Ranking (land register Germany)
Order of precedence (Germany) in land register law is the legally established order of several rights registered in the same land register , which affects the distribution of the proceeds from a foreclosure sale of the property .
General
A ranking is irrelevant as long as no or only one right is entered in the land register - except for property , which is an absolute right excluded from priority regulations. However, it is permissible to enter several rights in the same land register so that a ranking is created among these rights that must be taken into account when the property is foreclosed. This expresses the priority principle prevailing in property law , according to which a right established earlier takes precedence over a later right. If the auction proceeds are not sufficient to satisfy all of the creditors' rights, the rights that are last in the ranking are wholly or partially empty. 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.
As in all land register law, a distinction must be made between substantive and formal land register law when determining priority. The material law contained in the German Civil Code (BGB) states how a right is created, transferred or deleted. The formal law contained in the land register regulation regulates how the substantive law is specifically implemented in the land register.
Origin of the ranking
The Land Registry is the registration procedure to an essential role because it determines the entry order and will decide on the registered in the Land Registry ranking. Since the date of entry is of fundamental importance ( § 879 Paragraph 1 BGB), according to § 13 Paragraph 2 GBO, the time of receipt of the application at the land registry must be precisely noted ("present"). The date, hour and minute of receipt must be noted (Section 19 Paragraph 2 Business Handling Land Register Matters). In § 17 GBO it is determined that the land registry has to adhere to the order of receipt for the processing sequence. It is therefore not necessary to process incoming land register applications on the same day in order to maintain the legal order of precedence resulting from the entry in the land register. The land registry is forced to take over the postal order of receipt when registering.
Determination of priority
When entering rights, the date on which they were entered is important. The legal regulation in § 879 BGB, which distinguishes between rights in the same and rights in both sections II and III of the land register, is decisive for the ranking within the rights .
Rights in the same department
According to § 879 Paragraph 1 Clause 1 BGB and § 45 Paragraph 1 GBO, the so-called “ locus principle ” (optical order of entries) applies to multiple rights in the same department , so III / 1 has priority over III / 2 etc. Should the Exceptionally, rights standing in the same department (among each other) have equal status, this must be specially noted ( Section 879 Paragraph 3 BGB, Section 45 Paragraph 1 GBO). This is particularly important if several rights are applied for at the same time for the same department. Since rights can only be registered if they have been notarized, notarial ranking is of crucial importance. If several rights are applied for at the same time, the notary must precisely instruct the land registry which order of precedence is to be adhered to when registering in the same department, as several rights are usually submitted by post to the land registry by the notary on the same day. Several rights for the same department received on the same day at the office are given the same date of entry, so that the order of entry determines the ranking.
Rights in different departments
According to Section 879, Paragraph 1, Clause 2 of the German Civil Code (BGB), the ranking is not only compared within a department, but a decision is made on the ranking of the rights of Dept. II and III. To make this possible, the so-called " tense principle " (time of entries) applies . If, therefore, right II / 1 was entered earlier than III / 1 from the date of entry, II / 1 has priority. If a right is entered in Section II and a right in Section III on the same day, they have equal status.
Absolute and relative ranking
§ § 880 , § 881 BGB (change of rank and reservation of rank) results in a relative rank relationship for the rights concerned, whereby the land register loses clarity. Confusion is mainly created by these relative rank relationships, so that they should be replaced by absolute ones if possible. The reservation of priority in the land register enables the owner of a property to reserve a prior position for himself if a third party establishes a right to his property according to § 881 BGB. In the event that a property is encumbered with a right, the owner can reserve the right to later register another right with a specific scope with the rank before this right or with the same rank. The reservation of priority overrides the statutory principle of priority. This is because it causes the encumbered right to subordinate in favor of the reserved later right. If, after the encumbered right has been entered, but before the reserved right has been entered, another right is entered without reservation of priority (interim right), then relative rankings arise. The unencumbered intermediate right is not affected by the reservation of precedence ( Section 880 (5) BGB), so it must not be discriminated against by exercising it. The intermediate right therefore retains its previous rank even after the reservation of priority has been exercised. On the other hand, the right encumbered with the reservation of precedence may not be encumbered beyond the reservation of precedence through the later entry of unencumbered interim rights in the event that the reservation of precedence is exercised. The situation is similar with the change of rank, through which the ranking entered in the land register can be changed retrospectively by those involved. A ranking note from the land registry makes it clear that the registered ranking no longer applies due to the change in ranking. Here, too, the principle applies that intermediate rights are not affected by the change in rank and therefore have neither an advantage nor a disadvantage from the change in rank.
There are several possibilities to achieve effective priority of a mortgage lien ordered by the seller with the consent of the buyer over the notice of conveyance. On the one hand, a reservation of priority can be granted in the purchase contract for the reservation of title and a corresponding change in ranking can be carried out later, as already explained. Alternatively, the priority of the real estate lien can be achieved by means of a validity note in the land register. For this, it is necessary that the seller permits this in the purchase contract, for example through a corresponding debit authorization, and that the express consent of the buyer is notarized, for example by including a corresponding passage in the land charge deed. As the next step, a notice of effectiveness must be entered for both the reservation and the land charge. Such a notice of effectiveness has the same legal effect as a change of rank.
Some land registry offices carry out the validity note free of charge, others charge the same fee for this as for a change of rank. In the opinion of the Stuttgart Higher Regional Court, the entry of a notice of effectiveness, provided it occurs at the same time as the land charge entry, is to be made free of charge, even if the notice of conveyance was initially entered without the notice of effectiveness. The Bavarian Higher Regional Court had come to a different view in an earlier decision.
Public burdens
There are rights of third parties that are not in the land register because they cannot be registered, but still have an impact on the hierarchy. Public encumbrances that rest on a property are not entered in the land register. The owners entered in the land register are debtors. In the foreclosure auction process, debts from public burdens are satisfied at the level of rank 3, whereas claims from rights registered in the land register only receive rank 4. Public burdens therefore enjoy absolute priority. Public burdens include a. the property tax , chimney sweep fees , canal tolls, fees for street cleaning and improvement contributions .
Follow the entered ranking
The rank of rights to one another is a legal relationship and not a right and therefore cannot be attached. The rank is a legal characteristic of the respective law. The order of priority entered by the land registry has formal legal force. The rights were created through registration, even if the land registry did not observe the regulations on the order of registration. In the case of an official violation of the order of entry, it is not possible to speak of an entry that is inadmissible in terms of content in accordance with Section 53 Paragraph 1 Sentence 2 GBO, because this only includes entries that cannot exist with the entered content for legal reasons. Violations by the office of § 17 and § 45 GBO do not make the land register incorrect, so that there is no right to correction and no possibility of official objection ( § 53 para. 1, § 71 para. 2 GBO). The disadvantaged from incorrect entry has no claim to enrichment from the beneficiary, only the claim for compensation from § 839 BGB ( breach of official duty ) remains .
Colloquially, the ranking of land register law gave rise to the “first mortgage”, which is considered to be particularly secure and is granted by credit institutions as a real estate loan. The “first mortgage” does not have to share the auction proceeds with other competing rights in the event of realization. Accordingly, “subordinated mortgages” are more likely to be at risk of default. So-called “ subprime mortgages ”, however, are loans secured by real estate to borrowers with poor creditworthiness and have nothing to do with the ranking of the mortgage.
Individual evidence
- ↑ Joachim Kuntze: Land Register Law: Commentary on the Land Register Regulations and Land Register Decree . 1999, p. 986.
- ↑ Note on effectiveness. (No longer available online.) Archived from the original on March 4, 2016 ; Retrieved June 6, 2013 . Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ↑ BGH NJW 1999, 2275 (at lexetius.com)
- ↑ Note on effectiveness. Reno-Saar e. V., accessed June 6, 2013 .
- ↑ Effectiveness note - the alternative to the change of rank in the purchase price financing land charge. Reno-Saar e. V., accessed June 6, 2013 .
- ↑ OLG Stuttgart, May 30, 2011, 8 W 192/11. (PDF; 17 kB) (No longer available online.) Formerly in the original ; Retrieved June 7, 2013 . ( Page no longer available , search in web archives ) Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice.
- ^ Decision of February 26, 1998 - 3 Z BR 277/97
- ↑ a b BGH, judgment of July 18, 1997, Az .: V ZR 121/96.
- ↑ BGHZ 45, 186, 191.
- ↑ BGHZ 21, 98, 100.
