Amendments to the Immovable Property Law: Streamlining Mortgage Release Procedures

Recent amendments to the Immovable Property (Transfer and Mortgage) Law have introduced a new process to address delays in mortgage releases, ensuring that borrowers can clear their property titles in a timely manner after fulfilling their obligations. The Immovable Property (Transfer and Mortgage) (Amendment) (No. 2) Law 161(I) of 2024 introduces significant updates, particularly to Article 35, aimed at simplifying the procedure when mortgagees fail to act.

Key Provisions of the Amendment

1. Application for Mortgage Release: Borrowers (mortgagors) who have fully met their obligations but face delays from the lender (mortgagee) in releasing the mortgage can now take action. If the mortgagee does not proceed with the release within 30 days, the borrower can apply directly to the Director of the Department of Lands and Surveys to facilitate the release.
2. Director’s Authority to Release Mortgages: Upon receiving an application, the Director is empowered to investigate whether all obligations under the mortgage have been fulfilled. If confirmed, the Director can proceed with releasing the mortgage without requiring the mortgagee's explicit consent.
3. Notification and Objection Period:
   • The Director must notify the mortgagee of the intention to release the mortgage, providing a 30-day period for the mortgagee to submit any objections.
   • If an objection is raised, the Director will review and decide on the matter.
   • If no objections are submitted within the specified timeframe, the mortgage release will proceed.
4. Regulatory Framework: To support the implementation of these provisions, the amendment allows for the issuance of regulations detailing the required application process, including necessary documents and procedural guidelines.

Benefits of the Amendment

This legislative change aims to address inefficiencies in the current system by:

• Protecting borrowers from unnecessary delays in obtaining clear property titles.
• Establishing a clear, transparent mechanism for resolving disputes related to mortgage releases.
• Reducing dependency on the mortgagee's action to finalize the release process.

The new process ensures that borrowers who meet their financial obligations can confidently resolve their mortgage status without prolonged delays, fostering greater trust and efficiency in property transactions.

These changes reflect a broader commitment to modernizing property laws and aligning them with the needs of a dynamic real estate market.