The land charge issue: Can a mortgaged property be sold?

Often misinterpreted: How the land charge entry for a property works

A land charge is the creditor's right to collect outstanding claims in the event of non-repayment by the borrower by seizing the property in question, even without a court judgement. In other words, a limited right in rem is transferred that gives the bank power of disposal, for example to sell or auction the respective house or condominium in Hamburg Bahrenfeld. The land charge is entered in section III of the land register of the property and can be supplemented by a notarised letter. In contrast to the mortgage, which is almost no longer used in modern lending, the land charge is not linked to a fixed loan amount, which many property owners are unaware of. While the mortgage expires once the outstanding amount has been repaid in full and the property in Hamburg Bahrenfeld is no longer encumbered, the land charge remains in place even after this. However, the rights associated with it are then transferred to the borrower, so that there is a right of seizure on their own property - it becomes a so-called owner's land charge. The abstract nature of this concept becomes clear here, but it also offers some practical advantages. For example, the land charge can be used to take out further loans without the need for a new entry in the land register and is generally recognised as security without any problems. It is also possible to sell the land charge certificate.

But what happens if the condominium or house in Hamburg Bahrenfeld on which a land charge is encumbered is to be sold? The team of real estate agents at Engel & Völkers Hamburg Elbe will be happy to advise you in detail on this topic - in the next section you will find an overview of the most important relationships.

Selling a Hamburg property with a land charge: these options are available

Basically, there are two options when selling a house or condominium with a land charge in Hamburg Bahrenfeld. Firstly, the land charge can be transferred to the new owner. Initially, it does not matter whether there is still an outstanding loan on it - with the consent of the lender, this can be taken over by the buyer of the property so that the remaining amount is paid off immediately. Alternatively, the loan can continue to be paid by the new owner under the same contractual conditions. In either case, a notary must carry out the transfer of the land charge.

The second option is to have the land charge cancelled in advance of the sale, which is only possible if the associated loan has been paid off. This requires a cancellation permit, which must be issued by the lender. This is forwarded by the notary to the responsible local court, which then carries out the final cancellation.

Whether the land charge should be transferred or cancelled in individual cases when selling the property in Hamburg Bahrenfeld depends on a number of factors: How much is the remaining loan? On what terms has this been agreed? Are further investments planned after the loan has been paid off?

Depending on the answers to these questions, your personal real estate agent at Engel & Völkers Hamburg Elbe will work out an individual solution for the land charge on your property. With our support, you will be able to sell your house or condominium in Hamburg Bahrenfeld at the best conditions, even with outstanding debt, in order to free yourself from the existing obligations of the property or to turn to new projects with the sales price achieved. Our competent estate agents are at your disposal

in every phase of the sales process

with help and advice to achieve the best possible marketing result for you. You can get in touch with us today using the contact form on the right-hand side of the screen - we look forward to hearing from you!

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