How to sell a flat with a compulsory mortgage?

Sometimes flats with a compulsory mortgage (hipoteka przymusowa) are put up for sale. It is a specific type of encumbrance that can be established without the owner's knowledge or will. How should you act in such a case? How do you sell a flat with a compulsory mortgage, and is it possible? Learn the most important information on the subject.

What is a compulsory mortgage?

It is a special type of encumbrance intended to secure the repayment of claims confirmed by enforceable titles. It is established on the basis of an application submitted by the creditor to the land and mortgage register (księga wieczysta) division of the district court that keeps the register for the encumbered property. An enforcement title must be attached to the application.

A compulsory mortgage is entered in the land and mortgage register without informing the owner of the premises. A bank may use such a solution. Claims against the debtor are satisfied only once the compulsory mortgage is removed, that is, after repayment of the debt it secures.

The encumbrance described is never time-barred and remains in force even after the property is sold. It is worth noting that the obligation is attached to the premises, not to the debtor. This makes selling a flat with a compulsory mortgage rather difficult.

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How to sell a flat with a compulsory mortgage – basic information

Selling a flat or house encumbered with a compulsory mortgage is possible. However, the buyer agrees to purchase the property together with its encumbrances. The new owner will be obliged to repay the amounts due. Many people therefore choose to settle the mortgage before concluding the final sale agreement. The buyer then pays off the creditors and makes it possible for the compulsory mortgage to be struck from the land and mortgage register.

The remainder of the sale price of the residential premises is passed to the seller. There is, however, a risk associated with this type of transaction, which is why banks may take an unfavourable view of financing the purchase of a flat encumbered with a compulsory mortgage.

If you would like to find out more about how to sell a flat with a compulsory mortgage, contact the staff of the REMAX Gold estate agency in Katowice and get reliable information.