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240 O. Soergel/O. Stöcker, EU Enlargement and Property Law Notarius International 3-4/2002 Diagram 7: Land Charge (Grundschuld) same time however the security contract between the (third-party) provider of the security and the lender taking the security creates the causa as between these parties that entitles the lender to keep the security. Diagram 8: double causation, if security is furnished by a third party Although in practice the powers and obligations of the creditor of the land charge in respect of the land charge (Grundschuld) are generally governed by a special contract between the provider of the security and the taker of the security, the so-called security contract or security agreement (Sicherungsvertrag) , this does not alter the non-accessory nature of the land charge. This so-called security contract has, amongst others, the following functions in particular in this context: It describes the security purpose (Sicherungszweck). Thus it establishes, in relation to the contract partners, the purposes for which (i.e. for the security of which claims by the taker of the security or by other creditors) the taker of the security may use the security. As a result it takes on a similar function in the property law context to the role played by the statutory rules on accessoriness in the case of accessory securities. In addition, according to a widely held view 6 , it also contains the causa for the provision of the security. If the security contract is defined in this way then it contains the obligation of the provider of the security to give the agreed security to the taker of the security. If one looks at the contractual practice of the German banks however, then such a definition of the security contract is unclear to say the least, as normally the loan contract itself already contains the provision that the making of the loan is dependent upon the provision of a specified security. In this report therefore the authors start from the assumption (2.2 above and 3.1, 3.2 below) that the causa for the provision of the security is contained in the loan contract and not in the security contract. At the end of the day the difference between these two points of view does not matter – at least where the provider of the security and the borrower are one and the same person; the crucial thing is that the obligation to provide the security is governed somewhere in the contractual arrangements between the borrower and the lender. In the case where the borrower and the provider of the security are not one and the same person it is however clear that in the borrower/lender relationship it is not the security contract to be entered into between the (thirdparty) provider of the security and the lender taking the security that is the causa for the provision of the security but the loan contract, in which the borrower assumed an obligation to provide the security to the lender. At the Unlike the case with accessory security interests therefore, the provisions contained in the security contract only create rights and obligations; they do not change the legal attribution of the security in any way. Diagram 9: Accessoriness (Akzessorietät) 2.5 Accessoriness in Europe 2.5.1. The different legal systems If one looks beyond the German legal system then one finds a large variety of different types of property charges elsewhere in Europe in which accessoriness is more or less pronounced depending on the legal system. Very few legal systems have two such differently structured charges over property as German law with its Hypothek (mortgage) and Grundschuld (land charge). The two poles of the European spectrum, from “closely accessory” to “non-accessory” are represented on the one side by France with its mortgage which is closely accessory to existence and on the other side by Germany with the nonaccessory Grundschuld (land charge). 6 Cf amongst others MünchKomm-Eickmann, BGB, 3rd Edition 1997, § 1191 Rz. 13; Soergel/Konzen, BGB, 13th Edition 2001, § 1191 Rz. 12; Staudinger/Wolfsteiner, BGB, 13. Edition 1996, Preliminary statements to §§ 1191 onwards Rz. 23.
Notarius International 3-4/2002 O. Soergel/O. Stöcker, EU Enlargement and Property Law 241 - Legal systems with mortgages that are closely accessory to existence include Belgium, Italy, Luxemburg, Poland 7 and Spain. - Legal systems with non-accessory property charges include Hungary 8 , Estonia 9 and Switzerland 10 . - In banking practice the Danish ejerpantebrev (which can best be translated as owner mortgage) is also operated as a non-accessory property charge. Dogmatically viewed however the lien over the ejerpantebrev is not a charge over property but the pledge of a document of title. 11 - In between there are legal systems which – viewed dogmatically – do have the concept of the accessory mortgage, but nonetheless either have special legal forms with relaxed accessoriness or have developed a form of mortgage through lending practice that comes very close to being a non-accessory property charge. In the first group we have the Netherlands with the Bankhypothek, Austria with the Höchstbetragshypothek and Spain with the special form of the hipoteca de máximo, whilst the second group includes England and Wales with the land charge and Sweden with the pantbrev. 2.5.2. The main disadvantage of Accessoriness Despite all the relaxations of the concept of accessoriness that have been introduced by law or in practice, there is still however an essential difference between the accessory and non-accessory security interest which is also crucial in practice: the requirement for identity between the holder of the security interest and the holder of the debt secured can only be dispensed with in the case of the non-accessory security interest; in the case of the accessory security interest – no matter how relaxed the connection between secured debt and security interest may be – they must be one and the same person. The result is that whenever the execution of a transaction makes it necessary for the holder of the security interest and the holder of the secured debt to be separate persons, accessory security interests do not work. The problem arises in particular in relation to financing through a dormant consortium or in the handling of large volume MBS transactions. Diagram 10: identity or non-identity for accessory or non-accessory securities - shown for a case of a loan consortium 2.5.3. Current legislative plans Not least because of the requirements for greater flexibility and in particular because of the aforementioned identity problems, several European states are working on draft legislation to introduce a non-accessory property charge. - In Poland there has long been a draft law to amend the Civil Code, the Law on Registers and Mortgages and other Laws through which a charge over property that is not dependent on a debt will be introduced into Polish law alongside the existing mortgage security 12 . - In Slovenia a non-accessory property charge has recently been introduced into the Property Code 13 . - The most recent example is Catalonia. In the course of work on a Catalan Civil Code consideration was recently given to also including a non-accessory property charge in addition to the accessory mortgage. Finally in this context we must refer to the draft of a model law for a property charge that is akin to the Swiss Schuldbrief (certificate of charge) and the German Grundschuld (land charge) which has been developed and published by a working group of the Association of German mortgage banks (VDH). 14 3. Special problems 3.1. Security Purpose (isolated land charge) In the case of accessory security interests the security purpose (Sicherungszweck) arises by definition out of the law: without an debt to be secured the creditor has no security interest. With non-accessory security interests, in German law in particular therefore in the case of the land charge (Grundschuld), the security purpose generally arises out of the security contract. A land charge with a security purpose, in other words a land charge which the provider 7 Mortgage (hipotek), Art. 65 of the Law on Registers and Mortgages. 8 The independent lien (önálló zálogjog), § 269 Civil Code 9 The mortgage (hüpoteek), § 325 Property Law which despite its name is non-accessory. 10 The certificate of indebtedness (Schuldbrief), Art. 842 Civil Code 11 However, up to date the Danish legislature has prohibited Danish mortgage banks from lending against the pledge of an ejerpantebrev, see § 1 (4) (1) realkreditlov. This prohibition, introduced into the law by Amending Law 353/1995 of 6.6.1995, served only to state clearly the view that had always been taken by the banking regulators; see in respect of the disagreement at the time between the banking regulators and the mortgage banks: Houmann, Det danske realkreditsystem i et EF-perspektiv, 1994, pages 199-208. 12 This property charge will be called a dlug na nieruchomosci; the draft text has been published in the journal “Rejent“ 2000, No. 3, page 243 onwards. 13 This charge over property, governed by articles 192 – 200 of the draft Property Law (Stvarnopravni zakonik) is called zemljiški dolg; official Journal 2002, 9559, Internet: http://www2.gov.si/zak/Zak_ vel.nsf/570376691fe 96946c1256616002db3ea/c12563a400338836c 1256c4100324c8aOpenDocument&ExpandSection=1#_Section1 14 Discussion paper: Nicht akzessorisches Grundpfand für Mitteleuropa, printed in: DNotZ 1999, 451, 460 = ZBB 1998, pages 264 onwards.
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