RASK Advised a Client on Terminating Co-Ownership and Securing Release from Mortgage Obligations
Case
RASK Attorney-at-Law Virge Murak advised a client on terminating the co-ownership of an apartment following the end of a relationship. A key condition for the client was that transferring their share of the property would also result in a full release from all obligations under the mortgage loan taken out to purchase it.
Although the bank had confirmed in writing that the client would be released from these obligations, a review of the draft notarial agreement revealed a discrepancy. The agreement, prepared on the basis of information provided by the bank, still held the client liable for the mortgage loan. Had the transaction proceeded on those terms, the client would have given up their ownership interest in the apartment while remaining liable for the outstanding loan.
RASK's legal assistance included reviewing the draft agreement and negotiating with the bank regarding the loan obligations, the mortgage and the claims secured by it. Working closely with the notary and the bank's legal team, RASK ensured that the agreement accurately reflected the terms reached between the parties. The transaction was ultimately completed with the client fully released from their previous mortgage loan obligations.
This case highlights the importance of ensuring that a notarial agreement accurately reflects all agreed terms before signing. Even where a bank has provided written confirmation, it is essential to verify that the agreement correctly addresses both the transfer of ownership and any obligations that remain after the transaction.
Three Key Takeaways:
1. Involve a lawyer early in the negotiations. This allows key terms and potential risks to be considered before agreements are finalised and the transaction is prepared for signing.
2. Provide the notary with clear and accurate information. Communicate all agreed terms and clearly specify which obligations you must be released from as a result of the transaction.
3. Make sure the notarial agreement reflects what has been agreed. Do not rely solely on earlier confirmations, even if they were provided in writing.
Although the bank had confirmed in writing that the client would be released from these obligations, a review of the draft notarial agreement revealed a discrepancy. The agreement, prepared on the basis of information provided by the bank, still held the client liable for the mortgage loan. Had the transaction proceeded on those terms, the client would have given up their ownership interest in the apartment while remaining liable for the outstanding loan.
RASK's legal assistance included reviewing the draft agreement and negotiating with the bank regarding the loan obligations, the mortgage and the claims secured by it. Working closely with the notary and the bank's legal team, RASK ensured that the agreement accurately reflected the terms reached between the parties. The transaction was ultimately completed with the client fully released from their previous mortgage loan obligations.
This case highlights the importance of ensuring that a notarial agreement accurately reflects all agreed terms before signing. Even where a bank has provided written confirmation, it is essential to verify that the agreement correctly addresses both the transfer of ownership and any obligations that remain after the transaction.
Three Key Takeaways:
1. Involve a lawyer early in the negotiations. This allows key terms and potential risks to be considered before agreements are finalised and the transaction is prepared for signing.
2. Provide the notary with clear and accurate information. Communicate all agreed terms and clearly specify which obligations you must be released from as a result of the transaction.
3. Make sure the notarial agreement reflects what has been agreed. Do not rely solely on earlier confirmations, even if they were provided in writing.
Read also RASK's article “Love Is Gone, but the Property Remains: What Happens to a Home Bought Together?”.