Contract Of Real Estate Mortgage Template for Germany

The Contract of Real Estate Mortgage (Grundschuldbestellung) is a fundamental document in German property financing transactions. It is used when a property owner needs to secure a loan or financial obligation by creating a security interest in real estate. The document must comply with strict German legal requirements, including mandatory notarization and registration in the land register (Grundbuch). It contains essential information about the mortgaged property, the secured amount, and enforcement provisions. This type of agreement is commonly used in both commercial and residential property financing, providing banks and financial institutions with security while allowing property owners to access financing. The document's format and content are heavily regulated by German law, particularly the German Civil Code (BGB) and the Land Registration Code (GBO), ensuring standardization and legal certainty in property financing transactions.

1. Parties: Identification of the mortgagor (property owner) and mortgagee (typically a bank or financial institution), including full legal names, addresses, and registration details for legal entities

2. Background: Context of the mortgage agreement, including reference to any underlying loan agreement or credit facility

3. Definitions: Definitions of key terms used throughout the document

4. Property Details: Detailed description of the mortgaged property, including land registry details (Grundbuch information), exact location, and cadastral references

5. Mortgage Amount and Terms: Specification of the mortgage amount, interest rates, and payment terms

6. Creation of Mortgage: Legal declarations necessary for creating the mortgage (Grundschuld) and registration in the land register

7. Purpose Security: Declaration of the security purpose (Sicherungszweck) of the mortgage

8. Representations and Warranties: Mortgagor's declarations regarding property ownership, absence of encumbrances, and authority to grant the mortgage

9. Mortgagor's Obligations: Ongoing obligations including property maintenance, insurance, and payment of taxes

10. Enforcement Provisions: Terms for enforcement of the mortgage, including submission to immediate enforcement (Unterwerfung unter die sofortige Zwangsvollstreckung)

11. Costs and Fees: Allocation of costs for creation, registration, and enforcement of the mortgage

12. Notices: Process and addresses for serving legal notices

13. Governing Law and Jurisdiction: Confirmation of German law application and jurisdiction of German courts