Encumbrances: Arrest, Mortgage, Lease — How to Spot Them and What to Do

What an encumbrance is

An encumbrance is a limit on the owner's rights: the apartment is pledged to a bank, it is under arrest, it is let out, or someone has a right to use it. The owner remains the owner but cannot freely dispose of the apartment, and some restrictions pass to the buyer together with it. So a buyer needs to understand which restrictions will be removed at the deal and which will stay with the apartment afterwards.

Registered restrictions are listed in the unified Cadastre extract. Anyone can order it on e-cadastre.am; according to hartak.am, as of September 2026 it costs from 10,000 ֏ for three working days.

Types of encumbrance and what to do

Mortgage: the most common and solvable case

Many people sell apartments that are still under a mortgage. That is fine if the deal goes through the bank. Usually the buyer pays in the money, the seller's debt is repaid from it, the bank consents and lifts the pledge, and the right passes to the buyer. Agree on the exact scheme with the seller's bank in advance.

Do not give the seller money “to pay off the mortgage” before the deal without the bank's involvement: if it never reaches the bank, the apartment will stay pledged. Ask the seller's bank for a statement of the outstanding debt so you know in advance how much of the price will go to repay it.

Arrest: when it is better to wait

An arrest is imposed by a court decision or during enforcement proceedings, for example because of the owner's debts. While the entry is in the register, the transfer generally cannot be registered. The seller may promise that the arrest “will be lifted any day now”, but a deposit paid before it is lifted is your risk. Lifting an arrest is also recorded in the register, so the best confirmation is a new extract, not words or a copy of a decision.

Leases and tenants

Under the Civil Code, a transfer of ownership of rented housing does not end the tenancy: the new owner becomes the landlord on the same terms. The State Revenue Committee reminds that a real estate lease contract should be state-registered, in which case it shows up in the extract. In practice, though, many contracts are not registered, so ask the seller directly whether tenants live in the apartment and on what terms, and put the move-out date in the contract.

Check twice

1. Order a fresh extract before the deposit.
2. State in the preliminary contract that the apartment is transferred free of encumbrances other than those you agreed.
3. On the day of the deal the notary checks the register again; if more than two weeks have passed since your extract, order a new one.
4. After registration, order an extract in your name and make sure the old restrictions have been removed.

Key points

• An arrest, a mortgage and registered third-party rights appear in the unified Cadastre extract.
• A mortgage is solvable: the deal is done with the bank involved, and the pledge is lifted with the buyer's money.
• With an arrest, don't hurry: pay a deposit only after it is lifted and a new extract confirms it.
• A change of owner does not end a residential tenancy, so find out about tenants in advance.
• Check the extract before the deposit, on the day of the deal and after registration.