Last Updated on June 28, 2021 by LawEuro
German Civil Code (BGB) German law
Division 7
Mortgage, land charge, annuity land charge
Title 1
Mortgage
Section 1113
Statutory contents of the mortgage
(1) A plot of land may be encumbered in such a way that the person in whose favour the encumbrance is created is to be paid out of the land a specific sum of money to satisfy a claim to which he is entitled (mortgage).
(2) The mortgage may also be created for a future or a conditional claim.
Section 1114
Encumbrance of a fraction
A fraction of a plot of land may be encumbered with a mortgage only if it consists in the share of a co-owner, except in the cases set out in section 3 (6) of the Land Register Act [Grundbuchordnung].
Section 1115
Registration of the mortgage
(1) Upon the registration of the mortgage, the creditor, the amount of the claim and, where the claim bears interest, the rate of interest, and if other supplementary payments are to be made, their amount, must be stated in the Land Register; apart from this, in order to describe the claim, reference may be made to the consent to registration.
(2) Upon the registration of the mortgage for a loan by a credit institution whose articles of association have been publicly disclosed by the public authority responsible, reference to the articles of association is sufficient to designate the supplementary payments apart from the interest that are to be made in accordance with the articles of association.
Section 1116
Certificated and uncertificated mortgage
(1) A mortgage certificate shall be issued on the mortgage.
(2) The issue of the certificate may be excluded. This exclusion may also be effected subsequently. The exclusion requires the agreement of the creditor and of the owner as well as registration in the Land Register; the provisions of section 873 (2) and of sections 876 and 878 apply with the necessary modifications.
(3) The exclusion of the issue of the certificate may be cancelled; the cancellation takes place in the same way as the exclusion.
Section 1117
Acquisition of the certificated mortgage
(1) If the issue of a mortgage certificate is not excluded, the creditor acquires the mortgage only when he is provided with the certificate by the owner of the plot of land. The provisions of section 929 sentence 2 and sections 930 and 931 apply to the delivery.
(2) The delivery of the certificate may be replaced by the agreement that the creditor is to be entitled to have the Land Registry deliver the certificate to him.
(3) If the creditor is in possession of the certificate, it is presumed that delivery has taken place.
Section 1118
Liability for incidental claims
By operation of the mortgage, the plot of land is also liable for the statutory interest on the claim and for the costs of calling it in and of the pursuit of rights for the purpose of obtaining satisfaction from the plot of land.
Section 1119
Extension of liability for interest
(1) If the claim is interest-free or if the rate of interest is less than five per cent, the mortgage may, without the approval of the persons entitled with equal or lower priority, be extended so that the plot of land is liable for interest of up to five per cent.
(2) For an amendment to the time and place of payment, the approval of these persons entitled is likewise unnecessary.
Section 1120
Extension to products, parts and accessories
The mortgage extends to the products separated from the plot of land and to other components unless, by separation in accordance with sections 954 to 957, they passed into the ownership of a person other than the owner or the owner-occupier of the plot of land, as well as to the accessories of the plot of land with the exception of accessories that have not passed into the ownership of the owner of the plot of land.
Section 1121
Release from liability through disposal and removal
(1) Products and other components of the plot of land as well as accessories are released from liability if they are alienated and removed from the plot of land before they are seized for the benefit of the creditor.
(2) Where the disposal occurs before the removal, the purchaser may not plead in relation to the creditor that he was in good faith in respect of the mortgage. Where the purchaser removes the thing from the plot of land, a seizure effected prior to the removal is effective in relation to him only if he is not in good faith in respect of the seizure upon removal.
Section 1122
Release from liability without disposal
(1) Where the products or components have been separated, within the limits of proper management, from the plot of land, then their liability is extinguished even without disposal if they are removed from the plot of land before they are seized, unless the removal takes place for a temporary purpose.
(2) Accessories are released from liability without disposal if they lose the quality of being accessories, within the limits of proper management, before their seizure.
Section 1123
Extension to claim for rent or for usufructuary rent
(1) If the plot of land is let on lease or usufructuary lease, the mortgage extends to the claim for rent or for usufructuary rent.
(2) To the extent that the claim is due, it is released from liability upon the expiry of one year from the due date, unless it is attached in favour of the mortgage creditor prior to this date. If the rent or usufructuary rent is payable in advance, the release does not extend to the rent or usufructuary rent for a period later than the calendar month current at the time of the attachment; if the attachment is effected after the fifteenth day of the month, the release also extends to the rent or the usufructuary rent for the following calendar month.
Section 1124
Advance disposition of the rent or usufructuary rent
(1) If the rent or usufructuary rent is collected before it is attached in favour of the mortgage creditor, or if it is disposed of in another way prior to the attachment, the disposition is effective in relation to the mortgage creditor. If the disposition consists in the transfer of the claim to a third party, the liability for the claim is extinguished; if a third party acquires a right to the claim, it has priority over the mortgage.
(2) The disposition is ineffective in relation to the mortgage creditor to the extent that it relates to the rent or usufructuary rent for a period later than the calendar month current at the time of the attachment; however, if the attachment is made after the fifteenth day of the month, the disposition is effective insofar as it relates to the rent or usufructuary rent for the following calendar month.
(3) If the plot of land is alienated without the claim, this is equivalent to the transfer of the claim to a third party.
Section 1125
Set-off against rent or usufructuary rent
To the extent that the collection of the rent or usufructuary rent is ineffective in relation to the mortgage creditor, the lessee or the usufructuary lessee may not set off against the mortgage creditor a claim of the lessee or usufructuary lessee against the lessor or the usufructuary lessor.
Section 1126
Extension to recurring acts of performance
If a right to recurring acts of performance is connected with the ownership of the plot of land, the mortgage extends to claims for these acts of performance. The provisions of section 1123 (2) sentence 1, section 1124 (1) and (3) and section 1125 apply with the necessary modifications. A disposition made before the attachment in respect of a claim for an act of performance that first becomes due three months after the attachment is ineffective in relation to the mortgage creditor.
Section 1127
Extension to insurance claim
(1) If objects that are subject to the mortgage are covered by insurance for the owner or the owner-occupier of the plot of land, the mortgage extends to a claim against the insurer.
(2) Liability for the claim against the insurer is extinguished, if the insured object is restored to its original condition or a replacement is provided for it.
Section 1128
Insurance on buildings
(1) If a building is insured, the insurer may not pay the insured sum to the insured with effect in relation to the mortgage creditor until the insurer or the insured has notified the mortgage creditor that the damage has occurred and once one month has passed since the receipt of the notification. The mortgage creditor may, before the expiry of this period, make an objection to the insurer with regard to the payment. The notification may be omitted if it is impracticable; in this case the month is calculated from the point of time at which the insured sum becomes due.
(2) Where the mortgage creditor has notified the insurer of his mortgage, the insurer may only pay to the insured, with effect in relation to the mortgage creditor, if the mortgage creditor has given his approval to the payment in writing.
(3) Apart from this, the provisions governing a pledged claim apply; the insurer may not, however, plead that he did not know of the mortgage shown in the Land Register.
Section 1129
Other insurance against damage
If an object other than a building is insured, the liability for the claim against the insurer is determined in accordance with the provisions of section 1123 (2) sentence 1 and section 1124 (1) and (3).
Section 1130
Replacement clause
If, under the insurance provisions, the insurer is obliged to pay only the insured sum to replace the insured object, a payment to the insured in accordance with these provisions is effective in relation to the mortgage creditor.
Section 1131
Addition of a plot of land
If a plot of land is added to another plot of land in the Land Register under section 890 (2), the mortgages in existence on this plot of land extend to the added plot of land. Rights encumbering the added plot of land have priority over these mortgages.
Section 1132
Blanket mortgage
(1) If there is one mortgage on more than one plot of land for the claim (blanket mortgage), each plot of land is liable for the entire claim. The creditor may, at his discretion, seek satisfaction from each plot of land in whole or in part.
(2) The creditor is entitled to apportion the amount of the claim between the individual plots of land in such a way that each plot of land is liable only for the apportioned amount. The provisions of sections 875, 876 and 878 apply with the necessary modifications to the apportionment.
Section 1133
Danger to the security of the mortgage
If, as a result of the deterioration of the plot of land, the security of the mortgage is endangered, the creditor may determine for the owner a reasonable period of time to remove the danger. After the expiry of the period, the creditor is entitled to seek satisfaction from the plot of land immediately, if the danger has not been removed by the improvement of the plot of land or by the creation of another mortgage. If the claim is interest-free, and is not yet due, the creditor is entitled only to the amount which, when the statutory interest for the period from payment until due date is added to it, equals the amount of the claim.
Section 1134
Application for an injunction
(1) If the owner or a third party influences the plot of land in such a way that a deterioration of the plot of land that endangers the security of the mortgage is to be feared, the creditor may seek a prohibitory injunction.
(2) If the influence originates from the owner, the court shall, upon application by the creditor, order the measures that are required to avert the danger to be taken. The same applies if the deterioration is to be feared because the owner fails to take the necessary precautions against the influence of third parties or against other damage.
Section 1135
Deterioration of accessories
It is equivalent to a deterioration of the plot of land within the meaning of sections 1133 and 1134 if accessories to which the mortgage extends deteriorate or are removed from the plot of land against the principles of proper management.
Section 1136
Restraint on disposition by legal transaction
An agreement by which the owner binds himself in relation to the creditor not to alienate the plot of land or not to further encumber it is void.
Section 1137
Defences of the owner
(1) The owner may assert against the mortgage the defences that are available against the claim to a personal obligor, as well as those available to a surety under section 770. If the personal debtor dies, then the owner may not invoke the fact that his heir has only limited liability for the obligation.
(2) If the owner is not the personal debtor, he does not lose a defence by the latter waiving it.
Section 1138
Presumption of the accuracy of the contents of the Land Register
The provisions of sections 891 to 899 also apply to the mortgage, taking into consideration the claim and the defences available to the owner in accordance with section 1137.
Section 1139
Objection with regard to an uncertificated mortgage for a loan
If, upon the creation of a mortgage for a loan, the issue of a mortgage certificate is excluded, then an application of the owner to the Land Registry suffices to register an objection on the basis that the loan has not been provided, provided that the application is made before the expiry of one month after the mortgage is registered. If the objection is registered within this month, then the registration has the same effect as if the objection had been registered at the same time as the mortgage.
Section 1140
Mortgage certificate and inaccuracy of the Land Register
Insofar as the inaccuracy of the Land Register is apparent from the mortgage certificate or from a memorandum on the certificate, the invocation of the provisions of sections 892 and 893 is excluded. An objection to an incorrect entry in the Land Register that is apparent from the certificate or from a memorandum on the certificate is equivalent to an objection entered in the Land Register.
Section 1141
Notice of termination of the mortgage
(1) Where the due date of the claim is dependent on the giving of notice of termination, the notice is effective in respect of the mortgage only if it is given by the creditor to the owner or by the owner to the creditor. For the benefit of the creditor, the person registered as owner in the Land Register is deemed to be the owner.
(2) If the owner has no residence within the country, or if the requirements of section 132 (2) have been fulfilled, the local court [Amtsgericht] within whose district the plot of land is situated shall appoint for the owner, upon application by the creditor, a representative on whom the notice of the creditor can be served.
Section 1142
Owner’s right of satisfaction
(1) The owner is entitled to satisfy the creditor if the claim against him has fallen due or if the personal debtor is entitled to perform.
(2) The satisfaction may also take place by deposit or by set-off.
Section 1143
Passing of claim
(1) If the owner is not the personal debtor, then the claim, to the extent that the owner satisfies the creditor, passes to him. The provisions of section 774 (1), governing a surety, apply with the necessary modifications.
(2) If there is a blanket mortgage in relation to the claim, the provisions of section 1173 apply to it.
Section 1144
Delivery of documents
The owner may, in return for satisfaction of the creditor, demand delivery of the mortgage certificate and the other documents which are required for the correction of the Land Register or for the deletion of the mortgage.
Section 1145
Partial satisfaction
(1) If the owner satisfies the creditor only in part, he is not entitled to demand that the mortgage certificate is delivered. The creditor is obliged to record the partial satisfaction on the certificate and to present the certificate to the Land Registry for the purpose of the correction of the Land Register or for deletion, or to the public authority responsible or the notary responsible for the purpose of issuing a partial mortgage certificate for the owner.
(2) The provision of subsection (1) sentence 2 applies to interest and other supplementary payments only if they are due later than in the calendar quarter in which the creditor is satisfied or in the following quarter. Costs for which the plot of land is liable under section 1118 are not governed by the provision.
Section 1146
Default interest
If the requirements for a debtor to be in default are satisfied with regard to the owner, the creditor is entitled to default interest from the plot of land.
Section 1147
Satisfaction by execution
The satisfaction of the creditor from the plot of land and from the objects to which the mortgage extends is effected by execution.
Section 1148
Fiction of ownership
In the pursuit of the right arising from the mortgage, the person who is registered as owner in the Land Register is, for the benefit of the creditor, deemed to be the owner. The right of the unregistered owner to assert the objections to the mortgage to which he is entitled remains unaffected.
Section 1149
Prohibited agreements on satisfaction
The owner may not, as long as the claim has not fallen due in respect to him, allow the creditor the right to demand the transfer of the ownership of the plot of land for the purpose of satisfaction or to effect the disposal of the plot of land in any way other than by execution.
Section 1150
Right of redemption of third parties
If the creditor demands satisfaction from the plot of land, the provisions of sections 268, 1144 and 1145 apply with the necessary modifications.
Section 1151
Change of priority for partial mortgages
If the claim is divided, the approval of the owner is not required to change the order of priority between the partial mortgages.
Section 1152
Partial mortgage certificate
If there is a division of the claim, then unless the issue of a mortgage certificate is excluded, a partial mortgage certificate may be issued for each part; the approval of the owner of the plot of land is not required. The partial mortgage certificate takes the place of the previous certificate for the part to which it relates.
Section 1153
Transfer of mortgage and claim
(1) Upon the transfer of the claim, the mortgage passes to the new creditor.
(2) The claim may not be transferred without the mortgage; the mortgage may not be transferred without the claim.
Section 1154
Assignment of the claim
(1) For the assignment of the claim, it is necessary to make the declaration of assignment in writing and to hand over the mortgage certificate; the provision of section 1117 applies. The previous creditor shall, at the request of the new creditor, arrange for the declaration of assignment to be notarially certified at his expense.
(2) The written form required for the declaration of assignment may be replaced by the entry of the assignment in the Land Register.
(3) If the issue of a mortgage certificate is excluded, the provisions of sections 873 and 878 apply with the necessary modifications to the assignment of the claim.
Section 1155
Presumption of the accuracy of certified declarations of assignment
If the right of the holder of the mortgage certificate as creditor arises from a connected series of notarially certified declarations of assignment that lead back to a registered creditor, the provisions of sections 891 to 899 apply in the same way as if the holder of the certificate were registered in the Land Register as a creditor. A judicial transfer order and a notarially certified acknowledgement of an assignment of the claim effected by operation of law are equivalent to a notarially certified declaration of assignment.
Section 1156
Legal relationship between the owner and the new creditor
The provisions of sections 406 to 408 governing the transfer of the claim do not apply to the legal relationship between the owner and the new creditor with regard to the mortgage. The new creditor must, however, permit a notice of termination of the owner served on the previous creditor to be asserted against himself unless the transfer is known to the owner or is registered in the Land Register at the time of the notice.
Section 1157
Continuation of defences to the mortgage
A defence which the owner is entitled to assert against the mortgage on the basis of the legal relationship existing between him and the previous creditor may also be relied on in relation to the new creditor. The provisions of sections 892, 894 to 899 and 1140 also apply to this defence.
Section 1158
Future supplementary payments
To the extent that the claim is for interest or other supplementary payments that do not fall due later than in the calendar quarter in which the owner obtains knowledge of the transfer, or in the following quarter, the provisions of sections 406 to 408 apply to the legal relationship between the owner and the new creditor; the creditor may not invoke the provisions of 892 against the objections that the owner is entitled to raise in accordance with sections 404, 406 to 408 and 1157.
Section 1159
Arrears of supplementary payments
(1) To the extent that the claim is for arrears of interest or other supplementary payments, the transfer and the legal relationship between the owner and the new creditor are governed by the general provisions that apply to the transfer of claims. The same applies to a claim for the reimbursement of costs for which the plot of land is liable in accordance with section 1118.
(2) The provision of section 892 does not apply to the claims designated in subsection (1).
Section 1160
Enforcement of a certificated mortgage
(1) The enforcement of a mortgage may be contested, unless the issue of a mortgage certificate is excluded, if the creditor does not present the certificate; if the creditor is not entered in the Land Register, the documents required under section 1155 must also be presented.
(2) A notice of termination or a warning given to the owner is ineffective if the creditor does not present the documents necessary under subsection (1) and the owner rejects the notice or the warning for this reason without undue delay.
(3) These provisions do not apply to the claims set out in section 1159.
Section 1161
Enforcement of the claim
If the owner is the personal debtor, the provision of section 1160 also applies to the enforcement of the claim.
Section 1162
Public notice with regard to the mortgage certificate
If the mortgage certificate has been lost or destroyed, it may be declared invalid by means of the public notice procedure.
Section 1163
Owner mortgage
(1) If the claim for which the mortgage is created fails to come into existence, the owner is entitled to the mortgage. If the claim is extinguished, the owner acquires the mortgage.
(2) A mortgage with regard to which the issue of a mortgage certificate is not excluded belongs to the owner until the certificate is handed over to the creditor.
Section 1164
Passing of the mortgage to the debtor
(1) If the personal debtor satisfies the creditor, the mortgage passes to him to the extent to which he may demand compensation from the owner or from a predecessor in title of the owner. If the debtor is to be compensated only in part, the owner may not enforce the mortgage, to the extent that it has passed to him, to the disadvantage of the mortgage of the debtor.
(2) If the claim and the debt are merged in one person, this is equivalent to satisfying the creditor.
Section 1165
Discharge of the debtor
If the creditor waives the mortgage, or if he cancels it in accordance with section 1183, or grants priority to another right, the personal debtor is discharged to the extent that, without this disposition, he might have obtained compensation from the mortgage in accordance with section 1164.
Section 1166
Notification of the debtor
In the case where the personal debtor is entitled to demand compensation from the owner if he satisfies the creditor, then he may, if the creditor pursues a compulsory auction of the plot of land and does not notify him without undue delay, refuse to satisfy the creditor for a loss at the compulsory auction to the extent that he suffers damage as a result of the failure to notify. The notification may be omitted if it is impracticable.
Section 1167
Delivery of correction documents
In the case where the personal debtor, if he satisfies the debtor, acquires the mortgage, or where, in the event of satisfaction, he has another legal interest in a correction of the Land Register, he has the rights set out in sections 1144 and 1145.
Section 1168
Waiver of the mortgage
(1) If the creditor waives the mortgage, the owner shall acquire it.
(2) The waiver must be declared to the Land Registry or to the owner and it must be registered in the Land Register. The provisions of section 875 (2) and sections 876 and 878 apply with the necessary modifications.
(3) If the creditor waives the mortgage with regard to part of the claim, the owner has the rights set out in section 1145.
Section 1169
Defence with a negative effect on a right
If the owner is entitled to a defence that permanently excludes the enforcement of the mortgage, then he may demand that the creditor waive the mortgage.
Section 1170
Exclusion of unknown creditors
(1) Where the creditor is unknown, his right may be excluded by means of a public notice procedure if ten years have passed since the last entry in the Land Register with reference to the mortgage and the right of the creditor has not been recognised by the owner within this period in a manner appropriate under section 212 (1) no. 1 for the limitation period to recommence. If a calendar date is stipulated for payment of the claim, this period shall not commence before the end of the payment date.
(2) When the exclusory order comes into legal effect, the owner acquires the mortgage. The mortgage certificate issued to the creditor becomes invalid.
Section 1171
Exclusion by deposit
(1) The right of the unknown creditor may also be excluded by way of a public notice procedure if the owner is entitled to satisfy the creditor or to give notice of termination, and deposits the amount of the claim for the creditor, at the same time waiving the right of revocation. The deposit of interest is required only if the rate of interest is registered in the Land Register; interest for a period earlier than the fourth calendar year prior to the exclusory order coming into legal effect is not required to be deposited.
(2) When the exclusory order comes into legal effect, the creditor is deemed to have been satisfied, unless under the provisions on deposit satisfaction has already occurred. The mortgage certificate issued to the creditor becomes invalid.
(3) The right of the creditor to the deposited amount lapses upon the expiry of thirty years after the exclusory order coming into legal effect if the creditor does not report to the place of deposit before then; the depositor is entitled to revoke, even if he has waived the right of revocation.
Section 1172
Owner blanket mortgage
(1) In the cases set out in section 1163, the owners of the encumbered plots of land are jointly entitled to a blanket mortgage.
(2) Each owner may, unless otherwise agreed, demand that the mortgage on his plot of land be restricted, in accordance with section 1132 (2), to the partial amount which is equivalent to the proportion between the value of his plot of land and the value of all of the plots of land, and that it is allotted to him with this restriction. The value is calculated with the deduction of the encumbrances which have higher priority than the blanket mortgage.
Section 1173
Satisfaction by one of the owners
(1) If the owner of one of the plots of land encumbered with a blanket mortgage satisfies the creditor, he acquires the mortgage on his plot of land; the mortgage on the other plots of land is extinguished. It is equivalent to the satisfaction of the creditor by the owner if the right of the creditor is transferred to the owner, or if the claim and debt are merged in the person of the owner.
(2) If the owner who satisfies the creditor is entitled to demand compensation from the owner of one of the other plots of land or from a predecessor in title of this owner, then the mortgage on the plot of land of this owner also passes to him in the amount of the claim for compensation; it remains a blanket mortgage, together with the mortgage on his own plot of land.
Section 1174
Satisfaction by the personal debtor
(1) Where the personal debtor satisfies the creditor to whom a blanket mortgage is owed, or where, in a blanket mortgage, the claim and debt are merged in one person, then if the debtor is entitled to demand compensation only from the owner of one of the plots of land or from a predecessor in title of the owner, the mortgage on this plot of land passes to him; the mortgage on the remaining plots of land is extinguished.
(2) If only partial compensation is payable to the debtor, and for this reason the mortgage passes to him only for a partial amount, the owner must allow this amount to be counted towards the part of the remaining amount of the blanket mortgage to which he is entitled in accordance with section 1172.
Section 1175
Waiver of the blanket mortgage
(1) If a creditor waives the blanket mortgage, it devolves on the owners of the encumbered plots of land jointly; the provisions of section 1172 (2) apply. If the creditor waives the mortgage on one of the plots of land, the mortgage thereon is extinguished.
(2) The same applies if the right of the creditor is excluded in accordance with section 1170.
Section 1176
Owner partial mortgage ; conflict clause
If the requirements set out in sections 1163, 1164, 1168 and 1172 to 1175 are fulfilled only in respect of a partial amount of the mortgage, the mortgage, which on the basis of these provisions passes to the owner or to one of the owners or to the personal debtor, may not be enforced to the disadvantage of the mortgage that remains to the creditor.
Section 1177
Owner land charge, owner mortgage
(1) If the mortgage and the ownership are merged in one person, and the owner is not also entitled to the claim, the mortgage is converted into a land charge. With regard to whether the loan bears interest, the rate of interest, period for payment, notice of termination and place of payment, the provisions laid down for the claim remain decisive.
(2) If the claim is also owed to the owner, the rights of the owner under the mortgage are governed, as long as the merger exists, by the provisions applicable for a land charge of the owner.
Section 1178
Mortgage for supplementary payments and costs
(1) A mortgage for arrears of interest and other supplementary payments as well as for costs that are payable to the creditor is extinguished if it is merged with the ownership in one person. Extinction does not take place as long as a third party has a claim for any such performance.
(2) It is sufficient for a waiver of the mortgage for the performance set out in subsection (1) if the creditor makes a declaration to the owner. As long as a third party has a claim for such performance, the approval of the third party is necessary. Approval is to be declared to the person in whose favour it is given; it is irrevocable.
Section 1179
Priority notice of right to deletion
Where the owner agrees in relation to another to have the mortgage deleted if it is merged with the ownership in one person, a priority notice to secure the claim for deletion may be registered in the Land Register, if the person in whose favour the registration is to be made:
1. holds another right having equal or lower priority as a mortgage, land charge or annuity charge on the plot of land, or
2. is entitled to the grant of another such right or to the transfer of ownership of the plot of land; the claim may also be future or conditional.
Section 1179a
Claim for deletion in the case of third party rights
(1) The creditor of a mortgage may demand of the owner that the owner arranges for the deletion of a mortgage having higher or equal priority if, at the time of registration of the mortgage of the creditor, it is merged with the ownership in one person or such merger occurs subsequently. If, after registration of the mortgage given precedence under sentence 1, the ownership passed to another by way of singular succession, each owner is obliged to delete with regard to the mergers existing at the time of his ownership. The claim for deletion is secured in the same way as if a priority notice had been entered in the Land Register for its security at the same time as the mortgage given precedence.
(2) The deletion of a mortgage which is merged with the ownership in one person under section 1163 (1) sentence 1 may not be demanded under subsection (1) unless it appears that the claim to be secured will no longer come into existence; however, the claim for deletion is available from this point of time on with regard to the mergers existing beforehand. A claim under subsection (1) is not constituted by the merger of a mortgage with ownership in accordance with section 1163 (2).
(3) If, in the case of a favoured mortgage, the requirements under section 1163 are satisfied but the right has not been entered in the Land Register for the owner or his successor in title, the claim for deletion belongs to the registered creditor or his successor in title.
(4) If the priority of a mortgage is reduced, subsections (1) to (3) apply with the necessary modifications to the deletion of the mortgage that is prior or equal in rank to it as a result of the change of priority, provided that the time of the registration of the change of priority takes the place of the time of registration of the right with lower priority.
(5) If the creditor of a mortgage has a claim to deletion under the above provisions, it may be agreed that the exclusion of this claim is part of the contents of the mortgage; the exclusion may be restricted to a specific case of merger. The exclusion is to be stated in the Land Register with a designation of the mortgages which are wholly or partially exempted from the claim for deletion; if the exclusion has not been agreed for every case of merger, then, in order to define specifically the cases involved, reference may be made to the approval of registration. If the exclusion is cancelled, no claims for deletion arise from this for mergers which existed only prior to the cancellation.
Section 1179b
Claim for deletion based on one’s own right
(1) A person who is registered in the Land Register as the creditor of a mortgage or is identified as the creditor in accordance with section 1155 may demand from the owner the deletion of the mortgage, if, at the time of its registration, it is merged with the ownership in one person or such a merger occurs subsequently.
(2) Section 1179a (1) sentences 2 and 3, (2) and (5) applies with the necessary modifications.
Section 1180
Substitution for the claim
(1) The claim for which the mortgage exists may be replaced by another claim. The alteration requires the agreement of the creditor and the owner, and registration in the Land Register; the provisions of section 873 (2) and sections 876 and 878 apply with the necessary modifications.
(2) If the claim that is to take the place of the previous claim does not belong to the previous mortgage creditor, his approval is required; this approval is to be declared to the Land Registry or to the person in whose favour it is given. The provisions of section 875 (2) and section 876 apply with the necessary modifications.
Section 1181
Extinction by satisfaction from the plot of land
(1) If the creditor is satisfied from the plot of land, the mortgage is extinguished.
(2) If the creditor is satisfied from one of the plots of land encumbered with a blanket mortgage, the other plots of land are also released.
(3) Satisfaction from the plot of land is equivalent to satisfaction from the objects to which the mortgage extends.
Section 1182
Transfer in the case of satisfaction from the blanket mortgage
To the extent that, in the case of a blanket mortgage, the owner of the plot of land from which the creditor is satisfied may demand compensation from the owner of one of the other plots of land or from a predecessor in title of this owner, the mortgage on the plot of land of this owner passes to him. However, if the creditor is satisfied only in part, the mortgage may not be enforced to the disadvantage of the mortgage that remains to the creditor and, if the plot of land is encumbered with an equal or lower-ranking right, it may not be enforced to the disadvantage of that right.
Section 1183
Cancellation of the mortgage
For the cancellation of the mortgage by legal transaction, the approval of the owner is necessary. The approval is to be declared to the Land Registry or to the creditor; it is irrevocable.
Section 1184
Debt-securing mortgage
(1) A mortgage may be created in such a way that the creditor’s right under the mortgage is determined solely by the claim and the creditor may not rely on the registration to prove (debt-securing mortgage).
(2) The mortgage must be described as a debt-securing mortgage in the Land Register.
Section 1185
Uncertificated mortgage; inapplicable provisions
(1) In the case of a debt-securing mortgage, the issue of a mortgage certificate is excluded.
(2) The provisions of sections 1138, 1139, 1141 and 1156 do not apply.
Section 1186
Permitted conversions
A debt-securing mortgage may be converted into an ordinary mortgage, and an ordinary mortgage into a debt-securing mortgage. The approval of persons with equal or lower-ranking rights is not necessary.
Section 1187
Debt-securing mortgage for bearer instruments and instruments made out to order
Only a debt-securing mortgage may be created for a claim under a bearer bond, under a bill of exchange or under any other instrument that can be transferred by endorsement. The mortgage is deemed to be a debt-securing mortgage, even if it is not described as such in the Land Register. The provision of section 1154 (3) does not apply. There is no claim for the deletion of the mortgage in accordance with sections 1179a and 1179b.
Section 1188
Special provision for bearer bonds
(1) For the creation of a mortgage for a claim based on a bearer bond, a declaration of the owner to the Land Registry that he is creating the mortgage and registration in the Land Register are sufficient; the provision of section 878 applies.
(2) The exclusion of the right of the creditor in accordance with section 1170 is permitted only if the presentation period named in section 801 has expired. If, within the period, the bond is presented or the claim based on the document has been asserted in court, the exclusion may not take place until the limitation period has expired.
Section 1189
Appointment of a Land Register representative
(1) In the case of a mortgage of the kind designated in section 1187, a representative may be appointed for the current creditor with power to make certain dispositions with regard to the mortgage with effect for and against every subsequent creditor, and to represent the creditor in the enforcement of the mortgage. For the representative to be appointed, entry in the Land Register is necessary.
(2) If the owner is entitled to demand from the creditor a disposition that the representative is authorised to make, he may demand that the representative make the disposition.
Section 1190
Maximum amount mortgage
(1) A mortgage may be created in such a way that only the maximum amount to which the plot of land is to be liable is determined, and apart from this the stipulation of the claim is reserved. The maximum amount must be entered in the Land Register.
(2) If the claim bears interest, the interest is included in the maximum amount.
(3) The mortgage is deemed to be a debt-securing mortgage, even if it is not described as such in the Land Register.
(4) The claim may be transferred in accordance with the general provisions applying to the transfer of claims. If it is transferred under these provisions, the passing of the mortgage is excluded.
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