Rank (property law)
In property law, a rank is understood to mean the position that a limited real right has in comparison to other rights.
General
Apart from the absolute right of property , which as a rule cannot have any rank, the other limited real rights are not equal to one another, but are ranked relative to one another. This applies both to the mortgage liens on real estate and rights equivalent to real estate as well as to rights to movable property and rights . The possibility of a majority of rights to the same thing requires the establishment of a principle about the order in which the creditors are entitled to the proceeds from the exploitation of their rights, if the proceeds are not sufficient to satisfy all creditors.
Rank in land registry rights
A ranking is optically clear with rights in the land register . If there is more than one registered right in sections II and III of the land register, the order in which the entries are made gives rise to a ranking among these rights. This order of precedence can result from the order of entry in the land register ( locus principle ) as well as from the chronological order of entry ( tense principle ). The ranking means that in a foreclosure auction the rights with a higher rank are satisfied before the rights with a lower rank. For the satisfaction of rights, the hierarchy that exists among them is decisive ( Section 11 ZVG ), which is expressed when the lowest bid is determined. The rank is therefore of decisive importance for the risk of the creditor also - and especially - of mortgages and is taken into account by credit institutions through the lending period ( principle of sliding rank ).
To secure the rank it is possible for the property owner to register an owner land charge for himself in order to secure the rank position for a later loan , for example . It is also possible to enter a reservation of priority ( § 881 BGB). The rank of a right can be changed retrospectively by changing its rank ( § 880 BGB). This subordination requires the consent of both rightholders (both the advancing and the withdrawing), while any intermediate right may not be disadvantaged. This change of rank requires notarial certification and must be entered in the land register to be effective.
Rank with other real rights
This also applies to the other real rights to movable property, the so-called liens on furniture ( pledging and lien ). In the absence of publicity as in the land register, a ranking is not externally recognizable, but it is available. According to the priority principle , the earlier right takes precedence over a later one. Because according to § 1209 BGB the time of the order is decisive for the rank of the lien. This results in a “race” among the creditors , especially in the individual foreclosure . In the distribution of the proceeds from the realization of the pledge, the lower-ranking creditor always only gets his turn after the previous one has been satisfied. The time of the order of the right is decisive. According to Section 1247 of the German Civil Code (BGB), the pledging creditor acquires ownership of the auction proceeds, insofar as he is entitled to this according to his rank. If the utilizing creditor takes precedence over other liens, he may appropriate the proceeds of the utilization to which he is entitled according to his rank .
Rank in unsecured claims
Unsecured claims (unsecured loans ) of different creditors do not have any rank in relation to the common debtor , but in the crisis of the debtor a “race” of the creditors for loan collateral or for debt servicing can develop. The debtor could change the order of the debt servicing unilaterally when liquidity is scarce and thereby create a ranking. So that unsecured claims cannot acquire a better ranking among each other, negative declarations are supplemented by pari-passu clauses and guarantee the beneficiary of these covenants debt servicing on an equal footing with other unsecured creditors up to bankruptcy or out-of-court restructuring .
See also
Individual evidence
- ↑ Reinhold Johow: Property Law, Part 2: Restricted rights in rem and material foreclosure law , 1982, p. 431.
- ↑ Reinhold Johow: Property Law, Part 2: Restricted rights in rem and material foreclosure law , 1982, p. 412.
- ↑ Axel Schlieter, The pledging of GmbH shares , 2009, p. 149
