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Releasing a Mortgage (LIEN) in Puerto Rico
Hello and welcome to this episode of Puerto Rico Legal Blog. My name is Santiago Lampon and I am lawyer and notary in Puerto Rico.
In this episode I am going to show you, I am going to cover a subject that sometimes baffles people who own property outside of Puerto Rico and do not know what exactly to do with their promissory notes once a mortgage has been paid. Mortgage by definition is something that is tied up to a property. You have the note (which is a promissory note) you promise to pay someone. Once that note is paid for, then you get that note back from the bank or the lender if it is a private loan. The important thing is that at the property registry, if it is a mortgage note, the mortgage is the guarantee of the note. It is not the note. It is not the debt. The mortgage is a recording done at the property registry to tie up your land, the title with the land, with the promissory note, so that you are unable to sell the land without paying the note. So once you pay it out and you get your note back you have to cancel that note at the notary’s office so that the notary can record the cancellation of the note and cancel the mortgage at the property registry.
They are two separate things. So you do the promissory note, you pay it out. The lender has to hold the note and when you pay the lender, the lender gives you the note and you say fine, I got the note. Believe me I have seen this many times. This has happened many times. That’s why I’m doing this video. They take the note and they shove it. Some people leave it in the I envelope and put it somewhere and then years later when they want to sell the property the notary says “where is the promissory note?” “I don’t remember, I don’t remember the note.” And you find it, and what do I do with it and that’s what I’m going to show you. What do with that note?
Now I have here in this screen what is called a deed for the cancellation of a mortgage note. Now remember the promissory note has to have a mortgage associated with it. As I have covered in other videos the notaries practicing in Puerto Rico is very formal and it can only be done by lawyers. So you have here what was my deed number 21, it’s actually a sample. I took out the names and for example I put John Doe so I don’t disclose the name of the client. I also don’t disclose what the property is or anything like that but this was a deed, my deed number 21 and each deed for each year is sequential in number. This was done on the 25th of January of 2012. The person who had the note because the person paid out the mortgage, came to me, I identified the person and the person delivered to me the mortgage note so that I can have it cancelled and then I performed a certain action required on the law so that the note is duly cancelled and the note is attached to this deed.
Now what I do is, I prepare a certified copy of the deed as shown in this little note in the corner and I took that certified copy and send it to the property registry. The registrar looks at the deed and says this has been cancelled, goes to the official records, cancels the mortgage and then the property is free and clear of any liens.
Now it is very important in this regards that if you have a note you take it to a notary, the notary performs the requirements under applicable law, cancels the note and sends the notice to the registry so that your mortgage is cancelled. Otherwise you are going to have problems when you are going to sell the property.
If you have any questions you can send me an email or post it on this page. Again my name is Santiago Lampon. I am a lawyer and a notary in Puerto Rico. I hope you have enjoyed this episode and I hope you have a great day.