It is not uncommon for several mortgages to appear in the current land register extract of a property. When studying the chronology more closely, it may turn out that a mortgage was registered by the previous owner, for example. Sometimes it is even from the developer of the property.
Or, if it is the owner’s own mortgage, great astonishment arises on the part of the owner. It is not uncommon to hear statements such as: “Our mortgage has been paid off for years, why is it still listed in the land register?
If a mortgage has been paid off and therefore the loan account at the bank shows a 0.00 Euro balance, further measures are necessary.
Deed of cancellation
Ask your bank to issue the notarial deed of cancellation (Escritura de Cancelación de hipoteca). Make sure that this deed is presented to the land registry. Neither of these things happens automatically. You have to take care of it or instruct a lawyer or gestoria (administration office) to do it. This process triggers costs, taxes and fees that have to be paid by the owner.
Only when the deed of cancellation is returned from the land registry with a processing note has the mortgage also been removed from the land registry. In technical jargon we say: the mortgage has been cancelled.
Dealing with mortgages
You want to buy a property and the seller has encumbered the property with mortgages. What does this mean for the buyer? At CCC Real Estate, we take care that you acquire property free of encumbrances.
If the mortgage has not yet been paid off by the seller, the seller’s bank will issue a certificate. The remaining balance can be found there. If the mortgage is paid off, the certificate says 0.00 euros. The certificate is obligatory and must be presented to the notary. The bank of the buyer of the property issues a bank-confirmed cheque for this remaining balance amount.
The authorised representative of the seller’s bank appears at the notary on the day of the notary appointment for the purchase of your property. He signs the deed of cancellation (Escritura de Cancelación de Hipoteca). Then takes the bank cheque for the remaining amount to pay off the balance.
In your notarial purchase contract, the bank cheque for the seller’s bank will be listed as the (partial) purchase price payment. It is important that the deed of cancellation is submitted to the land registry together with your purchase contract. Only in this way can the property be registered in your name without encumbrances.
If the procedure seems too complicated for you, then you have us at your side. For us, it is common practice and a ” child’s play ” to consider the right steps and measures for your real estate acquisition.
We are happy to be your trustworthy partner for your property purchase in Mallorca.