Transfer in lieu of payment procedure
The law applies both to credit agreements in progress at the time of its entry into force and to acts concluded after that date.
The steps that the debtor must undertake in order to benefit from the provisions of the pay-as-you-go law are as follows:
(I) The consumer submits to the creditor, through a bailiff, a lawyer or a notary, a notice of the decision to transfer ownership of the mortgage-backed property to him, detailing the conditions for admissibility of the application listed above.
The notification will also include the setting of a time horizon in two different days in which the legal or conventional representative of the credit institution will present itself to a notary office proposed by the debtor for the authentication of the debit statement which will extinguish any debt debtor, principal, interest, penalties, stemming from the mortgage loan contract, according to the law.
The term of the first notice to the notary must be at least 30 days free, during which time any payment to the creditor is suspended, as well as any judicial or extrajudicial proceedings initiated by the creditor or persons subrogated to his or her rights against the consumer or its assets. At least 3 days prior to the first day of convocation to the notary public, the parties shall provide him/her with the information and documents necessary for the conclusion of the debit statement. All notarial costs and, as the case may be, the bailiff or the lawyer are borne by the debtor.
Such steps may be taken by co-signers, as well as by personal or mortgage guarantees of the principal consumer, with the agreement of the principal or his successors.
The effect of the notification is that, from the date of communication, the creditor’s right to appeal against debtors, but also personal or mortgage guarantors is suspended. In the event of a final admission of the appeal regarding the fulfillment of the conditions of admissibility of the proceedings, the creditor may start or, as the case may be, resume any judicial or extrajudicial proceedings against both the debtor and other personal or mortgage guarantors. Recurring action against the principal debtor is only admissible after the full settlement of the debt arising from the credit agreement.
(II) The creditor may contest the fulfillment of the conditions of admissibility of the procedure regulated by the law within 10 days from the date of notification of the notification. The request shall be dealt with in the urgency procedure, with the summons of the parties, by the court in whose jurisdiction the consumer is domiciled. The appeal against the decision is made within 15 working days of the communication and is judged with speed. Until the final settlement of the creditor’s appeal is maintained, the suspension of any payment to him, as well as of any judicial or extrajudicial proceedings initiated by the creditor or the persons subrogated to his rights against the debtor, shall be maintained. If the creditor’s appeal is admitted, the parties will be placed in the situation prior to the accomplishment of the actions provided by the Law.
(III) Within 10 days of the final rejection of the appeal, the creditor is required to submit, in accordance with the prior notice of the debtor, to the public notary indicated in the notice. At least 3 days prior to the first day of convocation to the public notary, the parties shall provide him with the information and documents necessary for the completion of the debit statement as well as the exact date of the signing of the payment docket.
(IV) Where the creditor fails to comply with legal requirements, the debtor may require the court to issue a judgment finding the settlement of the obligations arising out of the mortgage credit agreement and order the transfer of the ownership right to the creditor. The application shall be judicially heard, with the parties quoting, at the court in whose jurisdiction the debtor is domiciled. Pending final settlement of the request, the suspension of any payment to the creditor and any judicial or extrajudicial proceedings initiated by the creditor or by persons subrogated to his rights against the debtor shall be maintained. This judgment may be appealed against within 7 days of communication.
The right to ask the court to determine the settlement of the debts arising from the credit agreement also belongs to the consumer whose mortgaged property has been executed forced, irrespective of the holder of the claim, the status or the form of enforced execution that continues against the debtor.
(V) At the time of the conclusion of the payment transaction which has the effect of translating ownership, that is, from the date of delivery of the final judgment, any debt of the debtor to the creditor shall be extinguished, the latter not being able to claim any other sums of money. This law may also benefit the debtor or guarantor who has guaranteed the principal debtor’s obligation.
Documents required to authenticate the payout contract:
- identity papers;
- property acts of the real estate under the transaction;
- a fiscal certificate in the name of the owner issued by the competent Financial Administration;
- the cadastral documentation of the immovable property (the real estate form and the site plan, respectively the relevant plan), drawn up by an authorized cadastral expert;
- the land book extract – is obtained through the notary office.
Transfer in lieu of payment
Duty to pay a means of extinguishing an obligation consisting of the creditor accepting a benefit other than that owed by the debtor. The creditor’s acceptance must intervene at the time the performance is executed. if this agreement was earlier, a novelty was achieved by object change.
Transfer in lieu of payment is a variety of payment and produces the same effects: it extinguishes the obligation along with all its accessories. When the original obligation has as its object the payment of a sum of money and the creditor accepts instead the transfer of the property of a thing, the payment to make a sale, and in that case its specific rules on the capacity of the parties, the formal conditions and, where appropriate, prior authorization, warranty of eviction and vices, etc. For example, with regard to formal conditions, the law imposes the need to authenticate the payment contract to the notary in all cases where it relates to immovable property.
Under this law, four conditions must be met cumulatively to settle the debt arising from a bank credit by way of payment:
(1) The credit agreement must have been concluded between a consumer or a group of natural persons * and a creditor who may, as the case may be:
- credit institution (bank)
- non – bank financial institutions (lending corporations engaged in professional lending) or
- the assignee of the claim (debt collection company).
(2) The value of the borrowed amount at the time the bank or IFN granted the loan did not exceed the equivalent in lei of EUR 250,000, calculated at the NBR exchange rate on the day the credit agreement was signed.
(3) The consumer has contracted the credit to acquire, build, extend, modernize, modify, rehabilitate a dwelling or, irrespective of the purpose for which it contracted, is guaranteed with at least one dwelling.
(4) The consumer has not been convicted by a final judgment for crimes related to the credit for which application of Law.
To request an online legal consultation, please fill out the FORM