Mortgages

Real Estate and Property

Prepared by: Constantinople

A mortgage secures an existing or future claim against immovable property. Buying mortgaged property, creating a mortgage and discharging a paid mortgage require different checks.

The Claim, Owner and Debtor

The secured claim and personal debtor must be identified. The property need not belong to the debtor. Being the owner therefore does not necessarily mean being personally liable for the secured debt. The type of mortgage, whether it secures a maximum amount or principal sum, and the underlying agreement are examined together.

Rank and Payment Arrangements

The mortgage's rank and prior encumbrances may affect the amount recoverable from the property's sale. Planning payment and discharge simultaneously matters in a purchase. Learning the loan balance alone may not suffice; interest, expenses and the cancellation procedure should also be clarified. A document stating that the debt has been settled does not remove the need to check separately that the entry has been cancelled in the land register.

Disputes and Enforcement

An assertion that a mortgage was invalidly created, the claim has ended or the scope of security has been exceeded may lead to different claims. Defences in mortgage foreclosure proceedings are procedurally distinct from a request to cancel a land register entry. Notifications and strict deadlines must be examined without delay.

Documents to Prepare for an Initial Review

Send each document in its entirety as held by you, rather than only its first page or a screenshot. We determine, according to the file, what authority is needed to obtain missing official records. The following records are helpful at the outset:

• Official mortgage deed
• Current encumbrance and rank information
• Agreement underlying the claim
• Balance and payment documents
• Cancellation correspondence or enforcement documents

Why Do the Particular Circumstances Matter?

For example, if part of the sale price of a mortgaged home is to be paid directly to the creditor, the payment that will discharge each entry should be arranged in writing. Paying the price alone does not establish that the mortgage has been removed from the register.