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20.02.2009

So when can banks repossess without a court order?

   

The Ministry of Justice has issued clarification of its explanation this week of the changes to the situation on repossessions which invalidate its explanation of 25 December.  Times are difficult…

In a report on its official website, it explains that the mechanism for seizure of property used as security for a loan is possible without a court order only in relation to mortgage agreements concluded after 14 January 2009 and only after the introduction of the necessary amendments to a number of laws.

It explains that two days after its explanation of 23 December, on 25 December the Verkhovna Rada passed amendments to the Law “On mortgages”, in which a mechanism is set out for seizure without a court order on the basis of a contract.

These amendments came into force on 14 January with the Law “On preventing the impact of the world financial crisis on the residential construction industry”

The explanation stresses that the Ministry’s explanation of 17 February had been neutral and contained no other conclusion but that the previous explanation (saying that a court order was needed) was revoked.

Between these new explanations there was something of a scandal with Prime Minister Tymoshenko’s Press Secretary stating that the Government considered the statement from the Ministry of Justice that banks can seize property without a court order to be incorrect

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