Insights

HOW CAN THE DATA ON A REGISTERED MORTGAGE BE CHANGED?

The Ministry of Finance issued an opinion (number 011-00-1105 / 2017-16 of 18 December 2017) on the issue regarding which of the obligatory elements of the mortgage from the mortgage agreement or the mortgage statement can be changed without being considered a new mortgage.

Due to frequent problems that the Real Estate Cadastre Offices had in applying the Law on Mortgage regarding the change of data on the registered mortgage in cadaster, the Republic Geodetic Authority addressed the Ministry of Finance, which issued an opinion (number 011-00-1105 / 2017-16 of 18.12.2017), based of which a written instruction of the Director of the Republic Geodetic Authority (number 021-155 / 2017-1 of 18 January 2018) was prepared and sent to all the Real Estate Cadastre Offices.

Namely, the Law on Mortgage does not regulate the question which obligatory elements of a mortgage in a mortgage contract or in a mortgage statement may be changed without being considered a new mortgage. Changing the obligatory elements of the mortgage in the mortgage contract or in the mortgage statement which would not lead to an increase in the amount of claim to be settled in favor of a mortgage creditor, but would only represent compliance of the registered data in the real estate cadastre with the later amendments to the mortgage contract, or a mortgage statement (for example, related to the mortgage creditor, interest rate cuts, cutting the repayment periods, debt reduction, etc.) would not be considered as creation of a new mortgage, while changing the mandatory elements that could lead to an increase in the amount of claim to be settled in favor of the priority mortgage creditor and therefore deteriorating the legal position of mortgage creditors of lower rankings (for example, increasing the interest rate, extending the repayment period, etc.) would be considered as establishment of a new mortgage.

According to Article 82 paragraph 1 point 3 of Law on Public Notaries (Official Gazette of RS, no. 31/11, 85/12, 19/13, 55/14, 93/14, 121/14, 6/15 i 106/15) it is prescribed that the mortgage contract and mortgage statement are prepared in the form of a notarial deed if they contain an explicit statement by the debtor that, on the basis of the mortgage contract or the mortgage statement, a direct enforcement may be carried out directly in the court or out-of-court procedure (enforceable out-of-court mortgage).

Pursuant to the provisions of the Law on Public Notaries, it can be concluded that contracts or statements that change the mortgage contract and the mortgage statement, if they represent an enforceable out-of-court mortgage, must be concluded or made in the form of a notarial deed.

An annex to the mortgage contract or amendments to the mortgage statement are prepared in the form of a notarial deed in case of enforceable out-of-court mortgage within the meaning of Article 15 of the Law on Mortgage, while in other cases it is concluded in the form of a solemnized document in accordance with the provision of Article 10 of the Law on Mortgage.

The Real Estate Cadastre Office shall implement the change of the obligatory elements of the registered mortgage set forth in the contract or mortgage statement based on which the mortgage was registered, if it can be concluded from the application and an enclosed document (annex to the mortgage contract or amendments to the mortgage statement) that the requested change of data will not lead to an increase of the amount of claim to be settled in favor of the mortgage creditor for that mortgage, moreover that it will not lead to deterioration of the position of the lower ranked mortgage creditors, and especially when the change of the mortgage data is only a result of the conversion of the loan in accordance with decisions of the National Bank of Serbia on measures to preserve the stability of the financial system, regarding the loans denominated in a foreign currency.

Leave a Reply

Your email address will not be published. Required fields are marked *