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The claim of a mortgage bank to establish a mortgage against a real estate purchaser is an issue that appears more and more frequently in judicial practice.
Continuing the topic of mortgages, in today's article from the series "Tuesday Mornings for Construction Professionals," we want to introduce you to the institution of a claim for the establishment of a mortgage by a buyer in favor of mortgage banks (hereinafter referred to as the " Mortgage Bank Claim "). Mortgage bank claims are entered in Section IV of the land and mortgage register during the implementation of construction (development) investments and raise a number of concerns among other buyers. Therefore, we decided to explain what this security involves.
Mortgage bank claim – legal basis
The legal basis for the entry of a mortgage bank claim is primarily the Act of 29 August 1997 on covered bonds and mortgage banks (hereinafter referred to as the " BH Act "). Pursuant to Article 20, Section 5 of this Act, a mortgage bank may make available to the borrower the amount of funds specified in the loan agreement before securing the receivables from the loan granted with a mortgage, provided that the security specified in Section 4 is established, if the land and mortgage register maintained for the real estate on which the construction project is being carried out discloses the mortgage bank's claim to establish a mortgage on the premises to secure repayment of the loan simultaneously with the separation of the premises. The basic elements indicated below derive from the cited provision.
First, the entity on whose behalf a mortgage bank claim is entered can only be a mortgage bank . It should be noted that not every bank granting mortgage loans will be a mortgage bank. Currently, there are five in Poland, and the list can be found on the Polish Financial Supervision Authority website: https://www.knf.gov.pl/podmioty/Podmioty_sektora_bankowego/Banki_hipoteczne .
Secondly, the property on which the construction project is being implemented is security interest . The mortgage bank's claim is entered in Section IV of the land and mortgage register for this property. However, it does not encumber the entire property, but only a specific unit in the event that separate ownership is established.
Third, the target collateral is the residential property , and the mortgage is entered simultaneously with the separation of the premises. This means that, simultaneously with the conclusion of the agreement establishing separate ownership of the premises and its transfer to the buyers, a contractual mortgage is entered in the register that will be established for the premises in favor of the mortgage bank.
Entry and deletion of the BH Claim
The BH Act contains separate regulations regarding the entries and deletions of BH Claims.
Primarily, an application to register a claim may be submitted by: (1) the owner of the property on which the construction project is being carried out, (2) a mortgage bank , or (3) the purchaser of the residential property . Each of these entities has the right (legitimation), and in practice, these are most often the purchasers. Importantly, however, the entry of a BH Claim in the land and mortgage register does not require the consent of the owner of the property (or the perpetual usufructuary, if such a right exists) on which the construction project is being carried out. Therefore, it may turn out that claims for entry will appear in Section IV of the land and mortgage register without the developer's knowledge, and in this respect, the developer cannot limit or exclude this right of purchasers or mortgage banks.
Considering the provisions under review, developers should regularly monitor the status of all applications submitted to Section IV of the Land and Mortgage Register to confirm their basis. This is important because developers implementing a development project are required to obtain the consent of a bank, credit union, or other mortgage creditor to establish separate ownership of the premises in the name of the buyer without encumbrances, after the buyer has paid the full price or has committed. On the other hand, the legislator recognizes that developers have no influence over mortgage bank claims. Therefore, Article 33, Section 2 of the Act on the Protection of the Rights of Purchasers of Residential Premises or Single-Family Homes and the Developer Guarantee Fund clearly states that developers are not required to notify buyers of mortgage bank entries or claims (similar to entries of other buyers' claims in Section III).
The legislator has also explicitly stipulated that deletion of a claim from the land and mortgage register requires the consent of the mortgage bank in whose favor the mortgage is to be established . This means that even though security is established, i.e., a mortgage is established on the residential property, without the mortgage bank's consent, the mortgage bank's claim remains disclosed in the land and mortgage register maintained for the property. This consent is typically issued by the mortgage bank upon a separate request from the debtor. On the one hand, this protects the mortgage banks, but on the other hand, it leads to difficulties for the developer, or later the housing community, if the buyer fails to obtain the mortgage bank's consent and delete the mortgage bank's claim. Courts do not perform these deletions automatically, so the buyer's cooperation is crucial to ensure that the actual legal status is reflected in the land and mortgage register through deletion of the mortgage bank's claim.
Concerns of our clients and buyers
In practice, we receive many questions about whether the entry of a mortgage bank claim affects the rights and obligations of other purchasers of premises in a construction project . The answer is no, it does not . Until the premises are separated, the mortgage bank has no claims against the property on which the investment is being carried out. It should be emphasized here that the entry of a mortgage bank claim thing, and the application to register a mortgage in favor of the mortgagee are two different things, much less the establishment of a mortgage on the property itself (we wrote about mortgages in #244 , #245 , and #246 ). These are separate institutions, and in no case, despite their similar wording, do they produce the same legal effects. The mortgage (and the preceding application for entry) generally encumber the entire property and are effective against all co-owners whose shares are encumbered (issues related to encumbering shares #249 ).
Meanwhile, in the case of a mortgage bank claim, the bank secures itself by ensuring that, upon establishing separate ownership of the premises, the bank's mortgage is entered first in Section IV of the land and mortgage register established for the premises. The mortgage bank's claim consists precisely in the right to request entry of a mortgage in the land and mortgage register established for the premises for the purchase of which the loan was granted. It applies to the future residential property. This mortgage should be established by the buyer (debtor) upon signing the agreement transferring ownership of the premises or immediately thereafter.
In summary , it's worth carefully reading land and mortgage registers and any notes or applications entered there. In the case of an entry in Section IV of the land and mortgage register for a property on which a construction project is being carried out, the entry of a mortgage bank claim does not pose a risk when purchasing the property and does not affect the rights and obligations of other purchasers of the property in such a project.
This article is for informational purposes only and does not constitute legal advice.
Legal status as of May 20, 2025
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