The fiduciary agreement, same as the mortgage, is one of the assurance instruments with which the creditor can seize property of the debtor, if the later doesn’t settle his debt on time. The main difference between the mortgage and the fiduciary agreement is that the mortgage debtor retains ownership of the property, while in the case if a fiduciary agreement, the property right is immediately transferred to the creditor.

The fiduciary agreement is stipulated by an agreement that in order to secure certain creditors’ claims the property of some of the debtors’ objects or rights shall be transferred to the creditor. The debtor transferred the property to the creditor who is obligated to return it when the debt is paid.

The said agreement can be concluded at a hearing before a court or in front of a public notary in the form of a notarial deed or a certified private document.

Monetary and non-monetary claims can be ensured, as well as future claims, all of which have to be determined, or at least identifiable.

After the conclusion of such an agreement and the transfer of the ownership to the creditor, the debtor may still use the insurance object (if the parties have not agreed contrary). Moreover, the debtor can, without the consent of the creditor, burden the object with, for example, a mortgage. Should, however, the real-estate get sold, the fiduciary creditor has a priority claim over the mortgage creditor.

If the debtor fails to fulfill the debt upon expiration, the creditor is entitled to sell (cash) the burdened object or right. The creditor could sell the insurance object even before maturity of the debt and this would be considered a valid business transaction, but he would then be responsible for any damages caused to the debtor, and may be even criminally liable.

The object of insurance can be sold only by a public notary, in which case the rules governing the sale in the enforcement proceedings are applied to the sale of the insurance objects. The public notary shall hold an auction, and upon the deposit of the purchase price, he will, in the behalf of the creditor and in the form of a notarial deed, conclude the sales agreement with customer.

Rather than to sale the insurance object after the expiration of the debt the creditor can, through a public notary, ask the debtor to issue a statement within 30 days stating whether he requests for the insurance object to be sold by a public notary. If the debtor doesn’t give the asked statement within 30 days or the sales by a public notary is not successful, the creditor becomes the real owner of the insurance object for a price that corresponds to the amount of the secured claim with interest, costs and taxes, and the creditors’ debt is thus considered settled.

If the debtor has burdened the real-estate with a mortgage, the creditor who became the real owner of the real-estate can request the cancelation of the mortgage form the land register.

When transferring the property right to the creditor, the creditor does not pay taxes or other charges. If the object of insurance is sold or the creditor becomes the real owner of the object, then the taxes (real estate sales tax, VAT …) are calculated and charged same as in case of any other transaction.

Most often the property of real-estate is transferred by the fiduciary agreements, as it can be inscribed in the land registry. For all other objects (movables), which are not subject to registration in any public registers, as of 2006. the court and public notary insurance claims are to be inscribed in a special public registry. The Registry is conducted by a special department operating within the Financial Agency.

In the fiduciary agreement, an enforceable clause can be entered, which allows to the creditor to request the enforcement of the agreement and ensures him the cession into possession of the insurance object after the expiration of the debt, in basis of the contract it self. Such an agreement is an enforceable document, which means that the creditor can directly initiate the enforcement proceeding against the debtor if the claim at maturity would not be fulfilled, without any previous litigation process.