Major overhaul of Land and Mortgage Registers: the Polish mortgage system is being thoroughly reshaped
A wide simplification of mortgage regulations, in force as of February 20th, 2011, shall facilitate the marketability of mortgage.
First and foremost, mortgages are now unified. This means that instead of two general types of mortgage, i.e. the regular mortgage and the bail mortgage, only one type will now be available, similar to the bail mortgage. As a result, all mortgages will be established up to a certain maximum amount, although not specifying the exact sum. Under the new regulations, a single mortgage may secure more than one debt due to the same creditor, stemming from separate contractual relations. Moreover, a single contractual mortgage may also secure debts of more than one creditor, if the debts are to finance a particular undertaking. In that case all creditors assign a common mortgage administrator to represent all creditors in subsequent mortgage dealings (e.g. conclusion of contract establishing a mortgage). This is similar to the registered pledge administrator already existing in the Polish legal system. Perhaps the most revolutionary change is the limitation of the hitherto strict link between a mortgage and a secured debt. Now, expiry of secured debts will not necessarily imply expiry of the mortgage, if further debts are likely to arise from the same contractual relationship. Further, the ranking position of a mortgage may now be subject to trading by the encumbered real estate owner.
