In today's article from the series "Tuesday Mornings for Construction Professionals," we invite you to continue our discussion of mortgages. We'd like to answer the most frequently asked questions about compulsory mortgages .
What is a compulsory mortgage?
A compulsory mortgage is a type of mortgage, i.e., a limited property right obtained on the debtor's real estate or real estates to secure a claim. Its provisions are regulated by the Act of 6 July 1982 on Land and Mortgage Registers (" UKWiH "). Article 109 of the Land and Mortgage Register (KWU) is fundamental to understanding this institution, according to which: A creditor whose claim is established by an enforceable title , specified in the provisions on enforcement proceedings, may, based on that title, obtain a mortgage on all of the debtor's real estate (compulsory mortgage) .
As we can see, its compulsory nature is the fundamental distinguishing feature of this mortgage. Its creation is not the result of the debtor's cooperation, but of a unilateral legal act undertaken by the creditor. Therefore, obtaining it requires neither the debtor's consent nor even knowledge. It is precisely because of this compulsory nature that the legislator does not use the term "establishment" but rather "obtaining" in relation to the mortgage in question.
It should be remembered that, similarly to a contractual mortgage, a compulsory mortgage can only be used to secure a monetary claim .
According to the view adopted in case law, compulsory mortgage is not an enforcement measure (see, for example, the Resolution of the Supreme Court of 14 January 2016 (ref. IV CSK 205/15). It is established primarily to secure the performance of an obligation and to facilitate future enforcement proceedings.
Pursuant to Article 67 of the UKWiH, the creation of a compulsory mortgage is dependent on the disclosure of an entry in Section IV of the land and mortgage register maintained for the property. It is from this entry in the land and mortgage register that the priority of satisfaction of the mortgage-secured claim over the debtor's personal creditors arises.
The institution of compulsory mortgages is also regulated by the Act of August 29, 1997, the Tax Ordinance (the " Tax Ordinance ") and the Act of October 13, 1998, on the Social Insurance System (the " Social Insurance System Act "). In practice, a significant portion of compulsory mortgages is obtained under the aforementioned acts to secure receivables owed to the State Treasury and local government units. In these cases, applications for entry of a compulsory mortgage in Section IV of the land and mortgage register maintained for the property are submitted on the basis of relevant administrative decisions by the relevant Head of the Tax Office or the Social Insurance Institution, as the administrator of the Social Insurance Fund (FUS).
What can be the subject of a compulsory mortgage?
Pursuant to Article 109 of the UKWiH, all of the debtor's real estate may be subject to a compulsory mortgage. Unless otherwise stated in the document constituting the basis for obtaining the mortgage, the creditor may decide whether the mortgage encumbers only one, part, or all of the debtor's real estate.
Article 65 of the UKWiH also applies to compulsory mortgages, which stipulates that the subject of a mortgage may also be:
- perpetual usufruct together with buildings and facilities on the used land that are the property of the perpetual usufructuary or a share in this right;
- cooperative ownership right to the premises or a share in this right;
- receivable secured by a mortgage.
The above-mentioned scope is additionally specified by the provisions and Article 34 § 3-4 of the Tax Ordinance, as well as Article 26 § 3a and 3b of the Act on the Social Insurance System, according to which a compulsory mortgage may also cover:
- a fractional part of the property if it is the share of the taxpayer or debtor;
- real estate that is jointly owned by the taxpayer or debtor and his spouse;
- real estate constituting the joint property of partners of a civil partnership or a fractional part of real estate constituting the share of partners of a civil partnership – due to the company’s tax arrears;
- a seagoing vessel or a seagoing vessel under construction entered in the ship register.
On whose property can a compulsory mortgage be established?
A compulsory mortgage may be established on the debtor's real estate that is his property .
In the case of marriages with a marital property regime, in accordance with the established case law of the Supreme Court (Supreme Court Resolution of 28 October 2022, file reference I CSK 3073/22), a compulsory mortgage may be established on real estate located in the joint property of the spouses only if the document constituting the basis for obtaining the compulsory mortgage was issued in the name of both spouses.
Similarly, in the case of partners of a civil partnership, when the subject of a compulsory mortgage is to be real estate jointly owned by the partners, the enforcement title constituting the basis for entry must be issued against all partners.
However, it is not possible to obtain a compulsory mortgage on the real estate of a third party.
What documents can constitute the basis for obtaining a compulsory mortgage?
The necessary condition for obtaining a compulsory mortgage is a legal title in the form of:
- a writ of execution issued in court proceedings or by an enforcement authority;
- a document issued on the basis of specific provisions of the Tax Ordinance and the Social Insurance System Act;
- foreign enforcement title.
When does a compulsory mortgage expire?
A compulsory mortgage under Article 94 of the Land and Mortgage Act expires upon the expiration of the claim secured by the mortgage. This mortgage also expires upon the cessation of the basis for its registration, for example, by repealing the decision granting security or an administrative decision.
In order to delete a compulsory mortgage, the property owner must submit an appropriate application to the land and mortgage register court, along with a document confirming the repayment of the debt or the revocation of the basis for obtaining a compulsory mortgage.
I hope we've answered your basic questions about compulsory mortgages. We encourage you to continue following our series, as more articles on mortgages will be published soon.
This article is for informational purposes only and does not constitute legal advice.
Legal status as of April 28, 2025
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