German right

The mortgage is after German thing right a mortgage lien. It can be justified at the property at a property, at the hereditary building law, at the residential property or at the building property. The owner of the mortgage is entitled to demand the payment of a certain sum of money from property. That is, the owner of the mortgage may use substance and uses of property by execution ("§ 1147 BGB), in order to receive the fixed sum of money. This can prevent the debtor by payment to the creditor, "§ 1142 BGB. By the mortgage property is pawned to the creditor. The meaning of the mortgage continues to withdraw in practice to favour of the land charge always. Today only approximately 20% of the encumberances of property are ordered as Hypotheken.

To pledge rights at ships the special regulations apply to the ship mortgage, which resemble large to the mortgage liens those.

Relationship to the personal demand

Contrary to the land charge an intensive linkage of the mortgage at property with the personal demand exists against the debtor. For the mortgage the existence of such a personal demand directed toward the payment of money is an indispensable legal condition. This personal demand is typically a demand for loan, must it however legally not be, also all other personal pecuniary claims (for example from other contracts or also claims for damages) can by a mortgage become secured.

To the elucidation an example: The owner (E) orders the bank (B), to the safety device of a loan at a value of 100.000 "€, a mortgage at his property. In the course of the years it re-imbursed 70,000 "€ to the bank. The bank has demand for loan at a value of 30.000 against the owner still another "€. If it stops now the payment, then the bank can demand only 30,000 "€ from the mortgage, because the height of the mortgage shrinks with each payment of the owner, which it transacts on the loan. At the same time a of equal standing owner land charge at height of the payments made so far develops on the loan. Therefore E has an owner land charge at a value of 70.000 "€ acquired, which is not registered in the land register, but nevertheless material-legally exists. The land register is in so far incorrect and can by E be corrected.

In bank practice three contractual relations are to be differentiated approximately around the creation of a mortgage.

1. The loan agreement, from which regularly the demand of the bank results opposite the borrower, e.g. a requirement for loan repayment.
2. The material agreement over the order of a mortgage at the property of the debtor, if this property owner is or at the property third, that itself ready avowedly to secure with his property the demand of the debtor.
3. The safeguard agreement also safeguard contract mentioned. The present Treaty forms the contractual basis for the creation of a mortgage.

From it the following legal consequences result:

• If the loan agreement is futile, then strength of law a mortgage, but an owner land charge does not develop. In the doubt the mortgage does not secure then the requirement for repayment of the bank, which from the fact it results that this already disbursed the loan amount and only afterwards herausgesetllt itself that the loan agreement was invalid.
• If the material agreement is futile, e.g. because of legal incapacity of the property owner, then no material right at property develops. Against it if the bank afterwards successfully contests the agreement because of a mistake and if the mortgage is already registered in the land register, then according to dominant opinion an owner land charge developed.
• With inefficacy of the safeguard agreement the mortgage is regularly effective due to the abstraction principle valid in the German right. The property owner has then however a right to erasure of the mortgage, since none exists then argument for the mortgage.

The bank can proceed in principle in two different way against the not-paying debtor. On the one hand the contractual requirement for repayment from the loan agreement is entitled to the bank. Due to this requirement the debtor clings with his entire fortune. In addition the bank can use property loaded with the mortgage in the way of the execution. Then you only proceeds are entitled, which result from property. In this case only property and not the debtor cling personally.

Order of the mortgage

The mortgage results to the mortgage from agreement ("§ 873 Abs.1 BGB compare) between the owner and the owner of the personal demand and entry ("§"§ 873, 1115 compare Abs.1 BGB) into the land register. With the certified mortgage, which is to represent the rule after the law, the mortgage in a special mortgage deed is confirmed by a document. It is reached that the mortgage without entry in the land register by assignment of the demand and delivery of the letter will transfer can, which increases its negotiableness. In the case of the certified mortgage additionally the delivery of the mortgage deed is necessary for the emergence as mortgage apart from agreement and entry; before the letter delivery it concerns an owner land charge.

Transmission of the mortgage

The transmission of the mortgage takes place via transfer of the secured demand. For the effective transmission of a certified mortgage - this form of the mortgage is the rule in practice - the declaration of acknowledgement must be given in writing. In addition the mortgage deed must be handed over to the Erwerber. With the transition of the demand to the Erwerber the mortgage turns into on the new owner. This legal rule of the mortgage is called traffic mortgage. During its transmission the problem places itself that the Erwerber could not rely at the time of strict execution of the dependence of the mortgage on the demand on contents of the land register, because it would have to always examine whether the personal demand (still) exists. For the overcoming of this difficulty the public faith in the correctness of the land register for the mortgage extends also to the demand after the civil law book. The mortgage can be acquired thus also in good faith if against the land register the demand does not exist (more).

To the transmission the following applies for the uncertified mortgage: With this form of the mortgage the distribution of a letter is impossible, therefore it offers a increased protection from Erwerbern in good faith for the owner, but but it is reduced regarding their negotiableness. For its transmission it is necessary that the transfer is registered into the land register. Only with completion of this entry the owner change is carried out. Banks do not get involved to the safety device of a loan in the order of an uncertified mortgage.

Economic reason for the transmission of the mortgage demand sales or for example conversion of debts can be.

To the cautionary mortgage that does not apply. It is strictly accessory for personal demand. With their the Erwerber cannot appoint itself as the proof of the demand to the land register. The cautionary mortgage is simultaneous as book right, i.e. out-arranges without letter.

The floating charge represents a special case of the cautionary mortgage. It is a cautionary mortgage, with which not a certain demand in certain height becomes secured, but in the land register only one maximum amount is called, the statement of the demand however reserving remains.

Transformation into an owner land charge

Even if the demand, to which the mortgage refers, by which owners was erased, the mortgage remains nevertheless registered in the land register. By the distribution of a deletionable receipt, in which the bank keeps that the underlying demand was erased by the owner, the owner the possibility, the covered owner land charge registered at present confirmed into an open owner land charge to convert. In addition it contacts with the deletionable receipt a notary of its choice, which its request for rewriting authenticates and this the land register office submits.

Adhesionadhesion adhesion

The adhesion of property for the mortgage extends to the substantial and not substantial components including the products, to the accessories of property, the renting and demands for lease and to the demands for insurance from the insurance of articles, which belong to the adhesion mass.

Economic meaning

In practice the mortgage was displaced to a large extent by the land charge. Practical meaning has it however still as judicial mortgage and building craftsman cautionary mortgage.

Loans, which are besichert by Hypotheken, can be usually granted to more favorable interest rates. If the mortgage does not exceed 60% of the loan to value ratio of property, the load of responsible own resources reduces with the credit-giving bank. Via responsible own resources finally the height of the credits altogether which can be assigned from Kreditinstitut to is steered, this is regulated in the German right in the credit system law.

Become if mortgage loans of specialized credit institutes, which mortgage banks or ship mortgage banks, grants, then for these the refinancing at the capital market is facilitated by the emission by mortgage bonds. This can lead again to smaller refinancing costs.

Austrian right

In the Austrian thing right the mortgage is a pledge right at an immovable thing and thus, contrary to the German right, also by definitionem a pledge right.

see also: ''' Pledge right ''' /Hypothek

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