The number of mortgage loans granted for the purchase of real estate increases year by year. When buying a flat on credit, do we not collect or reduce our freedom to dispose of the property? Is it quite different, quoting Count Fredro: “Freedom, Tom, in his house.”? Do we remember this in the well-known fairy tale “house” is really mine?
Facts recorded in land and mortgage registers
When planning a property purchase, one of the first questions we will face from the Bank is the land and mortgage register number of the property. The entries in the land and mortgage register are a treasury of knowledge about the purchased property. The book’s layout consists of four sections:
- Part I: data regarding the designation of real estate, e.g. from the land register and a list of rights related to the property,
- division II – designation of property owners or perpetual users,
- section III – limited property rights (except for mortgages) and personal rights or claims that the property is encumbered with,
- section IV – mortgages together with their detailed description answering the questions, what amount is the property charged to, which entity, who has priority to enforce rights from the mortgage.
Analysis of these entries allows us to conclude that the property is formally owned by a person entered in section II of the land and mortgage register. The bank appears only in section IV, where the rights related to the established mortgage are described in detail.
The owner of the property is always the purchaser, i.e. most often the person who takes out the mortgage. However, the bank is entering into a mortgage, which is a limited right on real estate.
Mortgage register limit my rights to dispose of the property?
Everyone who buys property should check their legal status first. A simple way to check this information is to analyze your land and mortgage register. Currently, browsing the book entries is very easy: based on the special number assigned to each property, you can check the online records. The books can also be viewed in the court competent for the property, in the presence of an employee.
Once we have acquired a property financed with a mortgage, the land and mortgage register of our real estate will contain records of us as the owner and the bank as a mortgage holder. Formally, these provisions for the next owner, for example, who we want to sell already owned real estate, give full knowledge of its legal status. Yes, we are the owner of the property, but for the mortgage it is charged with the amount indicated in the book (greater than the amount of the loan).
What is my freedom to dispose of property?
Practically the sale of a mortgaged property is possible. There are known practices on the market for the sale of real estate, the purchase of which was previously financed by a mortgage. Most often, in such cases, a new mortgage agreement as well as a notarial deed related to the purchase of real estate establishes that the loan will be settled first of all the mortgage obligation already on the real estate.
This allows you to sell real estate with a loan that we have not yet repaid. It is worth noting, however, that it will be difficult or even impossible to finance a mortgage in real estate, which currently has entries regarding claims that the property is charged with. Limited property rights, i.e. easement of premises for current owners, may also be such an obstacle in obtaining financing.