Release of property from mortgage

"Written consent is required from all mortgage co-owners of the property"

A mortgage is a charge placed on immovable property by the owner in order to secure a sum of money or an obligation to the mortgage creditor. While in the case of repayment of the amount, the mortgage is extinguished by a written declaration of the mortgage creditor to the Land Registry, the same does not apply in the case of release of property from the mortgage. Written consent is required from all mortgage debtors and any guarantors. The issue mainly concerns co-owners of a property or properties who jointly mortgage their shares with the same mortgage or mortgages and some of them agree with the mortgage lender, bank or credit acquisition company, against the payment of a specific amount to release the property or properties from the mortgage. In this case, it is not the mortgage lender's obligation to secure the written consent of all the mortgage co-owners, as long as it’s readiness to release the mortgage from the property with the simultaneous payment of the agreed amount is sufficient.

The presentation of the written consent of the mortgage co-owner or co-owners is a legal requirement. Where the co-owners, being related to each other, do not have good relations or for other reasons, such as preventing the sale of the property, do not co-operate, the mortgage creditor who demonstrates in practice its intention to release the mortgage from the property and has submitted the release documents to the Land Registry, it is up to the co-owners to have available the amount to be paid and the written consents of all the mortgage co-owners of the property. If a mortgage co-owner does not consent and his written consent is not presented, then the property cannot be released from the mortgage.

Legislative provision

The provisions of article 34(1)(2) of the Transfer and Mortgage of Immovable Properties Law, Law 9/65, are clear and the Land Registry does not proceed with the release of the mortgage from the property, without the presentation of the written consent of all the co-owners. The relevant legislative provision surrounds the issue with the necessary security, describing the procedure followed and how the release of the property from the mortgage occurs. The presence of the mortgage creditor and the mortgage debtor is required, the presentation of the necessary certificates and documents, including the written consent of any guarantor is also required and if the Land Registry is convinced of the persons appearing and that the consents come from all interested parties, it proceeds with the relevant release.

Supreme Court Judgment

The Supreme Court, in its judgment issued in C.A.29/2015, dated 28.2.2025, examined the issue of the release of a property from a mortgage, approving as correct the interpretation and application of the relevant legislation by the Court of first instance. The case concerned a lawsuit by mortgage debtors against a bank for alleged breach of a rule of Court, claiming that despite their readiness to pay the corresponding amount against the judgment debt, the release of a specific property from the mortgage was not possible.

The Court of first instance examined the rule of Court and decided that the bank did not violate any of its terms and concluded that for the release of any of the mortgaged properties to which the mortgage referred, the consent of all mortgage debtors was necessary. In this case, the consent of the owner of one of the mortgaged properties, with whom the appellants' relatives did not have a good relationship, was not obtained. Moreover, obtaining the consent of all the mortgage debtors was not a condition of the rule of Court, which the bank bore the burden of satisfying.

Furthermore, it held that on the date set by the appellants for the presence of all those involved in the Land Registry for the purpose of paying on their behalf the corresponding amount and releasing the mortgaged property from the mortgage, despite the presence of the bank, none of the mortgage debtors appeared, either to consent to the relevant release or to make a payment. Therefore, it dismissed their claims and the lawsuit.

Supreme Court Conclusion

The Supreme Court, referring to the relevant provisions of Law 9/1965, emphasized that these confirm the necessity of securing the consent of all mortgage debtors in the event that the release of any of the mortgaged properties concerned by a mortgage is sought. Such consent was an implied condition for compliance with the relevant provisions of the law, an issue of which the appellants, due to their involvement in an identical case, were already aware, and for this reason the appeal was dismissed.