Do I need to inform the bank about receiving compensation from the government for damaged/destroyed property?

Yes, the borrower is obliged to notify the bank of receiving compensation from the state for damaged or destroyed real estate secured by the mortgage or its restoration at the expense of the state.

Procedure:

1. Notification period:

• The bank must be notified within 10 business days from the date of receipt of compensation or documentary recognition of such property as restored.

2. Form of notification:

• Submit an official application to the bank with supporting documents, such as:
• An act of compensation or payment from the state.
• Documents confirming the restoration of property at the expense of the state.

Important!

• Consequences of failure to notify:
• In case of failure to notify, the bank has the right to charge double interest on the loan in accordance with the terms of the agreement.
• This may result in additional financial losses for the borrower.

Reasons for mandatory notification:

• Compensation or restoration of property affects the terms of the loan agreement, among other things:
• The compensation may be used to partially or fully repay the loan.
• The restored property again becomes collateral under the mortgage agreement.

Recommendation:

• To avoid penalties or other sanctions, contact the bank immediately after receiving the compensation and provide all necessary supporting documents.