Encumbrances (Section C)

MORTGAGE

Original name: HIPOTEKA

Definition of this right: Limited right in rem whereby “to secure the obligation resulting out of the legal relation the property might be the subject of the right of creditor who may to claim the debt out of the premises, no matter who the owner is  with priority against the personal creditors of the owner of the property”. (Act of 6^th July 1982 on land books and mortgage (u.t. Dz. U. of 21 June 2013, Nr 707- art. 65).

Type of right according to national classification: Limited right in rem -“Security rights” “Guarantee rights”

Observations:  The entry has a constitutional power. There are two types of mortgages – contractual mortgage (agreed by the parties in the contract) and empowered mortgage (resulting out of the execution title or judicial or administrative decision).  A mortgage may be placed jointly on two or more premises – joint mortgage.

1.1. With respect to the mortgage liability, the Polish mortgage system prepares in general two options:

a) Extracts include the global amount including all liabilities due to the loan (loan, interests or other debts). [E.g. The loan is 100,000 € and interest at 20,000 € is agreed. LR extracts indicate that the secured debt is the sum of both concepts, i.e. 120,000€].

1.2. Regular LR information in this system also comprises ordinarily:

1. Contract or basis of obligation guaranteed by a mortgage (e.g. a loan)
2. Name of the mortgagee or creditor
3. Deed whereby mortgage was constituted or awarded
4. Currency, priority right, claim for the jump to the higher position in the mortgage rank (to change the rank position), information about changes the information

However, there should not be expected any information about deadline of the loan or credit or other contract which is basis of the mortgage, deadline of the mortgage or name of the mortgagor or debtor.

1.3. With respect to the mortgage rank (preference of the mortgage in comparison with other mortgages or encumbrances), this LR system has the following criteria:

1. Mortgage rank depends on date of registration of the mortgage, so whoever may ascertain mortgage rank taking into consideration the information on the date of registration of the mortgage.
2. Information indicates specifically what the mortgage rank is, as a general rule.

In this LR system these are the following:

PERPETUAL USUFRUCT

Original name: UŻYTKOWANIE WIECZYSTE

Definition of this right: According to article 232 of the Civil Code “Premises which belong to the Statio Fiscis laying within the boundaries of the cities and beyond them as well as premises owned by the local government or its associations may be a subject of transfer to natural persons or legal persons as perpetual usage limited right in rem” usufruct

Type of right according to national classification: “Rights of use and disposal”

Observations:  The contract in a form of notarial deed is signed for 99 years, in specific situations the deadline may be shortened, but no less then 40 years

COOPERATIVE OWNERSHIP RIGHT TO PREMISES

Original name: Spółdzielcze własnościowe prawo do lokalu

Definition of this right: The housing co-operative ownership right to a unit (apartment/ flat) – limited right in rem where it consists of two basic rights: the right to use premises and the right to dispose it. It is the transferable right to the buyer, to the heirs or to the donates etc. and it is a subject to execution.

Type of right according to national classification: Limited right in rem  – “right of use and disposal”

Observations:  A separate file is opened to the cooperative property ownership. This right is similar to the ownership rights.

USE

Original name: Użytkowanie (use)

Definition of this right: According to article 252 of the Civil Code “Thing may be the subject of right to use and usufruct”.

Type of right according to national classification: Limited right in rem- “right of use”

Observations:  If not exercised usufruct expires in ten years.

SERVITUDE

Original name: Służebność (servitude):

a) „służebność gruntowa” (land servitude),
b) „służebność osobista” (personal servitude)
c)  „służebność przesyłu” (utility servitude)

Definition of this right:

a) Land servitude – According to article 285 of the Civil Code. The premises may be a right of an owner of another premises (leading premises), which creates the legal situation that an owner of leading premises may use in agreed manner the used premises or that an owner of used premises is limited in ability of using certain rights which are given him in relation to leading premises according to the law on content and use the ownership rights”.
b) personal servitude according to article 296 of the Civil Code.The premises may be a right of certain natural person which terms and conditions are similar to the terms and conditions of land servitude
c) utility servitude according to article 305¹ of the Civil Code the premises may be a right of an entrepreneurship who is going to build or who is an owner of the devices, specified in article 49 § 1 of CC,, which constitutes that entrepreneur may use under the certain conditions of used premises, according to the goal of these devices.

Type of right according to national classification: Limited right in rem- “right of use”

Observations:  Land servitude and utility servitude if not exercised  expires in ten years.

Personal servitude if not exercised expires in the date of death.

This information includes LR entries or notices related to restrictions decreed by judicial orders which mean either a claim on the property, or a challenge on the registered title, or an attachment of the property to debts as a result of judicial procedures, etc.

In this system:

a) Information on judicial restrictions or charges forms part of the regular land register extracts
b) Means of formal publicity ordinarily contains information about the judicial order that leads to the registration of notices or caveats.

For purposes of the information, orders of attachment or seizure decreed by administrative authorities lead to notices or caveats.

LR information does not include tax liabilities (fiscal burdens).