Law No. 20,855 which requires the release and cancelation of mortgages and pledges without conveyance that guarantee loans

January 25, 2016

The Law shall govern every loan which has been fully paid from this date on. For loans that have been previously paid, the following rules apply:

• Mortgages operating as a specific guarantee of loans that have been fully paid up to 6 years before the Law’s enactment (January 26, 2010): The lenders shall, at their own expense, grant the release of mortgages, other encumbrances and prohibitions and public deeds and manage the cancelation of the registration in the CRE. This must be done within 3 years from the date the Law comes into force. Nevertheless, the debtor may request the release of the mortgage and other encumbrances and prohibitions, which the lender must complete within 45 days from the debtor’s request. The lender must notify the debtor within 30 days of the cancelation of the registration.
• Mortgages operating as a specific guarantee of loans paid prior to 6 years before the enactment of the law: If required by the debtor in writing, the lender, at their own expense, shall grant the public deeds and ask for the cancelation of the registrations of the mortgages and other encumbrances and prohibitions in the CRE within 45 days from the debtor’s request. The lender must notify the debtor within 30 days of the cancelation of the registration.
• PWC operating as specific guarantee of loans fully paid up to 4 years prior to the enactment of the Law: The lender, at their own expense, shall grant the release of the PWC and the other encumbrances and prohibitions granted, as well as manage the cancelation of the registration in the PWC Registry, within 18 months from the enactment of the Law. Nevertheless, the debtor may request in writing the release of the PWC and the other encumbrances and prohibitions granted to the lender. The lender must do this within 45 days from the request. The lender must notify the debtor within 30 days of the cancelation of the registration.
• PWC operating as specific guarantees of loans fully paid prior to 4 years before the enactment of the Law: If required by the debtor in writing, the lender, at their own expense, shall grant the public deeds and cancel the registrations of the PWC and other encumbrances and prohibitions in the CRE within 45 days from the debtor’s request. The lender must notify the debtor within 30 days of the cancelation of the registration.