What does it mean to establish a mortgage on real estate?

A friend bought an apartment from a developer and does not yet own a KW. Does that mean he doesn't have to put up a mortgage?

In a situation where the Borrower or the person on which the loan is to be secured, already has the right, which may be disclosed in section II of the land and mortgage register, the Borrower is obliged, before paying the loan, to submit to the Bank a confirmation of submission to the court and to pay for the application for the equipment (separation) of the land and mortgage register and for entry of a mortgage or application for entry of a mortgage, in which the Bank was indicated as a participant in the proceedings. It is allowed to pay for the application after the funds are disbursed on the date indicated by the court, later than the date of submitting the application, with the proviso that if the loan is covered by insurance, the rules for paying fees are specified in the contract concluded by the Bank with the insurance company. The Borrowers are not required to submit the application fee to the Bank, as they are exempt from the obligation to pay the above-mentioned fees in accordance with generally applicable regulations.

​

In the case of real estate for which there is no land and mortgage register, the Borrower is obliged to submit an application for setting up a land and mortgage register within no more than 14 days from the date on which, in accordance with the provisions of the contract with the developer or housing cooperative and entry of the mortgage, in which the Bank will be indicated as a participant in the proceedings, and to submit a proof of payment for this application within the time limit indicated by the Court. If, as a result of the practice adopted by some land and mortgage register courts, it is not possible to simultaneously submit an application for the land and mortgage register and an application for entry of a mortgage to secure the loan repayment in the correct form and content, at the same time, the Borrower is obliged to submit to the land and mortgage register court:

1) an application for a land and mortgage register for real estate as security for loan repayment, within 14 days from the date on which, in accordance with the provisions of the contract with the developer or housing cooperative, it should become possible,

2) application for entry of a mortgage to secure the loan repayment within 14 days from the date of setting up the land and mortgage register.

​

· In the case of a loan the purpose of which is to finance the purchase or purchase and construction of real estate, applications for the establishment of the land and mortgage register should be submitted in the form of a notarial deed containing an agreement transferring the ownership right to the Borrower. The Borrower may submit an application directly to the court if the mortgage is established on a cooperative ownership right to a flat or a cooperative ownership right to a single-family house.