A mortgage is a real encumbrance on real estate through entry in the land register. With the mortgage, the property is pledged to the obligee in the amount of his claim. He is entitled to use the substance and uses of the property by foreclosure to collect the claim.
The debtor can prevent this by paying the obligee. The real estate lien is closely linked to a personal claim against the debtor. This claim, which is directed towards the payment of money, is an indispensable legal requirement. Typically it is a loan claim.
The real property lien has been largely superseded by the mortgage today. In contrast to the mortgage, it is not accessory, but abstract and can therefore be transferred or used independently. The land charge can also be used as security for other claims after it has arisen.
This is also the reason why, in practice, land charges are preferred over mortgages. In practice, this independence is restricted by security agreements, which usually consist of the granting of a deletion permit. In 2007, this abstraction was allegedly used by home loan buyers to enforce the full mortgage on the grounds that they did not know the reason for the security.
The buyer should, however, have known the declarations of purpose of the security. The legal situation was clarified by the Risk Limitation Act 2008, because it was stipulated that there can be no bona fide acquisition of the land charge without an objection. If the loan is sold, the borrower can hold this security agreement against the new creditor.
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