When purchasing real estate and on other occasions, the land register can play a decisive role. This official document contains information about the property. In addition to details about the building and plot, it contains detailed information about the owner as well as encumbrances such as rights of way, pre-emption rights or mortgage loans.
What exactly is the land register? What purpose does it serve and what specific content does it contain? Who may inspect it and when, and where can interested parties find this document?
The Land Register Is an Official Register
There is a land register or land-register sheet for every property in Germany. Legally, it is an official register. Details about its content and amendments, as well as access to the land register, are governed by the Land Register Code and the Land Register Regulation. There are some regional differences, but essentially the nature of this register is the same in all federal states.
Where Can the Land Register Be Found?
The land register was, and in some cases still is today, a physical document kept at the land registry office. The land registry office is generally located at the local court. In some municipalities, it may also have a different name or be affiliated with another authority.
Since 1993, authorities have also been able to maintain the register in electronic form. Upon application, entitled persons receive an extract in written form. This electronic land register can likewise be accessed online. However, the data are accessible only to entitled persons.
What Is Recorded in the Land Register?
The register sheet for the property contains various details that may be of interest to owners, buyers, creditors and entitled persons. The information is divided according to a system known as land-register sections. These sections are separated thematically.
- Heading: This section contains information about the responsible local court and the land-register district, as well as the details of the land-register volume and file number. These details are general in nature.
- Inventory register: This section contains information about the location and size of the property. This includes the parcel number, cadastral district and the size of the plot.
- Section I: This part contains information about the owner or holder of the heritable building right. If there are several owners, their exact shares in the property are recorded.
- Section II: This The section describes all encumbrances and restrictions on the property. These may include, for example, rights of way. Insolvencies are also recorded here.
- Section III: This section is often the most important for owners. It contains the information on so-called land charges. These include mortgages, land charges or annuity charges, as well as liens. These entries remain in place until the relevant debts have been paid off and removed from the register with a deletion authorisation.
Who may inspect the land register?
Only a few people are permitted to inspect a register sheet. In the case of real estate, this group is strictly limited. It includes:
- all owners,
- creditors, lenders and mortgage banks,
- notaries,
- courts,
- authorities and officially appointed persons such as experts,
- persons with a legitimate interest, such as prospective buyers.
If in doubt, the interest must be demonstrated. Authorised persons may request information and obtain an extract.
When is an extract required?
All authorised persons may request a land register extract upon application. The circumstances are not limited to a possible property purchase.
Between spouses, an extract may be important if, for example, a divorce is pending. Even neighbours may have an interest if, for example, the land register grants you the right to lay a utility line or drive across a section.
At the latest before concluding a purchase, prospective buyers should also address the issue in order to inspect encumbrances. This also applies to the banks financing the purchase. In addition, all other lenders must be able to verify whether an additional loan for the property is still economically viable. Banks may also request extracts as part of creditworthiness checks.
Registering the land charge
One of the most important practical functions of the land register concerns the purchase of a property. The buyer generally pays using funds that are at least partly derived from a loan. To secure these often substantial amounts, the banks have themselves registered in the land register.
The land charge is registered in the order of the loans used. Older loans have priority. If the owner or borrower can no longer service the loan, the bank has the option of initiating a forced sale. The proceeds are then used for repayment in the orderused for the listings.
When purchasing a property, the buyer has the previous owner's land charge deleted and registers their own. Put simply, the buyer's bank confirms to the owner and the seller's lenders that it will pay out the available portion of the purchase price. This bank confirmation enables the purchase to be notarized and the old land charge to be deleted. Only then can the new owner and the bank's land charge be registered.
When is an entry in the land register possible?
An entry in the register is always required when encumbrances or obligations change or ownership changes. An application must be submitted. There is no automatic process.
Changes to ownership must be entered. This also applies to gifts, partial sales and inheritances. The same is required when the division of properties changes. Examples include converting apartment buildings into condominiums or similar processes. Banks can also have the land charge arising from mortgages they have granted registered. This also applies to loan amendments or refinancing.
The entries are subject to fees. The exact costs depend, among other things, on the value of the property and the fee schedule. The specific prices can be obtained from the land registry office.