Establishing a mortgage right in Germany

Posted on 16-08-2020 by D. Voesenek

Crowdrealestate's loan portfolio consists of 58% projects in Germany. Enough reason to highlight the procedure for registering the mortgage right in Germany. After all, a precondition for the disbursement of Crowdrealestate propositions is that investors obtain at least a mortgage right as security.

1. Approval of mortgage deed

The draft mortgage deed (Grundschuldurkunde) is submitted to Crowdrealestate and the independent Foundation Collateral Agent Crowdrealestate which safeguards the interests of the investors. After approval by both parties, the Borrower then receives a written agreement that the mortgage deed can be registered in the Grundbuch, Germany's land register.

2. Passing mortgage deed

The Crowdrealestate Borrower, i.e. the current or future owner of the property must sign the deed at the office of the German notary. This is also called the Beurkundung in German. If the property has not yet been acquired in ownership by the Borrower, the seller is also included as a party in the mortgage deed. The copy of the signed mortgage deed is delivered to Crowdrealestate's permanent notary office in the Netherlands, where the third-party account is managed.

3. Confirmation German notary

After the mortgage deed has been executed, the German notary sends a confirmation thereof to Crowdrealestate's notary in the Netherlands. This confirms that the deed has been passed and sent to the Grundbuchambt for registration.

4. Copy of mortgage deed

After passing the mortgage deed, the Vollstreckbare Ausfertigung (the copy of the mortgage deed - provided with an apostille) is sent by post to mortgagee Stichting Zekerhedenagent Crowdrealestate. This copy is carefully kept by the crowd's advocate. A copy of it is available to investors in the relevant proposition at any time upon request.

5. Confirmation Grundbuchambt

Within a few weeks, confirmation is received that the mortgage right has been registered in the Grundbuch. This confirmation is communicated by post, by means of an Eintragungsbekanntmachung to the mortgagee. This also applies to future changes to rights in rem relating to the property in question, such as the cancellation of the mortgage right or ownership changes.