House With Mortgage on Part: How to Sell and Who Gets the Money
Published 12 November 2026
A house with a mortgage on only part of it can be sold in full if all owners agree and the bank releases its security interest from the sale proceeds. From the purchase price, the debt secured by the mortgage must be paid first, and the remainder is divided according to ownership shares. The co-owner whose share is not mortgaged should not bear the debt burden, though this ultimately depends on who is named as the borrower in the credit agreement.
Summary
- A mortgage 'on part only' typically means a security interest on a co-ownership share or part of the property, not on the entire house.
- The entire property is best sold as one, so the buyer acquires a clear and unencumbered ownership.
- The purchase price goes into attorney's escrow; the bank is paid first from the portion corresponding to the mortgaged share, and the remainder is divided between the owners.
- The credit agreement determines responsibility: if only one owner is the borrower, the other does not owe the debt; if both are borrowers, the bank may pursue either one.
- An informal quotation or assessment of your situation is available through the form below the article.
What does a mortgage on part of the house mean?
In practice, this usually refers to a security interest that encumbers only a co-ownership share of one of the owners, or perhaps only certain separate property, such as the land but not the building. A security interest (zastavní právo in Czech law), under § 1309 of the Civil Code (Act No. 89/2012 Coll.), secures the performance of a debt, and if the creditor (the bank) does not receive payment, it can satisfy itself from the secured property.
Typical situations:
- after a divorce or settlement, one former partner retained the mortgage and the other owns a share without security,
- one co-owner pledged their own share for a personal loan,
- the mortgage was registered only on part of the plots or buildings that form a whole.
The exact status can be verified from the land registry entry (the Czech Land Registry — katastr nemovitostí, showing the title document and part C of the property register) and the credit and security agreement. Only these will show precisely what is secured and who is responsible for the debt.
Can only the encumbered share be sold, or the whole house?
The most practical approach is to sell the entire property together with all owners, so the buyer acquires a house without any co-owner or mortgage. A single share can be sold separately, but the buyer then becomes a co-owner with another person, and interest in such a share is usually limited.
Co-owners no longer have a general right of first refusal (this was abolished). A six-month window remains only if the share arose by inheritance from the moment it was created (§ 1124 of the Civil Code). When selling the entire house, however, the right of first refusal is not an issue, because all owners sell at the same time.
If the owners cannot agree, the only option is court proceedings to terminate the co-ownership. This is usually lengthy and emotionally challenging, so it is worth trying to reach an agreement. In the case of divorce, see also the page on selling a property in a divorce.
How is this handled with the bank?
The bank must consent to the sale, and its security interest is removed from the land registry only after the debt is paid from the sale proceeds. The typical process is as follows:
- Ask the bank for the current debt amount as of a specific date and the conditions for releasing the security interest.
- Verify whether only one owner is the borrower, or both, and whether anyone is a guarantor.
- The bank will advise whether the debt can be satisfied from part of the purchase price and how it will provide its consent to remove the security.
- In the purchase agreement and escrow agreement, it is stipulated that the bank will be paid directly from the escrow.
- After the debt is paid, the bank issues a confirmation or consent to remove the security, and the security interest is deleted from the land registry.
Be aware of situations where the bank requires full repayment of the loan even though the security interest applies only to part of it. This is determined by the contract, so have a lawyer review it. For details on selling with a loan, see the page on purchase of a property with a mortgage.
In what order are the bank and co-owner paid?
The bank is paid first from the part of the purchase price corresponding to the mortgaged share; the co-owner receives their share from the price to which the mortgage does not apply. The purchase price is paid without cash, preferably into attorney's escrow. Cash payments are limited to EUR 9,000 per day (Act No. 254/2004 Coll.).
| Step | What happens | Money goes to |
|---|---|---|
| 1 | Buyer pays the price into escrow | Attorney's escrow |
| 2 | From the mortgaged share, the debt is paid | Bank |
| 3 | Remainder of the mortgaged share | Owner who was the borrower |
| 4 | Share not mortgaged | Co-owner |
If the proceeds from the mortgaged share do not cover the debt, the difference remains owed by the borrower to the bank. The bank will only release the security according to its terms, so it is essential to discuss this with the bank beforehand. You can get an approximate idea of the price from the calculator.
How does the sale proceed and how long does it take?
When purchasing with attorney's escrow, the entire process takes place over a period of weeks, and the bank and co-owner are paid from the escrow.
- You receive an offer in writing and without obligation within 24 hours.
- Signing of contracts and deposit at signing usually within 1–3 days.
- Registration at the land registry takes about 3–4 weeks; on average about 22 days.
- The final payment arrives within 5 days of registration from the attorney's escrow.
Ownership passes only with registration at the land registry. The land registry office cannot decide earlier than 20 days after notifying the owner (Land Registry Act No. 256/2013 Coll.). Tax on the acquisition of immovable property was abolished (Act No. 386/2020 Coll.).
The process includes attorney's escrow and complete legal services, with no fees, no repairs required, and no need for clearing or vacating the property.
What to watch out for
The biggest risks are unclear responsibility for the debt and disagreement about the share of the price.
- Borrower and co-borrower. A security interest on one share does not mean the co-owner cannot be bound by the loan.
- Other encumbrances. Check the land registry entry for any other security interests, attachments, or property burdens. See the page on purchasing property with security interests or debt.
- Agreement on division of money. Shares need not be equal; they are based on the land registry entry or a settlement agreement.
- Income tax. Proceeds from the sale may be exempt, for example if certain time requirements are met or if it is your own residence (Act No. 586/1992 Coll.). Verify your specific situation with the Financial Administration or a tax advisor.
If there is a risk of forced sale (auction), act quickly; at auction, the minimum opening bid is two-thirds of the sale price (§ 336e of the Code of Civil Procedure No. 99/1963 Coll.; the same applies proportionally to enforcement proceedings).
What to do now
First prepare the documentation and find out exactly how the property is encumbered; then ask for an informal assessment.
- Download the current land registry entry.
- Prepare the credit and security agreement and any settlement agreement.
- Request from the bank the debt amount as of a specific date.
- Agree with the co-owner on the division of proceeds.
- Fill out the form below the article; you will receive an informal quotation or assessment through it.
A similar process can be reviewed in the case study of a house with a mortgage after divorce.