Publication date: 04.06.2024
Mortgage Disputes: Current Court Practice
Introduction
Mortgage disputes are one of the most relevant categories of litigation in Ukraine, as they relate to the protection of the rights of real estate owners and lenders. Mortgage law is governed by the Civil Code of Ukraine, the Law of Ukraine "On Mortgage" and other regulations. These disputes often arise in connection with the failure of debtors to fulfill their obligations under mortgage-backed loan agreements. In this article, we will analyze the current court practice on mortgage disputes, including the main trends and problematic issues.
The main part
1. The basis of legal regulation of mortgage disputes
1.1. Legal framework
Key regulations governing mortgage relations in Ukraine:
- Civil Code of Ukraine
- The Law of Ukraine "On Mortgage"
- The Law of Ukraine "On Enforcement Proceedings"
- Law of Ukraine "On Banks and Banking Activities"
1.2. Basic rights and obligations of the parties
The mortgagee (creditor) has the right to demand fulfillment of obligations under the loan agreement and, in case of non-fulfillment, to foreclose on the mortgaged property. The mortgagor (debtor) is obliged to fulfill its obligations under the loan agreement in a timely manner and ensure the safety of the mortgaged property.
2. Main categories of mortgage disputes
2.1. Disputes regarding the foreclosure of a mortgaged property
These disputes arise when a lender files a claim with the court to foreclose on a mortgage due to the debtor's failure to fulfill its obligations.
2.2. Disputes regarding the invalidation of mortgage agreements
Such disputes may arise in cases where one of the parties believes that the mortgage agreement was concluded in violation of the law or on the basis of invalid documents.
2.3. Disputes regarding changes to the terms of mortgage agreements
These disputes relate to circumstances where one of the parties demands to change the terms of the mortgage agreement, for example, due to changes in financial position or other material circumstances.
You may also be interested in the following articles: advice of a lawyer, legal advice, analysis of documents, legal analysis of the situation, written advice, verification of documents by a lawyer, lawyers documents, online legal advice, online lawyer, legal opinion, legal opinion of a lawyer, lawyer online.
3. Current court practice
3.1 Recognition of mortgage agreements as invalid
A number of court decisions of the Supreme Court of Ukraine have considered cases involving the invalidation of mortgage agreements due to violations of the law when they were concluded. For example, in case No. 761/17486/21, the court declared a mortgage agreement invalid due to the lack of notarization.
3.2. Foreclosure on the mortgaged property
In case No. 826/20266/20, the Supreme Court of Ukraine confirmed the right of a creditor to foreclose on a mortgaged property in case of default by the debtor under a loan agreement. The Court emphasized the need to comply with all procedural requirements set forth in the Law of Ukraine "On Enforcement Proceedings".
3.3. Changing the terms of mortgage agreements
In case No. 914/2142/22, the Supreme Court recognized the possibility of amending the terms of a mortgage agreement if there are reasonable grounds, including a significant deterioration in the debtor's financial condition. However, the court emphasized that such changes may be made only with the consent of both parties or by court decision in exceptional cases.
