You can repay a loan from the State Housing Development Fund before selling. On written request, the fund must allow early repayment of the outstanding loan balance and may not charge a fee for doing so. The fund’s security interest does not cease to exist on sale. The outstanding loan balance is therefore paid from the purchase price, for example through escrow, the security interest is deleted from the Land Registry after repayment, and you will generally receive the remainder of the price only then.
You originally bought the apartment with support from the State Housing Development Fund (ŠFRB), and Part C of the title sheet records a security interest in favour of the fund. The security interest does not prevent a sale. However, the sale must be structured so that the loan is repaid first from the purchase price and the buyer acquires the apartment free of the fund’s encumbrance. Act No. 150/2013 Z. z. on the State Housing Development Fund ties support for acquiring an apartment to the individual applicant and the conditions they meet (Section 7(1), letter (a), Section 9(1) and Section 10(4) and (5)). It expressly provides for the transfer of rights and obligations under an agreement with the fund to another person only in the case of another legal entity, with the fund’s prior consent (Section 16(3)). Also check your loan agreement and security agreement to establish what a sale means for you.
You can repay the loan early
The borrower has a statutory right to early repayment of the loan:
The following quotation is reproduced in its original language:
Fond je povinný umožniť predčasné splatenie zostatku poskytnutého úveru alebo časti úveru na základe písomnej žiadosti žiadateľa. […] Za predčasné splatenie zostatku poskytnutého úveru alebo časti úveru nemôže fond požadovať poplatok.
The exception in the second sentence of this paragraph concerns rental apartments and accommodation buildings acquired with the fund’s support, not an apartment you bought to live in. The fund publishes an early repayment application form on its website. Ask the fund for a statement of the outstanding balance as at the anticipated payment date so that the amount in the purchase agreement matches the actual debt. If your loan was granted before 2014 under the previous Act, the current Act treats legal relationships involving the fund that arose before 1. 1. 2014 as relationships under the current Act (Section 22(2) of Act No. 150/2013 Z. z.). Nevertheless, read the early repayment terms in your loan agreement.
How to coordinate payment and deletion of the security interest
The security interest is also effective against the buyer unless the security agreement provides otherwise (Section 151h(1) of the Civil Code, Act No. 40/1964 Zb.), and it ceases to exist only when the secured claim is extinguished, that is, when the loan is repaid (Section 151md(1), letter (a)). The purchase agreement should therefore specify:
- that the portion of the purchase price equal to the outstanding balance will be paid directly into the account designated by the fund, and how any difference will be settled if payment is delayed,
- who will request confirmation of repayment from the fund, and who will apply for deletion of the security interest and when,
- when you will receive the remainder of the price, for example after registration of the buyer’s ownership has been approved and deletion of the security interest has been demonstrated.
The secured creditor must apply for deletion without undue delay after the security interest ceases to exist. The person who granted the security may also apply, provided they attach the creditor’s written confirmation that the obligation has been discharged (Section 151md(3)). The Land Registry will delete the security interest within 5 working days of the commencement of the proceedings (Section 43(1), letter (c) of the Cadastral Act, Act No. 162/1995 Z. z.). Escrow protects the buyer’s money until the agreed conditions are met, with the outstanding loan balance paid to the fund from escrow. The procedure is similar to that for a seller’s bank mortgage and is discussed in more detail in the article on buying an apartment subject to the seller’s mortgage.
When the buyer is using a mortgage
If the buyer finances the purchase with a loan secured against the apartment and there are multiple security interests, the order in which they are registered determines the order in which the secured claims are satisfied (Section 151k(1)). If the security interest of the buyer’s bank is to be registered before the fund’s security interest is deleted, check the agreement with the fund to see whether its consent is required. The fund publishes a separate form for this request. Creditors may also change the ranking of their security interests by agreement, which takes effect only upon registration (Section 151k(3)). We explain why the buyer’s bank may also require you to sign a security agreement in the question on the bank’s security agreement and the seller.
A different situation arises if an owners’ association or the building manager took out the ŠFRB loan to renovate the building. For such a loan, the Act also permits security over claims for payments into the operation, maintenance and repairs fund (Section 15(7), letter (c)). When selling, the building manager’s confirmation concerning arrears is important; we discuss it in the question on the building manager’s confirmation when selling an apartment.
We will coordinate the purchase agreement, the fund’s statement of the outstanding balance, escrow and deletion of the security interest as part of our lawyer-held escrow for the purchase price service. If the buyer is using a mortgage, we will also plan the procedure with their bank as part of our buying property with a mortgage service.
This answer provides general information on the law as at 3 October 2026. It does not constitute legal services or replace an assessment of an individual case. The details of your situation may differ. Book a consultation to discuss them.
