kinnisvaratagatis
Kinnisvaratagatis, often translated as real estate collateral or property security, is a legal arrangement where a piece of real estate is pledged as security for a loan or other obligation. If the borrower defaults on their loan or fails to fulfill their contractual obligation, the lender or creditor has the right to seize and sell the property to recover their losses. This practice is common in mortgage lending, where the property being purchased serves as collateral for the mortgage loan.
The underlying principle of kinnisvaratagatis is to reduce the risk for the lender. By having a tangible
In Estonia, the concept of kinnisvaratagatis is regulated by the Law of Obligations Act and other relevant