A mortgage is a means of securing financial claims, most commonly in favor of a bank or another creditor, and is effectuated by registering the right in the Land Registry. In Bosnia and Herzegovina, the registration of a mortgage is a legally regulated process aimed at ensuring legal protection for both the creditor and the property owner.
What is a mortgage and when is it registered?
A mortgage is a security right that a creditor (e.g. a bank) acquires over the debtor’s real estate as collateral for a debt. Although the debtor remains the formal owner, the creditor gains the right to request the sale of the property if the obligations are not fulfilled. Registration of the mortgage is mandatory for the lien to be legally valid and enforceable against third parties.
Mortgages are most commonly registered when:
- Taking out a residential or business loan
- Securing business obligations
- Pledging personal property as collateral for someone else’s debt
How is a mortgage registered?
- Drafting the basic legal document – A mortgage agreement or a statement permitting registration must be in written form, with signatures notarized.
- Filing the application for registration – The application is submitted to the competent Land Registry Office based on the location of the real estate. The agreement, proof of ownership, and other required documents must be attached.
- Land registry procedure – The office reviews the documentation, registers the mortgage in the Land Registry, and notifies the parties of the completed registration.
- Mortgage registration – Once registered, the mortgage becomes legally binding and can only be removed upon debt settlement or deletion from the registry.
What should you pay special attention to?
- Whether all elements of the mortgage agreement are legally correct
- Whether the property is legally clear and unencumbered
- The priority order of registration – an earlier registered mortgage has priority
- Whether all conditions for removal of the mortgage after repayment are met
Practical experience
In our practice, we have often handled situations where it was necessary to determine whether a mortgage was legally registered, assist clients with contract termination, mortgage cancellation after debt settlement, or represent them in disputes arising from inaccurate or unlawful registrations.
Proper and timely registration of a mortgage is a key legal measure for protecting the interests of both parties – the debtor and the creditor. If you are unsure whether your mortgage has been correctly registered, or have questions about repayment, cancellation, or challenging a mortgage, seeking expert legal advice is recommended.
