Is it possible to donate an apartment with a mortgage in 2021? How to draw up a deed of gift?

When a person takes out a mortgage on an apartment, he often pays it off for at least 10-15 years.

During this time, a lot can change, the borrower’s plans may change, for example, he may want to give a mortgaged apartment to his child, spouse, or parents.

But a logical question arises: “Is it possible to donate an apartment with a mortgage if the debt has not yet been paid?”

Resolving the issue of changing the owner of an apartment that is encumbered by a bank is difficult and there are subtleties in this matter, which will be discussed below.

The procedure for registering a deed of gift for a mortgage apartment in 2021

If the borrower plans to donate mortgaged housing to a third party, then he must:

Obtain the bank's consent to carry out the transaction for the transfer of housing.
Collect a package of documents for the bank.
Draw up a deed of gift.
Submit documents with an application to Rosreestr for re-registration of property rights to housing.
Receive an extract from the Unified State Register of Real Estate.

How to negotiate with the bank and donate a mortgage for an apartment?

In isolated cases, banks agree to change the owner of a mortgaged apartment . If in the future the borrower plans to donate mortgaged housing, then even at the stage of drawing up and signing an agreement with the bank, he must insist that the contract contains a clause on the possible donation of housing in favor of third parties (with the consent of the bank).

Only in this case does the borrower have at least some chance of donating an apartment that is under encumbrance.

If this clause is included in the agreement, then the borrower’s next step is to agree with the bank on the issue of donating housing under encumbrance.

To do this you need:

Go to the bank branch with which the borrower entered into a mortgage agreement.
Write an application for obtaining the right to donate an apartment. The application must be accompanied by documents for the collateral property, as well as papers in the name of the person to whom the borrower plans to gift the home.
Explain and, if necessary, prove to the bank employee why he should agree to change the borrower (for example, it is difficult for the current borrower to pay the mortgage, but the new owner has a much better financial condition).

Consequences of violating the ban

Is it possible to register a deed of gift if the home is under a mortgage, without the bank’s permission? What happens if the terms of the non-donation agreement are violated? It will not be possible to draw up a deed of gift without the consent of the bank.

To consider the transfer of property to have taken place, you must first register the transfer of ownership. And for state registration, certain documents issued by the bank are required.

The borrower may try to violate the terms specified in the agreement. In this case, the bank can do the following:

File a claim with a judicial authority. This is necessary so that the transfer of the home as a gift is considered invalid.
Insist on the early closure of the debt and payment of fines that were imposed due to violations of the terms of the contract.
Sell the mortgaged home if the debt is not repaid.

You can learn how to terminate an apartment donation agreement from our article.

How to draw up a deed of gift for an apartment with a mortgage? Features of compilation

If the borrower has received written consent from the bank to donate a mortgage, then it is worth thinking about drawing up a deed of gift.

The document is drawn up in writing; the text of the contract must reflect the following information:

information about the parties to the transaction: the donor, the recipient and the creditor (bank);
information about the documents on the basis of which the apartment is the property of the donor;
documents regarding the subject of the transaction (technical passport, etc.);
information that the apartment is being donated free of charge;
rights and obligations of the parties to the transaction (indicate that the recipient receives the obligation to pay the balance of the mortgage debt);
procedure for transferring an apartment;
information that the transferred housing is pledged to the bank;
signatures of the parties (donor, recipient, responsible bank employee).

The deed of gift does not need to be notarized . The main thing is that the agreement is correctly drawn up and registered with Rosreestr.

You must complete the deed of gift registration procedure within 12 months. If you do not meet this deadline, then the contract will lose its legal force.

Registration of a donation agreement for a mortgaged apartment

According to Part 3 of Art. 574 of the Civil Code of the Russian Federation, the deed of gift must be drawn up in writing and it must undergo state registration. Therefore, after signing the agreement, it is necessary to submit all necessary documents to Rosreestr.

It is mandatory to provide a mortgage agreement, which will indicate the possibility of transferring the subject of the agreement to another person as a gift. Also, a Rosreestr employee will not accept documents from the applicant if he does not provide written consent from the bank to carry out the transaction.

Only if you have this document, as well as the mortgage agreement itself, can you register a deed of gift and subsequently transfer the apartment to the donee.

Categories and status of donees

The transfer of ownership following the donation process for a credit institution is a change of borrower, requiring a study of its financial capabilities and comparison with the solvency of the original debtor in terms of commercial risks. Banks give their consent if the primary borrower’s financial situation has been shaken, or if there has been a sharp deterioration in health, but they put forward requirements in relation to the new borrower, considering each individual individually:

Children of the donor. Whether it is possible to give an apartment with a mortgage to a child comes down to the age of the recipient. If the child has not reached the age of majority at the time of the desired transfer, the bank will not consider it as a possible borrower. This is explained by the incapacity and incapacity of the person, which directly contradicts the interests of the credit institution.
Spouses. The process of donation between husband and wife is not provided for due to the fact that property acquired during marriage is part of joint property. Legally registering a deed of gift makes sense provided:
divorce with the accompanying desire of one of the spouses to annul the rights and obligations to housing.

Whether it is possible to give a mortgaged apartment to a spouse or part of it depends on the approval of the bank, which will study the reputation of the married couple for solvency.

Close relatives. The presence or absence of family relations does not matter for the banking institution, which will evaluate the donee based on the income received, credit history, and stability of the financial situation. However, the answer to the question whether it is possible to gift a mortgaged apartment to parents will most likely turn out to be negative due to a comparison of the age of the current debtor with the expected ones, which will not be in favor of the parents.
Co-borrowers. Raising the question makes sense if a person wants to be freed from status by transferring rights to real estate with obligations to repay the loan. Whether it is possible to donate a share in a mortgaged apartment by the bank will be assessed from the point of view of whether the remaining co-borrowers have sufficient financial capabilities to repay the mortgage without the participation of a specific person.

A distinctive feature of a gift agreement from a purchase and sale agreement is that there is no need to obtain the consent of the remaining owners to transfer a share. Registration of an apartment in shares under a mortgage does not limit the owner in exercising his own rights, requiring only the consent of the credit institution.

The status of the donee is of interest to the bank solely from the point of view of the financial situation and assessment of its own risks when changing the borrower. The credit institution will make a positive decision if the “credit reputation” of the prospective debtor is higher than the current one. Donating a mortgaged apartment to a first-degree relative is of interest to participants in the deed of gift due to the exemption from personal income tax, which is mandatory when transferring to a third party.

In what cases can you obtain the bank’s consent to donate a mortgaged apartment?

When considering a borrower’s application to donate housing to another person, the bank pays attention to the following points:

terms of the mortgage agreement . If the agreement contains a clause on the possible procedure for donating housing under mortgage, then the bank will consider the application. Otherwise, banks often refuse borrowers;
percentage of remaining debt . If the borrower has repaid most of the mortgage, then he can actually obtain the bank’s consent to donate mortgaged housing. If the borrower has not repaid even 50% of the amount that the bank gave him, then the chances of approval of the application are reduced;
solvency of the new owner . When considering an application for donating a mortgaged apartment, banks are sure to ask where the person to whom the current borrower plans to donate an apartment works, how much he earns, how long he has been working, etc. If the financial condition of such a person is favorable, and the current borrower loses his previous financial stability, then the bank can approve the procedure for donating a mortgaged apartment.

Banks' reaction

How might the bank react? The possibility of transferring real estate as a gift before the end of the credit relationship is indicated in the agreement. In this case, the organization carrying out banking activities has the right to prohibit the gift transaction.

At the same time, the bank can, on the contrary, give consent, or indicate in the agreement that it is not necessary to wait for a positive response when transferring encumbered real estate as a gift.

So, when drawing up an agreement between the bank and the borrower, if the apartment is planned to be donated to another person in the future, it is best to discuss this possibility in advance and include this clause in the loan agreement.

Before drawing up an alienation agreement for a mortgaged home, you need to obtain approval from the bank. If you cannot give good reasons, then the deal is unlikely to go through.

It is necessary to argue to the lender that the relationship between the donor and the donee is necessary in this case. It is also possible that the person donating the residential premises is in poor health or does not have sufficient financial resources.

All this is explained by the fact that, along with the ownership of real estate, the bank loan is also transferred to the donee. Therefore, a person who can receive housing as a gift must meet the following conditions:

be a citizen of the Russian Federation and have permanent registration where the bank is located;
have worked at your last place of work for at least 6 months (must have at least a year of total experience);
be provided with enough money to successfully repay the loan.

You can give an apartment as a gift, even if there are debts on it. The donee will be obliged to repay all debts owed to the bank or HOA (this also includes penalties).

If the successor is not notified of the debts, the transaction will be invalid.

The bank will not agree to the execution of the gift agreement and its registration if this procedure increases the risks of the financial organization. For example, it will most likely not be possible to donate living space to an elderly person or a minor citizen.

This can be explained by the fact that it will be difficult for the bank to force the sale of the mortgaged housing if the borrower stops fulfilling its obligations.

Is it possible to donate a mortgaged apartment without the bank's consent?

Some people mistakenly think that they can give a mortgaged home to one of their relatives . However, without the bank's consent, this cannot be done.

Even if the donor and recipient enter into a gift agreement, such a document will not have legal force, since it will then have to be registered with Rosreestr, and no one there will accept the agreement without the consent of the financial institution where the borrower took out the mortgage.

And even if the borrower has some connections, he registered the agreement in a cunning way, then if this fact is discovered, the bank may demand to cancel the transaction and oblige the borrower to repay the mortgage prematurely.

If the borrower does not comply with the bank's requirements, then the lender has the right to demand the sale of the borrower's collateral property in court.

List of documents

To draw up a deed of gift, you need to collect the following documents:

personal passports of the parties to the transaction;
application for registration of the agreement;
title documents for the subject of the agreement;
real estate registration certificate;
consent from the second spouse, certified by a notary (if the living space was purchased after the marriage was registered);
extract from the household ledger;
consent from the guardianship and trusteeship authorities (if one of the parties to the transaction is a minor or incompetent citizen);
bank's consent.

Is it possible to give an apartment with a mortgage as a gift to a child?

An apartment purchased with a mortgage is pledged to the bank until the debt is paid off. Only with the consent of the bank can the borrower carry out any real estate transaction taken on a mortgage.

Even if the bank agrees to change the owner, it will carefully check its solvency . And since the child does not have his own income, the bank may refuse to process the transaction for him, even if he has the consent of his parents or they have confirmed their solvency.

If the bank has approved the borrower’s application to donate a mortgaged apartment to a child, then the donor must enter into a deed of gift with the recipient, obtain written consent from the bank and send documents for registration to Rosreestr.

Who can I give it to?

Before thinking through the donation procedure, you should do something, namely: study the terms of the agreement concluded with the bank. Some lending institutions prescribe a clause prohibiting the gift of mortgage real estate. If it is present in the mortgage, then you should not count on the consent of the lender. In the absence of such a prohibition, several more mandatory conditions must be met:

The recipient must be notified of the status of the residential premises.
The recipient of the property is ready to fulfill all obligations under the loan.
The lender has an interest in signing the deed of gift. Most often, banks are reluctant to take such steps, but if the owner no longer has the financial ability to pay the loan, then it will be beneficial for the lender to shift responsibility to another person and receive his money back along with interest.

The easiest way is to issue a deed of gift for a co-borrower. This is often the borrower’s spouse if the mortgage was taken out during marriage. But it will not be possible to donate an unpaid mortgage to minors. Children do not bear financial responsibility and therefore cannot be successors to the collateral property.

If there is a ban on donation, this procedure will be possible only after the encumbrance is removed from the apartment, after debt obligations have been repaid in full.

Is it possible to donate a share in a mortgaged apartment?

You can donate a share of an apartment, as well as the entire apartment under a mortgage, only with the consent of the bank.

According to Art. 37 of the Law “On Mortgage”, property pledged under a mortgage agreement can be transferred to a third party only with the consent of the mortgagee (bank). Consent must be expressed in writing. Without it, you cannot even donate a share in an apartment with a mortgage.

In theory, it is possible to donate an apartment that has a mortgage, but only with the consent of the bank, which issued the money to the borrower . In practice, not every borrower the bank gives its consent to such a transaction, because it does not want to risk entering into a relationship with a new borrower.

But if the donor proves that it is beneficial for the bank to give his consent (for example, indicates that the recipient is a solvent person), then there is a chance of obtaining the bank’s approval.

It is impossible to donate a mortgaged apartment without the written consent of the bank (unless the borrower pays off the mortgage in full and becomes the full owner of the apartment).

Instructions for registration

How to draw up a deed of gift for living space that is on a mortgage?

To give a home to another person if it has a mortgage, you need to go through the following steps:

First, you need to obtain consent from the bank (in writing) for the free transfer of property.
After this, the donor collects the necessary documentation and draws up a deed of gift.
Documents are accepted at the MFC or Rosreestr. The period for state registration of donation of an apartment on credit can last up to 1 month.
The donee becomes the owner of the certificate of ownership of the residential premises encumbered with a mortgage.

You can find out how to register a deed of gift for living space with a notary and how much it will cost on our website.

Is donation allowed?

When applying for a mortgage loan, the right to the apartment in which the citizen lives is retained by the banking organization until the loan is fully repaid.

If before this moment a person decided to formalize the donation of a share, he will need the lender to give his consent (Article 37 of the Federal Law “On Mortgage”). The agreement may include a condition according to which the borrower is allowed to donate housing. But this is rare, since replacing the borrower creates additional difficulties for banks.

Therefore, if a refusal is received from the bank, donation of shares is not permitted.

Reasons for refusal

Most likely, the borrower will be refused to transfer the share as a gift if:

he committed violations of the payment schedule;
Most of the loan has not been repaid;
the loan agreement contains a condition prohibiting the alienation of part of the living space;
he has a difficult financial situation (medical expenses, loss of ability to work, dismissal);
he often changed his place of residence.

In this case, the share can be donated only after the loan has been repaid. You should not try to donate a share without informing the credit institution - the bank may demand that the agreement be invalidated, repay the loan early, or sell the home.

What bank requirements must the recipient meet?

The recipient can obtain the status of a new owner of a mortgaged property only after passing a solvency check. To do this, you need to provide the following information to the credit bank:

the total income of the recipient per month;
the number of dependents supported by him;
monthly amount of expenses necessary for living;
proof of stability of earnings (prestige of the employer, success of the borrower’s company, etc.).

At the same time, the bank is unlikely to accept an elderly candidate or a minor child.

The essence of mortgage lending and the rights of each party

Each banking structure has its own characteristics regarding the issuance of housing loans. But, in essence, they all agree on one thing: the bank is the full owner of an apartment purchased on credit until the amount of debt is fully repaid. In this case, housing serves as collateral for the security of the transaction.

The list of rights that the borrower is entitled to in relation to the property is determined by each bank independently. Most often, the lender's permission is not required to register in the apartment yourself and register your family members there.

Also, transactions for the transfer of an apartment for free use are often carried out without the knowledge of the bank, and this does not contradict the law. But everything that relates to transactions for the alienation of property - purchase and sale, donation, paid rent - is under the vigilant control of the real owner of the property, that is, the bank.