LA LEY DE LA GARANTÍA MOBILIARIA PERUANA Y SUS ASPECTOS REGISTRALES.

Abstract

The enactment of Law number 28677 on Chattel Mortgages (known by its Spanish initials as «the LGM»), which was published in the official journal on 1 March 2006 and will soon take effect, is an extremely significant event for Peru. It seeks to facilitate access to that keystone of the economy, credit, by creating a single chattel mortgage system that embraces all existing types of pledges and uniform regulation on the matters of chattel mortgage creation, disclosure, priority and foreclosure. This law unifies and simplifies the regulations on existing pledges by instituting a single system of laws that makes all kinds of chattel goods valid for use in transactions by rendering them mortgageable, whether the goods are registered or unregistered, tangible or intangible, generic or specific, consumable, present or future (vehicles, temporary buildings, bank balances, shares, etc.). Thus the law expands the universe of borrowers and consequently the universe of secured lenders. The law also creates the Chattel Contract Registry, in which entries will be made of guarantees under which unregistered chattel goods are posted as collateral. This will unify the existing contract registries (dealing with pledges of industrial equipment, pledges of agricultural materials or land, comprehensive pledges of variable collateral, etc.); the existing legal registries of property, however (Registry of Chattel Goods, of Vehicle Ownership, in which the Vessel and Aircraft, Fishing Boat and Ship Registry will be incorporated), will be maintained. Acting along these same lines, the law also creates the «Integrated System of Chattel Mortgages and Contracts », which will link the information held in the Chattel Contract Registry with the existing registries of property, to allow remote access depending on the creator, and it approves the use of «registration forms» as registrable documents which receive a shorter form of scrutiny.