1 March 2019
Mr Hereliuk discloses risks associated with buying flat mortgaged to bank
To get rid quickly of mortgaged flats, banks sometimes use procedural tricks that cause significant problems to bona fide purchasers of such real property.
In Ukraine, it occurs, commonly, when a person who purchased a flat on mortgage fails to meet his obligations due to his financial position worsened. The financial institution recovers the borrower’s debt through legal action and forecloses the mortgaged property (flat).
The judgment clearly provides that the real property should be sold by public auction. However, the bank, acting in neglect of this procedure, registers the real property in its name and evicts the debtor. The debtor brings an action, but the hearing establishes that the financial institution has sold the flat to a third party.
Advocate Taras Hereliuk has advised a victim who found themselves in such a situation.
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