Banks can seize property without a court order


The Ministry of Justice has stated that banks are fully entitled to repossess flats if their clients have used them as security and do not meet their contractual agreements. Banks intend to remove flats where payments are more than 90 days in arrears, however at present they are not planning to do this actively since it’s better for them to restructure the debt.

Lawyers, however, say that the decision to repossess flats without a court order can be appealed.

The Ministry of Justice yesterday found that the seizure without court warrant by banks of property used as security on loans, and withdrew its previous explanation to the public from 23 December 2008.  The latter had stated that forcible seizure was possible only on possession of a court order.

The Ministry now cites amendments to the Law “On mortgage” passed on 14 January with the Law “On preventing the impact of the world financial crisis on the residential construction industry”. It says that the warning contained in the mortgage agreement is equivalent in legal weight to a separate agreement between the debtor and the bank to meet the latter’s demands.

Bankers asked by the newspaper were unwilling to comment on whether this change would mean that they would be seeking seizure of mortgaged property more frequently

From information at

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