Establishment of a mortgage
A mortgage is a limited property right regulated by the provisions of the Act of 6 July 1982 on land and mortgage registers and on mortgage.
A mortgage is established to secure claims on real estate and on certain rights.
The purpose of establishing a mortgage is to secure a designated claim resulting from a specific legal relationship (e.g. a bank's claim under a loan granted). For such security, real estate may be encumbered with a right under which the creditor may claim satisfaction from the real estate, regardless of who has acquired the real estate and with priority over the personal creditors of the real estate owner.
The following may be encumbered with a mortgage:
- real estate,
- perpetual usufruct along with buildings and equipment on the used land owned by the perpetual usufruct holder (in this case the mortgage also includes buildings and equipment on the used land which are owned by the perpetual usufruct holder),
- a cooperative member's ownership right to premises,
- a claim secured by a mortgage,
- a fractional part of the real estate, if it is the co-owner’s share, and the share of the jointly entitled in the commonality of the rights listed in items 1-3.
A mortgage established on real estate encumbers its appurtenances as well.
An entry in the land and mortgage register is required to establish a mortgage.
Contractual mortgage is established on the basis of an agreement between the creditor and the person establishing the mortgage (real estate owner), but only the declaration made by the person establishing the mortgage must be in the form of a notarial deed. There is an exception to this general rule which applies to mortgages established in favour of banks. In the above case the form of a notarial deed is not required, but using the services of a notary public is certainly a convenience for the person establishing the mortgage, as he/she does not have to appear in person in the land and mortgage register court and the tax office, these activities are performed by the notary public instead.
A compulsory mortgage is established by virtue of law or on the basis of a court decision.