An apartment mortgage agreement is an agreement under which one party, represented by the mortgagee, acting as a lender, provides funds for the purchase of real estate to the other party.
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In essence, a mortgage agreement is a regular loan. The main difference from a loan is the type of collateral, which is the apartment.
The subjects of such a transaction can be both individuals and legal entities. The parties to the mortgage agreement are the Mortgagor and the Mortgagee.
An apartment mortgage agreement, in accordance with the requirements of the legislation of the Russian Federation, is subject to mandatory written execution.
Below we will present an approximate version of the design of such an agreement and step by step we will analyze what provisions should appear in the text of this document.
Apartment mortgage agreement
Kurgan
November 11, 2023
We are PJSC "Bank Yabloko", represented by the head of the mortgage lending center, Alexander Alexandrovich Alexandrov, acting on the basis of the Charter, hereinafter referred to as the Mortgagee, on the one hand, and Sergey Mikhailovich Loginovskikh, born on 04/07/1983, residing at the address Kurgan region, Kurgan city, Maxim Gorky Street, building 901, apartment 902, passport series XXXX number XXXXXX, issued by the department of the Federal Migration Service of Russia for the Kurgan region in the city of Kurgan on 04/07/2003, hereinafter referred to as the Pledgor, on the other hand, we have entered into this agreement as follows:
The preamble to an apartment mortgage agreement traditionally contains the following information:
- type of agreement;
- place and date of the transaction;
- names and roles of subjects under the contract;
- passport details of an individual acting as a Pledgor.
Also in the text of the document it is necessary to specify the conditions, without which the agreement will not enter into legal force. The essential conditions, according to Article 9 of Federal Law N 102-FZ “On Mortgage” are:
- subject of mortgage;
- assessment, essence and size of the subject of the mortgage;
- term for fulfillment of obligations secured by a mortgage.
In what cases does it occur?
A mortgage, by force of law, arises when the acquired real estate is registered as collateral using loan funds. The funds received under the agreement are used to purchase the property into the ownership of the borrower.
One should not confuse a mortgage by force of law and a mortgage by force of contract, which arises when taking out non-targeted mortgage loans from banks, the collateral of which is the pledge of existing real estate. Moreover, those objects that in this case are purchased through a loan are not the subject of collateral.
The exception is the possibility of re-registering a mortgage agreement from one property to another.
What does it provide?
According to the law, a mortgage secures obligations related to the payment of the principal amount of the debt, interest, compensation of fines, penalties, penalties for late repayment of the debt, reimbursement of legal costs that arose in connection with the foreclosure of the pledged property, and reimbursement of expenses for the sale of the collateral.
Unless otherwise provided by the contract, claims are satisfied in the amount that arose at the time of foreclosure. The contract may stipulate a specific amount for satisfying the claims.
. Then the amount of debt to the lender that exceeds this amount is considered not secured by a mortgage.
Item
Subject information is a fundamental component of any document. The subject of the apartment mortgage agreement is the funds with which the Buyer purchases the property. In the text of the document, information about the subject is written as follows:
The buyer, using funds provided by the Public Joint Stock Company PJSC "Bank Yabloko", located at the address: Kurgan region, Kurgan city, Burova-Petrova street, building 30, INN 000000000, which is a credit institution with a banking license number 000, acquires ownership of an apartment located at the address: Kurgan region, Kurgan city, Blyukhera, building 30, apartment 233. In accordance with this agreement, the Lender in favor of the Buyer provides a sum of money in the amount of 5,567,000 (Five million five hundred sixty-seven thousand) rubles 00 kopecks The Buyer pays interest to the Lender according to the annual rate of 7 (Seven) percent per annum. According to Article 77 of Federal Law N 102-FZ “On Mortgage”, the right to participate of the Lender as a Mortgagee is certified by the mortgage. The apartment indicated in the text of the document is owned by the Seller according to an extract from the Office of the Federal Service for State Registration of Cadastre and Cartography for the Kurgan Region. The price of the apartment is 5,567,000 (Five million five hundred sixty-seven thousand) rubles 00 kopecks. The apartment is not in dispute, under arrest or pledge, is not a gift, and is not encumbered with the rights of third parties.
When concluding a contract for the purchase and sale of residential premises between the seller (the owner of the housing) and the buyer, who is provided with credit or borrowed funds for the purchase of residential premises on the basis of a credit agreement or loan agreement, a mortgage arises by force of law.
State registration of contracts of sale and purchase and transfer of rights is carried out in accordance with the Civil Code of the Russian Federation (hereinafter referred to as the Code) in the manner established by Federal Law dated July 21, 1997 No. 122-FZ “On state registration of rights to real estate and transactions with it” ( hereinafter – the Law on Registration) and the Federal Law of July 16, 1998 No. 102-FZ “On Mortgage (Pledge of Real Estate)” (hereinafter – the Law on Mortgage).
The following must be submitted for state registration of a purchase and sale agreement in accordance with Articles 16 and the Registration Law:
statements of the parties to the agreement or persons authorized by them if they have notarized powers of attorney, unless otherwise established by federal law, on state registration of the sales agreement; an individual (including a representative of a legal entity) presents an identification document (clause 4 of Article 16 of the Registration Law). In this case, a copy of the identity document is not provided;
an original payment document confirming payment of the state fee for state registration of the sales contract (clause 1 of Article 11, clause 1 of Article 13, clause 4 of Article 16, clause 5 of Article 18 of the Registration Law);
originals of the sale agreement, completed in simple written form, in at least two copies, one of which is returned to the copyright holder after state registration, the second is placed in the file of title documents, or an original copy of the sale agreement, completed in notarial form, and its copy for inclusion to the file of title documents (clause 1 of Article 17, clause 5 of Article 18 of the Registration Law) and other documents required in accordance with the law.
State registration of a mortgage by force of law is carried out simultaneously with the state registration of the property rights of the person whose rights are encumbered by the mortgage, unless otherwise provided by federal law. The rights of the mortgagee under a mortgage may by force of law be certified by a mortgage.
A mortgage is subject to state registration by force of law. State registration of a mortgage by force of law is carried out on the basis of an application from the mortgagee or mortgagor.
In the case of drawing up a mortgage, the relevant agreement and the mortgage are presented (Article 20 of the Mortgage Law).
In accordance with the Code, the purchase and sale agreement indicates the parties to the agreement (Articles 420, 549 of the Code), and also defines the following conditions:
the subject of the agreement, including data defining the location of a residential building (part of a residential building) on the corresponding land plot, an apartment (part of an apartment) as part of a multi-apartment residential building (Articles 432, 554 of the Code);
the price of residential premises established by agreement of the parties to the contract (it is allowed to indicate the price in the ruble equivalent of an amount determined in foreign currency or conventional monetary units (Article 317 of the Code), indicating the price per unit of area, in connection with which the price of residential premises is determined based on its area (Article 555 of the Code), and when selling residential premises on credit with the condition of payment in installments, the price, procedure, terms and amounts of payments are indicated (Article 489 of the Code));
A special feature of a purchase and sale agreement using credit funds is the indication in the purchase and sale agreement of the agreement or the basis from which the monetary obligation secured by the mortgage arose, the date and place of conclusion of such an agreement or the date of occurrence of the basis for the monetary obligation secured by the mortgage (Article 22 of the Mortgage Law).
Unlike ordinary transactions for the purchase and sale of residential premises, the legislator has established a special period for state registration - 5 (five) working days.
Chief expert
state registrar Pecherskaya M.I.
Rights and obligations of the parties
The section on rights and obligations specifies the provisions on the obligations of the parties under this agreement. Since the mortgage agreement is provided by the bank itself, the wording of the obligations is drawn up by the organization’s employees. Below we will try to present typical wording that may appear in the text of the document:
The mortgagor has the right to: • Own and use the property in accordance with its purpose, provided that ownership and use do not entail loss, destruction, damage or reduction in the value of the apartment. The mortgagor undertakes: • To pay for the purchased object in accordance with this agreement using funds issued by the bank. The mortgagee has the right to: • Demand timely payments on the loan, taking into account interest charges. The pledge holder undertakes: • To provide funds in the amount stated in the paragraphs of this agreement for the purchase by the mortgagor of the property.
What is a legal mortgage?
A mortgage is a transaction that is carried out in accordance with the requirements of the law, regardless of what conditions are put forward by the parties. Its main difference from ordinary collateral agreements concluded by banks is that it is subject to mandatory state registration.
With this type of security, the creditor has the right to satisfy his claims arising against the debtor from the value of the pledged property. The mortgagor can be either the borrower himself or a third party.
In this case, the pledged property remains with the mortgagor.
Placing an encumbrance on collateralized real estate reduces the bank's risk, so credit institutions use only this type of collateral for real estate.
The procedure for obtaining a mortgage is regulated by Federal Law No. 102 “On Mortgages”
(mortgage of real estate):
- The law determines the requirements for concluding a mortgage agreement, for state registration of a transaction for the transfer of property as collateral, the procedure for foreclosure on pledged property, etc.
- A mortgage, by force of law, arises on the following property: industrial real estate, buildings, structures, apartments, private households, land plots, garages, cottages, etc. The entire object or part of it can be pledged.
Schematically the process of occurrence of an obligation
as follows:
- The client chooses a bank to apply for a mortgage.
- Collects the necessary documents and fills out a loan application form.
- If the bank's decision is positive, the borrower looks for real estate that he plans to purchase.
- Coordinates the purchased property with the bank, and sets a day for signing the contracts.
- After signing the pledge agreement, it is submitted for registration to Rosreestr.
- Only after registration is completed, the mortgage is considered to have come into force by force of law. The extract from the Unified State Register of Real Estate records information about the existence of an encumbrance on the property.
- The loan is provided to the account of the seller or borrower.
Individual conditions
This section specifies provisions on individual conditions under the loan agreement between the Bank and the Pledgor. Such conditions may look like this:
• The loan amount is 5,567,000 (Five million five hundred sixty-seven thousand) rubles 00 kopecks. • The currency in which the loan was issued is the Russian Ruble. • The interest rate at the time of conclusion of the agreement is 7 (Seven) percent per annum. • The interest rate is set in accordance with the base interest rate. • Number of Borrower payments – 359 (Three hundred fifty-nine). • Payment frequency: monthly during the payment period. • Payment period: 10th day of each calendar month no later than 18:00. • The interest period begins on the next day. After the actual issuance of the loan. • The amount of the monthly payment, except for the first and last, is XX XXX XX rubles XX kopecks, taking into account the interest rate in effect at the time of conclusion of the agreement. The first payment includes interest. • In everything. What is not provided for in the section on individual conditions, the parties are guided by the current legislation of the Russian Federation.
