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LAW OF UKRAINE

of June 5, 2003 No. 898-IV

About mortgage

(as amended on 15-08-2022)

Section I General provisions

Article 1. Determination of terms

In this Law the stated below terms are used in the following value:

the debtor - ipotekodatel or other person responsible before the mortgage holder for accomplishment of primary obligation;

the highest priority - the priority established earlier any other priority concerning the same real estate;

mortgage - type of ensuring accomplishment of the obligation by real estate (indivisible object of construction in progress, future real estate object) which remains in ownership and use of ipotekodatel according to which the mortgage holder has the right in case of failure to carry out by the debtor of the obligation provided with mortgage to meet the requirements at the expense of mortgage subject mainly before other creditors of such debtor according to the procedure, established by this Law;

ipotekodatel - person giving to mortgage real estate for ensuring execution of the obligation or the obligation of other person to the mortgage holder. The debtor or the property guarantor can be Ipotekodatel;

the mortgage holder - the creditor on primary obligation;

the property guarantor - person giving to mortgage real estate for ensuring obligation fulfillment of other person debtor;

the following mortgage - transfer to mortgage of the real estate which is already mortgage subject of the previous mortgage agreement;

real estate (real estate) - the parcels of land, and also the objects located on the parcel of land is also integral related which movement is impossible without their depreciation and change of their appointment. Pledge (mortgage) of objects of construction in progress and future real estate objects is regulated by the rules determined by this Law with observance of the requirements established by the Law of Ukraine "About guaranteeing the corporeal rights to real estate units which will be built in the future". Pledge of air and ocean ships, inland navigation vessels, space objects is regulated by the rules determined by this Law;

lower priority - the priority established after priority of any other priority concerning the same real estate;

primary obligation - the obligation of the debtor according to loan agreements, the credit, purchase and sale, leasing, and also the obligation arising on other bases which accomplishment is provided with mortgage;

priority - the privilege of one person concerning the right of other person to the same real estate.

The terms "indivisible object of construction in progress", "divisible object of construction in progress", "object of construction in progress", "future real estate object" are used in this Law in the values given in the Law of Ukraine "About guaranteeing the corporeal rights to real estate units which will be built in the future".

Article 2. Legislation on mortgage

The legislation of Ukraine on mortgage is based on the Constitution of Ukraine and consists of the Civil code of Ukraine, the Economic code of Ukraine, the Land code of Ukraine, the laws of Ukraine "About notariate", "About guaranteeing the corporeal rights to real estate units which will be built in the future", this Law and other regulatory legal acts, and also international treaties of Ukraine.

Article 3. Origin, application and priority of mortgage

The mortgage arises based on the agreement, the law or the judgment. Rules about mortgage which arises based on the agreement are applied to mortgage which arises based on the law or the judgment if other is not established by the law.

The mutual rights and obligations of ipotekodatel and the mortgage holder arise from the moment of state registration of mortgage according to the law.

The mortgage agreement, mortgage subject of which are property rights on object of construction in progress, makes sure the notary based on the documents confirming property rights on this object.

Accomplishment of the valid obligation or satisfaction of the requirement which can arise in the future based on the agreement which took legal effect can be provided with mortgage.

The mortgage has derivative nature from primary obligation and is valid before the termination of primary obligation or before the termination of effective period of the mortgage agreement.

In case of violation by the debtor of primary obligation according to mortgage the mortgage holder has the right to meet the requirements provided with it at the expense of mortgage subject mainly before other persons, the rights or requirements of which of the real estate transferred to mortgage are registered after state registration of mortgage. If the priority of the separate right or the requirement of the real estate transferred to mortgage arises according to the law, such right or the requirement has priority before the requirement of the mortgage holder only in case of its origin and registration until state registration of mortgage.

The priority of the right of the mortgage holder to satisfaction of the requirements provided with mortgage at the expense of subject of mortgage rather registered in the procedure for the rights or requirements of other persons of the real estate transferred to mortgage established by the law arises from the moment of state registration of mortgage. The registered rights and requirements of real estate are subject to satisfaction according to their priority - in priority of their state registration.

Article 4. State registration of mortgage

Burdening of real estate mortgage is subject to state registration according to the law. State registration of pledge of air and ocean ships, inland navigation vessels, space objects is carried out according to the procedure, established by the Cabinet of Ministers of Ukraine.

The mortgage holder shall file to the state registrar petition for state registration of the termination of mortgage no later than 14 days from the date of complete debt repayment on the primary obligation provided with mortgage.

Article 5. Mortgage subject

One or several real estate units under following conditions can be subject of mortgage:

real estate belongs to ipotekodatel on the property right or on the right of economic maintaining if ipotekodatel is the state or municipal company, organization or the organization;

real estate can be aloof ipotekodately and on it according to the legislation collection can be turned;

the real estate registered in the procedure established by the law as the separate object of the property right allocated in nature if other is not established by this Law.

Mortgage subject can also be object of construction in progress, property rights on it, other real estate which will become property of ipotekodatel after the conclusion of the mortgage agreement provided that the ipotekodatel can document the right to the respective real estate acquired by it in property in the future. Burdening of such real estate mortgage is subject to state registration in the procedure established by the law irrespective of who is the owner of such property for the period of the conclusion of the mortgage agreement.

Object of construction in progress, constructed facility of the real estate which is component of object of construction in progress, concerning which the right to accomplishment of construction works after entry into force of the Law of Ukraine "About providing the rights to real estate units which will be built in the future", on condition of observance of requirements of the Law of Ukraine "About providing the rights to real estate units which will be built in the future" is acquired can be subject of mortgage. Divisible object of construction in progress can be exclusive subject of mortgage in the case provided by the Law of Ukraine "About financial and credit mechanisms and property management in case of construction of housing and real estate transactions".

The part of the real estate unit can be mortgage subject only after its allocation in nature and registration of the right of property / special property right on it as on separate real estate object if other is not established by this Law. The mortgage extends to part of the real estate unit which cannot be allocated in nature and was attached to mortgage subject after the conclusion of the mortgage agreement without registration of the property right to it as on separate real estate object.

Real estate is transferred to mortgage together with all its accessories if other is not established by the mortgage agreement.

If the mortgage subject was reconstructed by ipotekodatel or concerning it the unauthorized construction (including, but it is not exclusive, new buildings, constructions, etc. on the parcel of land belonging to ipotekodatel on the property right or being in its use are built) was carried out, all reconstructed, newly created real estate objects are considered as mortgage subject according to the mortgage agreement.

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