Eviction of an Individual from Dwelling Building or Premises Transferred to Mortgage May not Be Carried out before the Expiration of the Law of Ukraine "On Temporary Measures for the Anti-Terrorist Operation Period" – SC Legal Opinion

By Article 9 of the Law of Ukraine "On Temporary Measures for the Anti-Terrorist Operation Period" the operation of the Law of Ukraine "On Mortgage” is terminated with respect to the realization of a mortgage holder’s right to acquire property right to a mortgaged property, to sale the mortgaged property or to place it at public procurement, as well as eviction of dwellers from apartment buildings and premises transferred to mortgage, as for which there is a judgment on levying an attachment upon such objects.

This was noted in the Resolution No. 265/4748/16/16-ц (cassation judicial proceedings No. 61‑16347св18) of 28 November 2018 issued by the panel of judges of the First Judicial Chamber of the Civil Cassation Court within the Supreme Court

Courts found that in order to fulfill the commitments upon the credit agreement between parties, a mortgage contract had been concluded. By the judgment of the Appeal Court of Donetsk Oblast an attachment was levied on the respondent’s dwelling house as part of the debt payment by selling it to KB PryvatBank Public Company with the conclusion of the sale contract. Since the respondent had not fulfilled willingly the request for eviction, the bank applied to court with a claim.

The first instance court, in its judgment on the satisfaction of the claim, confirmed by the appeal court, considered that it was proved that the mortgaged property had been purchased for credit funds; the judgment made it possible to levy an attachment upon mortgaged property, therefore, the respondent had to be evicted from the dwelling house without providing her with permanent shelter.

The panel of judges of the Supreme Court did not confirm such an opinion of the courts.

In Article 109 of the Housing Code of the Ukrainian Soviet Socialist Republic it is stated that individuals evicted from a dwelling house (dwelling unit), which is a mortgaged property, with regard to levying an attachment upon mortgaged property, shall be provided with shelter only if mortgage-based dwelling has not been purchased by means of loan, ensured by the mortgage of this dwelling.

However, pursuant to Article 9 of the Law of Ukraine "On Temporary Measures for the Anti-Terrorist Operation Period" (as amended at the moment of consideration of the case by the first instance court) during the operation of this Law as for real estate situated on the territory of the Anti-Terrorist Operation belonging to Ukrainian citizens (including individual entrepreneurs) or legal entities – subjects of small and medium-sized entrepreneurships – and being in a mortgage, the operation of Article 37 (with respect to the execution of mortgage holder’s right to acquire property right to a mortgaged property), Article 38 (with respect to the execution of mortgage holder’s right to sale the mortgaged property), Article 40 (with respect to the eviction of dwellers from dwelling houses and premises transferred to mortgage, as for which there is a judgment with regard to levying an attachment upon such objects), Articles 41, 43-47 (with respect to placing the mortgaged property at public procurement) of the Law of Ukraine "On Mortgage” shall be terminated.

The provisions of the noted article did not terminate the operation of the Article 109 of the Housing Code of the Ukrainian Soviet Socialist Republic. However, termination of the operation of Article 40 of the Law of Ukraine "On Mortgage” with respect to eviction of dwellers from dwelling houses and premises, situated on the territory of the Anti-Terrorist Operation, transferred to mortgage and as for which there is a judgment on levying an attachment upon such objects, makes it impossible to apply Article 109 of the Housing Code of the Ukrainian Soviet Socialist Republic.

Taking into account the fact that Mariupol is included into the list of cities, on the territories of which the Anti-Terrorist Operation was held, and Article 9 of the Law of Ukraine "On Temporary Measures for the Anti-Terrorist Operation Period", the eviction of dwellers from dwelling houses and premises transferred to mortgage, as for which there is a judgment on levying an attachment upon such objects, may not be held prior to the termination of this Law.

Taking into account the fact that the courts issued unjustified judgment on the satisfaction of the bank’s claim and the eviction of the respondent from the disputed house, the Supreme Court cancelled the judgments of previous courts and dismissed the satisfaction of the claim. Follow the link http://www.reyestr.court.gov.ua/Review/78376714 to see the full text of the Resolution.