The Supreme Court explained why a bank cannot evict a family with a child from a mortgaged house

The panel of judges of the Supreme Court, consisting of the Second Judicial Chamber of the Cassation Civil Court, considered case No. 713/134/25 regarding the bank's cassation appeal against the decisions of the courts of first and appellate instances, which denied the claim to evict residents from a residential house.

Case circumstances

As seen from the case materials, the legal relations between the parties arose from a loan agreement concluded in 2006 between the banking institution and the borrower. Under this agreement, the bank provided the borrower with a loan of 70,000 US dollars with a final repayment deadline of December 2021 and an interest rate of 13% per annum.

To secure the fulfillment of the loan obligations, on the same day the parties concluded a mortgage agreement, under which the residential house with outbuildings was pledged to the bank. It was established that this real estate belonged to the borrower since 2005. Subsequently, as a result of foreclosure on the mortgage object, ownership of the specified house passed to the bank, which acquired the status of its owner.

Despite this, the defendants—members of the borrower's family—continued to live in the disputed house, were registered at this address, and actually used the housing as their sole place of residence. The defendants refused to voluntarily vacate the premises, which became the basis for the bank's court claim demanding their eviction.

The district court denied the bank's claims, and this decision was upheld by the Chernivtsi appellate court. The courts reasoned that the bank did not prove that the mortgage object was purchased with loan funds and did not justify the possibility of eviction without providing alternative housing.

Supreme Court decision

The Supreme Court recalled that according to Article 47 of the Constitution of Ukraine, everyone has the right to housing, and forced deprivation of housing is possible only on the basis of law and by court decision. At the same time, interference with the right to housing must comply with the principle of proportionality, which follows both from the practice of the European Court of Human Rights and from Article 8 of the Convention for the Protection of Human Rights and Fundamental Freedoms, which guarantees the right to respect for one's home.

The Court drew attention to the provisions of Article 391 of the Civil Code of Ukraine, which provide the owner the right to demand the removal of obstacles to the use of property, as well as the provisions of Article 40 of the Law of Ukraine "On Mortgage," according to which foreclosure on mortgaged housing is grounds for eviction of residents in the manner prescribed by law.

At the same time, the Supreme Court reminded that the provisions of Article 109 of the Housing Code of Ukraine establish a general rule: in case of eviction, citizens must be provided with other permanent housing. An exception to this rule applies only when the housing was purchased with a loan (credit), the repayment of which is secured by a mortgage on the same housing. The determination of the source of housing acquisition is decisive in resolving the issue of the possibility of eviction without providing other housing.

The Supreme Court added that the general principles of evidence, enshrined in Articles 76–81 of the Civil Procedure Code of Ukraine, in particular that each party must prove the circumstances to which it refers, and evidence cannot be based on assumptions.

Evaluating the case materials, the Supreme Court agreed with the conclusions of the previous instances that the bank did not provide proper and admissible evidence that the disputed residential house was purchased specifically with loan funds secured by the mortgage. It was also taken into account that the plaintiff did not specify other housing that could be provided to the defendants in case of eviction and did not prove that they had other housing in ownership or use.

Additionally, the Supreme Court drew attention to the circumstances of the presence of a minor child of the defendants in the disputed house. The Court noted that according to the norms of civil legislation, child protection legislation, and freedom of movement legislation, the child's right to live with parents is subject to special protection, and the mere fact of the child's residence in the housing cannot be considered grounds for depriving the child of the right to use the housing.

The Court emphasized that the arguments of the cassation appeal essentially amount to a re-evaluation of evidence and establishment of new factual circumstances, which according to Article 400 of the Civil Procedure Code of Ukraine is beyond the powers of the cassation court.

In view of the above, the Supreme Court concluded that there are no grounds to cancel the decisions of the previous courts, left the cassation appeal without satisfaction, and the court decisions unchanged.

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