Armenia Proposes Introducing Two New Legal Institutions: "Reverse Mortgage" and "Spousal Ownership"

YEREVAN, November 7. /ARКА/. The Cadastre Committee of Armenia has put forward a new legislative proposal aimed at incorporating the terms "reverse mortgage" and "spousal ownership" into the Civil Code.

According to the agency's press service, these mechanisms will enable pensioners who possess an apartment, house, or garden house to mortgage their property and receive a steady income—without the obligation to make payments during their lifetime.

Moreover, ownership of the property is maintained for the entire duration of the contract, allowing citizens to earn income from the value of their home while still retaining the right to own, utilize, and reside in it.

The draft includes substantial guarantees:

* the annual interest rate on reverse mortgages must not exceed the minimum interest rate applicable to existing mortgages;

* the property will be subject to mandatory insurance, tax obligations will be fulfilled, and its condition will be monitored through specialized mechanisms;

* The obligations of the pledger or their legal successors will not surpass the amount received from the sale of the property;

* Prior mandatory consultation is required to mitigate financial and legal risks.

Regarding the notion of "spousal ownership," it is specified that property acquired during marriage and deemed joint property may, upon the request of the owners, be registered as the property of the spouse. This provision will enable the surviving spouse to fully own and utilize the apartment or house as a singular property, without the necessity of dividing the property with the heirs at this stage.

The Committee notes that similar concepts are extensively utilized in several developed nations—the United States, Canada, and the United Kingdom—facilitating the expansion of financial instruments and creating opportunities to convert property value into a reliable source of income.

The draft has been made available for public commentary on the centralized portal for publishing draft regulations—www.e-draft.am.

A reverse mortgage is a financial instrument that allows property owners, typically retirees, to receive regular cash payments secured by their home while retaining ownership. Upon the owner's death, the home passes to the bank or to the heirs, provided they are able to repay the debt and keep the property in the family.-0-

-