Notes related to mortgage relations in Ukraine
16 February, 2007
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Mortgage issues are regulated by Civil and Business Codes (both effective as of January 1, 2004), Law On Mortgage of 1992, Law On Hypothec of 2003 and corresponding normative acts.
Generally, tangible or intangible assets may be mortgaged in Ukraine. But certain objects such as state-owned “national and historical valuables” may not be mortgaged.
There are several specific types of mortgage. A hypothec denotes a mortgage in land and immovable property. A zaklad denotes a mortgage on movables, passed into possession of a mortgagee.
Whatever the object of the mortgage, any mortgage agreement must be concluded in writing. Notarization is required for mortgages of immovable property. The parties also may agree to notarize other mortgage agreements.
A mortgage over movable assets may be registered in the State Registry of Movable Property Charges. Mortgages over immovable property are recorded in State Notary registries. Upon performance of the secured obligations, the mortgagee is required to cancel the registration.
If a secured party wishes to enforce its security interest over mortgaged assets, then the secured party has to seek for a court order or judgment, unless there is a “notary endorsement” (a separate notary procedure from the notarization of a mortgage agreement). A secured party can apply directly to an execution officer (similar to a marshal) to enforce a mortgage.
Other security arrangements may also be used, but care must be taken to comply in each case with provisions of the Ukrainian Civil Code and other applicable legislation.
The above is intended to provide a brief guide only. It is essential that appropriate professional advice is obtained. Our company will be glad to assist you in this respect. Please do not hesitate to contact us.
