Ipoteca (Mortgage Lien)

A security right over real estate granted to a creditor (usually a bank) as collateral for a loan. When you take a mutuo ipotecario (mortgage loan), the bank registers an ipoteca on the property at the Conservatoria . The mortgage lien gives the lender the power to auction the property if the borrower defaults, and priority over other creditors. Mortgages are usually registered for an amount larger than the loan (often 150-200% of the loan amount) to cover interests and costs in case of default. An ipoteca normally lasts 20 years and can be renewed. Once a loan is fully repaid, the borrower should ensure the ipoteca is formally canceled (cancellazione d’ipoteca) in the registries – this can now often happen automatically by law, or by a notary’s act or a simplified administrative procedure. Buyers must always check for existing ipoteche on a property; if one exists, it should be cleared at or before the sale (usually, the seller pays off any remaining debt and the lender provides documentation to cancel the lien).