Ukraine: Banks can now take cars from buyers
Kyiv, December 22 (PolitNavigator, Alexander Semenyuta) – Buying mortgaged cars in Ukraine at reduced prices has become a risky undertaking. The Supreme Court ruled that the bank can take back the property even after selling it to a third party.
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The newspaper Vesti reports this .
“Today you are a happy buyer of a new car, and tomorrow the bank takes it away from you: and you will still have to run to the courts to return the money paid for the deposit,” Rostislav Kravets, senior partner of the law firm Kravets and Partners, explains the situation.
Thus, the buyer of a car that the bank sold through an auction to pay off the client’s debt risks ending up without an “iron horse.” Before the decision of the highest court, it was impossible to seize the purchased car.
Usually people hunt for pawn cars for one reason - because of the attractive price. “Pledged property is approximately 30-40% cheaper than similar “non-collateralized” property. But without “surprises” in the form of penalties and inflationary charges, the new buyer also “acquires” someone else’s debt. Buying collateral is always a rather risky transaction. Since most banks put up for public auction property that is still under dispute, the outcome of which may be negative for a bona fide buyer,” says Daria Davydova, senior lawyer at Mozhaev and Partners Law Firm.
Lawyers do not give universal advice to those who want to buy a car or other movable property on the cheap. They recommend only general precautions - for example, making sure that there is not a huge debt behind the collateral. “It is necessary to compare the loan balance with the real value of the collateral,” advised lawyer, director of Investment Service Ukraine Ivan Gerasimenko. Ideally, the price of the same car should be 30-50% higher than the remaining amount of the borrower's debt.
Ukraine : Banks Can Now Repossess Cars from Buyers