Success in a precedent case in the Supreme Court – purchasing an apartment in the developer’s bankruptcy proceedings without mortgages
We gladly inform, that on 10th of March 2017 our law firm has obtained a ruling of precedent in the Supreme Court, concerning mortgages encumbered on apartments purchased from an bankrupt development company.
The insolvency proceedings of the developer has been carried on since 2009. Our clients – five families had purchased the apartments, paid 100% of the price and already moved in, but before the date of the developer’s insolvency proclamation the legal title to the apartments was not conveyed. The real property, on which the whole investment was built, had been encumbered by mortgages in favor of an entity, which provided financing for the developer.
In 2013 our law firm obtained an interim relief, prohibiting the sale of the apartments to other entities. As a result, the official receiver decided to fulfill the binding developer contracts and convey the legal titles. In 2014 proper notarial deeds were signed.
During the land register proceedings a dispute has risen whether the newly separated apartments sold by the official receiver should be encumbered by mortgages or not. The regulations of the insolvency law are not unambiguous in this matter. There was also no proper case law.
In the first of the mentioned five cases the Supreme Court upheld the complaint filed by MyLo law firm and ruled, that purchasing from an official receiver has always the same legal effect, as purchase in due of an enforcement procedure. This means, that the mortgages encumbered on the apartments were expired. The following cases should be decided accordingly. The aforementioned five families are be allowed to enjoy the legal title to their apartments without paying any additional sums to the developer’s financing entity.
Legal advisor Agnieszka Grzesiek-Kasperczyk acted as attorney on this case. Supreme Court record no. III CSK 91/16.