Legal text
(1) If, in accordance with Section 1177 Paragraph 1 or Section 1198 of the Civil Code, a land charge or a pension debt replaces the mortgage, then, unless the issuance of a new letter is requested, the legal change is to be entered on the previous letter note and separate a debt document associated with the letter.
(2) The same applies if, in accordance with Section 1180 of the Civil Code, another claim is substituted for the claim for which a mortgage exists.
A. General
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Section 65 GBO regulates the treatment of the letter in the event that the mortgage is replaced by a land or pension debt or the claim on which the mortgage is based is replaced. Paragraph 1 first mentions the case of Section 1177 BGB. The main cases of this are Section 1163 Paragraph 1 Sentence 2, Section 1163 Paragraph 2, Sections 1168, 1170 Paragraph 2 BGB. The case of Section 1198 BGB (conversion of a mortgage into a land charge) is equivalent. Paragraph 2 equates these cases with the substitution of claims (§ 1180 BGB).
B. Exceptions
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If the mortgage is partially converted into a land charge, Section 65 GBO does not apply. Even in the case of a legal partial exchange of claims, Section 65 GBO cannot apply if the claims are not owned by the same creditor. In this case, an independent letter will be created upon request. If no application is made, there are no objections to the fact that the letter is partly about a mortgage and partly about a land charge.
The conversion of a letter mortgage into a book mortgage and the conversion of a book mortgage into a letter mortgage do not fall under Section 65 GBO.
C. Procedure
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§ 65 GBO requires the prior entry of the legal change in the land register in all cases. The entry of the legal change on the new letter and the separation of the debt certificate are carried out ex officio. The note must bear the date, signature and seal or stamp. The debt certificate must be returned to the person who submitted the letter or to their authorized representative (§ 69 sentence 2 GBO).
Instead of this procedure, a new letter can also be issued about the new right created by the change. However, this must be expressly requested. The previous letter must be presented.
D. Section 65 GBO is a regulatory regulation
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Violating it does not render the letter ineffective, but claims for damages are possible.
