Authorization to delete

Authorization for Discharge - An authorization for discharge is a written statement from a creditor, typically a bank, stating that a land charge recorded in the land register may be discharged. It is issued after the associated loan has been fully repaid.

Significance and Process of the Discharge Authorization

When a real estate loan is fully repaid, the bank’s claim is extinguished-however, the land charge in the land register remains in effect. Since the land charge is an abstract security interest, it is not automatically discharged. To have it discharged, the owner requires an explicit discharge authorization from the creditor.

The bank issues the cancellation authorization after the final installment has been repaid. The document contains the consent to cancel the land charge, the exact designation of the land register page, Section III, and the serial number, as well as details regarding the encumbered property. The bank’s signature is notarized, or the bank issues the authorization in a form suitable for entry in the land register.

The owner submits the cancellation authorization to a notary, who then files the cancellation application with the competent land registry office. The notary verifies the formal correctness and submits the application together with the authorization. The land registry office then cancels the land charge from Section III by striking through the entry. The property is thus released from this encumbrance.

It is important to know that the owner must actively apply for the cancellation. The bank is only obligated to issue the authorization. The owner must personally engage the notary and apply for the cancellation at the land registry office. We therefore recommend carefully storing the cancellation authorization upon receipt and using it promptly.

Cancel or Leave the Land Charge in Place?

Canceling the land charge is not always the best option. An already registered land charge can be reused for new financing. For example, if you plan to finance a renovation with a bank loan or purchase another property, you can offer the existing land charge as collateral. In this case, no additional notary or land registry fees are incurred for the creation of a new land charge.

However, a land charge that remains on the record can become an obstacle when selling the property, as buyers generally expect a land registry free of encumbrances. In sales practice, the cancellation is therefore usually carried out as part of the transfer of ownership, with the seller bearing the costs.

The key factor is whether specific follow-up financing is planned in the coming years. If not, cancellation is worthwhile in most cases, as a clean land register improves the property’s marketability and avoids future bureaucratic hassle. If so, the land charge can remain in place as a so-called owner’s land charge and be assigned to the next lender without incurring new registration costs.

Costs of Discharge

The costs for discharging a land charge consist of notary fees and land registry fees. These are based on the Court and Notary Fees Act (GNotKG), which calculates the fees based on the nominal amount of the land charge. For a land charge of 200,000 euros, the total costs amount to approximately 400 to 500 euros, divided between the notary and the land registry office. For a land charge of 300,000 euros, the costs rise to approximately 550 to 700 euros. Compared to the costs of a new registration (approx. 1,500 to 2,000 euros for a 200,000-euro land charge), the pure cancellation costs are low.

Important: The bank generally does not charge any fees for issuing the release authorization-unless this is expressly agreed upon in the contract. If this occurs, you should question the legal basis for the fee; courts have frequently ruled such additional fees to be invalid in the past.

Practical Tip for Nuremberg and the Metropolitan Region

In the Nuremberg metropolitan area, we regularly see sellers requesting the release authorization from their bank only shortly before the scheduled notary appointment. Since processing times at some financial institutions can take several weeks, we recommend requesting the release authorization at least six to eight weeks before the sale date. This helps avoid delays in the purchase process.

In Nuremberg and the surrounding area, experience shows that the Land Registry Office processes the cancellation request within four to six weeks. Anyone selling a property in the region should factor this timeframe into their overall planning. Especially for properties with multiple registered land charges-such as when an extension loan was secured separately-acting promptly is crucial to ensure all entries can be cleared in time. We actively coordinate these processes for our clients with the notary and the bank.

Frequently Asked Questions About Discharge Authorization

Does a land charge have to be discharged after repayment?

No, there is no legal obligation to discharge it. After full repayment, the land charge converts into an owner’s land charge, which belongs to the owner. The owner can use it for future financing. In most cases, deletion is only required when the property is sold, as buyers and their banks require an unencumbered land register.

How long is a deletion authorization valid?

The cancellation authorization generally has no expiration date. It remains valid until it is submitted to the land registry office and the cancellation is completed. We nevertheless recommend using the authorization promptly after receipt to avoid complications-such as if the bank’s representation arrangements change or the document is lost.

What should I do if the bank refuses to issue the cancellation authorization?

Once the loan has been fully repaid, the bank is obligated to issue the cancellation authorization. If the bank refuses to issue it, the owner can compel the bank to do so through legal action. In practice, such disputes are rare. Delays due to the bank’s internal processing procedures are more common. In such cases, we recommend requesting the issuance in writing with a deadline and seeking legal assistance if necessary.

What happens if I lose the release authorization?

If the document is lost, the bank must issue a new authorization. If the bank has since been dissolved or merged, the legal successor must issue the authorization. In rare cases-such as when there is no legal successor-a public notice procedure at the local court may be necessary to have the land charge legally deleted. This process is time-consuming and costly, which is why it is important to keep the document in a safe place from the very beginning.

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