We provide mortgaged property appraisal services to lending banks and borrowers (individuals as well as legal entities). It should be noted that the current Russian legislation
contains quite a few requirements for compulsory independent appraisal of the mortgaged property in various situations.
The obligation to indicate the value of mortgaged property is directly required by the Russian Civil Code, Art. 339 “Mortgage Agreement, Method and Registration”, clause 1:
“Any mortgage agreement must specify the mortgaged property and its appraised value, essence, amount and time of discharge of liability secured by the mortgage…”.
Mortgage appraisal is especially relevant for mortgage lending. In particular, the obligatory mortgage appraisal requirement in the event of a dispute is stipulated by the
Russian Federal Law “On Valuation Activities in the Russian Federation”, Art. 8: "Appraisal is compulsory … in the event of any dispute over the value of the subject property,
including… in mortgage lending to individuals and legal entities in the event of any dispute over the value of the mortgaged property”.
Furthermore, the Russian Law “On Mortgage (Pledge of Real Property)”, Article 14, contains the following requirement: "The mortgage issued to the original mortgagee by a public
registration authority must contain …. appraised monetary value of the mortgaged property, and in the event of statutory mortgage, appraised monetary value of the property supported by
an appraiser’s opinion”.
Thus, even such a brief analysis of statutory requirements existing in current Russian legislation positively permits to say that an independent mortgage appraisal creates a sound and fair
legal basis of future relationship between the lender and the borrower.
Should you have any queries regarding professional valuation of a mortgage in Russia, please contact us.