Purchase and sale of mortgaged real estate: Guarantees, Clauses, Procedures and Recommendations. Know your rights and crucial steps for a safe and successful transaction.
The mortgaged real estate comprises the security interest that falls on a real estate property in the face of an obligation of the debtor, which must satisfy the creditor and release the creditor from any lien that may fall on the real estate property.
By the mortgage, the rights of possession and disposition by the owner are not lost, and it is not an impediment to the sale of the property. However, before buying a property, the buyer must review the complete registry record, through a real estate registry certificate obtained in the nearest Registry Office, in order to verify that only one mortgage has been constituted on the real estate, which we consider to be the most advisable amount as far as encumbrances are concerned.
In the minutes of sale of a mortgaged real estate property, it must be stated in the clauses that the buyer is aware of the existence of the mortgage, with full identification of the entry of the registry entry, and the financial entity, if applicable, as creditor, In addition, it should be expressly stated that the sale price will be paid by means of the cancellation of two cashier’s checks, the first one made out to the creditor bank or financial institution for the amount owed, in order to proceed with the lifting of the mortgage and its registration, and the second one for the balance in favor of the seller.
We also recommend that in the referred minutes it be stated that the check in favor of the seller be kept in custody at the notary’s office and that it be delivered immediately upon verification that the public deed for the lifting of the mortgage has been signed, a procedure that must be promoted by the seller.
Dr. Rina Bendezú Hernández
Lawyer - Registry, Notary and Civil Area
