The buyer of the real estate must retain the right to rely on the data in the land register

We represented the client in a dispute shaping legal practice, where the main question was whether the buyer of the real estate has the right to rely on the land register data, i.e. the entry of a combined mortgage, and what rights and obligations apply to the real estate owners encumbered with a combined mortgage.

 

Joint and several liability

 

The dispute arose when the owner of the real estate encumbered with the combined mortgage claimed compensation from the other owner by way of recourse. Although the owner of the other real estate (the defendant) and our client should have been jointly and severally liable for the satisfaction of the mortgage claim, the mortgagee’s claim was satisfied only at the expense of our client’s real estate. The owner of the other real estate claimed that, based on the principle of good faith, our client’s claims should be dismissed.  

 

Negligent conduct doesn’t deserve judicial protection

 

The Harju County Court disagreed with the other party’s approach and ordered monetary compensation from the other real estate owner in favour of our client, which distributes the mortgagee’s claim equally between the combined mortgaged real estate owners. In addition, the court explained the rights and obligations of the real estate owners encumbered with combined mortgage and decided that the principle of good faith doesn’t apply and doesn’t exempt the defendant from the obligations arising from the combined mortgage. The court also agreed that the negligent conduct of the defendant did not merit judicial protection. The court further stated that the defendant could, in turn, claim the payment of monetary compensation awarded in favour of our client from the person whose obligation the defendant secured by his real estate.

 

The dispute shapes the legal practice and confirms that the buyer of real estate must retain the right to rely on the data in the land register (on the combined mortgage entry). The judgment also confirms that the fulfilment of the mortgagee’s claim by one real estate owner does not release the other owner from responsibility towards the owner who fulfilled the mortgagee’s claim.

 

Our services and customer team

We advised the client on all legal issues related to the dispute. We represented our client in the Harju County Court and continue to represent the client in the Circuit Court. 

 

The client is represented by Mari Agarmaa, the head of insolvency, and Elina Mizerova, an associate.