The German Grundschuld
Lars Van Vliet
June 1, 2012
The Edinburgh Law Review 16.2 (2012): 147-177
The original model of the “euromortgage” was based on the Swiss land charge (Schuldbrief) which is a form of security lacking accessoriness. Proponents of the model stressed the advantages of this lack of accessoriness. In 2008, however, the German legislator was forced to make the land charge (Grundschuld) accessory to prevent investors making misuse of the lack of accessoriness. This non-accessoriness meant that investors who bought portfolios of mortgage claims were able to enforce the land charges for a larger amount of money than the claims due by the borrowers. It may seem surprising that it was possible for German law to adopt a form of mortgage with such an important weakness that enabled mortgagees to make such misuse. The article shows how and why non-accessory land charges were developed and what the impact is of the 2008 amendment.
Number of Pages in PDF File: 32
Keywords: Grundschuld, Hypothek, accessority, accessoriness, accessory, mortgage, land charge, Risikobegrenzungsgesetz, euromortgage
JEL Classification: K11Accepted Paper Series
Date posted: June 3, 2012
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo6 in 0.438 seconds