The special land charge: The owner’s land charge
The owner’s mortgage is a fascinating and at the same time complex element of German real estate law. It represents a special form of mortgage that is important not only for property owners, but also for lenders and legal experts.
Essentially, it is a legal construct that enables the owner of a piece of land or real estate to have a land charge registered in his name in the land register. This registration plays a crucial role in the owner’s financial flexibility and security, especially in relation to future credit opportunities and the protection of financial interests.
In this context, it is important to understand the origins, the legal basis as well as the advantages and disadvantages of the owner’s mortgage in order to fully understand its significance in German real estate law.
This will be discussed in detail below in the floor plan.
What is an owner’s mortgage?
The owner’s land charge is a special form of land charge that plays an important role in German law.
It is created either by order or by law and is registered in the land register.
In contrast to a normal land charge, which is often used to secure a loan and is owed to a lender such as a bank, the owner’s land charge belongs to the property owner himself.
The owner’s land charge is legally regulated in Section 1177 of the German Civil Code (BGB). There it says:
“If the mortgage is combined with the property in one person without the owner also being entitled to the claim, the mortgage turns into a land charge.“
Creation of the owner’s land charge
An owner’s land charge can therefore arise in two ways:
Advantages of the owner’s mortgage
The owner’s mortgage offers several advantages:
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First-class security: Due to its position in the land register, the owner’s land charge offers a high level of security. It is first-class and therefore cannot be displaced in the ranking by third-party land charges.
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Flexibility for additional loans: It can later serve as security for further borrowing. In the event of a seizure, the owner’s mortgage is privileged due to its first priority and can therefore serve as attractive security for lenders.
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Automatic creation: In certain cases, it arises automatically, which saves the owner the costs that would otherwise be incurred for deleting a third-party mortgage.
Costs and alternatives
Setting up and deleting an owner’s mortgage involves costs. These usually include notary and land registry costs, which can amount to around 0.2% of the mortgage amount.
Alternatively, a partial sale of real estate can be considered to generate cash without requiring an owner’s mortgage.
Conclusion
In summary, it can be said that the owner’s mortgage is an important tool for the property owner.
It offers first-class security in the land register and allows the owner to maintain financial flexibility without having to rely on external collateral.
Although setting up and deleting an owner’s mortgage involves costs, it still offers a significant advantage, especially when it comes to securing new loans.
The owner’s mortgage reflects the balance between security and flexibility in German real estate law and is an example of how legal structures can be adapted to meet the needs of owners.
However, it remains important that owners carefully consider all aspects, including potential alternatives, to make the best possible decision for their individual situation.
Particularly in the event of compulsory enforcement or the collision of several security interests, it is essential to consult a qualified lawyer.
This article does not represent specific and individual legal advice, but rather only provides a rough initial overview of the very complex legal matter described. You can only obtain legal certainty for your specific case constellation through coordinated examination and advice from an expert lawyer.
I would be happy to assist you as a lawyer and specialist lawyer for a legal assessment and assessment of your case and to accompany and support you with financial transactions or the assertion of liability claims and compensation for damages from financial transactions and investments as well as with banking law issues regarding loan collateral and loan agreements. Please feel free to contact me by phone or write to me.
I advise nationwide on site or via Zoom as a specialist lawyer in the legal areas of corporate law, tax law, insolvency law and banking and capital markets law, especially in the cities and metropolitan areas around Stuttgart, Heilbronn, Karlsruhe, Freiburg, Ulm, Augsburg, Munich, Frankfurt, Wiesbaden and Saarbrücken , Kaiserslautern, Bonn, Wuppertal, Duisburg, Nuremberg, Münster, Saarbrücken, Düsseldorf, Cologne, Dortmund, Hanover, Kassel, Leipzig, Dresden, Bremen, Hamburg and Berlin.
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2024-01-06 19:19:29
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