How Do Mortgage and Attachment on a Unit Work?

Concepts such as "mortgage", "attachment" and "encumbrance", encountered when buying an apartment or dealing with a property, worry many people. In what cases can a mortgage or attachment be placed on an independent unit, and what can be done for a dues debt? In this article we explain these legal encumbrances on a unit and their link with condominium ownership.

What are mortgage and attachment?

A mortgage is a land-registry annotation placed on an immovable as security for a debt. If the debt is not paid, the mortgaged immovable is sold and the debt is collected. An attachment is the seizure of an immovable through enforcement due to an unpaid debt. Both are recorded in the land registry and appear as an encumbrance (restriction on the ownership).

Bank mortgage (mortgage loan)

The most common type of mortgage is a mortgage loan. A person who buys a unit with a loan places a mortgage in favour of the bank on the unit. The mortgage continues while the loan is being paid; once the debt is paid off, the mortgage is discharged (removed). A mortgaged unit can be sold, but the buyer proceeds knowing that the mortgage exists; typically, the debt is paid off at the sale and the mortgage is removed.

Statutory mortgage for dues debt

There is an important arrangement from the point of view of condominium ownership. Under Article 22 of the KMK, the creditor unit owners or the management may request that a statutory mortgage be placed on the debtor's independent unit for unpaid common expense (dues) receivables. This provides strong security for the dues claim. This statutory mortgage is also effective against third parties.

Moreover, even if the debtor owner sells the unit, the new owner is jointly and severally liable for the dues debt of the previous period. It is therefore critical to investigate any dues debt when buying a unit.

The attachment process

If a creditor (a bank, a dues creditor or any other creditor) initiates enforcement proceedings and the debt cannot be collected, an attachment can be placed on the debtor's unit. The attachment is annotated on the land registry; the unit can be sold through enforcement (auction) further along in the process and the debt satisfied. An attachment does not immediately end ownership but restricts sale and transfer transactions.

Encumbrance check when buying a unit

Before buying a unit, the encumbrances on the land registry record must be checked without fail. Burdens such as mortgage, attachment and dues debt can cause problems for the buyer. Because a dues debt in particular passes to the new owner under Article 22 of the KMK, the debt situation must be asked from the management and the land registry record must be examined before purchase. A clean land registry is a precondition for a safe purchase.

Summary: A unit can have a bank mortgage (mortgage loan), a statutory mortgage for dues (KMK Art. 22) or an attachment for debt, all annotated on the land registry. Dues receivables are secured by a statutory mortgage and the new owner acquiring the unit is liable for the previous debt. Encumbrance and debt checks are essential at purchase. For condominium and dues matters, see our blog guides, and keep your dues tracking in order with our digital tools.

Frequently Asked Questions

Can a mortgage be placed on a unit for a dues debt?
Yes. Under KMK Art. 22, a statutory mortgage can be placed on the independent unit for unpaid dues; this security is effective against third parties as well.

Can a mortgaged unit be sold?
Yes, it can. The buyer proceeds knowing about the mortgage; typically, the debt is paid off at the sale and the mortgage is removed.

The unit I intend to buy has an attachment — what should I do?
An attachment does not immediately end ownership but restricts sale. Before purchase, always check all encumbrances on the land registry record and any dues debt.

Related content

In connection with this topic, our articles on how complex (site) management works, legal rules for renting out a unit and renting out common areas cover the subject in more detail.

This content is for general information only and does not constitute legal advice. For your specific situation, please consult a lawyer.