – or, failing that, for legislative reform.