An encumbrance is a constraint on the title deed of a property which restricts the rights of its owner to act on that property, or which may affect the security value of the property.
This note is intended to give some brief information about the potential encumbrances you may come across.
WHAT IS INTERLOCUTORY INJUNCTION?
An interlocutory injunction is a court order to compel or prevent the owner of a property from doing certain acts on said property, pending the final determination of the case.
WHAT IS A PUBLIC DISTRAINT?
This is a type of distraint that a state agency, local authority or municipality may impose in order to recover debts arising from taxes, duties, charges or fines. After this distraint is processed with the land registry, the debtor may not have any disposition over the real estate under distraint without getting the written consent of the public authority in the capacity of the creditor.
WHAT IS A FOUNDATION NOTATION?
This is registered on the ‘type’ column in the land register. Unless the foundation concession fee is paid, immovable property may not be assigned.
WHAT IS THE “COMPOSITION OF DEBTS” ANNOTATION?
This is a way of liquidation whereby the debtor reaches a settlement with the creditors. The terms of the composition decision are processed and recorded by the land registry, and upon registration the owner may not assign or sell the property.
WHAT IS THE BANKRUPTCY ANNOTATION?
After the bankruptcy office provides a notice of bankruptcy to the land registry office and the decision is entered with the registry, the owner’s right to have disposition over that property is transferred to the bankruptcy estate. It is not possible from now on to transfer or assign the property or to create a real/ in-kind right over it.
WHAT IS HOMESTEAD ANNOTATION?
A homestead is a system whereby a person allocates properties suitable for residence, agriculture or industry along with their appurtenances to his / her family. This creates a protected familial property that may not be assigned, transferred, pledged, attached or leased.
WHAT IS ARTICLE 31/B OF THE EXPROPRIATION LAW?
If there is an ‘Article 31 of the Expropriation Law’ annotation over an immovable property, this property now belongs to the administration. That’s the reason why after the Article 31 annotation, it is not possible to transfer or assign the property or to create any other real or personal right there on.
WHAT IS THE ‘CEASE OF BUSINESS’ ANNOTATION?
After the publication of the ‘cease of business’, the execution office gives a notice to the land registry office and the ‘cease of business’ annotation is processed with the land registry details. It prohibits a real or personal right over a property for two months following the registry of this annotation.
WHAT IS THE LEASEN ANNOTATION?
A lease annotation obliges a subsequent owner of a leased property to suffer and tolerate the lessee, meaning that even if the property is transferred, the lessee may not be asked to discharge the property for the term of the annotated lease right.
WHAT IS THE USUFRUCT LAW?
This is a Civil Law term referring to the right of one individual to use and enjoy the property of another. The right of disposition over the property covered by the usufruct is vested with its owner.
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