The house belongs to the bank, but they do not claim it, grandma lives in it

Hello,

first of all, sorry, I couldn’t think of a better headline.

I’ll try to describe the situation.

My mother and my grandmother took out a loan x years ago and used the house as collateral. The loan was for a dubious (which they didn’t know at the time) business model of a relative. The business then went downhill, the loan was lost, and the house belongs to the bank. At that time, only my grandmother and my grandfather lived in the three-family house. That must have been roughly 10 years ago now. Two other apartments were already empty at that time because we had moved out and my great-grandmother had passed away. First, they talked to the bank, but the bank wanted a sum for the house that we couldn’t afford. At some point, there was no more contact between the bank and us. My grandmother and my grandfather continued to live in the house. This has been the case for about 10 years now. The bank never got in touch again, and neither did we, as we of course didn’t want to wake sleeping dogs and otherwise my grandparents would have had to move into a rental apartment.

So, I hope this was at least somewhat understandable.

Now my grandfather recently passed away. Naturally, some fear is setting in that the bank might remember that they still have a property there, get in touch, and my grandmother would have to move out. Of course, it would be nice, given her small pension, if she could continue to live there as long as her health allows.

Yesterday a buddy told me something about customary rights, usage rights, a right of residence or something like that. So basically, since she has already lived in the house for 10 years, even though it no longer really belongs to her, she is allowed to continue, and the bank cannot evict her. I somewhat doubt if this is really the case...

Does anyone happen to know how such a case is handled? Of course, it would be good if we had reliable information here; that would take a great burden off my grandmother. Or where could one get information here? We’d rather not ask the bank to avoid waking sleeping dogs.

Oh, about the house maybe: It is on a plot of about 900 sqm. The house is probably from the 60s without any real renovations since then. It is therefore not in very good condition. So the value won’t be that high. One thought of mine is that the bank might see it as a value-appreciating plot. I suspect that it has gained good value in the last 10 years and soon a major construction project in the village will take place, which will probably increase the value even more.

Thanks in advance.

Best regards
Specki

Who is currently the owner? The bank or Grandma together with the mother? Is anyone paying installments or rent to the bank?

As far as I know, the bank, since the loan was lost. No, no one pays anything to the bank.

Blowing the loan is not the drama, as long as someone services the debt. What do the documents say? Just to be clear: does anyone of you pay property taxes or receive notices about them?

Just because the loan was not serviced does not automatically mean it is to the bank.

Requesting an excerpt from the land register would be a start to clarify who the actual owner is and whether land charges/mortgages are registered. Just because a secured loan is not being serviced, the bank does not automatically become the owner. Normally, it then initiates foreclosure measures against the borrower or against the person with the land charge. Has the relative been insolvent until today? It’s possible that the bank has already collected the money from the relative.