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Contracts Relating To Immovable

TITLE XVIII CONTRACTS RELATING TO IMMOVABLE

Chapter 1. Sale of Immovable

Art. 2875 – Principle.

Without prejudice to the provisions of the following Articles, the provisions of the Title of this Code regarding “Contracts relating to the assignment of rights” shall apply to the sale of immovables.

Art. 2876 – Work and labour relating to immovables and sale.
A contract whereby one of the parties undertakes to deliver to the other party a house, a flat or another building which does not yet exist, is a contract of work and labour relating to immovables and not a contract of sale.

Art. 2877 – Form of contract.
A contract of sale of an immovable shall be of no effect unless it is made in writing.

Art. 2878 – Registration in registers of immovable property.
The sale of an immovable shall not affect third parties unless it has been registered in the registers of immovable property in the place where the immovable sold is situate.

Art. 2879 – Cooperation of seller.
(1)    The seller shall furnish to the buyer all the documents necessary to enable the buyer to cause the transfer of the immovable to be registered in the registers of immovable property.
(2)    Such obligation shall be deemed to be an essential stipulation of the contract of sale.

Art. 2880 – Seller to declare certain rights.
(1)    The seller shall declare to the buyer the rights which third parties have on the immovable sold where such rights may be set up against the buyer independently of a registration in the registers of immovable property.
(2)    The contract may compel the seller to declare to the buyer the rights which third parties have on the immovable notwithstanding that such rights are entered in the registers of immovable property.

Art. 2881 – Registered rights and burdens. – 1. Principle.
The buyer shall be deemed to know al the rights and burdens affecting the immovable which have been registered in the registers of immovable property in the place where the immovable is situate.

Art. 2882 – 2. Express warranty by seller.
(1)    In respect of the rights mentioned in Art. 2881, the buyer may not avail himself of the provisions concerning the warranty against eviction, unless the seller has warranted that such rights did not exist.
(2)    Such warranty may only result from an express provision in the contract of sale.

Art. 2883 – 3. Mortgage and antichresis.
The buyer may avail himself of the provisions concerning the warranty against eviction where the immovable is attached and sold at the request of a creditor who has a mortgage or an antichresis.

Art. 2884 – Sale of immovable belonging to others.
(1)    The provisions concerning the warranty against eviction shall apply where the sale relates to an immovable which, in whole or in part, did not belong to the seller.
(2)    The buyer may avail himself of the provisions relating to the warranty against eviction without waiting until he has been evicted.
(3)    He may not avail himself of such provisions where, at the time when the court is to make its decision, such eviction is no longer to be feared.

Art. 2885 – Right of recovery.
Unless otherwise expressly agreed, the seller shall not be liable in damages to the buyer where the latter is evicted by a person who avails himself of a legal right of recovery on the immovable sold.

Art. 2886 – Liability of seller.
In case of total or partial eviction of the buyer, the seller shall refund to the latter, in addition to the price and the expenses of the contract, all the expenses incurred by him in altering the immovable.

Art. 2887 – Lesion.
A sale of an immovable may not be rescinded by the buyer or the seller on the ground of lesion.

Art. 2888 – Warranty of area. – 1. Principle.
The seller shall guarantee the area of the immovable sold where such area has been indicated in the contract.

Art. 2889 – 2. Rights of buyer.
(1)    Where the true area is smaller than that which has been indicated, the buyer may require that the price be reduced accordingly.
(2)    He may require the rescission of the contract where the true area is smaller by at least one-tenth than that which has been indicated or where it renders thae immovable unsuitable for the use which the buyer intended to make of it and such use was known to the seller.

Art. 2890 – 3. Conditions and time.
The action of the buyer based on the warranty of area shall be subject to the same conditions and be instituted within the same time as an action based on the warranty against defects.

Art. 2891 – 4. Rights of seller.
(1)    The seller may not require an increase of price where the true area is larger than that indicated in the contract.
(2)    The provisions of sub-art. (1) shall not apply where the error of the seller is due to fraud on the part of the buyer.

Art. 2892 – Compulsory execution of contract.
(1)    The buyer of an immovable shall be deemed to have a particular interest in the specific performance of the contract.
(2)    He may accordingly demand such execution.
(3)    The buyer shall lose the right to demand the specific performance of the contract where he fails to demand it within one year after he has ascertained the delay of the seller.

Art. 2893 – Sale with right of redemption.
(1)    The seller may, in the contract of sale, reserve to himself the right to purchase the immovable from the buyer during a certain period.
(2)    The provisions of the Title of this Code relating to “Joint ownership, usufruct and other rights in rem” concerning the promise of sale shall apply to such stipulation (Art. 1410-1425).

Art. 2894 – Reference.
Those provisions in the Title of this Code regarding “Contracts relating to the assignment of rights” which apply to contracts of barter, assignment of rights other than property and hire-purchase shall apply to contracts relating to immovables.

Art. 2895 – Registration in the case of hire-purchases.
In the case of a hire-purchase, the hire-purchaser may register in the registers of immovable property in the place where the immovable is situate the right of contractual pre-emption resulting from the contract.

Chapter 2. Lease
Section 1. Lease of immovables in general

Art. 2896 – Definition.
(1)    The lease of an immovable is a contract whereby one of the parties, the lessor, undertakes to ensure to the other party, the lessee, the use and enjoyment of an immovable, for a specified time and for a consideration fixed in kind or otherwise.
(2)    Nothing shall affect the provisions of the Commercial Code or of particular laws concerning the lease of immovables in which a business or other industry is carried out.

Art. 2897 – Lease and sale.
Where it is agreed that the lessee shall become the owner of the immovable after the payment of a certain number of terms of rent, the contract shall constitute a sale, notwithstanding that the parties have termed it as a contract of lease.

Art. 2898 – Proof of contract.
(1)    So long as the lease has not had a beginning of execution, the proof that an immovable has been let may be made only by a written instrument, by an admission made or oath taken in court.
(2)    No other means of evidence shall be admitted to prove the existence of such contract.
(3)    Where a contract of lease has had a beginning of execution, it may be proved by witnesses or presumptions.

Art. 2899 – Entry in registers of immovable property.
(1)    Leases made for a period exceeding five years shall not affect third parties until they are entered in the registers of immovable property at the place where the immovable is situate (Art. 1571).
(2)    Leases made for a period exceeding five years which have not been entered in the registers of immovable property shall, where their date is certain, affect third parties during five years from the day when such third parties have registered their rights on the immovable.
(3)    In other cases, such leases shall be deemed to have been made for an undefined period of time.

Art. 2900 – Delivery of immovable.
(1)    The lessor shall deliver to the lessee the immovable given on lease and its accessories, in a state to serve for the use for which it is intended in terms of the contract or according to its nature.
(2)    The place and time of delivery shall be regulated in accordance with the provisions relating to sale.

Art. 2901 – State of tenement and inventory. – 1. Principle.
(1)    On the request of either of the parties and as soon as such request is made, there shall be drawn up a statement showing the condition of the tenement as well as an inventory with a valuation of the movable property, accessory to the immovable given on lease, the use and enjoyment of which have been given to the lessee.
(2)    Any stipulation to the contrary shall be of no effect.

Art. 2902 – 2. Expenses.
(1)    The inventory and the statement showing the condition of the tenement shall be made at common expense.
(2)    Where the lessee has advanced the expenses, he may deduct the amount due by the lessor from the rent due by him to the latter.

Art. 2903 – 3. Sanctions.
(1)    Where one of the parties does not take part in the drawing up of the statement and inventory together with the other party, such other party may draw them up or cause them to be drawn up at his expense and communicate them to the other contracting party.
(2)    Where the latter fails to make known his objections and his reservations within a reasonable period, the statement and inventory shall be deemed to have been approved by him.
(3)    The objections and reservations shall not be taken into consideration unless the contracting party causes a statement showing the condition of the tenement and an inventory to be drawn up at his expense within six months from his having received the communication under sub-art. (1).

Art. 2904 – Defect of thing. – 1. Rescission of contract.
(1)    Where, at the time of delivery, the thing has defects of such nature that its normal use is appreciably diminished, the lessee may demand the rescission of the contract.
(2)    The lessee shall have the same right where the defect occurs or is discovered after the immovable has been delivered to him.
(3)    A special use to the lessee shall not be taken into consideration unless the lessor knew or should have known thereof on the making of the contract.

Art. 2905 – 2. Damages.
(1)    Where the lessor knew or should have known of the defect of the thing at the time of delivery and failed to inform the lessee thereof, he shall be liable for the damage thereby caused to the lessee.
(2)    The lessor shall also be liable for the damage caused to the lessee during the currency of the contract through the fault of the former.

Art. 2906 – 3. Relation with rescission.
(1)    The damages provided in Art. 2905 are independent of the rescission of the contract.
(2)    They may be awarded notwithstanding that the contract is not rescinded.
(3)    They may be awarded where rescission is ordered, in particular with a view to compensating the damage resulting from rescission.

Art. 2907 – 4. Apparent defect.
The lessee may not exercise his rights under the preceding Articles where the defect on which his claim is based is apparent or where he knew or should have known of the defect on the making of the contract.

Art. 2908 – 5. Dangerous defect.
(1)    Where the thing is in such a state as to constitute a serious danger to the life or health of the lessee or of those who reside with him or of his employees, the lessee may require the rescission of the contract even in a case of an apparent defect or of a defect of which the lessee knew at the time of the contract.
(2)    Any stipulation to the contrary shall be of no effect.

Art. 2909 – 6. Agreement of exemption from liability.
Any stipulation whereby the lessor excludes or limits the liability which he incurs as a consequence of the defects of the thing shall be of no effect where the lessor has in bad faith failed to mention the defects or the defects are such as to render the thing completely useless for the lessee.

Art. 2910 – 7. Contractual warranty.
(1)    The lessee may require the rescission of the contract and compensation for the loss sustained by him where the thing given on lease does not have or ceases to have a quality the existence of which has been expressly warranted by the lessor.
(2)    The limitations made to such right by the preceding Articles may not be invoked by the lessor.

Art. 2911 – Peaceful enjoyment of immovable.
The lessor shall warrant to the lessee the peaceful enjoyment of the immovable during the currency of the lease.

Art. 2912 – Alteration of immovable.
The lessor may not, during the currency of the lease, make any alterations in the immovable without the consent of the lessee.

Art. 2913 – Claims of third parties on the immovable.
(1)    Where a third party claims the ownership of the immovable let or claims to have any right thereon, the lessee shall immediately inform the lessor of such claim.
(2)    Where the third party institutes proceedings, the lessee may demand that the proceedings against him be discontinued and that the suit be proceeded with between the third party and the lessor.
(3)    Where his enjoyment has been interrupted in consequence of such proceedings, the lessee shall be entitled to a proportional reduction of the rent, where he informed the lessor of the molestation or hindrance.

Art. 2914 – Mere molestations of fact.
(1)    The lessor shall not warrant the lessee against molestations to his possession by third parties who do not claim to have any right on the immovable.
(2)    The lessee may take action in his own name against such third parties.

Art. 2915 – Burdens and taxes.
The lessor shall pay the burdens and taxes charging the immovable.

Art. 2916 – Repairs. – 1. Duties of lessor.
The lessor shall maintain the immovable in good condition and make therein during the currency of the lease such repairs as are necessary and are not repairs incumbent upon the lessee.

Art. 2917 – 2. Duty to give notice to lessor.
Where the thing let requires, for its preservation or maintenance, expenses which are not incumbent upon the lessee, the latter shall inform the lessor of such requirement.

Art. 2918 – 3. Duty to suffer repairs.
Where, during the currency of the lease, the thing let requires repairs which cannot be delayed until the expiration of the lease, the lessee shall suffer them, whatever the inconvenience which they cause him and notwithstanding that he may be deprived of a part of the immovable let during their execution.

Art. 2919 – 4. Limitation of duty of lessor.
The lessor may not be compelled to carry out the repairs which are at his charge, where their cost is higher than the rent which he is to receive from the immovable in the course of three years of lease.

Art. 2920 – 5. Sanction of duties of lessor.
(1)    Where repairs which are necessary to ensure the enjoyment and which are at the charge of the lessor are not executed without delay by the latter, the lessee may have them executed at his expense and retain their cost, which legal interest thereon, from the rent payable by him.
(2)    The lessee may, where he prefers to do so, according to circumstances, claim damages from the lessor and, where appropriate, the termination of the lease.

Art. 2921 – Enjoyment of immovable by lessee.
(1)    The lessee shall use the immovable let with all necessary care and according to the purpose which has been given to it in the lease.
(2)    In particular, he may not make in the immovable or in the mode of its exploitation and important alteration the effects of which extend beyond the period of the lease.

Art. 2922 – Control by lessor.
(1)    The lessor may at any time satisfy himself that the lessee fulfills his obligations.
(2)    Such control shall be exercised reasonably, without causing an excessive inconvenience to the lessee and without assuming a vexatious character.

Art. 2923 – Payment of rent.
(1)    The lessee shall pay the rent at the times fixed by the contract.
(2)    In default of a stipulation in the contract, he shall pay it at the times fixed by the law.

Art. 2924 – Right of retention of lessor – 1. Principle.
The lessor shall have a right of retention on the movables which furnish the immovable let and which serve either for its fitting up or for its use, as a security for the rent in respect of the year which has elapsed and of the current period of six months.

Art. 2925 – 2. Movables affected.
(1)    The right of retention shall not affect those things which the lessor has known or should have known not to be the property of the lessee.
(2)    Where the lessor comes to know only during the currency of the lease that some movables brought by the lessee are not the property of the latter, his right of retention on such movables shall lapse unless he gives notice for the termination of the contract for the next following term of the lease.

Art. 2926 – 3. Effect.
(1)    By virtue of his right of retention, the lessor may, with the authorization of the court, compel the lessee to leave in the immovable let as many movables as are necessary to guarantee the rent.
(2)    The things taken away secretly or with violence shall continue to be subject to the settlement of the preferential claims of the lessor, where the latter attaches them within ten days after they have been removed.

Art. 2927 – Duration of contract.
(1)    The lease of an immovable may be made for a determinate or an indeterminate period.
(2)    It may not be made for more than sixty years.
(3)    A lease of an immovable made for a period of more than sixty years shall be deemed to have been made for sixty years.

Art. 2928 – Death of lessor or lessee.
(1)    A contract of lease shall not terminate upon the death of the lessor or lessee or upon either of them becoming incapable.
(2)    Nothing shall affect the special provisions relating to the lease of lands and those of the Commercial Code relating to the bankruptcy of the lessee.

Art. 2929 – Loss of immovable let.
(1)    Where, during the currency of the lease, the immovable let is totally destroyed by fortuitous event, the lease shall terminate as of right.
(2)    Where the immovable is only partly destroyed, the lessee may, according to circumstances, require a reduction of the rent or the termination of the lease.
(3)    No compensation shall be payable in either case.

Art. 2930 – Lessor failing to fulfill his obligations.
(1)    The lessee may require the termination of the lease, where the lessor fails to fulfill his obligations in such a manner that the use or enjoyment of the immovable is thereby notably diminished.
(2)    In addition to or independently of such termination, he may claim damages in compensation of the loss which the non-fulfillment of obligations on the part of the lessor causes to him.

Art. 2931 – Lessee failing to fulfill his obligations.
(1)    The lessor may require the termination of the lease, where the lessee fails to fulfill his obligations so that the rights of the lessor are endangered.
(2)    In addition to or independently of such termination, he may claim damages in compensation of the loss which the non-fulfillment of obligations on the part of the lessee caused to him.

Art. 2932 – Lease set up against purchaser of immovable. – 1. Principle.
(1)    Unless otherwise expressly agreed between the lessor and the lessee, a contract of lease may be set up against a third party who acquires the ownership or usufruct of the immovable given on lease after the delivery of the immovable to the lessee.
(2)    Nothing shall affect the case where the immovable has been expropriated by the public authorities.

Art. 2933 – 2. Lease not registered in registers of immovable property.
(1)    The person who acquires the immovable may regard the lease as having been made for an indeterminate period, where it has not been registered in the registers of immovable property in the place where the immovable is situate.
(2)    Where the date of the lease is certain, the lessee may set it up against the purchaser during five years from the purchaser having registered his contract in the registers of immovable property.

Art. 2934 – Stipulation relating to such case. – 1. Effect.
(1)    Where the lessor and the lessee have agreed that the person who acquires the immovable may terminate the lease, the person acquiring the immovable shall, within three months from the lessee having required him to do so, inform the latter whether or not he intends to terminate the lease.
(2)    The person who acquires the immovable shall lose such right where he fails to exercise it within such period.

Art. 2935 – 2. Sale with reservation of right of redemption.
The person who acquires an immovable subject to a right of redemption may not make use of the right to expel the lessee until such time as he becomes the absolute owner by the expiry of the period fixed for the redemption.

Art. 2936 – Duty to restore thing. – 1. Principle.
(1)    The lessee shall, at the end of the lease, restore to the lessor the immovable given on lease.
(2)    He shall also restore in kind to the lessor all the things which he has received with the immovable and which still exist in kind.

Art. 2937 – 2. Conformity with statement or inventory.
Where a statement showing the condition of the tenement or an inventory has been made by the lessor and the lessee, the latter shall restore the thing as he has received it, according to such statement or inventory.

Art. 2938 – 3. Absence of statement or inventory.
(1)    Where a statement showing the condition of the tenement has not been drawn up conjointly by the parties, the lessee shall be deemed to have received the immovable in good condition.
(2)    Where an inventory has not been drawn up conjointly by the parties, the immovable shall be deemed not to have comprised any accessories.
(3)    Evidence shall be admitted to rebut such presumption.

Art. 2939 – 4. Power of the court.
Where a statement showing the condition of the tenement or an inventory has been drawn up unilaterally by one of the parties and has not been approved by the other, the court shall give to such statement or inventory the credit which, in the circumstances, it thinks it deserves.

Art. 2940 – Loss or deterioration of thing.
(1)    The lessee shall be liable where the thing is lost or deteriorates after he has received it.
(2)    He shall be liable in particular where the loss or deterioration is caused by a person of his household or by a person he has admitted to the immovable.

Art. 2941 – Limit of liability.
(1)    The lessee shall not be liable where he proves that the loss or deterioration is due to the fault of the lessor or to a fortuitous event.
(2)    He shall not be liable where he proves that the loss or deterioration is due to old age or to some other defect of the thing given on lease.
(3)    He shall not be liable where the deterioration is due to normal and lawful use of the thing given on lease.

Art. 2942 – Lessee in default.
Where the lessee has been called upon the restore the thing, he shall be liable unless he proves that the thing would have been lost or deteriorated, had he restored it to the lessor at the time required.

Art. 2943 – Amount of damages.
(1)    Where the things which are not restored have been valued conjointly by the parties, the lessee shall be bound by the amount of such valuation.
(2)    The lessor may obtain additional damages where he proves that the lessee has alienated such things at a price higher than the amount of the valuation.
(3)    The provisions of sub-art. (2) shall not apply where the alienation of the thing by the lessee amounted to an act of management according to the common intention of the lessor and lessee at the time of the conclusion of the contract of lease.
Art. 2944 – Case of rescission attributable to the lessee.
The lessee, where rescission is caused by his fault, shall pay the rent during the time required to re-let the immovable without prejudice to the damages which may have been caused by the abuse.

Section 2. Special rules regarding the lease of houses

Art. 2945 – Scope of this Section.
(1)    The provisions of this Section shall apply where the contract of lease relates to a house, furnished or unfurnished, a flat, a room or some other building or part of a building.
(2)    Nothing shall affect the provisions governing contracts relating to hotels in the Title of this Code relating to “Contracts for the performance of services” (Art. 2653-2671).

Art. 2946 – Model contracts.
(1)    Model contracts for the lease of houses or flats situate within the territory of a particular commune may be drawn up by the municipal authorities.
(2)    Individual contracts relating to such houses or flats shall be deemed to have been made on the terms laid down in such model contracts.
(3)    They may depart from such terms by express stipulations.

Art. 2947 – Lease of part of immovable. – 1. Duties of lessor.
(1)    Where part only of an immovable is given on lease to a lessee, the lessor shall, on giving on lease the other part of the immovable, take into consideration the interests of the lessee according to custom and the nature of the immovable.
(2)    The lessor shall comply with the provisions of sub-art. (1) as regards both the selection of the other lessees and the provisions to be included in the contracts made with them.

Art. 2948 – 2. Duties of lessee.
(1)    The lessee shall have the consideration which is due to the other persons who dwell in the house a part of which has been given to him on lease.
(2)    The lessor may require the termination of the lease where the lessee or other persons living with him or whom he admits to the immovable, behave in such manner that they disturb the other lessees in the enjoyment of the immovable.
(3)    Nothing shall affect the right of such other lessees or of the lessor to claim damages in compensation of the damage caused to them.

Art. 2949 – Duty to furnish immovable given on lease.
(1)    The lessee shall furnish the immovable given on lease in conformity with its nature and according to the custom of the place.
(2)    The provisions of sub-art. (1) shall not apply where the lessee has taken on lease furnished premises or paid a term of rent in advance or given a security or other guarantee for such payment.

Art. 2950 – Amount of rent.
(1)    The amount of the rent shall be fixed by agreement between the parties.
(2)    In case of doubt, it shall be fixed in conformity with the tariffs established by the municipal authorities or, failing such tariffs, in conformity with the custom of the place.

Art. 2951 – When the rent falls due.
(1)    Unless otherwise agreed, the rent shall be paid at the end of each quarter where the lease has been made for one or more years.
(2)    It shall be paid at the end of each month, where the lease is of a shorter duration or made for an indeterminate period.
(3)    The rent shall in all cases be paid on the expiry of the lease.

Art. 2952 – Delay of lessee.
(1)    Where the lessee is late in paying a term of rent which has fallen due, the lessor may give him a period of thirty days where the lease is for a year or more, and a period of fifteen days where the lease is for a shorter period, informing him that, in default of payment, the contract shall be terminated at the end of that period.
(2)    The period shall run from the day when the lessee has received the notice of the lessor.
(3)    Any stipulation reducing such periods or giving to the lessor the right to terminate the lease forthwith on account of a failure in the payment of rent shall be of no effect.

Art. 2953 – Repairs incumbent upon lessee. – 1. Duties of lessee.
The lessee shall carry out at his expense the repairs which are incumbent upon him.

Art. 2954 – 2. Which repairs are incumbent upon lessee.
(1)    The repairs which in the contract of lease are placed at the charge of the lessee shall be deemed to be repairs incumbent upon him.
(2)    Unless otherwise agreed, repairs necessary to the doors, windows, floorboards, tiling, taps, and water-drains shall be deemed to be repairs incumbent upon the lessee.
(3)    The works of cleaning and maintenance which become necessary by the enjoyment of the thing shall also be deemed to be repairs incumbent upon the lessee.

Art. 2955 – Old age or force majeure.
(1)    No repairs which are deemed to be incumbent upon the lessee shall be at the charge of the lessee where they are occasioned only by old age or force majeure.
(2)    The contract of lease may derogate such rule by an express stipulation.
Art. 2956 – Deprivation of enjoyment due to repairs.
(1)    Where the repairs which the lessor carries out on the immovable during the lease take more than fifteen days, the rent shall be reduced in proportion to the time and to the portion of the thing let of which the lessee is deprived.
(2)    Where the repairs are of such a nature as to render uninhabitable what is necessary for the accommodation of the lessee and his family, the lessee may require the termination of the lease.

Art. 2957 – Sub-lease. – 1. Principle.
(1)    The lessee may sub-let all or part of the immovable let to him.
(2)    Prior to sub-letting, he shall give notice of his intention to the lessor and ask him whether he has any objection to such sub-lease.

Art. 2958 – 2. Objection by lessor.
(1)    The lessor may object to such sub*lease where it is contrary to contractual undertakings made by him in favour of other lessees of the same immovable or is of such nature as to cause to him damage for any other reason.
(2)    The lessee may in such case terminate the contract.
(3)    Nothing shall affect the right of the lessor to claim damages where the reason of his opposition was known or should have been known by the lessee on the making of the contract.

Art. 2959 – 3. Provision restricting right to sub-let.
(1)    A contract of lease may prohibit the sub-lease of the immovable or make such sub-lease conditional on the acceptance of the sub-lessee by the lessor.
(2)    Where, under the contract of lease, the sub-lease of an immovable is made conditional on the acceptance of the sub-lessee by the lessor, the lessee may demand the termination of the lease where the lessor arbitrarily refuses his consent to the sub-lease.

Art. 2960 – 4. Duties of lessee.
(1)    A lessee who has sub-let all or part of the immovable shall remain bound, in his relations with the lessor, by all the obligations which, by virtue of the contract of lease, have to be performed by him.
(2)    The provision of sub-art. (1)  shall apply notwithstanding that the lessor has given his consent to the sub-lease.
(3)    The lessee shall not be released from such obligations unless such release has been expressly stipulated between the lessor and himself.

Art. 2961 – 5. Duties of sub-lessee.
(1)    The sub-lessee shall comply with the provisions of the principal lease concerning the enjoyment of the immovable given on lease.
(2)    The lessor may take action directly against the sub-lessee to enforce compliance with such provisions.
(3)    Where the sub-lessee did not know of such provisions or was dispensed by the lessee from observing them, he shall have recourse against the lessee.

Art. 2962 – 6. Direct action of lessor.
(1)    The sub-lessee shall be liable only up to the amount of rent payable in respect of  what has been sub-let to him.
(2)    The lessor may require the sub-lessee to pay such rent directly to him.
(3)    The sub-lessee may not set up against the lessor the payment made by him in advance, with the exception of the payments made in respect of the current term of the principal lease.

Art. 2963 – 7. Right of retention.
The right of retention of the lessor may be exercised by the lessor and by the lessee on the movables brought in the immovable by the sub-lessee.

Art. 2964 – 8. Termination of principal lease.
(1)    The termination of the principal lease shall bring the contract of sub-lease to an end.
(2)    Where the lessor has expressly consented to the sub-lease, the sub-lessee may substitute himself for the lessee for the execution of the principal lease.

Art. 2965 – Termination of contract of lease for a determinate period.
A contract of lease made for a determinate period shall terminate as of right on the expiration of the period agreed upon without the necessity of giving notice.

Art. 2966 – Termination of lease for an indeterminate period.
(1)    Where the contract of lease has not been made for a determinate period, notice may be given by the lessor to the lessee or by the lessee to the lessor.
(2)    In such case, the contract shall terminate on the day when, under the contract or the law, the second term of rent becomes or would have become exigible, had notice of termination not been given.

Art. 2967 – Person acquiring the immovable.
(1)    Where a person who acquires the immovable wishes to terminate the lease, in the case where such right has been reserved to him, he shall observe the period laid down in Art. 2966.
(2)    Any stipulation to the contrary shall be of no effect.

Art. 2968 – Renewal of contract.
(1)    Where, at the expiration of the lease, the lessee continues in the enjoyment of the thing with the knowledge and without the opposition of the lessor, the contract of lease shall be renewed for an indeterminate period.
(2)    The rights and duties of the parties for the further duration of the lease shall be governed by the provisions of the previous contract
(3)    The security given for the original lease shall however be released.

Art. 2969 – Retaking of immovable by lessor.
(1)    Unless otherwise agreed, the lessor may not terminate the lease, notwithstanding that be declares that he himself wants to occupy the house let.
(2)    Where it has been agreed in the contract of lease that the lessor may occupy the house, he shall give to the lessee notice to quit and shall observe the period laid down in Art. 2966.

Art. 2970 – Fire on immovable. – 1. Principle.
The lessee shall be liable for fire to the lessor unless he proves that the fire was due to force majeure or a defect of construction or started in a neighbouring house.

Art. 2971 – 2. Several lessees.
(1)    Where there are several lessees, they shall all be liable, in case of fire, in proportion to the rental value of the part of the immovable which they occupy.
(2)    Where it is proved that the fire has started in the dwelling of one of them, he alone shall be liable for it.
(3)    Where some lessees prove that the fire could not have started in their dwellings, such lessees shall not be liable for it.

Art. 2972 – 3. Immovable partly inhabited by lessor.
(1)    The provisions of Art. 2971 shall also apply where the lessor dwells in a part of the immovable which has caught fire.
(2)    In such case, the lessor shall be treated as though he himself were the lessee on that part of the immovable.

Art. 2973 – Improvements made in immovable. – 1. Right to indemnity.
(1)    The lessee shall not be entitled to compensation for improvements which he has made in the immovable without the consent of the lessor.
(2)    Where the improvements have been made with the consent of the lessor, the lessee may claim the reimbursement of the lesser sum between the amount of expenses made by him and the increase in the value of the immovable, as at the time of the restoration.

Art. 2974 – 2. Set-off and right of removal.
(1)    Even where the lessee is not entitled to compensation, he may set of the increase in value procured by him to the immovable against the decrease in value that such immovable has sustained as a consequence of deteriorations for which he is liable but which have been caused without any fault on his part.
(2)    The lessee may also remove the improvements which he has made in the immovable where this can be done without damage to the immovable.

Section 3. Special rules regarding the lease of lands

Art. 2975 – Scope of this Section.
(1)    The provisions of this Section shall apply where the contract of lease relates to a piece of land which the lessee undertakes to exploit.
(2)    The parties may in their contract derogate such rules uless such derogation is expressly prohibited by law.

Art. 2976 – Model contracts.
(1)    Model contracts may be drawn up by the Ministry of Agriculture, concerning lands intended for certain kinds of cultivation or lands situate in certain areas of Ethiopia.
(2)    Individual contracts regarding the lands to which such model contracts relate shall be deemed to have been made on the terms laid down in such model contracts.
(3)    They may derogate them by express stipulations.

Art. 2977 – Direction of exploitation. – 1. To whom it pertains.
(1)    The direction of the exploitation shall be ensured in accordance with the agreement of the parties.
(2)    Unless otherwise agreed or provided by custom, it shall pertain to the lessor where the rent consists, exclusively or principally, of a determinate part of the products or of determinate products of the land given on lease.
(3)    Unless otherwise agreed or provided by custom, it shall pertain to the lessee where the rent consists, exclusively or principally, of a sum of money which is to be paid in case to the lessor.

Art. 2978 – 2. Rights of other party.
(1)    The other party shall be consulted where the decisions which are contemplated are of such a nature that their effects shall continue after the end of the lease.
(2)    Such party may and shall take a decision instead of the other contracting party where the latter has not informed him f his decision in good time and such decision may not be delayed without serious inconvenience.

Art. 2979 – Obligation of exploiting.
(1)    A farmer-tenant shall exploit the land and keep it in a good state of productivity.
(2)    The lessor may require the rescission of the lease where the farmer-tenant does not fulfill such obligation.

Art. 2980 – Nature and manner of cultivation.
The contracting party who has the direction of the exploitation shall decide on the nature and manner of the cultivation to be undertaken.

Art. 2981 – Time of works.
(1)    The farmer-tenant shall in any case decide on the time when he will do the works of cultivation or other works.
(2)    The lessor may only make to him recommendations in this regard.

Art. 2982 – Expenses of exploitation.
(1)    The ordinary expenses arising from the exploitation shall be borne by the farmer-tenant.
(2)    Where the rent consists of a part of the products or determinate products of the land, the lessor shall advance to the farmer-tenant such expenses, without interest, where the latter is unable to meet such expenses.
(3)    The advance so made shall be reimbursed to the lessor out of the products of the next crop.

Art. 2983 – Repairs and maintenance.
(1)    The farmer-tenant shall make on premises to be used as dwellings, barns, stables and other buildings given to him on lease such repairs as are incumbent upon the lessee under Section 2 of this Chapter.
(2)    He shall maintain according to local custom the roads, well, fences, ditches, canals and dikes included in the tenement given on lease.

Art. 2984 – Old age or force majeure.
(1)    The repairs referred to in Art. 2983 shall be made by the farmer-tenant notwithstanding that they are caused by old age or force majeure.
(2)    The farmer-tenant shall replace the implements or tools of small value which have perished by old age or force majeure.

Art. 2985 – Extraordinary expenses.
The farmer-tenant shall not be bound to make extraordinary expenses for the purpose of reconstructing the tenement following an exceptional disaster.

Art. 2986 – Exchange of parcels of lands.
(1)    The party who has the direction of the exploitation may, in order to facilitate such exploitation, exchange parcels, of land with other owners of farmer-tenants.
(2)    Where such exchanges are made by the farmer-tenant, they shall affect only the enjoyment of such parcels.
(3)    They shall as of right cease to have effect at the end of the lease, unless they have been decided upon by the lessor or the lessor has given his consent thereto.

Art. 2987 – Management of tenement.
The farmer-tenant may destroy the slopes, trenches or fences which are an obstacle to the rational exploitation of the tenement given on lease.

Art. 2988 – Kinds of rent.
(1)    The rent may consist of a fixed sum of money, or of a fixed quantity of agricultural products, or of a sum of money which varies according to the current price of certain agricultural products.
(2)    The rent may also consist of a fixed share of the agricultural products or of various agricultural products of the land given on lease.

Art. 2989 – Amount of rent.
The amount of the rent shall be fixed by agreement between the parties.

Art. 2990 – Legal presumptions.
(1)    Unless otherwise provided by custom, the rent shall consist of one half of the agricultural products of the land given on lease.
(2)    Unless otherwise provided by custom, the products shall be shared in kind between the lessor and the farmer-tenant.
(3)    Before any partition, the farmer-tenant may retain the seeds necessary for the next crop.

Art. 2991 – Legal maximum.
(1)    The share of the products due to the lessor may in no case exceed three fourths.
(2)    Where a greater share has been stipulated, such stipulation shall be of no effect and the products shall be divided equally between the lessor and the farmer-tenant.

Art. 2992 – Products necessary for subsistence. – 1. Principle.
(1)    The farmer-tenant may in any case keep such part of the products as is necessary for his substance and that of the persons living with him.
(2)    The provisions of sub-art. (1) shall not apply where the products are equally necessary for the subsistence of the lessor and of those who live with him.
(3)    In such case, the products shall be divided equally between the lessor and the farmer-tenant.

Art. 2993 – 2. Reservation of rights of lessor.
Where, by applying the provisions of art. 2992, the lessor has not received the whole part which is due to him, he shall exercise his rights on the next crop.

Art. 2994 – Crops.
(1)    Where the rent consists of a portion of the crops or is fixed having regard to such crops, the farmer-tenant shall, as far as possible, inform the lessor, before gathering the crops.
(2)    He shall ensure the custody and preservation of such crops until such part thereof as is under the contract to be given to the lessor has been delivered to him.

Art. 2995 – Rent when to be paid. – 1. Principle.
(1)    The rent shall be paid at the end of each year of lease where it consists of an amount of money or of a predetermined quantity of agricultural products.
(2)    The year of the lease shall begin on the day when the lessor has delivered the immovable to the former-tenant.

Art. 2996 – 2. Default of farmer-tenant.
(1)    Where the farmer-tenant is late in the payment of a term fallen due, the lessor may give him a period of sixty days, informing him that, in default of payment, the contract shall terminate at the end of that period.
(2)    Such period shall run from the day when the farmer-tenant has received the notice of the lessor.
(3)    Any stipulation or custom reducing such period or giving to the lessor the right to terminate the lease immediately by reason of failure in the payment of rent shall be of no effect.

Art. 2997 – 3. Rent consisting of products.
(1)    Where the rent consists of a determinate share of the products, or of determinate products of the tenement given on lease, the part due to the lessor shall be delivered to him upon his requiring so, after the products have been separated from the ground.
(2)    Nothing shall affect any custom to the contrary.

Art. 2998 – Revision of rent. – 1. Principle.
(1)    Where the rent consists of a sum of money or of a quantity of agricultural products determined beforehand, the farmer-tenant may require a remission of part of his debt or time for the payment of such debt where, in consequence of an invasion of locust, an exceptional drought or other extraordinary accidents or disasters of the same nature, the yield of a given year has diminished by at least one half in comparison with the normal yield.
(2)    Any stipulation or custom to the contrary shall be of no effect.

Art. 2999 – 2. Exceptions.
(1)    The farmer-tenant may not obtain any remission where the loss of the crops takes place after they have been separated from the ground.
(2)    The farmer-tenant may not require a remission where the cause of the damage existed and was known on the making of the contract.
(3)    He may not require a remission where the damage suffered by him is covered by an insurance or otherwise.

Art. 3000 – 3. Amount of remission.
(1)    For the purpose of fixing the amount of the remission which the farmer-tenant may require, regard shall be had to the usual yield and the importance of the loss which has been sustained.
(2)    Regard shall also be had to the profits which the farmer-tenant made on the crops of the preceding years or which he can expect to make during the years of the lease which are still to run.
(3)    The court shall not alter the terms of the contract unless equity so requires and to the extent necessary to enable the farmer-tenant and his family to live and to continue the exploitation.

Art. 3001 – Sub-lease. – 1. Principle.
(1)    Unless otherwise provided by custom, the farmer-tenant may not sublet without the consent of the lessor.
(2)    He may require the rescission of the lease where the lessor arbitrarily refuses to consent to the sub-lease.

Art. 3002 – 2. Exception.
(1)    The farmer-tenant may sub-let buildings which appertain to the thing given on lease, where no change prejudicial to the lessor arises there-from.
(2)    The provisions of Section 2 of this chapter concerning sub-leases shall apply in such case as well as where the lessor agrees to the sub-lease.

Art. 3003 – Termination of contract. – 1. Principle.
(1)    A contract of lease shall terminate at the expiration of the period fixed, provided that notice has been given by one party to the other at least six months before that date.
(2)    Nothing shall affect any custom to the contrary.

Art. 3004 – 2. Renewal of lease.
(1)    Unless otherwise provided by custom, the contract of lease shall be renewed for four years where notice as provided in Art. 3003 has not been given or where, notwithstanding such notice, the farmer-tenant remains in the enjoyment of the thing with the knowledge and without opposition of the lessor.
(2)    The rights and obligations of the parties under the renewed contract shall be settled in accordance with the terms of the previous contract.
(3)    The security given for the original lease shall however be released.

Art. 3005 – 3. Contracts of long duration.
(1)    Where the contract of lease has been made for a lifetime or for a period exceeding ten years, the farmer-tenant may unilaterally alter such provision as to time where ten years have elapsed from the land having been delivered to him.
(2)    In such case, the contract of lease shall terminate on the first day of Megabit, four years after the lessor has received notice of the intention of the farmer-tenant to terminate the contract.
(3)    Any stipulation or custom to the contrary shall be of no effect.

Art. 3006 –  4. Lease for an indeterminate period.
(1)    A lease made without an indication of its duration shall be deemed to have been made for four years to be reckoned from the day when the farmer-tenant in possession of the tenement.
(2)    Nothing shall affect any custom to the contrary.

Art. 3007 – 5. Transfer of immovable.
(1)    Where a person acquiring the immovable intends to terminate the lease, such right having been reserved in his favour, he shall give notice to the farmer-tenant within three months from the acquisition made by him.
(2)    The lease shall terminate on the first day of Megabit which follows but not less than three months from the day when such notice has been given.
(3)    Any stipulation or custom to the contrary shall be of no effect.

Art. 3008 – 6. Right of farmer-tenant.
(1)    The farmer-tenant to whom notice has been given may advance the day on which the contract terminates by giving notice of his intention to the lessor or to the person who has acquired the immovable.
(2)    In such case, the contract shall terminate on the day fixed by the farmer-tenant a month, at the earliest, after the lessor or the person who has acquired the immovable has received notice of the intention of the farmer-tenant.

Art. 3009 – Death of farmer-tenant or lessor.
(1)    In case of death of the farmer-tenant, his heirs may terminate the contract of lease by giving notice to the lessor within six months from the death.
(2)    In case of death of the lessor, the farmer-tenant may terminate the contract of lease by giving notice to the heirs of the lessor within six months from the death of the latter, where the direction of the exploitation has been reserved to the lessor by the contract of lease,
(3)    In the cases mentioned in sub-art. (1) and (2), the contract shall terminate on the first day of Megabit which follows but not less than three months after the lessor or his heirs have received the notice from the farmer-tenant or from the heirs of the farmer-tenant.

Art. 3010 – Illness of farmer-tenant. – 1. Right of farmer-tenant.
(1)    The farmer-tenant may terminate the lease before the time fixed by the contract or by law where an illness affecting him or a member of his family prevents him from continuing the exploitation in a normal manner.
(2)    The farmer-tenant shall not be liable to pay compensation where he avails himself of such right.
(3)    The contract shall terminate six months after the lessor has received the notice from the farmer-tenant.

Art. 3011 – 2. Right of lessor.
(1)    Where the rent consists of a determinate share of the products, or of determinate products of the tenement, the lessor may terminate the lease before the time fixed by the contract or by law, where an illness affecting the farmer-tenant or a member of the family of the farmer-tenant prevents him from continuing the exploitation in a normal manner.
(2)    Where the lessor avails himself of such right, he shall pay to the farmer-tenant compensation equal to a moiety of the average rent of one year.
(3)    The contract shall terminate six months after the farmer-tenant has received the notice of the lessor.

Art. 3012 – fire.
The provisions of Section 2 of this Chapter regarding the destruction or deterioration by fire of the thing let shall apply to the dwelling places and other buildings which form part of the immovable let to the farmer-tenant.

Art. 3013 – Settlement at the end of the contract. – 1. Stable-litter, forage and manure.
(1)    The outgoing farmer-tenant shall leave the stable-litter, forage and a manure of the last year, in the quantity required for the normal exploitation of the tenement.
(2)    Where, on entering in possession of the tenement, he received a smaller quantity, he shall be entitled to compensation in respect of the difference.
(3)    Unless otherwise provided by custom, he hall pay compensation in respect of the difference where he received more.

Art. 3014 – 2. Seeds.
Unless otherwise provided by custom, the outgoing farmer-tenant shall not be bound to leave seeds for the next crop.

Art. 3015 – 3. Expenses of cultivation.
(1)    The farmer-tenant shall not be entitled to the fruits which, at the termination of the contract, are still undetached.
(2)    The court may, where equity so requires, grant him compensation for the expenses of cultivation incurred by him.
(3)    Such compensation may not exceed the value of the fruits from which the lessor derives a benefit.

Art. 3016 – Improvements made in tenement. 1. Principle.
(1)    What ever the reason for the termination of the lease, the lessee who, by his work or at his expense, has made improvements in the tenement let shall be entitled to compensation at the end of the lease.
(2)    The farmer-tenant shall also be entitled to compensation where he has erected construction on the tenement given on lease.
(3)    Any stipulation or custom to the contrary shall be of on effect

Art. 3017 – 2. Amount of compensation.
(1)    The compensation due shall be equal to the increase in the rental value of the tenement for nine years resulting from the improvements or constructions.
(2)    The court may grant the lessor a period of time for the payment of such compensation.

Art. 3018 – 3. Right of removal.
The farmer-tenant may, where he so prefers, remove the improvements or destroy the constructions which he has made, where this can be done without damaging the immovable.

Chapter 3. Contract of work and labour relating to immovables

Art. 3019 – Application provisions.
(1)    The provisions of this Chapter shall apply to contracts of work and labour relating to work to be done in connection with the building, repair or installation of immovables.
(2)    The provisions relating to contracts of work and labour laid down in the Title of this Code relating to “Contracts for the performance of services” shall also apply where they are not inconsistent with those of this Chapter (Art. 2610-2631).

Art. 3020 – Making and proof of contract.
(1)    The contract shall be completed where the parties have agreed on the work to be done and on the price.
(2)    There shall be evidence of the contract where the contractor has undertaken work to the knowledge of the client or received an advance from the client.

Art. 3021 – Work to be done. – 1. Sufficient description.
(1)    The work to be done may be described by means of a plan, scheme or other document.
(2)    The contractor shall in such case comply with the indications given in such documents.

Art. 3022 – 2. General description.
(1)    Where the work to be done has been described in a general manner, the contract shall be construed in a restrictive manner as regards the importance of such work.
(2)    Prior to undertaking a work, the contractor shall, whenever this appears reasonable, satisfy himself that the client agrees to the work to be undertaken.

Art. 3023 – Provisions as to price.
(1)    The price to be paid by the client may be fixed by way of a lump sum.
(2)    An estimate price may be fixed.
(3)    Where no lump sum or estimate price is fixed, the price shall be deemed to be fixed having regard to the value of the materials and importance of the work necessary to perform the contract.

Art. 3024 – Price fixed approximately.
(1)    Where the price has been fixed approximately, the contractor shall carry out the contract as though the price had been fixed by way of a lump sum.
(2)    He shall fix the price definitively having regard to the expenses made and difficulties encountered in the performance of the contract but the price so fixed may not exceed by more than twenty percent the price agreed as approximate price.
(3)    Unless otherwise agreed, the client may not demand accounts for the price so fixed nor may he appeal against such price.

Art. 3025 – Price fixed having regard to expenses and labour. – 1. Duty to account.
(1)    Where the price is fixed having regard to the value of the materials and the work necessary for the performance of the contract, the contractor shall, notwithstanding any agreement to the contrary, inform the client of the work already done and expenses already incurred.
(2)    Unless otherwise agreed, such information shall be given at the end of each month.

Art. 3026 – 2. Remuneration of contractor.
(1)    The contractor shall be entitled to the remuneration fixed by agreement between the parties.
(2)    In the absence of a specific provision, he may only enter in the accounts given by him to the client wages corresponding to his work.

Art. 3027 – 3. Rights of client.
(1)    The client may at any time require that the amounts appearing in the accounts of the contractor be checked by experts.
(2)    Where the parties have not agreed on the remuneration of the contractor, the client may require that such remuneration be fixed by arbitrators.

Art. 3028 – Examination of work.
The client may at any time cause to be examined by express the progress achieved in the work, the quality of the materials used and of the work completed.

Art. 3029 – Delivery and payment.
(1)    Payment of the price shall raise the presumption that the work has been examined and accepted by the client.
(2)    The provisions of sub-art. (1) shall not apply where the sums paid are to be regarded as installments on the price.

Art. 3030 – Partial delivery and payment.
(1)    Where it has been agreed that the work would be carried out by stages, such work shall be examined and delivered on completion of each of such stages.
(2)    The contractor may require that part of the price corresponding to the work completed be paid to him on completion of each of such stages.

Art. 3031 – Alterations required by client. – 1. Rights of client.
The client may demand that alterations be made in the work as originally planned where such alterations can technically be made and are not such as to impair the solidity of the work.

Art. 3032 – 2. Effect.
(1)    The client may require a reduction in the price as originally agreed where the alterations required by him reduce the expenses of the contractor.
(2)    The contractor may require an increase in the price and his remuneration as originally agreed, where the alterations required by the client increase his expenses, work or liability.
(3)    Where the parties do not agree, such reduction or increase shall be settled by arbitrators appointed by the parties or, failing such, by the court.

Art. 3033 – 3. Contractor refusing alterations.
(1)    The contractor may refuse the alterations required by the client where such alterations affect plans, schemes or other documents on which the parties had agreed.
(2)    The contractor may also refuse the alterations where they are of such a nature or importance that they constitute a work absolutely different to the agreed work.
(3)    The work shall be deemed to be absolutely different to the agreed work where it implies an alteration exceeding by twenty percent the value at which the original work was or could have been estimated.

Art. 3034 – Alterations required by contractor.
(1)    Where it appears necessary for technical reasons to make alterations in the work as originally agreed, the contractor shall, except in urgent cases, give notice thereof to the client.
(2)    The contractor shall give such notice notwithstanding that the proposed alterations do not result in the client having to pay an increased price.

Art. 3035 – Termination of contract.
The client may at any time terminate the contract, notwithstanding that the contractor has committed no fault.

Art. 3036 – Rights of contractor. – 1. Price fixed by way of a lump sum.
(1)    Where the client terminates the contract, the contractor shall be entitled to the lump sum or approximate price agreed.
(2)    The amounts saved by the contractor in consequence of the termination of the contract shall be deducted.
(3)    Where the price had been fixed approximately, the contractor may increase by not more than twenty percent the sums due by the client under sub-art. (1) and (2).

Art. 3037 – 2. Price fixed otherwise.
(1)    Where the price had been fixed having regard to the value of the materials and the work necessary for the performance of the contract, the contractor shall be entitled to the value of the materials used and work carried out before he was informed of the termination of the contract.
(2)    The client shall be bound by the contracts made in good faith by the contractor prior to the termination of the contract or shall make good the damage caused to the contractor by the rescission of such contracts.
(3)     The contractor shall be entitled to the whole remuneration agreed with the client.

Art. 3038 – Rescission of contract.
(1)    Where the contract is rescinded by reason of a fault committed by the contractor or his refusing to accept alterations required by the client, the contractor shall be entitled to such part of the price and remuneration as corresponds to the work already carried out.
(2)    Nothing shall affect the client’s right to claim damages for the prejudice caused to him by the contractor failing to perform his obligations.

Art. 3039 – Warranty due by contractor.
(1)    The contractor shall guarantee during ten years from its delivery the proper execution and the solidity of the work done by him.
(2)    He shall be liable during this period for such loss or deterioration of the work as is due to a defect in its execution or to the nature of the soil on which the work has been done.
(3)    Any provision shortening the period laid down in sub-art. (1) or excluding the warranty due by the contractor shall be of no effect.

Art. 3040 – Claim by sub-contractors or workmen.
Independent contractors or workmen employed under a contract of work and labour relating to an immovable may claim against the person on whose behalf the work was done with a view to obtaining payment of their claims to the extent of the amount due by the client to the principal contractor on the day the claim is made.

Chapter 4. Mortgage and antichresis
Section 1. Creation of mortgage

Art. 3041 – Mortgage how created.
A mortgage may result from the law or a judgment or be created by a contract or other private agreement.

Art. 3042 – Legal mortgage of seller of immovable.
Whosoever sells an immovable shall have a legal mortgage on such immovable as a security for the payment of the agreed price and for the performance of any other obligation laid down in the contract of sale.

Art. 3043 – Legal mortgage of co-partitioner.
(1)    A co-partitioner shall have a legal mortgage on the immovables allotted to his co-partitioners in accordance with the act of partition.
(2)    Such mortgage shall secure the payment of any compensation in cash that may be due to him or such other compensation as may be due by the co-partitioners where he is dispossessed of any property allotted to him.

Art. 3044 – Judicial mortgage.
(1)    A court or arbitration tribunal may secure the execution of its judgments, orders or awards by granting one party a mortgage on one or more immovables the property of the other party.
(2)    The judgment or award shall specify the amount of the claim secured by mortgage and the immovable or immovables to which such mortgage applies.

Art. 3045 – Instrument creating mortgage.
(1)    The contract or other agreement creating a mortgage shall be of no effect unless it is made in writing.
(2)    It shall be of no effect unless it specifies in Ethiopian currency the amount of the claim secured by mortgage.

Art. 3046 – Claim secured by mortgage.
(1)    A mortgage may be created to secure any claim whatsoever, whether existing, future, conditional or contingent.
(2)    It may be created to secure a claim embodied in a title to order or to bearer.

Art. 3047 – Property liable to mortgage.
(1)    A mortgage may charge an immovable only.
(2)    Nothing shall affect the provisions of this Code or special laws whereby certain kinds of movables may be mortgaged.

Art. 3048 – Immovable mortgage.
(1)    The act creating the mortgage shall clearly specify the immovable mortgaged.
(2)    Such act shall specify in particular the commune in which the immovable is situate, the nature of the immovable and, where appropriate, the number of the immovable in the cadastral survey plan.
(3)    Where the immovable is situate in an area where there is no cadastral survey plan, not less than two of its boundaries shall be specified.

Art. 3049 – Conditions for creating a mortgage.
(1)    A mortgage may be created by the debtor or by some other person in favour of the debtor.
(2)    A person may not secure his debt by mortgage unless he is entitled to dispose of the immovable for consideration.
(3)    A person may secure the debt of another by mortgage where he is entitled to dispose of the immovable gratuitously.

Art. 3050 – Sanction.
(1)    A mortgage shall be of no effect where it is created by a person who is not entitled to dispose of the immovable as provided in Art. 3049.
(2)    It shall not become valid where the mortgagor subsequently acquires the right to dispose of the immovable.
(3)    A mortgage shall be of no effect where it relates to future immovables.

Art. 3051 – Ownership evidenced by title deed.
(1)    A mortgage shall be valid where it is created by a person who is the owner of the immovable under a title deed issued to him by the competent authorities.
(2)    It shall be valid notwithstanding that the title deed was issued on the basis of an act which is invalidated, unless the person who avails himself of the mortgage is shown to be in bad faith.
(3)    In such cases, the owner who discharged the mortgage shall be compensated by an insurance fund created, in accordance with administrative regulations, by means of the fees charged on delivery of title deeds.

Art. 3052 – Registration necessary.
A mortgage, however created, shall not produce any effects except from the day when it is entered in the registers of immovable property at the place where the immovable mortgaged is situate.

Art. 3053 – Manner of making registration.
(1)    The keeper of the registers of immovable property required to make an entry relating to a mortgage shall make such entry in the manner provided by the Title of this Code relating to “Registers of immovable property” (Art. 1587-1601).
(2)    The provisions of the same Tile shall apply as regards the correction and alteration of entries (Art. 1621-1627).

Art. 3054 – Costs of registration.
(1)    The costs of registration shall be borne by the debtor.
(2)    Whosoever has caused a mortgage to be registered for useful purposes and has advanced the costs of registration shall be refunded by the debtor.

Art. 3055 – Reduction of claim.
(1)    Where the debtor has discharged one fourth of the debt, he may apply for the entry to be corrected accordingly.
(2)    The creditor shall give his consent to the correction.
(3)    The fact that part of the debt has been discharged shall not enable the debtor to require that part of the immovable mortgaged be released.

Art. 3056 – Increase of claim.
(1)    The amount of the claim as specified in the original entry may not be increased by was of a correction made to such entry.
(2)    A new entry shall be required to secure such part of the claim as is not covered by the original entry.

Art. 3057 – Time for making entry.
(1)    An entry relating to a mortgage shall be of no effect where it is made after a third party who is not liable for the payment of the debt has acquired the immovable and registered his rights in the registers of immovable property.
(2)    An entry relating to an immovable shall be of no effect where it is made after an action for the attachment of the immovable has been brought and entered in the registers of immovable property or after the mortgagor has been declared bankrupt.

Art. 3058 – Effect of registration.
(1)    The registration of a mortgage shall be effective for ten years from the day when the entry was made.
(2)    The effect of such registration shall continue where, prior to the expiry of the period of ten years, a new entry is made with a view to renewing the first registration.
(3)    In such case, the first registration shall be effective for ten years from the day when the new entry was made.

Section 2. Effect of mortgage

Art. 3059 – Principle.
(1)    Where the immovable mortgaged is attached by the creditors of the mortgagor, the mortgagee may demand to be paid, out of the proceeds of the sale of the immovable, in priority to any other creditor.
(2)    Where the immovable has been sold by the mortgagor, the mortgagee may attach it in the hands of the purchaser whose rights have been registered subsequently to the registration of the mortgage.
(3)    The mortgagee shall in addition have all the rights of an ordinary creditor.

Art. 3060 – Prohibited provisions.
(1)    Any provision whereby the creditor may, after the debt has become due, appropriate or sell the immovable without due regard for the conditions prescribed by law shall be of no effect, notwithstanding that such provision was made after the creation of the mortgage.
(2)    Provisions may however be made to the effect that the mortgagor shall, after the debt has become due, transfer the ownership of the immovable to the mortgagee.

Art. 3061 – Legal proceedings. – 1. Jurisdiction.
Any action relating to the registration of a mortgage or the sale of the mortgaged immovable shall fall within the exclusive jurisdiction of the court of the place where such immovable is situate.

Art. 3062 – 2. Address for service.
(1)    The mortgagor and the mortgagee shall, on the request of any interested party, specify an address for service at the place where the sittings of the court having jurisdiction are held.
(2)    Where they fail to specify such address within one month from having been required to do so, the court shall specify the place where service shall validly be made.

Art. 3036 – 3. Curator.
The court may, on the application of any interested party, appoint a curator to a creditor whose name or domicile is unknown, where the personal appearance of such creditor is required by law and urgent decisions are to be made.

Paragraph 1. Preferential rights of mortgagee
A – Property to which such rights extend

Art. 3064 – Intrinsic elements and accessories. – 1. Principle.
(1)    The mortgage shall charge the mortgaged immovable together with its intrinsic elements and accessories.
(2)    Any object expressly specified as an accessory in the act creating the mortgage shall be deemed to be an accessory.
(3)    Evidence may be adduced to rebut the presumption laid down in sub-art. (2).

Art. 3065 – 2. Rights of third parties.
(1)    The mortgagee may not enforce his rights on such intrinsic elements or accessories of the mortgaged immovable as have been separated therefrom and transferred to a third party.
(2)    In such case, he may only exercise the rights vested in him by Art. 3073, 3074 and 3107 of this Code.

Art. 3066 – Improvements and buildings. – 1. Principle.
The mortgage shall apply to any improvement made on the mortgaged immovable and to the buildings, plantations and crops made on such immovable.
Art. 3067 – 2. Prior rights of contractors and suppliers.
(1)    The contractors who built the buildings or made the improvements mentioned in Art. 3066 and the suppliers who supplied the materials, plants, seeds or fertilizers used in the improvements, buildings, plantations or crops shall have priority over mortgagees on such part of the proceeds of the sale of the mortgaged immovable as is necessary to cover the costs of the improvements, buildings, plantations or crops made by them.
(2)    In case of dispute, the court shall settle the amount to be paid in priority.
(3)    Where appropriate, the court shall settle, how such amount shall be distributed among contractors and suppliers.

Art. 3068 – Rent.
(1)    Where the mortgaged immovable is leased, the mortgage shall apply to the rent having run from the day when the immovable was attached.
(2)    The lessees and farmer-tenants may not validly pay the rent to the owner of the mortgaged immovable after they have been notified of the attachment of the immovable.

Art. 3069 – Indemnities charged by mortgage. – 1. Principle.
(1)    The mortgage shall apply to any insurance compensation or compensation for damages which may be due in cases of loss or deterioration of the immovable.
(2)    The mortgage shall also apply to the compensation due to the owner whose immovable is expropriated.

Art. 3070 – 2. Consent of creditors to payment.
(1)    Insurance or expropriation compensation and compensation for damages may not be paid to the mortgagor unless all the mortgagees who have a registered claim on the immovable agree to such payment.
(2)    The mortgagor to whom such compensation is due shall inform all registered creditors of the amount of and reason for compensation and of the name and address of the person liable to pay it.
(3)    The creditors shall be deemed to agree to the compensation being paid to the debtor where they fail to declare their objection to the payment within thirty days from having received information as provided in sub-art. (2).

Art. 3071 – 3. Rights of mortgagor.
(1)    The mortgagor may demand that any compensation not exceeding one thousand Ethiopian dollars be paid to him.
(2)    He may demand that any compensation be paid to him where he undertakes to use it to rebuild or repair the immovable and offers to furnish sureties or securities sufficient to guarantee that he will comply with his undertaking.
(3)    He may in any case require that compensation be paid into the hands of a trustee appointed by the court.

Art. 3072 – Mortgage of bare ownership.
A mortgage charging the bare ownership of an immovable shall, upon the extinction of the usufruct, extend to the full ownership of such immovable.

Art. 3073 – Reduction in value of immovable. – 1. Due to mortgagor.
(1)    Where the mortgagor intentionally or by negligence reduces or endangers the value of the immovable mortgaged, the mortgagee may demand new securities.
(2)    Where the mortgagor fails to furnish such securities within the period of time reasonably fixed to him by the mortgagee, the mortgagee may demand that an adequate part of the debt be discharged.

Art. 3074 – 2. Due to third party acquiring the immovable.
The mortgagee may exercise against the mortgager the rights mentioned in Art. 3073 where the value of the immovable mortgaged is reduced or endangered by a third party who has acquired such immovable from the mortgagor.

Art. 3075 – 3. Other cases.
The mortgagor may not demand new securities nor that part of the debt be discharged where the actual or possible reduction in the value of the immovable mortgaged is due to causes other than those specified in Art. 3073 and 3074.

B – Priority of mortgages
Art. 3076 – Capital of claim.
The mortgage shall secure the payment to the mortgagee, in priority to other creditors, of the registered amount of claim.

Art. 3077 – Interest.
(1)    The mortgage shall secure the payment to the mortgagee, in priority to other creditors, of interest on the claim at the rate fixed in the registration of the mortgage.
(2)    The mortgage shall secure the preferential payment of interest to an amount not exceeding two years interest.
(3)    It may not be specified in the registration of the mortgage that the mortgage shall secure the payment of interest for a longer period of time.

Art. 3078 – Necessary expenses and insurance premiums.
The mortgage shall secure the repayment to the mortgagee, in priority to other creditors, of the necessary expenses made by him for the preservation of the mortgaged immovable and of the insurance premiums due by the owner and which have been paid by the mortgagee.

Art. 3079 – Costs of attachment proceedings.
The mortgage shall secure the repayment to the mortgagee, in priority to other creditors, of the normal costs arising from proceeding instituted by him for the attachment of the immovable.

Art. 3080 – Legal interest.
(1)    Interest at the rate provided by law shall run on the sums specified in Art. 3076-3079 from the day when the immovable was attached.
(2)    The mortgage shall secure the payment of such interest until the immovable is sold by auction following attachment.

C – Plurality of mortgagees
Art. 3081 – Principle.
(1)    Where several creditors have a registered claim on the same immovable, they shall rank according to the date on which they have registered their claim.
(2)    No regard shall be had to the date on which the claims became certain or exigible.

Art. 3082 – Creditors registered on the same day.
Creditors whose claims have been registered on the same day shall rank equally and be paid in proportion to the amount of their claims.

Art. 3083 – Subrogation.
(1)    Any mortgagee may pay a creditor having priority with the consent of such creditor or, where the immovable is attached on the latter’s request, without such consent.
(2)    The creditor who has paid shall be subrogated to the rights of the creditor whom he has paid.

Paragraph 2. – Right to follow immovable
A – General provisions

Art. 3084 – Right to transfer ownership of mortgaged immovable.
(1)    He whose immovable is mortgaged shall retain he right to transfer the ownership thereof.
(2)    Any provision to the contrary shall be of no effect.

Art. 3085 – Right of mortgagee.
The mortgagee who has registered his mortgage prior to the registration of the deed evidencing the transfer may attach the immovable in the hands of the person who acquired it.

Art. 3086 – Effect on original debtor.
(1)    The transfer of the immovable mortgaged shall bring no change in the obligations of the original debtor.
(2)    The original debtor shall however be released where the person who acquired the immovable has undertaken to pay the debt, unless the mortgagee informed the original debtor in writing that he would continue to hold him liable.
(3)    Such information shall, under pain of loss of right, be given within one year from the mortgagee having been informed of the agreement made between the original debtor and the person who acquired the immovable.

Art. 3087 – Indivisibility of mortgage.
(1)    A mortgage is indivisible.
(2)    Where part of the immovable mortgaged is alienated or such immovable in divided, each part shall secure the full payment of the debt.

Art. 3088 – Creation of rights in rem on immovable mortgaged.
(1)    He whose immovable is mortgaged shall retain the right to charge it with an usufruct, servitudes, mortgages or other rights in rem.
(2)    Any provision to the contrary shall be of no effect.

Art. 3089 – Rights of creditor.
(1)    Registered rights in rem on an immovable mortgaged shall not affect the mortgagee where such rights have been registered after the mortgagee has registered his mortgage.
(2)    The mortgagee may cause the immovable to be sold as though such rights had not been created.
(3)    Where the immovable is attached, the beneficiary of the right in ?????? may demand that the value of such right be paid to him in priority to creditors whose mortgage has been registered subsequently to his own right being registered.
B – Position of person acquiring the immovable
Art. 3090 – Attachment of immovable. – 1. Assimilation to surety ship.

He who acquires an immovable mortgaged may, in his relations with the mortgagee, avail himself of the rights vested in the guarantor by the provisions of the Title of this Code relating to “Contracts in general”.
Art. 3091 – 2. Improvements or buildings.
(1)    He who has acquired an immovable mortgaged and has increased its value by making thereon improvements, buildings, plantations or crops, may require to be paid, out of the proceeds of the sale, an amount corresponding to the increase in the value of the immovable since the day when the transfer of ownership was registered.
(2)    Servitudes and other rights in rem which the person who acquired the immovable had on such immovable prior to acquiring it shall give rise to compensation, where they cannot revive.

Art. 3092 – 3. Loss or deterioration of immovable.
(1)    He who acquires an immovable mortgaged shall not be liable to the mortgagee for the loss or deterioration of the immovable.
(2)    He shall however be liable where such loss or deterioration is due to his fault or negligence and occurs after he has been informed that proceedings have been instituted for the attachment of the immovable.

Art. 3093 – 4. Fruits.
(1)    He who acquires an immovable mortgaged shall not account for the fruits he has collected prior to attachment.
(2)    He shall cease to be the owner of such fruits on the day when the immovable is attached in his hands.

Art. 3094 – 5. Action for warranty.
(1)    Where the immovable is attached in the hands of the person who acquired it, such person may bring an action for warranty against the person from whom he acquired the immovable.
(2)    He may bring such action notwithstanding that he acquired the immovable gratuitously.
(3)    An action for warranty may not be brought where it is expressly prohibited in writing by the deed evidencing the transfer of ownership.

Art. 3095 – 6. Subrogation.
(1)    Where the immovable is attached in the hands of the person who acquired it, such person shall be subrogated to the rights of the mortgagee.
(2)    He may not avail himself of such subrogation to the detriment of third parties who have acquired for consideration, from the debtor or guarantor, an immovable intended to secure the debt.

Art. 3096 – 7. Appointment of curator.
(1)    He who acquired the immovable may, where he is not personally liable for the payment of the debt under the mortgage, demand that proceedings for attachment instituted against him be discontinued.
(2)    In such case, he may appoint or cause to be appointed by the court a curator against whom the proceedings shall be contained.
(3)    The curator shall reside or specify an address for service at the place where the sittings of the court of competent jurisdiction are held.

Art. 3097 – Voluntary discharge of debt.
(1)    He who acquires an immovable mortgaged may pay a creditor having a registered claim on such immovable with the consent of such creditor or, where the immovable is attached on the latter’s request, without such consent.
(2)    In such case, he shall be subrogated to the rights of such creditor and merger may not be raised against him.

Art. 3098 – Redemption of mortgage. – 1. When possible.
He who acquires an immovable mortgaged may redeem the mortgage where he is not personally liable for the payment of the debt under the mortgage.

Art. 3099 – 2. Offer to redeem.
He who intends to redeem the mortgage shall serve on the registered creditors and on the person from whom he acquired the immovable a document specifying:
(a)    the nature and date of the title by virtue of which he acquired the immovable and the date on which he registered his rights; and
(b)    any particulars necessary for identifying the immovable, such as the place where such immovable is situate and its number in the cadastral survey plan; and
(c)    the price he paid for the immovable or its estimate value, where he acquired it gratuitously; and
(d)    an offer to pay such price or value; and
(e)    a list of the mortgages registered on the immovable together with the name of the registered creditors, the amount of the claims and the date of registration of the mortgages; and
(f)    his address for service at the place where the sittings of the court of competent jurisdiction are held.

Art. 3100 – 3. Offer may not be withdraw.
(1)    He who offered to redeem the mortgage shall be bound by his offer for a period of sixty days.
(2)    He may not withdraw his offer during this period unless all the persons to whom such offer was made agree to the withdrawal.

Art. 3101 – 4. Offer accepted.
(1)    The creditors shall be deemed to accept the offer where they do not reject it within sixty days from the day when it was made.
(2)    The amount offered shall in such case be distributed among the creditors according to their rank.

Art. 3102 – 5. Offer rejected.
(1)    Where a creditor refuses the offer, the immovable shall be sold by public auction.
(2)    The creditors who have refused the offer shall advance the costs of such sale by auction.

Art. 3103 – 6. Costs of sale by auction.
(1)    The costs of the sale shall be borne by the purchaser, where the immovable is sold at a price exceeding by ten percent the price offered under Art. 3099.
(2)    In other cases, such costs shall be borne by the creditors who rejected the offer of redemption.
Art. 3104- 7. Time for making offer.
No offer to redeem the mortgage may be made after proceedings for attachment have been instituted and an entry to this effect has been made in the registers of immovable property.

C – Special provisions applicable to guarantor
Art. 3105 – Presumption.

He who has mortgaged his immovable to secure the debt of another person shall be presumed not to have bound himself on his other property.

Art. 3106 – Position of guarantor.
Without prejudice to the provisions of art. 3107 and 3108, the guarantor shall be assimilated to the person who acquires an immovable mortgaged.

Art. 3107 – Loss or deterioration of immovable.
(1)    Where the guarantor intentionally or by negligence reduces or endangers the value of the immovable mortgaged, the mortgagee may require him to produce new securities.
(2)    The mortgagee shall have the3 same right where the value of the immovable is intentionally or negligently reduced or endangered by a third party who acquired the immovable from the guarantor.

Art. 3108 – Other differences.
(1)    Where the immovable is attached in his hands, the guarantor may not bring an action against the person from whom he acquired the immovable.
(2)    He may not require that proceedings fro attachment instituted against him be discontinued.
(3)    He may not offer to redeem the mortgage.

Section 3. Extinction of mortgage

Art. 3109 – Principle.
(1)    A mortgage shall be extinguished where the registration of the mortgage is cancelled in the registers of immovable property.
(2)    The registration shall be cancelled in accordance with the provisions of the Title of this Code relating to “Registers of Immovable Property” (Art. 1630-1636).

Art. 3110 – Grounds for cancellation.
Any interested party may require the registration to be cancelled where:
(a)    the claim secured by the mortgage is extinguished; or
(b)    the mortgagee has renounced his mortgage; or
(c)    the immovable mortgaged has been sold by auction and the proceeds of the sale have been distributed among the creditors; or
(d)    the amount accepted by the creditors in cases of an offer of redemption has been distributed among the creditors.

Art. 3111 – Mortgage of usufruct.
(1)    Any interested party may require the cancellation of the registration of the mortgage of an usufruct, where such usufruct is extinguished.
(2)    The usufructuary may not renounce the usufruct to the detriment of the mortgagee.

Art. 3112 – Renunciation of mortgage.
(1)    Where the creditor renounces his mortgage, such renunciation shall be of no effect unless it is made expressly and in writing.
(2)    Unless otherwise agreed, such renunciation shall not imply that the mortgagee renounces his claim.

Art. 3113 – Creditor making subrogation impossible.
Where the mortgage applies to an immovable which is not the property of the debtor, the cancellation of the registration may be sought where the creditor makes it impossible for the owner of such immovable to be subrogated to the rights of the creditor.

Art. 3114 – Conditions for canceling registration.
(1)    No registration shall be cancelled unless the court so orders.
(2)    The court shall order cancellation where the creditor agrees in writing to the cancellation.
(3)    The creditor shall be liable where he refuses without good cause to agree to the cancellation.

Art. 3115 – Effect of cancellation.
(1)    Where the registration is cancelled, such cancellation shall benefit the creditors having registered their claims after the entry which is cancelled.
(2)    The owner may not create a new mortgage to replace the mortgage the registration of which has been canceled.

Art. 3116 – Cancellation mad without good cause.
(1)    Where a registration has been cancelled, such registration shall in no case revive, notwithstanding that the cancellation was made without good cause.
(2)    The mortgage which has been cancelled without good cause shall be registered again and shall be effective from the day of the new registration.
(3)    Nothing shall affect the liability of the person who caused the registration to be cancelled without good cause.

Section 4. Antichresis
Art. 3117 – Definition.

A contract of antichresis is a contract whereby the debtor undertakes to deliver an immovable to his creditor as a security for the performance of his obligations.

Art. 3118 – Creation of antichresis. – 1. Principle.
Without prejudice to the provisions of art. 3119, the provisions of this Title relating to the creation of mortgages shall apply to contracts of antichresis.

Art. 3119 – 2. Special rules.
(1)    Antichresis may be created by contract only.
(2)    It may not be created to guarantee a claim embodied in an instrument to order to bearer
(3)    It may not be created by the bare owner of an immovable.

Art. 3120 – Relations between parties.
Without prejudice to the provisions of the following Articles, the provisions of this Code regarding the relations between the lessor and lessee or farmer-tenant shall apply to the relations between the parties under a contract of antichresis.

Art. 3121 – Delivery of immovable.
(1)    The person having created the antichresis shall deliver the immovable and its accessories to the creditor or such other person as has been specified in the contract.
(2)    The antichresis shall have the same effects as a mortgage until such delivery has taken place or after the immovable has been returned to the person having created the athichresis.

Art. 3122 – Warranty against defects.
(1)    The immovable shall be delivered in its condition as on the day of the making of the contract.
(2)    The person having created the antichresis shall give no warranty against the defects of such immovable.
(3)    He shall only be liable, where he knew of them at the time of the contract and failed to mention them, for such defects of the immovable as seriously endager the life or health of the possessor of the immovable, of persons living with him or of his employees.

Art. 3123 – Repairs.
The person having created the antichresis may not be compelled to make repairs on the immovable.

Art. 3124 – Interest on claim.
(1)    The creditor under the contract of antichresis shall pay no rent to the person having created the antichresis.
(2)    The use the creditor makes of the immovable and the fruits and profits he drives therefrom shall replace interest on the claim.
(3)    Any provision whereby the creditor is entitled to interest in addition to such use, fruits and profits shall be of no effect.

Art. 3125 – No duty to furnish premises.
The creditor shall be under no obligation to furnish the premises.

Art. 3126 – Contract relating to land.
Unless otherwise agreed, where land is given as a security under a contract of antichresis, the creditor shall have the direction of the works.

Art. 3127 – Assignment of right.
The creditor may not lease the immovable nor assign his right to a third party without the consent of the person having created the antichresis.

Art. 3128 – Unilateral termination of antichresis.
(1)    The creditor may at any time renounce his right of antichresis.
(2)    Unless otherwise agreed, the creditor may at any time terminate the antichresis by performing the obligation secured by the antichresis.

Art. 3129 – Relations between creditor and third parties.
The provisions of this Title relating to the registration and effect of mortgages shall apply to contracts of antichresis.

Art. 3130 – Extinction of antichresis.
The provisions of this Title relating to the extinction and stricking out of mortgages shall apply to contracts of antichresis.