Can a mortgaged property or share be partitioned in Lebanon?

Also asked as: “Can a mortgaged share be partitioned in Lebanon?” · “Does a mortgage stop izalat al-shuyu?” · “What happens to a bank mortgage when co-owned property is divided?” · “Can a co-owner mortgage their share in Lebanon?”

What happens to a mortgage on one co-owner's share#

After an inheritance, the heirs hold undivided shares, written as fractions of 2,400, until the property is partitioned^[3]. Kallas Law Firm, the only published source we found on this point, says one co-owner may mortgage their share without asking the others, and that the mortgage does not stop anyone from asking for partition. The firm bases this on Article 122 of the Code of Real Property^[1,2].

What happens next depends on how the partition ends. A court must first divide the property in kind where that is feasible, then consider a real-estate company if co-owners holding at least 51% of the shares ask for it, and order a public auction only as a last resort^[1]. If the property is divided, the mortgage moves onto the lot that falls to the co-owner who granted it. If it is sold, that co-owner's part of the price goes to the debt^[1,2]. Kallas does not say what happens to the mortgage if the case ends in a company.

The mortgage can also matter at an auction. A co-owner who bids normally deposits or guarantees only the value of the shares they do not own, but Kallas states this for property with no registered rights or creditors burdening it^[1]. With a mortgage registered, ask the lawyer running the case what you would have to deposit. The full court process is in how to end co-ownership of a property, and the auction route in what happens when one heir refuses to sell.

A pledge is a different thing#

A possessory pledge (rahn) works differently from a mortgage. According to Kallas, a pledge cannot attach to an undivided share at all, because Articles 101 and 104 of the Code of Real Property prohibit pledging co-owned shares^[1,2]. If someone tells you a share was "pledged", ask a lawyer to read the Land Registry entry and tell you what kind of charge it really is.

What nobody has published: a mortgage on the whole property#

The rules above cover a mortgage one co-owner put on their own share. We found no source on a mortgage over the whole property, such as one the deceased granted before death, or on what happens to that charge after a partition or an auction^[1,2]. A partition application is notified to holders of registered real rights, which includes a mortgagee bank^[1]. Whether the bank must also be a full party to the case is not published.

If the whole property is mortgaged, ask two people before you file anything. Ask the bank whether it will release the property, or one lot, and on what terms. Ask a Lebanese lawyer how the court is likely to treat the charge in your case. Selling a property under a lien is covered in selling a mortgaged property.

Releasing the mortgage#

Kallas puts the Land Registry fee for releasing a mortgage on an estate property at 1% of the debt released^[3,4], plus notary and Bar Association charges. If the mortgage secures an interest-bearing debt, the release also needs prior approval from the tax departments, according to the same firm. No source says how long either step takes, so ask the bank and the notary.