Hidden charges and overriding interests

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Do any of these, or any other similar matters, have priority over a mortgage, where the lender was acting in good faith and was unaware of them? Explain if there is any simple way that the property can be freed from them.

Special rights, based on a contract or another transaction, over the real estate of another (leases, other usufructs, a right to pension off the real estate, a right to take timber and a right to extract land or mineral resources or another comparable right of extraction) may be registered in the Finnish Land Register. In addition, certain rights belonging to someone else than the titleholder and relating to a building, construction, machine, or facility used in business and contributing to the purpose of the real estate may be registered in the Land Register.

In addition, certain rights are registered in the Land Register by notification of an authority (pre-emption or compulsory purchase by a municipality or state, execution, precautionary measures, bankruptcy and other official rights and encumbrances etc.). Provisions regarding registration of rights over the real estate of another are contained in the Finnish Code of Real Estate (540/1995).

However, the holder of a lease or another usufruct on the real estate of another is obliged to apply for the registration of his right in the Land Register only if the usufruct is transferable to a third party without hearing the titleholder and if there are buildings or other constructions belonging to the usufructuary on the real estate or it has been agreed that they may be built (leases and other usufructs). Hence, there are several of the rights specified in the paragraph above that are not registered at all in the Land register.

Some of said rights, whether so called hidden charges or not, usually have priority although a party was acting in good faith and was unaware of them (leases, other usufructs, a right to pension off the real estate, a right to take timber and a right to extract land or mineral resources or another comparable right of extraction). However, some of said rights, though only when they are so called hidden charges, usually have priority only when the other party actually knew of them (rights belonging to someone else than the titleholder and relating to a building, construction, machine, or facility used in business and contributing to the purpose of the real estate). Usually the seller is obliged either directly or indirectly by law or agreement to inform the buyer of said hidden charges.

Usually the hidden charges can be removed only by mutual agreement between the holder of the right and the owner of the property.

A special right specified in the first paragraph above shall not be registered if it is permanent, if it is for the benefit of a given real estate or area or if it has been established by an official real estate formation measure or otherwise by a decision of the authorities (servitudes, public rights of way and public rights to use the land etc.). Usually said rights, which cannot be registered in the Land Register, are registered in the Cadastre.

Said rights have priority although a party was acting in good faith an was unaware of them. Usually these so called hidden charges can be removed only by mutual agreement between the holder of the right and the owner of the property or by force in land division proceedings.

The existence of charges, taxes and other debts pertaining to a piece of real estate is not automatically registered in the Land Register or Cadastre. Usually these charges, taxes and other debts have the same priority as the right to which the charges, taxes and other debts pertain.

Usually the seller is obliged either directly or indirectly by law or agreement to inform the buyer of said hidden charges.