Rrestriction on disposal
This term refers to the law of the country selected below.
Czech Republic
What is a restriction on disposal?
A restriction on disposal means a limitation on the right to dispose of an asset or a right.
We most commonly encounter this in relation to insurance payouts in connection with the granting of loans, including mortgage loans. Typically, this involves the restriction of insurance proceeds from insurance covering a financed property in favour of the bank providing the mortgage loan. For larger or long-term loans, the taking out of life insurance is often also required. In the event of a claim, the insurance proceeds are paid to the creditor to settle the outstanding loan.
Securities may also be restricted, which in practice means that the issuer’s consent is generally required to transfer them to another person. In the case of joint-stock companies, restrictions can only be applied to registered shares.
Restrictions are also applied to deposits in bank accounts, where the account holder cannot dispose of the funds without the consent of a third party. This is a security measure designed to ensure the fulfilment of an obligation or the designated use of funds.
For more information about our specialization in civil and commercial law, please contact us.
Get in touch