Land charge

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The owner mortgage is real estate enterprises a mortgage , they deserve the owner of the polluted land; so that there is an identity between the land debtor and the owner of the encumbered property. From the legal system, it is mentioned in § 1196 BGB , i.e. within the framework of the land charge law. This makes it clear that it is a matter of an ( abstract ; better: non-accessory) mortgage that is detached from an underlying transaction - in particular a claim .

General

The owner's land charge has a rank-securing effect, because the owner blocks the free rank in Section III with its entry in the land register and thus refers to subordinate positions that are to be entered later. The order of precedence resulting from several mortgage liens is important in any later foreclosure auction of the property. This rank-securing function is fulfilled by landlord property debts, especially in industry, if they have equal ranking frameworks entered on their properties in the form of equal-ranking owner land charges "in reserve" and later borrowings are made available by assigning individual property land charges to banks or insurance companies as collateral. Then it does not matter that the loans are granted at different times because they are given the same rank in terms of land charges.

Emergence

An owner land charge can arise either by appointment or by law.

Order

The owner land charge arises originally through a unilateral declaration by the property owner to the land registry and entry ( Section 1196 (2) BGB). In terms of material and law, it is therefore free of form; formally and legally, there is a certification requirement according to Section 29 GBO . The content of the original owner's land charge differs significantly from the content of an original foreign land charge:

  • According to Section 1197 (1) of the German Civil Code (BGB), foreclosure on one's own property is not possible so that the loss of subordinate beneficiaries cannot be caused. However, a subordination declaration under § 794 1 Abs. Sentence 5 ZPO because the owner land charge and registrable allowed because the limitation of the § 1197 1 Para. BGB example in the assignment can be dispensed with the owner mortgage.
  • The original land charge of the owner is fundamentally non-interest-bearing ( Section 1197, Paragraph 2 of the German Civil Code), since the owner cannot regularly have any interest claims against himself (just as little as a claim; hence its abstract nature). Nevertheless, interest can be entered because this restriction can also be omitted in the event of a later assignment. However, the assignment of the interest is only permitted from the date of the assignment, but not from the date of the entry of the owner's land charge.
  • The right to cancellation from § 1179a and § 1179b BGB does not already arise with the original owner's land charge , but only becomes the content of a third-party land charge that has arisen in the meantime through assignment. Assignment creditors (assignees) therefore do not acquire an owner land charge with a claim for cancellation, but this only arose through the assignment ( Section 1196 (3) BGB).

By virtue of law

The owner mortgage arises as a derivative

  • regularly by converting a mortgage via the intermediate stage owner mortgage , which is no longer based on a secured claim ( Section 1177 (1) sentence 1 BGB);
  • also in the case of foreign land debts in a wide variety of cases:
    • due to the loss of the security purpose at credit institutions as land debtors,
    • by assignment by the land debtor to the owner,
    • by paying the owner on the land charge capital (regardless of whether the owner is also a personal debtor or only the security provider ),
    • by not revising the repayment clause when assigning the land charge to a new creditor.

By fault legal agreements in the land charge certificate (amortization provision, General fuse clause or abstract promissory note) are formed owner land charges in favor of banks only condition subsequent designed. Final land charges only arise when the property is reassigned to the property owner or a bank waives a third-party land charge. The most common cause of the owner's land charge is the final repayment of loans that are secured with a third-party land charge or mortgage. Then the security purpose of the third-party land charge is permanently omitted, whereby the property owner is entitled to a refund claim against the lender for the return of the land charge. The final repayment of the claim justifies a claim for restitution from the security agreement even without an express provision. The claim arises with the establishment of the land charge, subject to the condition precedent of repayment of the secured claim, but only for the corresponding lowest part of the land charge. This restitution includes an option, according to which the lender

In contrast to the original owner's mortgage, which can be seen from the entry, the forms of the derivative owner's mortgage are so-called "hidden owner mortgages" because the entry of the third-party mortgage is usually retained in the land register until it is deleted.

particularities

In the event of the sale of a property encumbered with the owner's mortgage, the original owner's mortgage is still due to the previous owner as a third-party mortgage against the purchaser; then the restriction on foreclosure pursuant to Section 1197 (1) of the German Civil Code (BGB) no longer applies. If an original owner land charge is in the lowest bid in a foreclosure auction, any auction proceeds will go to the owner (in insolvency : the insolvency estate ). Therefore, subordinated creditors must seize the priority land charges of the owner or secure their claims in other ways in good time (e.g. by assignment).

Priority land owner debts

If an owner's mortgage takes precedence over a third-party land charge, the creditor of the third-party land charge must strive to grow into the higher-ranking position. This prevents other creditors from seizing the primary owner's mortgage and thus preventing the creditor from moving up to a higher position. In addition, it prevents the auction proceeds in the amount of the land charge from being paid out to the property owner in the event of a property auction.

According to Section 857, Paragraph 1 of the German Code of Civil Procedure (ZPO), in the event of foreclosures against the property owner, an owner's land charge can be attached in his favor. With a seizure, the seizure creditor then acquires a lien on the owner's land charge according to § 1287 BGB . However, the seizure only takes effect if the property owner has not yet assigned the land charge. Therefore, the assignment of an owner's mortgage in favor of subordinate mortgage creditors is also an important tactical means of preventing third-party seizures in senior or equal owner mortgages.

Peer group framework

The peer-to-peer framework is the combination of several original, identical-content owner land charges with absolutely pari passu entries. The legal order of precedence of Section 879, Paragraph 1, Clause 1 of the German Civil Code ( Lokusprinzip ) is overridden by a note of equal status for all landlord property debts according to Section 45 Paragraph 1 of the GBO. In this respect, Section 45 (1) GBO has not only formal, but even material legal force. In the case of owner land debts, a real agreement on equal status is not required, so that a unilateral declaration by the property owner when ordering is sufficient. Owner mortgage debts are customary, in which the collateral is provided by an assignment outside the land registry to the lender. Since this assignment is not entered in the land register, the creditors usually do not have an overview of the use (value date) of the equality framework.

Such peer group frameworks are typical for industrial companies that pursue the following motives:

  • high flexibility for future credit requirements,
  • low level of transparency among future creditors,
  • no ranking problems for later lenders.

Legal fate of personal claim

If the land charge capital is paid (for whatever reason), this has the following effects on the personal claim of the land charge creditor:

  • If the security seller and the borrower are identical, the land charge becomes the owner's land charge, and at the same time the bank's personal claims are reduced.
  • If the guarantor pays for the borrower who is not identical to him , the personal claim of the bank (against the borrower) remains as an exception, and the land charge becomes the owner's land charge . However, the bank can then no longer assert the outstanding claim (against the personal debtor ) because it would obtain double satisfaction. Due to the security agreement, the bank has to assign this claim to the security seller, since there is no legal subrogation (“ cessio legis ” as with the mortgage, here automatic) with the land charge .

Individual evidence

  1. ↑ Joachim Süchting, Finanzmanagement: Theory and Politics of Corporate Finance , 1995, p. 154
  2. Jump up ↑ Peter Svoboda, operational financing , 1994, p. 20 f.
  3. ↑ BGH NJW 1985, 100
  4. ↑ BGH NJW 1986, 2108
  5. ↑ BGH WM 1980, 982
  6. ^ BGH WM 1987, 202
  7. ↑ BGH WM 1988, 1259
  8. ↑ BGH ZIP 1988, 1096