Repeal of the mortgage contract

Many people in the country are turning to financial institutions / banks in order to obtain a loan. The funds are spent for various purposes at the discretion of the borrower. As you know, banks are almost always in such cases, require borrowers to enter into mortgage contracts (unless, of course, there are real estate owned). Consider the situation where the credit is received by the borrower (one spouse) with a preliminary conclusion of the mortgage agreement and mortgage contract if possible to annul all related to its invalidity consequences.

It should be recognized that quite often so there are not really “good faith” the wife / husband of the borrower (turning to the court for recognition of mortgage contract null and void) in the absence of really violated right. The most common situation when a spouse goes to court with a claim for recognition of mortgage contract null and void on the grounds that it is not obtained consent to the conclusion of the contract (of course, that the bank will by all means to protect their interests).

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For the purposes of Articles 572, 575 of the Civil Code of Ukraine the mortgage is a type of enforcement obligations of the real estate, which remains in the possession and use of the mortgagor, according to which the mortgagee has the right in case of default by the debtor obligations secured by the mortgage to obtain satisfaction of their claims at the expense of the subject mortgage.
Indeed, in accordance with the civil law and the law of Ukraine “On mortgage”, property in common ownership may be transferred as collateral (mortgage) only with the consent of all co-owners.

Such consent by their legal nature is a unilateral transaction. According to Article 219 of the Civil Code of Ukraine in case of non-compliance with the requirements of the law on notarization unilateral transaction the transaction is void. These rules tend to be the main reason for going to court, and the courts often satisfy these claims.

But should pay attention to the following: in accordance with Article 369 of the Civil Code of Ukraine and Article 65 of the SC of Ukraine at the conclusion of one of the spouses by the order of the common property of the contract is that it is acting with the consent of the other spouse.

For the purposes of Article 60 of the UK property acquired by the spouses during the marriage belongs to the wife and husband on the right of joint ownership, unless the contrary is proved.

According to the content of Article 203, 215 of the Civil Code of Ukraine grounds for the invalidity of the transaction is non-compliance at the time of the transaction party (parties) of the requirements established in paragraphs 1 – 3, 5, and article 203 6 of the Civil Code, and, in particular, when the transaction content is contrary to Civil Code of Ukraine, other acts civil law.

Consequently, the grounds for the invalidity of the transaction is non-compliance with party (parties) requirements according to the contents transaction Civil Code of Ukraine and other acts of civil legislation is at the time of the transaction.

Conclusion of a contract of the spouses by the order of the common property without the consent of the other spouse may be the basis for the recognition of the contract null and void only if the court finds that the spouse who concluded the contract in respect of the common property, and a third person – a counterparty for such a contract (the bank), acted in bad faith, in particular, that the third party knew or circumstances of the case could not have been unaware that the property is owned by spouses on the right of joint ownership, and one of the spouses, which concludes the contract, has not received the consent of the this other spouse.
This means that in case of submission of documents to the financial institution in order to obtain the loan the borrower (one spouse) indicates false information (in particular, it is not in a registered marriage), and if the bank does not know really what the property is in joint ownership then recognize such a contract of mortgage in the future invalid unlikely, although there is no consent of the other spouse.