Indemnity in the case of expropriation of real estate encumbered with mortgage

The current practice of expropriating mortgages consists in the administrative body repay the mortgage and reduce the indemnity payable to the expropriated owner or perpetual user by the amount of liabilities paid. This solution can be considered incorrect because it is based on the erroneous assumption that the value of the mortgage is equal to the value of the liabilities secured by it.

To protect the mortgage creditor's interest, in the case of expropriation of the mortgage, it would be necessary to apply general provisions on mortgage protection, in particular article 93 of The Act on Land and Mortgage Registers and on Mortgage.

Applying aforementioned article to the expropriation of a mortgage, it is possible to avoid many of the adverse effects that occur under the current practice of expropriating mortgages.