Mortgage certificate when selling a property: what you should clarify early on
When selling a property, the mortgage certificate must be cancelled or transferred. If the paper mortgage certificate is missing, the notarisation will be delayed by months. Comparis shows what you should clarify beforehand.
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1. What is a mortgage certificate?
The mortgage certificate is a charge on real property. It records a personal claim that is secured by your property (Art. 842 para. 1 CC). Almost every property with a mortgage is encumbered with one.
A mortgage certificate can only be created by means of an entry in the land register. The basis for this is a publicly notarised contract (Art. 799 CC). Important: You are not only liable with the property. You are liable with your entire assets.
Mortgage certificate and mortgage: the difference
«Mortgage» is an everyday term. The law does not recognise it. Legally, there are two things behind it: the bank’s claim and the charge on your property. The mortgage certificate combines both in a single instrument.
If you do not repay the loan, the bank can recover its money from the proceeds of your property. The mortgage certificate is therefore the security, not the loan itself.
Good to know: The amount secured in the mortgage certificate does not correspond to your current outstanding debt. It is usually higher. This allows the mortgage to be increased later on without having to draw up a new mortgage certificate.
2. Paper mortgage certificate and register mortgage certificate: the difference
Since 1 January 2012 there have been two types of mortgage certificate. The type of mortgage secured on your property determines the amount of work involved in selling it.
| Attribute | Paper mortgage certificate | Register mortgage certificate |
|---|---|---|
| Form | Security (document of title) plus land register entry | land register entry only |
| Creation | Issued by the Land Registry Office | Entry in the land register |
| Is issued in the name of | Holder or in a name | always in a single name |
| Risk of loss | Yes | No |
| When selling | The title deed must be physically present | Registration with the land registry is sufficient |
| Possible since | already before 2012 |
The Register mortgage certificate is created upon entry in the land register. No security is issued. In the case of Paper mortgage certificate the land registry also issues a mortgage certificate. This instrument is tradable, similar to a share.
How to tell which type of mortgage certificate you have
A look at the extract from the land register is all it takes. In the case of a register mortgage certificate, the creditor is entered directly in the land register. With a paper mortgage certificate, there is also a document of title. This is usually held by your bank. You can request the extract from the land registry office of your municipality.
How to convert a paper mortgage certificate
Was your paper mortgage certificate before 1 January 2012 created, the conversion is straightforward. A joint written application from you and the persons entitled under the mortgage certificate is sufficient. For more recent instruments, notarisation is required. The fees are set by the cantons.
Comparis tip: Is your sale not due for a few months? Then conversion is worthwhile. It eliminates the risk of loss permanently and costs less than court proceedings.
3. Who holds your mortgage certificate – and how do you request it?
With an existing mortgage
Your bank holds the mortgage certificate as security. Request it in writing as soon as the decision to sell has been made. When doing so, state the planned date for notarisation. Banks usually need one to two weeks.
If the mortgage has been paid off
This is where things get tricky. When the mortgage is repaid, the mortgage certificate claim does not automatically lapse. It continues to exist in its nominal amount. Your former bank has therefore either submitted the instrument to the land registry for deletion or handed it over to you.
In the second case, the certificate is in your possession. It is precisely these documents that disappear most often: in cases of inheritance, during house moves or in cleared-out bank safety deposit boxes.
Comparis tip: Can’t find the mortgage note? Contact your former bank. It is usually recorded there when and to whom the mortgage note was issued.
4. What happens if the paper mortgage note cannot be found?
Without a mortgage certificate, the land registry cannot delete or transfer the lien. You can still sell. However, the update in the land register is at a standstill.
What this means for you in concrete terms:
The date for the certification by a notary is postponed.
Or you need an interim solution with your bank and the buyers.
The only way back is through the declaration of invalidity by a court.
Good to know: Without a declaration of invalidity, the buyer bears a risk. If the title resurfaces years later, the person who owns it can make claims based on it. Banks and prospective buyers therefore require this to be resolved before notarisation.
5. Declaration of invalidity: procedure and duration
If the lien certificate is lost, a court will declare it invalid (Art. 865 CC). Only then can the lien on property be removed.
The process in four steps
Submit an application: You submit an application to the competent court. In it, you must substantiate that you are entitled to the title and that you previously held it.
Review: The court will review your details and the documents.
Public notice: The court issues a public notice of the lost instrument. Publication will take place in the Swiss Official Gazette of Commerce (SOGC) and in the cantonal official gazette.
Declaration of invalidity: If no one comes forward, the court will declare the instrument null and void. You can then have the lien deleted from the land register.
How long does it take to declare a document null and void?
The statutory period is six months from the public notice (Art. 865 para. 2 CC). In addition, there is the court’s processing time and the publication deadlines. You should therefore expect significantly more than six months.
How much does it cost to have a document declared invalid?
The cantons determine the court fees. In addition, there are the costs of the two publications. Ask the competent court about the current amount.
6. checklist: clarifying the mortgage certificate, with time required
Start with step one, as soon as you have made your decision to sell. This leaves time if something is missing.
| Step | Responsibility | Time required |
|---|---|---|
| Order an extract from the land register | You | a few days |
| Determine the type of mortgage certificate | You | immediately |
| Request the mortgage certificate from the bank | You and your bank | one to two weeks |
| Consider converting to a register mortgage certificate | Land registry office or notary’s office | a few weeks |
| If lost: initiate declaration of invalidity | Court | more than six months |
| Arrange deletion or transfer | Notary’s office | with the notarisation |
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7. FAQs on mortgage certificates
A paper mortgage certificate is a mortgage on property with a physical security. In addition to the land register entry, the land registry office issues a mortgage certificate. This is issued in bearer form or in registered form. If it is lost, legal proceedings are required.
For the duration of the mortgage, the bank holds it as collateral. After repayment, you can request the return of the paper mortgage certificate. With a register mortgage certificate, you instead have yourself entered as the creditor in the land register.
There are two ways. Either you pay off the mortgage from the proceeds and have the mortgage certificate cancelled. Alternatively, the buyer takes it over for their own financing. The second option saves on fees.
No one is forbidding you from selling the property itself. However, the lien cannot be removed without a mortgage certificate. In practice, this prevents the sale from going through, because the buyer and the bank require a clean settlement.
The costs are usually between 0.1% and 0.3% of the mortgage debt. In addition, there are fees for the notary and the land registry. If the buyer takes over an existing mortgage certificate, these costs.
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