Cancellation of an old mortgage in Nicaragua

By: Daniela Matus

Many debtors with loans originated in Nicaragua before the economic crisis of the national financial system in the year 2000-2001 and with old mortgages that had not been cancelled, did not know which institution they needed to go to cancel the mortgages on their properties or which procedure to follow or before whom to request the deed of cancellation of the mortgage guarantee.

By virtue of such events, the Nicaraguan legislation included in the General Law of the Public Registries the figure of the Informal Cancellation of the Mortgage as it regulates that “The mortgage registered in the Property Registry must be cancelled ex officio by the Registrar after ten years counted as of the expiration of the term of the obligation. The Registrar shall publish the cancelled entries on a monthly basis in the Notice Board of the corresponding registry office”.

The aforementioned has facilitated the cancellation of old mortgages through an informal administrative cancellation procedure, without requiring the approval of the Creditor, as prescribed by art. 126 of the Public Registry Law.

Pursuant to art. 108 of the Regulations of the General Law of Public Registries, to proceed with the informal cancellation of the mortgage, the registrar must qualify:

  • That ten years have elapsed since the expiration of the term of the obligation according to the registration entry of the mortgage.
  • That there are no registry entries indicating the interruption of the term.
  • When it is at the request of a party, the interested party must make it in writing to the registrar and present it in the Daily Book.
  • When the mortgage is the main obligation and involves the registration of an Agricultural and Industrial Pledge as an accessory obligation, the registrar, when canceling the mortgage, must cancel the accessory registration.
  • When the entry of registration of the mortgage to be cancelled has an extinct financial entity as the registrant, the registrar shall give prior notice to the Central Bank of Nicaragua and to the Attorney General’s Office of the Republic.
  • The applications filed must be published in the Notice Board of the Registry office, notifying the creditor, giving him a term of 30 days to oppose, and, if there is opposition, it must be resolved through the Courts of Justice.
  • On the first business day of each month, the list of mortgage entries cancelled ex officio in the previous month will be published in the Notice Board of the Registry Office.

As established in its regulations, this administrative procedure may be requested by the interested party through a written request submitted to the registrar, who must analyze the previously mentioned parameters, provided that ten years have elapsed since the expiration of the term of the obligation according to the registration of the mortgage.

This solution has come to solve the problem presented by debtors whose credits had been cancelled but who did not know before whom to request the cancellation of mortgage guarantees and who still have their properties encumbered with a lien of credits already paid.