Legal basis: Civil Code of People's Republic of China (PRC).
Article 405 If the mortgaged property was leased or transferred before the mortgage was established, the original lease relationship shall not be affected by the mortgage.
Article 406 During the mortgage period, the mortgagor may transfer the mortgaged property. Unless otherwise agreed by the parties, such agreement shall prevail. If the mortgaged property is transferred, the mortgage right will not be affected. Where the mortgagor transfers the mortgaged property, it shall promptly notify the mortgagee. If the mortgagee can prove that the transfer of the mortgaged property may damage the mortgage right, he may require the mortgagor to pay off the debt or deposit the proceeds of the transfer in advance with the mortgagee. The part of the transfer price exceeding the amount of creditor's rights belongs to the mortgagor, and the insufficient part is paid off by the debtor.
Article 407 The mortgage right may not be transferred separately from the creditor's rights or used as a guarantee for other creditor's rights. Where the creditor's rights are transferred, the mortgage right guaranteeing the creditor's rights shall be transferred together, unless otherwise provided by law or agreed by the parties.
Article 408 Where the mortgagor's behavior is sufficient to reduce the value of the mortgaged property, the mortgagee has the right to request the mortgagor to stop his behavior; If the value of the collateral decreases, the mortgagee has the right to demand the restoration of the value of the collateral or provide a guarantee corresponding to the decreased value. If the mortgagor fails to restore the value of the collateral or provide guarantee, the mortgagee has the right to demand the debtor to pay off the debt in advance.