Which easements, liens and mortgages are retained in the event of a foreclosure auction? ​Which ones go out?

1. Introduction

Real estate foreclosure is a complex legal procedure that is of great importance to both creditors and debtors. In fact, a lot of money can be realized here or lost if the legal treatment is incorrect.

At the center of this process is the land register, which is crucial for determining which rights remain and which are lost in the event of a compulsory auction.

This blog post will go into more detail about the rights that are registered in Divisions II and III of the land register and that may be lost or preserved in the event of a compulsory auction.

2. Continuation or extinction of easements, land charges, mortgages, etc. in the foreclosure proceedings

In the event of a compulsory auction of a property, the rights recorded in the land register are of crucial importance as they determine which rights remain and which are lost. The relevant rights are registered in sections II and III of the land register.

a. Rights from Department II of the land register

• Remaining rights: Certain rights in Division II of the Land Register, such as easements (e.g. rights of way) and limited personal easements (e.g. residential rights), generally remain in effect even after the foreclosure auction. This is regulated in Section 52 of the Compulsory Auction Act (ZVG), which states: “The rights with which a property is encumbered at the time of confiscation remain in effect unless they are not exercised in accordance with the provisions of this Act when the lowest bid is determined or when the property is distributed Auction proceeds must be taken into account.”
• Terminating rights: Other rights in Division II, such as rights of first refusal, may be terminated upon foreclosure under certain circumstances. However, a claim for value compensation may then arise under Section 92 ZVG.

b. Rights from Department III of the land register

• Remaining rights: Mortgages and land charges that rank above the operating creditor remain in effect. This means that creditors whose rights rank higher than the right leading to the auction will be satisfied from the auction proceeds.
• Terminating rights: Mortgages and land charges that rank after the creditor responsible are usually lost. They will be deleted by the winning bid as part of the compulsory auction if they are not included in the lowest bid.

3. Conclusion

The compulsory auction of real estate involves a number of legal nuances, particularly with regard to the rights recorded in the land register. Knowledge of the specific provisions of the BGB, ZVG and ZPO is essential for everyone involved in order to fully understand and effectively represent their rights and obligations.

While certain rights in Division II of the Land Register, such as easements, usually remain intact, others, such as rights of first refusal, may be lost.

In Division III, mortgages and land charges that rank above the creditor are protected, while subordinate rights can expire.

This knowledge is crucial not only for carrying out the foreclosure auction itself, but also for strategic planning and advice in advance of a possible auction.

Because at this point it will be decided whether a right or mortgage (still) applies and comes into the money or disappears without replacement.

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 represent your interests assertively and resolutely. Contractual partners, banks/credit institutions, financial service providers, creditors and third parties. Please feel free to contact me by phone or write to me.

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