Loan And Mortgage Agreement Template for Germany

The Loan And Mortgage Agreement is essential for real estate financing transactions under German law, whether for commercial or residential properties. It is used when a lender provides financing secured by real property, requiring registration in the German land register (Grundbuch). The document must comply with strict German banking regulations and property law requirements, including notarization for validity. It serves multiple purposes: documenting the loan terms, establishing the security interest, ensuring enforceability, and protecting both lender and borrower rights. The agreement is particularly important in German jurisdiction due to the formal requirements for creating and registering property security interests, and the specific regulations governing banking and real estate transactions.

1. Parties: Identification of the lender and borrower with full legal names and addresses

2. Background: Context of the loan and mortgage arrangement, including purpose of the loan

3. Definitions: Key terms used throughout the agreement, including German legal terminology where relevant

4. Loan Terms: Principal amount, interest rate, term, and repayment schedule

5. Property Details: Legal description of the mortgaged property as per German land register (Grundbuch)

6. Mortgage Creation: Establishment of the mortgage (Hypothek) or land charge (Grundschuld) including registration requirements

7. Disbursement Conditions: Prerequisites for loan disbursement including property valuation and insurance requirements

8. Borrower's Representations: Warranties regarding property ownership, authority to enter agreement, and absence of encumbrances

9. Borrower's Obligations: Ongoing duties including property maintenance, insurance, and tax payments

10. Events of Default: Circumstances constituting default and consequences thereof

11. Enforcement Rights: Lender's rights and procedures for enforcing the mortgage under German law

12. Costs and Fees: Allocation of costs including registration fees, notary fees, and enforcement costs

13. Notices: Communication requirements and contact details

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