Guide on Giving in Payment (datio in solutum)
Welcome on the CEC Bank page dedicated to the Giving in Payment operation! In the following, we will run together a presentation of the Giving in Payment operation, as this one results from the Law no. 77/2016 regarding the giving in payment of some immovable property for extinguishing the obligations undertaken by loans and we will discover the steps to follow for the giving in payment, the necessary documents and the options which you have in order to avoid giving up your family home.
What represents the Giving in Payment?
The Giving in Payment, as it is regulated by the Law 77/2016 regarding the giving in payment of some immovable property for extinguishing the obligations undertaken by loans, constitutes the action by which it is transferred the ownership on the mortgaged property, from consumer to creditor for extinguishing the debt resulting from the mortgage contract.
Whom is the law addressing to and what loans can be given in payment?
The individuals who can benefit from the provisions of the Law no. 77/2016 regarding the Giving in Payment of some immovable property for extinguishing the obligations undertaken by loans are the consumers who have contracted a loan in order to purchase, build, extinguish, modernize, arrange, rehabilitate a real estate for housing or, regardless the purpose for which it was contracted, it is guaranteed with at least one real estate for housing.
- By consumer, under the legislation referred to, it can be understood any individual or group of individuals constituted in associations acting for purposes outside their commercial, industrial or productive, artisanal or liberal activity. Also, the consumer does not have to be convicted by final judgment for crimes regarding the loan for which the Giving in Payment is required;
- The quantum of the borrowed amount, at the granting time, did not exceed the equivalent in lei of 250.000 EURO, the amount calculated at the exchange rate published by the National Bank of Romania in the day of the loan contract agreement;
- The Giving in Payment can also be applied if the loan given in payment is guaranteed with the fidejussion and/or solidarity of one or several co-debtors or co- payers;
- If the loan was guaranteed with two or more assets, of which at least one having destination of housing, the debtor shall offer in payment all the mortgaged assets in the favor of the Bank;
- The provisions of the law do not apply to the loans granted by the Prima Casã (First Home) program.
During the entire giving in payment procedure, respectively from the creditor’s notification regarding the decision of the ownership transfer over the building to the date settled for presenting at the notary office in order to perfect the ownership transfer, the parties have the possibility to agree on some alternative conditions of continuation of the contractual relationship.
First step: Is the giving in payment the best solution for you?
The purchase or the renovation of a building represents an important acquisition for each of us, requiring a substantial financial effort. Therefore, the most of the accessed loans to this effect have an extended development period, up to 35 years. During this period, you can find yourselves in situations of financial difficulty caused by:
- Decrease of your income or of your family’s members;
- Medical problems or disabilities of yours or of the loved ones, as well as the death of a family member;
- Interruption in work activity or changing the employer;
- Other problems that can affect the monthly repayment of the loan (the increase of the exchange rate if the loan was contracted in currency, etc.).
In case you face one of the mentioned situations or similar, we recommend you to contact us as soon as possible as, from experience, the cases that can be solved in the easiest way are the ones when the customer anticipates that an event affecting the situation of the incomes may occur and this one chooses together with the Bank the restructuring method of the debt which is the most appropriate to his/her situation.
By the restructuring operations, the Bank will identify advantageous repayment solutions which are to support you during the times of trouble and, at the same time, to maintain, at an acceptable level, the loan balance and the level of the loan risk. For these operations, the Bank will need your support regarding information and documents, support regarding the modification of the situation when granting the loan, as well as regarding your future plans which include future expectations related to incomes.
Among the restructuring operations, we mention: granting partial or total grace (for one or several components of the loan: principal, fee, interest, mixed variants of these ones), extending final maturity for diminishing the monthly effort of payment and other restructuring options which will be presented in order to identify the optimal variant for you.
Simultaneously, if the Bank carried out demarches in initializing the recovery by foreclosures procedures, we recommend you, also, to show up to the Bank, for identifying a recovery solution amicably, mutually beneficial (such as: by concluding a payment agreement with you, simultaneously with the enforcement suspend).
Therefore, taking into account the above mentioned, in case you find yourself in a situation of financial difficulty which makes impossible the repayment of the installments according to the undertaking obligations by the contract concluded with the Bank or you anticipate a situation of this type in the near future, we kindly ask you to contact your unit for identifying together a solution allowing you to maintain in your possession and/or your family’s the real estate which guarantees the loan.
Step two: As far as the giving in payment is concerned, which are the phases of this process?
Phase 1 – Notification of the giving in payment intention
If, as a result of following the previous step, you decide to continue the giving in payment action under the Law no. 77/2016, it will be necessary to formulate a notification addressed to the Bank by a public notary, lawyer or bailiff in compliance with the conditions provided by law. The date of the notification will be the date of the receipt and registration thereof in Bank.
As for the provisions appliance of this law it is also necessary to fulfill the legal provisions generated by the ownership, it is necessary for the notification to be accompanied by the following documents:
- Genuine extract of land book attesting that there are not tasks in the favor of the third parties (such as: execution, the building is rent, there is a right of usufruct, tasks in the favor of other creditors);
- Criminal Record Certificate resulting that you have not been convicted for crimes related to the loan for which you require the giving in payment;
- Fiscal Certificate resulting that there are not unsettled/outstanding debts;
- Certificate issued by the Owners’ Association resulting that there are not locative unsettled/outstanding debts;
- Certificate of Energetic Performance.
The notification regarding the giving in payment of the real estate can be initiated also by the borrowed and co-debtors, personal/mortgage guarantees but only with the express consent of the borrowed or of his/her successors.
The consent of the borrowed can be replaced by a statement released in authentic form.
Phase 2 – The request analyze by Bank
After the receipt of the notification, the Bank will analyze your request following to contact you for discussing the aspects regarding this situation, therefore being in the position of jointly identifying settlement possibilities of the situation you are facing.
For the achievement of the giving in payment, it is necessary to cumulatively fulfill the provisions provided by the Law no. 77/2016, as well as the legal conditions for transferring the ownership, otherwise, the Bank will be in the impossibility of accepting you request.
Concerning the costs of the giving in payment, we mention that in accordance with the provisions of the Law no. 77/2016, all the notary costs and, by case, of the bailiff or of the lawyer will be borne by you. To these ones there will be added other costs provided by the legislation in force in the seller’s task for the achievement of the ownership.
What is happening after finishing the decision/act of giving in payment?
When concluding the transfer contract of ownership, respectively since the date of the final judgment, the Bank will delete any of your obligations, of the co-debtors and of the fideiussors regarding the loan for which the giving in payment was performed. This event will be reported at the Loan Office in accordance with the legal provisions.
At that moment, it is irrevocably transferred the ownership, possession and use, undisputed and unstipulated, free of tasks and together with all that is necessary for the free and unhindered possession, free of all the movables of the guarantors. The real estate cannot be the object of any lease, bailment or other similar contract. No portion of the real estate is occupied by any individual or entity with or without legal basis in this regard.
From a practical perspective, the representative of the Bank will go together with the former owner to the real estate where a protocol will be signed mentioning its state when taking over and its keys will be handed. In the first place, this one has to be liberated by the belongings of the former owner.