Last Updated on June 28, 2021 by LawEuro
German Civil Code (BGB) German law
Title 2
Land charge, annuity land charge
Subtitle 1
Land charge
Section 1191
Statutory contents of the land charge
(1) A plot of land may be encumbered in such a way that the person in whose favour the encumbrance is created is paid a specific sum of money from the plot of land (land charge).
(2) The encumbrance can be created in such a way that interest on the sum of money and other supplementary payments are payable from the plot of land.
Section 1192
Applicable provisions
(1) The land charge is governed by the provisions on mortgages with the necessary modifications, unless the fact that the land charge requires the existence of a claim leads to a different conclusion.
(1a) If the land charge has been established as security for a claim (security land charge), defences to which the owner is entitled with regard to the land charge on the basis of the security contract with the previous creditor, or which emerge from the security contract, may also be imposed on any acquirer of the land charge; section 1157 sentence 2 does not apply in this respect. Section 1157 remains unaffected in other respects.
(2) Interest on a land charge is governed by the provisions on interest on a mortgage claim.
Section 1193
Termination
(1) The principal of the land charge only falls due until after prior notice of termination. Both the owner and the creditor are entitled to give notice. The notice period is six months.
(2) Diverging provisions are admissible. If the land charge serves as security for a monetary receivable, a provision derogating from subsection (1) is not permissible.
Section 1194
Place of payment
The payment of the principal and interest and other supplementary payments, unless otherwise provided, is to be made at the place where the Land Registry has its seat.
Section 1195
Bearer land charge
A land charge may be created in such a way that the land charge certificate is made out to the bearer. The provisions concerning bearer bonds apply with the necessary modifications to such a certificate.
Section 1196
Owner land charge
(1) A land charge may also be created for the owner.
(2) For the creation of the land charge, a declaration of the owner to the Land Registry that the land charge is to be registered in the Land Register for him as well as registration is necessary; the provision of section 878 applies.
(3) A claim for deletion of the land charge in accordance with section 1179a or section 1179b exists only for such mergers of the land charge and the ownership in one person as occur after the land charge has belonged to a person other than the owner.
Section 1197
Deviations from third party land charge
(1) If the owner is the creditor, he may not pursue execution for the purpose of his own satisfaction.
(2) The owner is entitled to interest only if the plot of land is seized on application by another for the purpose of judicially enforced receivership, and only for the duration of the receivership.
Section 1198
Permitted conversions
A mortgage may be converted into a land charge and a land charge into a mortgage. The approval of persons with equal or lower-ranking rights is not necessary.
Subtitle 2
Annuity land charge
Section 1199
Statutory contents of the annuity land charge
(1) A land charge may be created in such a way that a specific sum of money is payable from the plot of land on regularly recurring dates (annuity land charge).
(2) When the annuity land charge is created, the sum payable to redeem the annuity land charge must be specified. The redemption sum must be stated in the Land Register.
Section 1200
Applicable provisions
(1) The individual payments are governed by the provisions for mortgage interest, and the redemption sum by the provisions applying to the principal of a land charge, with the necessary modifications.
(2) The payment of the redemption sum to the creditor has the same effect as the payment of the principal of a land charge.
Section 1201
Right of redemption
(1) The owner has the right of redemption.
(2) The creditor may not be granted the right to demand redemption. In the case of section 1133 sentence 2, the creditor is entitled to demand the payment of the redemption sum from the plot of land.
Section 1202
Termination
(1) The owner may exercise the right of redemption only after giving previous notice. The notice period is six months, unless otherwise provided.
(2) A restriction of the right to give notice is admissible only to the extent that the owner may, after thirty years, give notice, observing the six-month notice period.
(3) If the owner has given notice, then after the expiry of the notice period the creditor may demand payment of the redemption sum from the plot of land.
Section 1203
Permitted conversions
An annuity land charge may be converted into an ordinary land charge, and an ordinary land charge into an annuity land charge. The approval of persons with equal or lower-ranking rights is not necessary.
Leave a Reply