THE REPUBLIC OF LITHUANIA

THE REPUBLIC OF LITHUANIA The Republic of Lithuania Law on the amendment of the law on Mortgage No. I-2936 (10 June 1997 No. VIII-251) (as amended by 19 March 1998 No. VIII-670) Vilnius Article

1. Revised Version of the Law on Mortgage The Law on Mortgage shall be amended to read as follows: “the Republic of Lithuania law on Mortgage Chapter I General Provisions Article
2. Definition of Mortgage Mortgage is the pledge of property as security for the performance of a present or future debt obligation where the owner of the mortgaged property retains the right of ownership. If the debt is not repaid to the mortgagee at the maturity, the mortgagee shall have the right to demand that the mortgaged property be sold in a foreclosure sale and that he be paid the due sum from the proceeds. An agreement on the conveyance of the mortgaged property to the mortgagee shall not be valid. Article
3. The Right of the Mortgagee for a Priority before Other Creditors in Satisfaction of his Claim from the Mortgaged Property The mortgagee shall have the right to fully satisfy his claim from the mortgaged property before other creditors. If the proceeds from the foreclosure sale of the mortgaged property are insufficient, the creditor shall have the right to lay claim to other property of the debtor on equal rights with the other creditors. Article
4. Grounds for a Mortgage
5. A mortgage shall be created by concluding a contract between the creditor and the owner of the mortgaged property or another person holding the property in trust (hereinafter - the owner), or by a unilateral declaration of the owner of the mortgaged property and the registration of the mortgage in the Register of Mortgages. A mortgage not registered in the Register of Mortgages shall not be valid.
6. The mortgage contract shall not be valid if the property has been mortgaged by a person who is not the owner of the property. Article
7. Priority of Claims Secured by a Mortgage
8. In the event of multiple mortgages of the property, claims of the mortgagees shall be satisfied according to the time of their application for registration at the mortgage office of the registration district court (hereinafter - mortgage office).
9. The sum of the mortgage claim, the interest and the default interest may not be increased, nor may the maturity date of the debt obligation be accelerated by agreement between the mortgagee and the debtor or the owner of the mortgaged property without the consent in writing of all the subsequent mortgagees. Article
10. Retention of a Mortgage with the Conveyance of the Mortgaged Property to Some Other Person With the conveyance of the mortgaged property to some other person, the mortgage shall follow the property. Article
11. Accuracy of the Information in the Register of Mortgages All information recorded in the Register of Mortgages shall be regarded as accurate and full until contested in the manner prescribed by the law. Article
12. Public Access to the Information in the Register of Mortgages
13. The information in the Register of Mortgages shall be public. It shall be accessible to everyone for a fee in the manner prescribed by the regulations of the Register of Mortgages.
14. In the event of a dispute, ignorance of a mortgage of property may not be given as an excuse if the property was registered in the Register of Mortgages. Chapter II The Subject of Mortgage Article
15. The Property Subject to a Mortgage
16. Under this Law, a mortgage may be created upon immovable property registered in the Register of Immovable Property of the Republic of Lithuania, ships registered in the Register of Ships of the Republic of Lithuania or the Ship Book, aircraft registered in the Registers of State Aircraft and Civilian Aircraft of the Republic of Lithuania.
17. Under this Law, property withdrawn from the civil turn-over, seized property as well as property to which, under the laws of the Republic of Lithuania, execution may not be levied, may not be subject to a mortgage.
18. With the exception of land, the property which is going to be mortgaged must be insured until the discharge of the mortgage.
19. When a portion of the property is intended for a mortgage, the portion must be clearly defined and registered in the Register of Property as a separate entity.
20. Property of common ownership may only be mortgaged with the consent in writing by all the owners.
21. If the mortgaged property passes into the ownership of the State or a local government by right of inheritance or the mortgaged ownerless property is assigned by a court decision into the ownership of the State or a local government, the creditor shall have the right to claim the discharge of the debt obligation from the State of a local government not in excess of the value of the mortgaged property. Article
22. Mortgage of Immovable Property The mortgage of immovable property shall comprise: 1) the principal object and its fixtures registered in the Register of Immovable Property at the time of the registration of the mortgage; 2) objects added to the principal property by the will of the owner or due to natural events.
23. The mortgage shall not extend to the property which was added to the principal property after its mortgage by a tenant or a person using the property under a loan for use contract.
24. If the mortgage of a building does not entail the mortgage of the land on which the building is standing, the mortgage of the building shall include tenancy ( loan for use) arising on the basis of the tenancy (loan for use) contract of the land registered in the Register of Immovable Property.
25. Mortgage of land shall not extend to the buildings on it unless the mortgage contract provides otherwise. In this case, after the foreclosure sale of the mortgaged land, the owner of the building shall acquire easement appurtenant. If a plot of land with buildings on it belonging to another person (not the owner of the land) by right of ownership is sold in a foreclosure sale, the rights and liabilities of the former owner of the land in relation to the owner of the building shall pass to the person who acquires the land in a foreclosure sale.
26. Mortgage of immovable property shall not extend to the income generated by that property. Article
27. Retention of the Mortgage after Dividing the Mortgaged Immovable Property After the division of the mortgaged property, the mortgage claim shall not be divided and shall remain valid for all the items of the immovable property existing after the division. An agreement on the division of the mortgage claim shall not be valid. The priority in a foreclosure sale of items of immovable property emerging after the division of the immovable property belonging to different owners by right of ownership shall be established at the moment of division by a written agreement of the owners of property. In the absence of an agreement between the owners of the property, the priority in a foreclosure sale of the immovable property shall be established by the mortgage judge. Article
28. Retention of the Mortgage after Joining together Items of Immovable Property
29. The mortgaged items of immovable property may be joined into one item subject to a written consent of the creditors the priority of satisfaction of whose claims will change after the joining.
30. After joining together several items of immovable property, the mortgage on each of them will extend to the immovable property formed after the joining. The priority of satisfaction of creditors’ claims shall be established in accordance with the date of filing an application for registration of the mortgage at the mortgage office. Article
31. Mortgage of Movable Property
32. Mortgage of movable property shall extend to the property, its constituent parts and fixtures registered in the Register of Property at the moment of mortgaging.
33. Mortgage of movable property shall not extend to the income generated by this property. Article
34. Decrease in the Value of the Mortgaged Property The owner of the mortgaged property has no right to reduce the value of the mortgaged property. If the value of the mortgaged property is reduced to such a degree that there is a risk of not fully satisfying the claim of the mortgagee, he may request from the mortgagor an accelerated satisfaction of the amount of the debt obligation by which the value of the mortgaged property has decreased. Article
35. The Right of the Mortgagee to the Insurance Sum of the Mortgaged Property
36. If the value of the mortgaged property decreases or if the property is destroyed because of reasons that do not depend upon its owner (fire, natural disaster, etc.), the creditor shall have the right to the insurance sum which does not exceed the claim. The insurance sum of the mortgaged property must be deposited with the mortgage department and paid to the creditors in accordance with the priority of satisfaction of their claims.
37. Upon receiving a written consent of all the creditors, the insurance sum may be also paid to the owner of the mortgaged property.
38. Upon termination of the mortgaged property insurance contract, the mortgagee has the right to apply to the mortgage department for an early recovery of the debt, following the same procedure as at maturity. Chapter III TYPES OF MORTGAGE Article
39. Types of Mortgage The following types of mortgage shall be established in the Republic of Lithuania: 1) ordinary mortgage; 2) joint mortgage; 3) a third person’s property mortgage; 4) maximum mortgage; 5) blanket mortgage; 6) conditional mortgage. Article
40. Ordinary Mortgage Ordinary mortgage shall be registered when the debtor secures the discharge of one definite obligation by mortgaging one definite items of his/her property. Article
41. Joint Mortgage
42. Joint mortgage shall be registered when the debtor secures the discharge of one definite obligation by simultaneously mortgaging several items of his/her property.
43. When the property mortgaged by joint mortgage is sold in a foreclosure sale, the debt shall be recovered simultaneously from all the items on sale, and only as much of the property may be sold as is necessary for the satisfaction of the creditor’s demand. The priority in the sale of the items of property shall be set by the owner of the property. Article
44. The Mortgage of a Third Person’s Property
45. The mortgage of a third person’s property shall be registered when the mortgage secures the discharge of the obligation not by the owner of the mortgaged property (the mortgagor) but by another person (the debtor). The mortgagor shall not be liable for the discharge of the debtor’s obligation by his other property.
46. When the mortgagor discharges the obligation secured by the mortgaged property or when the mortgaged property is sold in a foreclosure sale the mortgagor shall have the right of recourse for the reimbursement for the amount paid to the person for the security of the performance of whose obligation the property was mortgaged. Article
47. The Maximum Mortgage
48. The maximum mortgage shall be registered when only the maximum sum of the property as security for the performance of the obligation as well as the field in which the loan will be used have been agreed upon. The maximum mortgage shall be valid for a period not exceeding 5 years. Upon the expiration of this term, the amount of debt shall be fixed, and the mortgage shall become an ordinary mortgage and it shall not secure the obligations assumed thereafter.
49. The date for fixing the amount of the debt may be specified in the mortgage contract. If this has not been done, the mortgagee may demand to fix the amount of the debt at any time, but not earlier than 3 years after the date of registration of the mortgage.
50. The amount of the debt shall also be fixed in the following cases: 1) when other creditors demand a foreclosure sale of the mortgaged property; 2) upon seizure of the mortgaged property; 3) upon declaring the debtor or the creditor insolvent, or upon their liquidation; 4) upon the death of the creditor or the debtor, if the heirs to the property fail to re-register the mortgage in their own name within 8 months from the day the inheritance descends to them.
51. The fixing of the amount of the debt shall be cancelled if the creditors call off the demand for a foreclosure sale of the property, if the seizure of property is revoked, or if the liquidation of the debtor or the creditor is rescinded.
52. The fixing of the amount of the debt and its cancellation shall be registered in the Register of Mortgages in the manner prescribed by the regulations of the Register of Mortgages.
53. The maximum amount of the obligation security may not be increased without the approval of the other mortgage creditors in rank of the same property. Article
54. The Blanket Mortgage
55. The blanket mortgage shall be registered when several items owned by different owners are mortgaged for the security of one debt obligation.
56. The owner of the property mortgaged by the blanket mortgage may mortgage that item once again only following the closure of the mortgage.
57. The contract on the blanket mortgage must set forth the order of priority in the foreclosure sale of the mortgaged items. Article
58. The Conditional Mortgage 1.The Conditional mortgage shall be registered subject to a covenant that: 1) the mortgage shall become effective from the date of fulfillment of the condition stipulated in the contract. Before the fulfillment of the condition, the mortgage may be closed at any time at the request of the mortgagee; 2) the mortgage shall be effective only up to the moment when the condition stipulated in the contract is fulfilled. If the condition is no longer being fulfilled, the mortgagee shall have the right to demand the closure of the mortgage.
59. The condition may be imposed on both the mortgagee and the mortgagor. Chapter IV Procedure of Registration of the Mortgage Article
60. Application for Registration of the Mortgage
61. An application for registration of the mortgage of immovable property shall be filed with the mortgage office within the district in which the immovable property is situated, and an application for registration of the mortgage of movable property - with any mortgage office.
62. An application for the change or closure of the mortgage shall be filed with the mortgage office where the mortgage has been registered. Article
63. The Form of the Mortgage Contract and a Unilateral Declaration of the Owner of the Mortgaged Property
64. The mortgage contract or a unilateral declaration of the owner of the mortgaged property about the mortgage of the property shall be executed in a mortgage bond of the form approved by the Ministry of Justice. When the property is mortgaged by a mortgage contract, the mortgage bond shall be signed by the mortgagor, the owner of the mortgaged property (where the mortgagor and the owner of the mortgaged property is not the same person) and the mortgagee; where the property is mortgaged by a unilateral declaration of the owner of the mortgaged property - by the owner of the mortgaged property.
65. The mortgage bond must be notarized and recorded subject to a procedure prescribed by this Law in the Register of Mortgages.
66. All the changes of the mortgage contract shall be entered in the mortgage bond and recorded in the Register of Mortgages in the same way as the mortgage. Article
67. The Form of the Mortgage Bond
68. The mortgage bond must indicate: 1) the mortgagor (the first name, name, address, and the identification number of a natural person; the name, registered office, and the identification number of a legal person or an undertaking without the rights of a legal person); 2) the owner of the property to be mortgaged - where the borrower and the owner of the property is not the same person (the first name, name, address, and the identification number of a natural person; the name, registered office, and the identification number of a legal person or an undertaking without the rights of a legal person); 3) the mortgagee (the first name, name, address, and the identification number of a natural person; the name, registered office, and the identification number of a legal person or an undertaking without the rights of a legal person); 4) the property to be mortgaged (its location, the identification number and other identification particulars of the property); 5) the amount of the debt secured by the property or the maximum secured amount of the obligation; 6) the date of the performance of the obligation; 7) the interest; 8) if the obligation is to be performed at request, - the date from which the creditor may claim the performance of the obligation; if a conditional mortgage is to be registered, - the condition under which the mortgage will be valid, or the condition upon the fulfillment whereof the mortgage will become effective; also the conditions which must be covenanted at the request of one of the parties.
69. If the mortgage bond is drawn up unilaterally by the owner of the property to be mortgaged the mortgagee need not be indicated. In this case a bearer mortgage bond shall be drawn up.
70. A bearer mortgage bond may, at any moment, be executed as a registered bond. Article
71. Performance of the Debt Obligation Secured by a Mortgage
72. A request for the performance of the debt obligation secured by a mortgage may be made only subject to the production of the mortgage bond. If the mortgagee fails to produce the mortgage bond the mortgagor is not obliged to perform his obligation.
73. After the mortgagor performs the debt obligation secured by a mortgage the creditor must return to the mortgagor the mortgage bond with an inscription about the performance of the debt obligation. Article
74. Registration of an Application to Register a Mortgage
75. An application to register a mortgage shall be registered subject to filing to the mortgage office of the mortgage bond and other documents specified in the regulations of the Register of Mortgages.
76. Upon receiving an application to register a mortgage, the mortgage bond and documents appended to it, the mortgage office shall duly stamp the mortgage bond indicating the date (the year, the month and the day) and the time (the hour and the minutes) of filing the application to register the mortgage and shall assign it the number of entry in the record of filed documents of the mortgage office (hereinafter - the record of the mortgage office) (with the exception of cases specified in Article 28).
77. If the application to register a mortgage is delivered by post before 12 o’clock, the application shall be registered as of 9 o’clock of the day of its delivery by post. If the application to register a mortgage is delivered by post after 12 o’clock, the application shall be registered as of 9 o’clock of the following day.
78. At the applicant’s request he shall be issued a document certifying the date of registration of his application at the mortgage office. Article
79. Recordation of Data in the Register of Mortgages Upon registering the application to register a mortgage, the particulars indicated in the mortgage bond shall be recorded in the Register of Mortgages in the manner prescribed by the regulations of the Register of Mortgages and within 24 hours shall be e-mailed to the Central Register of Mortgages. Article
80. Refusal to Accept the Application to Register a Mortgage
81. The mortgage office shall refuse to accept an application to register a mortgage and shall return it together with documents attached to it in each of the following cases provided: 1) an application to register the mortgage of immovable property is filed with the mortgage office other than that of the locality wherein the property is located; 2) the application fails to indicate the mortgagor and the owner of the mortgaged property and their identification particulars.
82. If, owing to the causes stated in paragraph 1 of this Article, the application to register a mortgage is returned to the applicant, it shall be deemed not to have been filed. Article
83. Procedure for Considering the Application to Register a Mortgage
84. The application to register a mortgage must be considered no later than the next following day following the receipt. When considering the application to register a mortgage it shall be checked, in the manner prescribed by the regulations of the Register of Mortgages, whether the mortgage bond is in compliance with the prescribed form, whether it has been filled out in full and properly, whether it has been notarized, whether it has been made up in accordance with the requirements laid down by law, and whether the registration fee has been paid.
85. If there are obstacles for the registration of the mortgage, the mortgage judge may reject the application to register the mortgage by a written reasoned order or may fix a term to meet the prescribed requirements. If they are not met by the fixed time, the application shall be rejected and together with the attached documents shall be returned to the applicant.
86. Following the rejection of the application to register the mortgage, the data about the filed application transmitted to the Central Register of Mortgages shall be kept in the Register until the expiration of the term of appeal against the judge’s order to reject the application to register the mortgage; in the event of the appeal against the judge’s order - until the consideration of the appeal and a decision on it. Article
87. Registration of the Mortgage
88. After the application to register a mortgage has been granted, the mortgage judge or a duly authorized employee of the mortgage office shall register the mortgage in the local Register of Mortgages in the manner prescribed by the regulations of the Register of Mortgages no later than the next business day and within 24 hours shall electronically transmit the data about it to the Central Register of Mortgages. The mortgage shall become effective from the moment of its registration in the Central Register of Mortgages.
89. The registered original of the mortgage bond together with the documents attached to it and a certificate of registration of the mortgage in the Central Register of Mortgages shall be mailed to the mortgagee; in the event of registration of a bearer mortgage bond - to the owner of the mortgaged property. The form of the certificate shall be established by the regulations of the Register of Mortgages.
90. A copy of the mortgage bond shall be kept in the archives of the mortgage office in the manner prescribed by the regulations of the Register of Mortgages. Article
91. Transfer of the Data about the Registration of a Mortgage to the Register of Property The data about the registration of a mortgage shall be transmitted within 24 hours to the Register (Registers) of Pledged Property in the manner prescribed by the Regulations of the Register of Mortgages. Article
92. Registration of Applications to Change and Close a Mortgage Applications to change and close a mortgage shall be registered in the same manner as an application to register a mortgage by filing to the mortgage office a mortgage bond with all the duly recorded changes or inscriptions about the performance of the debt obligation. Article
93. Lack of Correspondence between the Mortgage Bond and the Data of the Register of Mortgages
94. Where the text of the mortgage bond does not correspond to the entry in the Register of Mortgages, the entry in the Register of Mortgages shall prevail. In this case the damage sustained by the honest mortgage bond holder through the fault of the office of the Register of Mortgages shall be compensated for by the State in the manner prescribed by law. The awarded damages due shall be recovered from the funds of the office of the Register of Mortgages; if the office does not have sufficient funds for paying the damages, the sum shall be recovered from the State budget. In civil actions for damages the State shall be represented by the Ministry of Justice.
95. After compensating for the damage the State shall have a right of recourse against the mortgage judge and other employees of the office of the Register of Mortgages whose illegal actions caused the damage. The sums recovered by recourse shall be paid to the State budget. Article
96. Restoration of Rights under the Lost Bearer Mortgage Bond
97. If a bearer mortgage bond has been lost, the mortgagor or the mortgagee may apply to the district court for the recognition of the lost bearer mortgage bond as invalid and restoration under it of the rights in the manner prescribed by the Code of Civil Procedure (unilateral proceedings).
98. If the court recognized as invalid the bearer mortgage bond under which a debt obligation is still to be performed, the mortgage office issues to the person concerned a duplicate of the lost mortgage bond and makes an appropriate entry in the Register of Mortgages.
99. If the court recognized as invalid a bearer mortgage bond that has been paid, pursuant to such a decision, the entry about the mortgage shall be stricken out of the Register of Mortgages and the mortgage shall be closed. Chaper V Transfer and Pledge of the Claim Secured by Mortgage Article
100. Transfer of the Claim Secured by Mortgage
101. The mortgagee may transfer the claim secured by mortgage to another person except when by the agreement between the parties the mortgage contract contains a clause to the effect that the mortgagee does not have the right to do so.
102. All the rights of the previous mortgagee shall pass to the transferee. Article
103. The Procedure of Transfer of the Claim Secured by Mortgage
104. The claim secured by mortgage shall be transferred by endorsement of the mortgage bond.
105. The endorsement shall be written on the mortgage bond by indicating the person to whom the claim secured by mortgage shall be transferred. The endorsement must be signed by the endorser (the holder of the mortgage bond) and must be registered in the Register of Mortgages.
106. The transfer of the claim secured by mortgage (the endorsement of the mortgage bond) shall be registered in the Register of Mortgages in the same manner as the mortgage. Article
107. The Right of the Mortgagee to Transfer his Priority for the Satisfaction of his Claim from the Mortgaged Property to Another Mortgage Creditor
108. If the property is subject to several mortgages, one mortgagee may transfer his priority for the satisfaction of his claim from the value of the mortgaged property to another mortgagee of the same mortgagor. A corresponding entry shall be made upon both mortgage bonds. If the sum of the claim of the mortgagee who transfers his priority is smaller than the sum of the claim of the transferee, a notarized consent of the mortgagees succeeding the transferor and preceding the transferee shall be necessary.
109. The agreement on the transfer of priority of the mortgagee shall become effective subject to its registration in the Register of Mortgages. Article
110. Pledge of the Claim Secured by Mortgage
111. The mortgage creditor may pledge his mortgage claim to secure a loan extended to him. When pledging the mortgage claim, the date of maturity may not be later than the date of maturity stipulated in the mortgage agreement.
112. The mortgage claim shall be pledged by an agreement between the parties by making an entry in the mortgage bond and shall become effective from the date of registration of the agreement in the Register of Mortgages. Chapter VI RECOVERY OF DEBT TO THE BENEFIT OF THE MORTGAGEE Article
113. Filing and Satisfaction of the Petition for Foreclosure
114. If the mortgagor defaults on the debt obligation secured by mortgage under the contract, the mortgagee may file a petition for foreclosure to the mortgage office where the mortgage has been registered, by stating in the petition the number of the entry in the record book of the mortgage office, the amount of the outstanding debt, the mortgagor, the owner of the mortgaged property and their addresses (offices). Within three business days, the mortgage judge shall hand down an order of attachment of the mortgaged property and shall make an entry thereof in the Register of Mortgages and no later than on the following day shall notify the register/registers of mortgaged property and shall warn the mortgagor and the owner of the mortgaged property that in the event of failure to settle the debt within one month, the mortgaged property shall be sold by auction.
115. Within three days the order of the mortgage judge to attach the mortgaged property shall be mailed for execution to the bailiff of the district in which the property is situated. The mortgaged property shall be attached in the manner prescribed by the Code of Civil Procedure. Article
116. The Right to Acceleration of the Mortgage Claim
117. The mortgagee has the right to demand the acceleration of the mortgage claim provided: 1) other creditors are demanding, in cases provided by law, a foreclosure sale of the mortgaged property; 2) the debtor has died (when the borrower is a natural person); 3) bankruptcy proceedings of the mortgagor or the owner of the mortgaged property have been initiated or a decision of its liquidation has been adopted (when the mortgagor is a legal person or an enterprise without the rights of a legal person); 4) the mortgagor has failed in the case specified in Article 13 of this Law to satisfy a portion of the debt obligation by which the value of the mortgaged property has decreased; 5) the contract of insurance of the mortgaged property has been terminated before its expiration.
118. If in the cases specified in paragraph 1 of this Article the mortgagor fails to fulfill the mortgagee’s claim secured by mortgage before the maturity date, the mortgagee shall have the right to apply to the mortgage office for the acceleration of the debt in the same manner as at maturity.
119. In those cases when bankruptcy proceedings have been initiated against the mortgagor (the owner of the mortgaged property), the mortgaged property shall be sold and the claims of mortgagees shall be satisfied in the manner prescribed by the Enterprise Bankruptcy Law. Article
120. Limitation of the Right of the Owner of the Mortgaged Property to Dispose of the Mortgaged Property From the moment of attachment of the mortgaged property the owner of the mortgaged property shall forfeit the right to transfer the property to other persons, to pledge, lease or encumber it in any other way, to fell woods on the mortgaged property, to sell or destroy objects which under the law or contract are fixtures, to demand partition of the mortgaged property or separate the fixtures from the mortgaged property. Contracts made in breach of the above prohibitions may be recognized as null and void in judicial proceedings. Article
121. Accounting of the Income from the Mortgaged Property Income from the mortgaged property following attachment of the said property shall be accounted separately and shall be used for the satisfaction of claims of all the present mortgagees. Article
122. Order for a Foreclosure Sale
123. If the debt is not repaid within one month following the day of the attachment of the mortgaged property the mortgagee shall file a repeated petition to the mortgage office for the recovery of the debt with the mortgage bond attached. Upon receiving the petition, within three days the mortgage judge shall hand down an order for a foreclosure sale of the mortgaged property, and shall make a corresponding entry in the Register of Mortgages and no later than on the following business day shall notify the Register (Registers) of Property. Within three days the order of the mortgage judge together with the mortgagee’s petition for the recovery of the debt shall be sent to the bailiffs’ office of the district court in the area where the property is located.
124. If two months after the attachment of the mortgaged property the mortgagee did not apply for the recovery of the debt, the mortgage judge shall hand down an order to annul the attachment of the mortgaged property and shall make an entry thereof in the Register of Mortgages and no later than on the following business day shall notify the Register (Registers) of Property. Article
125. Notification of the Interested Parties about the Foreclosure Sale The bailiff shall send a notice of the sale to all the mortgagees for the satisfaction of whose claims the property has been mortgaged to the addresses designated in the Register of Mortgages, to the owner of the mortgaged property and to the mortgagor. Article
126. Announcement of the Sale and its Procedure The sale shall be announced and shall proceed in the manner prescribed by this Law and the Code of Civil Procedure. The sale shall be conducted by the bailiff of the court of the area where the property is located. Article
127. Joinder of Other Interested Parties to the Claim Parties possessing writs of execution in other actions may join the execution by filing an application to the bailiff. Article
128. Memorandum of the Sale Before the sale the bailiff shall draw up for each item of the property under sale a memorandum of sale stating in it: 1) the mortgaged property subject to sale; 2) restrictions remaining on the property (rent, easements and other) and liabilities; 3) the valuation price; 4) the initial price of the property at the sale.
129. The mortgagees’ claims shall be recorded according to the priority of their satisfaction and their exact amounts shall be stated. Article
130. The Initial Price of the Property The sale shall open by calling the initial price which may be the appraised value of the property or the total amount whichever is higher. The total amount shall consist of the sum payable to the mortgagee and the execution expenses. Article
131. The Right of the Mortgagee to Demand a Second Sale If the auction price of the property seems inadequate to any of the mortgagees, within 10 days after the day of the sale, he may request a second sale and may offer a price which exceeds the price at which the property has been sold at least by one-tenth. If within a fixed time period the mortgagees do not challenge the sale, the senior bailiff shall acknowledge the record of the sale of the property and not later than on the following business day shall transfer it to the mortgage office and mail it to the purchaser. Article
132. Disposal of the Property not Sold by Auction
133. The property not sold by auction may be conveyed to the plaintiff or be sold without auction in the manner set forth in the Code of Civil Procedure.
134. The mortgagee to whom the property not sold by auction has been conveyed, must within 5 days pay to the deposit account of the mortgage office the difference between the valuation price of the property and the sum total of his claims. Article
135. Rendering of a Judgment on the Closure of the Mortgage Within three days after receiving a record of the sale (conveyance) of the property, the mortgage judge shall render a judgment on the closure of the mortgage. Article
136. Distribution of the Proceeds from the Foreclosure Sale of the Property
137. The proceeds from the foreclosure sale of the property shall be paid into a deposit account of the mortgage office and, within 3 days after the acknowledgement of the sale of the property record, by an order of the mortgage judge shall be distributed among the mortgagees in accordance with the priority of satisfaction of their claims.
138. The mortgagee shall be paid: 1) the principal; 2) the interest for the last 3 years prior to the expiration of the designated term of performance of the obligation or prior to the commencement of bankruptcy proceedings or the adoption of a decision on its liquidation; 3) the debt recovery expenses.
139. A copy of the order by a mortgage judge on the distribution of sums shall be sent to all the mortgagees. Article
140. Settlement of Disputes over the Distribution of the Proceeds and the Procedure of their Payment
141. If within 10 days after receipt of a copy of the order the mortgagees declare their disagreement with the distribution of the proceeds, the repayment of debts shall be postponed. The dispute between the mortgagees, between the mortgagees and the mortgagors over the distribution of the proceeds shall be settled through action proceedings upon a claim submitted by anyone of them. In this case the debts shall be repaid pursuant to a writ of execution issued after the judgment becomes effective.
142. In the absence of a dispute, the proceeds for the sold property shall be paid to the mortgagees as specified in the order of the mortgage judge. The sum remaining after deduction of the sale costs, shall be returned to the owner of the sold property; in those cases when the recovery was joined not by the mortgagees the remaining sum shall be deposited at the bailiffs' office and shall be distributed and paid to the creditors pursuant to the manner stipulated in the Code of Civil Procedure. Article
143. Recourse by the Owner of the Mortgaged Property against the Debtor If the property sold at the foreclosure sale was acquired by a third person following the registration of the mortgage, this person shall have a recourse against the debtor. Chapter VII PROCEDURE OF DEREGISTRATION OF THE MORTGAGE Article
144. Closing of the Mortgage A mortgage shall be closed from the moment of its de-registration from the Central Register of Mortgages. Article
145. The Debtor’s Right to Demand Closing of the Mortgage Upon the full payment of the debt or the discharge of another covenanted obligation, the mortgagor may demand closing of the mortgage. Within 3 business days after submitting the mortgage bond with an inscription to the effect that all the mortgage demands have been fulfilled, the mortgage office shall de-register the mortgage from the Register of Mortgages. Article
146. The Right of the Person who has Acquired the Property Subject to a Mortgage to Close the Mortgage
147. Pending the application of the mortgagee to the mortgage office for the recovery of the debt, the person who has acquired a mortgaged property for payment may release the property from the mortgage by offering to the mortgagee a sum smaller than the one designated in the debt obligation. The person who has acquired the mortgaged property must submit to the mortgage office the purchase of the property contract and an application with a request for release of the property from the mortgage, by stating the sum he is offering for release of the property. The mortgage office shall communicate a written notice thereof to the mortgagee.
148. If within 40 days the mortgagee does not give any notice to the mortgage office it shall be assumed that he has accepted the offered price. The new owner of the property shall pay to the mortgagee the negotiated price, closing the mortgage in this way. The mortgage office shall de-register the mortgage within 3 days from the day of filing the mortgage bond attesting payment of the negotiated sum.
149. If the mortgagee disagrees with the offered price, the mortgage judge shall hand down an order for a foreclosure sale of the mortgaged property. The initial price shall be offered by the mortgagee. This price must be higher by at least one-tenth of the price offered to him. The sale shall be conducted in the manner prescribed by this Law and by the Code of Civil Procedure.
150. The person who has acquired for payment a property subject to multiple mortgages may release the property from the mortgages in the order of their priority.
151. If the property is sold by auction, the mortgagee must compensate the expenses of the execution of the purchase to the person who requested release of the property from the mortgage.
152. Successors to the title of the mortgaged property and persons who acquired this property without payment shall have no right to release the property from the mortgage. Article
153. Release of the Mortgaged Property Sold in a Foreclosure Sale from all Mortgages The foreclosure sale of the mortgaged property shall release it from all mortgages. The mortgages of the sold property shall be de-registered within 3 days from receipt of the record of the property sale. Article
154. The Mortgagee’s Right to Relinquish the Mortgage
155. The mortgagee shall have the right to relinquish the mortgage at any moment even though the mortgagor has not fulfilled the obligation. In this case, together with the mortgage bond the mortgagee must file with the mortgage office an application to close the mortgage.
156. Within 3 days from the cancellation of the entry in the register, the mortgage office must communicate a written notice about closing of the mortgage to the owner of the mortgaged property. Article
157. Closing of the Mortgage upon Declaring the Mortgage Contract Void When the mortgage contract is declared void in the manner prescribed by law, the mortgage registered in the Register of Mortgages shall be closed and shall be de-registered from the Register of Mortgages within 3 days from the filing with the mortgage office of the effective court order declaring the mortgage void. Article
158. Closing of the Mortgage when the Whereabouts of the Creditor are Unknown at the Maturity If at the maturity the whereabouts of the mortgagee are unknown, the owner of the mortgaged property or the mortgagor may pay the principal and the interest due to the deposit account of the mortgage office and file an application with the mortgage office to close the mortgage. When the mortgage judge hands down an order to grant the request of the interested party, the mortgage shall be de-registered. The mortgage judge must announce closure of the mortgage and declaration of the mortgage bond as void in the “Valstybës þinios”(the Official Gazette) and must invite the mortgagee to withdraw the amount of the debt due to him from the deposit account of the mortgage office. The mortgagee may collect the debt within 10 years. If the mortgagee failed to collect the debt due to him within 10 years, the mortgage judge shall publish a repeated invitation to the mortgagee in the “Valstybës þinios” to collect the debt. If within 6 months from the publication of this announcement the mortgagee does not come to collect the debt he forfeits his right to it. The mortgage office shall return two-thirds of the amount of the debt to the mortgagor and shall transfer one-third to the State budget. Article
159. Closing of the Mortgage when the Mortgagee’s Whereabouts are Unknown for 10 Years after the Maturity When for 10 years after the maturity the mortgagee’s whereabouts are unknown the owner of the mortgaged property or the mortgagor may demand closing of the mortgage. Upon the receipt of the application from the interested party the mortgage judge shall publish a warning in the “Valstybës þinios” that the mortgagee may assert his mortgage rights within 6 months. If the mortgagee does not respond within the specified period, the mortgage shall be closed by an order of the mortgage judge, the mortgage bond shall be declared void and the mortgagee shall forfeit the claim. The order of the mortgage judge on the declaration of the mortgage bond as void shall be announced in the “Valstybës þinios” within 3 days.” I promulgate this Law passed by the Seimas of the Republic of Lithuania. PRESIDENT OF THE REPUBLIC ALGIRDAS BRAZAUSKAS