What sort of security is typically created or entered into by an investor who is borrowing to acquire or develop real estate?
The most common form of security over real estate is mortgage (teitoken), including without limitation, revolving mortgage (ne-teitoken). Mortgage in general is a fixed charge and it entitles the mortgagee to take possession of the asset and dispose of it with priority as against other unsecured creditors. Mortgage is perfected by registration in the land or building registries.
It is sometimes the case that security is granted over the rental income from a property by way of an assignment whereby the tenants are directed to pay the rental income to the lender, if necessary. Or, a lender (bank) sometimes requires the borrower to open its bank account with the lender and to have the tenants pay the rental income to such bank account so that the lender may set off its credits against the borrower, if necessary.
A corporate borrower can also create and perfect with registration, security by way of transfer (jyoto-tampo) over assets other than real estate. This security could be floating security over a class of assets which in the course of the borrower's business changes from time to time and which may be disposed of without consent of the lender. Pledge over the same assets is possible and for pledge over claims, a registration system is available. However, for pledge over movable assets, a registration system is not available. It is sometimes the case that a lender takes both mortgage over real estate and security by way of transfer or pledge over other assets in or around the real estate.