ARTICLES and NOTES - Notarius International

More documents

Recommendations

Info

242 O. Soergel/O. Stöcker, EU Enlargement and Property Law Notarius International 3-4/2002 of the security has given to the taker of the security in order to secure the debt is generally called the “Sicherungsgrundschuld“ (land charge serving as collateral). It is also possible however to have cases of non-accessory security interests where there is no security purpose. In the case of the German Grundschuld such a case is referred to as an isolierte (isolated) Grundschuld. The holder of an isolated land charge has not received it as security for a debt but rather as another asset. Thus, he has only an isolated claim for payment out of the real estate encumbered As there is no debt to be secured there is also no security purpose and therefore no security contract either by which the security purpose would be governed. The term “isolated” should not lead to the assumption that the isolated land charge has no causa. Just as the land charge serving as collateral (Sicherungsgrundschuld) has its causa in the loan contract, the isolated land charge also has its causa in an underlying obligation, for example in a purchase contract. In the past purchase contracts concerning land charges were to be found in German banking practice, for example in the context of the financing of property leasing transactions. In such cases the company owning the leased asset (Objektgesellschaft) granting the lease sold the bank a land charge for the benefit of the owner (or short: owner charge) (Eigentümergrundschuld) over the asset being leased; the purchase price was equivalent to the total of all future instalments payable under the leasing contract for the forfeiting amount. The performance arising out of the purchase contract consisted on the one hand of the assignment of the land charge to the bank and on the other hand of the payment of the purchase price to the company owning the leased asset (Objektgesellschaft). The bank therefore did not record the payment of the purchase price in its books as a loan, but instead recorded the land charge as an asset. The intention behind this arrangement was to avoid loosing of the business tax exemption on the earnings from the leasing transaction in the Objektgesellschaft, if the lessee become partner in the Objektgesellschaft – as often practised in the case of sale-and-lease-back transactions. Even though the tax idea did not ultimately succeed 15 , there was no doubt about the efficacy of this contractual arrangement under civil law. 3.2. Problem of the land charge in “causality countries” As shown with the example of the land charge serving as collateral versus the isolated land charge (Sicherungsgrundschuld – isolierte Grundschuld) the concepts of security purpose (Sicherungszweck) and causa must be clearly separated. Otherwise unnecessary problems arise again and again in countries that adopt the principle of causality (causality or causation countries) as a result of the mixing of the two conceptual categories. However much in practice the isolated land charge is the exception and the land charge serving as collateral is the rule, dogmatically the so-called isolated land charge is the “pure” form of Grundschuld 16 . This pure form is diluted by the contractual coupling of the land charge with a security purpose, that is agreed by the contract parties in the security contract 17 . At the same time it opens up the possibility of an inadmissible mixing of the two concepts of causa and security purpose, particularly when the causa for the creation of the security is seen in the security contract 18 . The conclusion drawn from this in causation countries is that the land charge in its dogmatically pure form of the isolated land charge is a land charge without a causa, with the further consequence – if one follows the doctrine of causality– that in these countries a land charge cannot be effectively created at all. These conclusions are as wrong as the assumptions on which they are based. - The isolated land charge too has its causa, just as the land charge serving as collateral (Sicherungsgrundschuld) and the mortgage (Hypothek) do. Like the land charge serving as collateral and the mortgage, it too is based on an obligation which obliges the provider of the land charge to create it and forms the ground that justifies the acquisition of the land charge by the creditor. - This contractual relationship which underlies the acquisition of the land charge and is the justification for it can be a purchase contract – as in the example set out above of the purchase of the land charge, or for example it can be a contract of gift or a partnership agreement. In the case of loan-related security interests (Hypothek, Sicherungsgrundschuld), the underlying contractual relationship which justifies the acquisition of the security – in the relationship between the parties to the loan contract – is normally the loan contract, in which the borrower undertakes to the lender to create the Hypothek or Sicherungsgrundschuld in the latter’s favour as security for the loan. Essentially the security contract governs only the security purpose, the prerequisites of the security and how to realise the security, apply the proceeds of the security and return the security. The “problem” of causality in this context is in reality therefore not a problem at all, or at least not a problem that is special to the land charge. A causa is required in the case of both the land charge and the mortgage and can generally be found. 15 Cf Federal Tax Court, judgment of 5.5.1999 – XI R 6/98, DStR 1999, 1310 onwards 16 Cf Staudinger/Wolfsteiner (Footnote 7), Preliminary statement 10 on §§ 1191 onwards which calls the isolierte Grundschuld (“Primär- Grundschuld“) the historic example and legislative model for the Grundschuld. 17 Staudinger/Wolfsteiner (Footnote 7), Comment 4 on §§ 1191 onwards talks in this context of the “ongoing attempt to reduce the Grundschuld ... to the ancient legal form of the Hypothek “. 18 The Federal Supreme Court in its judgment of 8.12.1988 – III ZR 107/87, ZIP 1989, 157 f = NJW 1989, 1732, 1733, and with it EWiR 1989, 157 (Clemente) under uncritical reference to MünchKomm- Eickmann, BGB, 2nd Edition 1986, § 1191 note 13.
Notarius International 3-4/2002 O. Soergel/O. Stöcker, EU Enlargement and Property Law 243 The so-called causality countries generally start from the basis that there is unity between the obligation (Verpflichtungsgeschäft) and the performance (Erfüllungsgeschäft). The difficulties that can arise in practice due to the failure to separate the two transactions are generally overcome by using a preliminary contract. To this extent therefore there are no insoluble problems and indeed no differences between the isolated land charge and the mortgage or the land charge serving as collateral. 3.3. Owner Charge (Eigentümergrundschuld) and causa The first point to be made is that for non-German lawyers it is by no means a matter of course that the owner of real property can have a charge over his own property. The legal systems of continental Europe often start from the Roman law principle of nulli res sua servit (nobody can be served by things that belong to him). Following on from this principle the Roman law conclusion is that the charge must inevitably be extinguished in the event of a so-called consolidation (Konsolidation), in other words when the property and the title to the charged property are in the hands of the same person. - This principle still applies today for example in Polish law: according to article 247 of its Civil Code, a limited right in rem (of which the mortgage is an example according to article 244 § 1) is extinguished when it is transferred to the owner of the thing charged or when the obligee acquires title to the thing charged. - Hungarian law too starts from this principle: according to § 266 (4) (1) of its Civil Code a pledge is extinguished when the pledgee acquires title to the property pledged; however, in the case of pledges without possession (mortgages) this is qualified inasmuch as under § 266 (4) (2) of the Hungarian Civil Code in the event of a consolidation a pledge without possession remains valid as against lower ranking pledge creditors. - The same applies under Latvian law: under article 1312 (4) of its Civil Code the pledge is extinguished if the pledge creditor acquires title to the thing pledged; under article 1300 (2) of the Latvian Civil Code however the pledge creditor retains the rights to which he was entitled under his earlier pledge as against the other pledge creditors. For purely practical reasons – in particular in order to allow the owner of the charged thing to keep his rank – the German legislator has introduced the provision contained in § 889 BGB into the law. § 889 BGB: “A right over property belonging to another is not extinguished by virtue of the fact that the owner of the property acquires the right or the obligee acquires title to the property.” Without this rule the charge would also be extinguished under German law in the event of a consolidation. German law goes a step further however. Not only does it allow the charge to subsist in the event of consolidation, it also gives the owner the power to charge his property with a charge in favour of himself from the outset (§ 1196 (1) BGB). For the creation of such a land charge for the benefit of the owner or owner charge (Eigentümergrundschuld) it is necessary to have a declaration of creation from the owner (§ 1196 (2) (1) BGB) in addition to registration in the property register, with such declaration having to be made before the property registry. This declaration of creation is a unilateral legal transaction and is not therefore a contract. As the creation of the owner charge is not based on a contract, there is no prerequisite for a obligation which then has to be performed by the creation of the charge. Performance in the sense of an in rem law contract (2.1. above) does not therefore come into the equation either, because the creation of the owner charge does not lead to any change of legal attribution. The creation of an owner charge from the outset does not therefore have anything to do with the concepts obligation and performance (Verpflichtungsgeschäft – Erfüllungsgeschäft) that are discussed above (2.1.). The same is true however of an owner charge that arises at a later stage, in other words on consolidation. Given that the sequence of obligation followed by performance (Verpflichtungsgeschäft – Erfüllungsgeschäft) does not arise in this context, the question of the unity or separation (Einheit or Trennung) of the two transactions does not arise either. And because the question of whether the two transactions are separate disappears, their possible relationship to one another in the sense of causality or abstraction (Kausalität or Abstraktion) does not need to be clarified. All these questions are therefore obsolete in the case of the owner charge. They only regain their significance if the owner transfers the land charge to which he has title to a third party. Even then their significance relates not to the owner charge itself, but only to the obligation between the owner and transferee of the land charge that underlies the transfer, the transfer transaction (the Abtretung – assignment) based on it and the relationship between the two transactions. 3.4. The abstract Promise of Payment (abstraktes Schuldversprechen) Special mention needs to be made of the so-called abstract promise of payment or independent promise (abstraktes Schuldversprechen) that is regulated in the BGB, because in German lending practice the land charge is often linked with such a promise of payment (in theory it might also be a promise to perform another duty, but in practice it is nearly always a promise of payment). The abstract promise of payment is generally declared by the borrower, and indeed declared in a notarised deed, because the lender demands that the whole of the borrower’s assets be subject to an immediate right of enforcement because of the payment obligation of which the lender has the benefit by virtue of the promise (§ 794 (1) nr. 5 of the Civil Procedure Code (ZPO). In practice one often finds that the land charge and the promise of payment are created in a single deed – each time with submission to enforcement; they are nevertheless two completely
Page 1 and 2:
NOTARIUS INTERNATIONAL Vol. 7 3-4/2
Page 3 and 4:
Notarius International 3-4/2002 E.
Page 5 and 6:
Page 7 and 8:
Page 9 and 10:
Notarius International 3-4/2002 B.
Page 11 and 12:
Page 13 and 14:
Page 15 and 16:
Page 17 and 18:
Notarius International 3-4/2002 T.
Page 19 and 20:
Page 21 and 22:
Page 23 and 24:
Page 25 and 26:
Page 27 and 28:
Page 29 and 30:
Page 31 and 32:
Page 33 and 34:
Page 35 and 36:
Page 37 and 38:
Page 39 and 40:
Page 41 and 42:
Page 43 and 44:
Page 45 and 46:
Page 47 and 48:
Page 49 and 50:
Page 51 and 52:
Page 53 and 54:
Page 55 and 56:
Page 57 and 58:
Page 59 and 60:
Page 61 and 62:
Page 63 and 64:
Page 65 and 66:
Page 67 and 68:
Page 69 and 70:
Page 71 and 72:
Page 73 and 74:
Page 75 and 76:
Page 77 and 78:
Page 79 and 80:
Page 81 and 82:
Page 83 and 84:
Page 85 and 86:
Page 87 and 88:
Notarius International 3-4/2002 F.
Page 89 and 90: Notarius International 3-4/2002 F.
Page 115 and 116: Notarius International 3-4/2002 C.
Page 125 and 126: Notarius International 3-4/2002 O.
Page 139: Notarius International 3-4/2002 O.
Page 143 and 144: Notarius International 3-4/2002 R.
Page 159 and 160: Chambres Notariales en Europe Europ
show all

ARTICLES and NOTES - Notarius International

Create successful ePaper yourself

Delete template?

Save as template?