Juridical analysis of the defense against allegations of unlawful acts on the execution of mortgage rights

Abstract

Background: This research aims to analyze the defense against allegations of unlawful acts in the execution of mortgage rights. The background of this research is based on the increasing problem of non-performing loans that have an impact on the execution of mortgage rights through auction.  Methods: The method used is the juridical-normative method with a literature study approach, which examines legislation and legal principles related to the execution of mortgage rights, particularly the provisions of Article 6 and Article 20 of Law No. 4 of 1996 on Mortgage Rights, Article 1365 of the Civil Code on tort, and Article 51 of Minister of Finance Regulation No. 213/PMK.06/2020 concerning auction guidelines. Findings: The results showed that in case No. 750 K/Pdt/2012 there was a mismatch between the auction procedure and the principle of justice, resulting in a potential violation of the law. The study found that although the auction was conducted under the authority of the Mortgage Law, the absence of an agreement between the debtor and creditor regarding underhand sales and the failure to obtain the highest possible price raised concerns of unfairness and potential legal violations.  Conclusion: The research concludes that the defense against allegations of unlawful acts in mortgage execution must balance strict adherence to legal provisions with principles of justice to ensure fairness for both creditors and debtors. Novelty/Originality of this article: The contribution of this research lies in the in-depth analysis of legal defense in the execution of mortgage rights as well as recommendations for policy making related to the protection of creditor rights. The findings are expected to provide practical guidance for legal practitioners in handling mortgage execution disputes.