Veðréttur

Veðréttur is a security interest in Icelandic law by which a debtor pledges property to a creditor to secure an obligation, typically the repayment of a loan. The right allows the creditor to satisfy the debt from the pledged asset if the debtor defaults. Veðréttur is most commonly created on immovable property through a real estate mortgage and is established by contract and registered in the veðskrá, a public mortgage register, to have priority against other claims.

A veðréttur gives the creditor a claim against the pledged asset that is enforceable upon default. If the debt is not paid, the creditor may initiate enforcement to realize the asset, usually through sale. The proceeds are used to satisfy the secured debt, with any surplus returned to the debtor and the creditor bearing the costs of enforcement. If the sale does not cover the debt, the creditor may claim the deficiency against the debtor, subject to applicable procedures and limits.

The debtor may redeem the property at any stage before the completion of enforcement by paying the outstanding debt and costs. A veðréttur can be released by agreement or by discharge from the veðskrá after full payment. Veðréttur also exists on movable assets or other collateral in various forms, though real estate mortgages are the most common instance.

In sum, veðréttur is the legal mechanism in Icelandic law that secures performance of an obligation by giving a creditor a right to satisfy the debt from a pledged asset, typically via a registered mortgage on real property.