Cancellation of mortgage notes
Cancellation of mortgage notes
Given the high cost of setting up a bearer mortgage security, property owners often hold such securities at risk of losing them. Generally speaking, article 856 of the Civil Code (CC) states that when the creditor of a mortgage note has remained unknown for ten years and interest has not been claimed during that period, the owner of the encumbered property may request the court to publicly summon the said creditor to make himself known within six months. If the creditor fails to do so, and if the investigation shows that, in all likelihood, the debt no longer exists, the court will order the corresponding pledge to be cancelled.With regard more specifically to paper mortgage notes, article 865 of the Civil Code provides that if one of these is lost or has been destroyed without intent to extinguish the debt, the creditor may request the court to cancel the note and order payment or, if the debt is not yet due, to issue a new note. The debtor also has the right to have an acquitted instrument that cannot be represented annulled. In order to bring an action for annulment, it is sufficient for the loss to be plausible. This is the case, for example, if the applicant can demonstrate that he or she had possession of the schedule and that it has been lost or destroyed. If the judge is convinced, he will summon the unknown holder, by means of three publications in the Swiss Official Gazette of Commerce, to produce the document of title within 6 months. If the document of title is not produced within this period, the court will order the cancellation of the paper schedule. However, this will have no effect on the debt itself, and once you say that the debt covered by the mortgage on your house has been repaid, the debt and the right of pledge no longer have more than a virtual existence. At the end of the above-mentioned procedure, you can request that a new title be issued or registered by the Land Registry, which you can then transfer free of charge or for a consideration to the purchaser of your property, or even transfer to another property belonging to you in the canton.
