Pandrecht

A pledge is a limited right created over movable property or rights in order to secure a claim. The pledgee thereby obtains the power to sell the pledged assets if the debtor defaults.

This security interest is of considerable importance in Dutch property law, as it facilitates the extension of credit and affords creditors a strong position in the event of the debtor’s insolvency. It is distinguished from a mortgage in that it relates solely to movable property and rights.

In practice, pledges are widely used in bank financing, with inventories, machinery or receivables serving as collateral. Creation may be effected either by notarial deed or by private instrument accompanied by registration.