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Burdening a property with a mortgage or land charge, creation of a land charge

To secure a loan, you can grant the creditor a mortgage on your property and have it entered in the land register.

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Detailed description

If you take out a loan, you can offer your property as collateral to the creditor (the person from whom you receive the money) to secure the loan amount and have a mortgage or land charge (so-called land liens) registered in the land register in his or her favor.
If you do not repay the loan, the mortgaged property can be auctioned off by way of a forced sale. Your creditor will get his money back from the proceeds.

In practice, the land charge has prevailed over the mortgage because the mortgage secures a specific claim (a specific loan), while the land charge can be used as security for new loans as often as desired, but only up to the registered amount of the land charge.

You as the owner and, for example, a lending bank therefore regulate in a further contract (the so-called security agreement) which claims are to be secured by the mortgage. Before you sign a security agreement, you should find out about its exact scope and, if necessary, seek legal advice.

Mortgages must be registered in the land register. The mortgage can be registered with a notary. You can submit the declarations required for the registration of a mortgage there. The notary prepares the documents, explains the often very complicated clauses and ensures that the entry in the land register is correct.

 

Information

Prerequisites

pre-registration
In order to register a land charge or mortgage, you must be registered as the owner in the land register.

Documents required

  • Application

Either you or the notary authorized by you must submit the written application for registration. The application can also be submitted by the beneficiary lender (bank).
The application must clearly state who is making the application, which right is to be registered and with which content (e.g. interest)

  • declaration of approval

You must expressly consent to the registration. This declaration of consent must be certified or authenticated by a notary.
Here too, the content of the right must be clear and consistent with the application.
In particular, the following must be stated:

  • what kind of land charge should be created (land charge, mortgage, with or without deed)
  • for whom it should be ordered (creditor)
  • possibly the community relationship if the right is to be created for several persons
  • the amount of the claim (loan amount)
  • Interest charges
  • interest start
  • interest due date
  • additional services
  • due date of the additional service
  • capital maturity

Please note

  • If you, as the owner of the property, have submitted to immediate enforcement in a notarial deed in such a way that the enforcement from the deed is permissible against the respective owner of the property and this submission is also entered in the land register, the bank does not need to sue the owner of the property in court for toleration of the enforcement, but can enforce directly against you.
  • You can find such a declaration of submission in the forms for land charges. However, if the creditor enforces the claim unjustly, the owner is of course free to take legal action to defend himself.

Please note:
Legal advice is not available at the district court. Please contact the persons authorized to provide legal advice. These are lawyers or notaries.
The Public Legal Advice Service (ÖRA) offers low-cost legal advice for people with low incomes.

Deadlines

No

Procedure

  • You or the lender (creditor) submits the application for registration of the mortgage in your land register to the land registry office responsible for you.
  • Submit your registration authorization in public or publicly certified form. You can have the certification done by a notary.
  • The land registry office will check your documents and request additional documents if anything is missing.
  • If all documents and requirements are met, the land registry office enters the mortgage in the land register.
  • You and the mortgage creditor will be informed of the entry.

Processing time

The processing time depends on the respective land registry office.

Fees

For the full fee based on the value of the mortgage, see Appendix 1 No. 14122 List of Costs to the GNotKG (Court and Notary Fees Act), Section 34 GNotKG (Appendix 2 Table B).

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Keywords: register a mortgage encumber the property mortgage property property as collateral

Last updated: 05.02.2025