Land Charge vs. Registered Land Charge: A Practical Comparison

When financing a property in Nuremberg, the question inevitably comes up sooner or later: registered land charge or book land charge? The answer may seem technical, but it has practical implications for flexibility in refinancing, protection against misuse, and costs. In the Nuremberg metropolitan area, buyers and owners still encounter many registered land charges from previous decades, particularly in existing properties.

Legal Background: Land Charge under Sections 1191 et seq. of the German Civil Code (BGB)

The land charge is the preferred security instrument for real estate financing in Germany. It differs from a mortgage in that it is not accessory-meaning it is not tied to the existence of a loan and continues to exist even after the loan has been repaid. Section 1191 of the German Civil Code (BGB) defines a land charge as the right to claim a specific sum of money from the property.

Land charge law recognizes two forms:

Book land charge (Section 1192 BGB in conjunction with Section 1195 BGB): It arises and exists solely through entry in the land register. No deed is issued; the “exclusion of a deed” is explicitly noted in the land register. The transfer of the registered land charge requires an entry in the land register (Section 1154(3) BGB). This makes the current creditor traceable in the land register at any time.

Certificate-based land charge (Sections 1191, 1116 BGB): Comes into existence through agreement, registration, and-unless excluded-the issuance of a land charge certificate. The transfer of the certificate-based land charge may take place without land register entry through agreement and the handover of the certificate (Section 1154(1) BGB). This enables quick transfers but entails transparency risks.

The Nuremberg Local Court maintains the land registers for the city of Nuremberg. For new registrations, a registered land charge is entered by default unless the applicant specifies otherwise. The land registry office does not actively inquire about the desired form-this information must be included in the notarial deed.

The non-accessory nature of the land charge has an important consequence: it remains effective even after the loan has been fully repaid and can be reactivated for new loans. For this, a so-called declaration of purpose must be in place, specifying for which loan the land charge serves as collateral. If there is no current declaration of purpose, the bank can use the land charge for the owner’s new liabilities-a risk that owners should be aware of.

Practical Comparison: Strengths and Weaknesses of Both Forms

Feature	Registered Land Charge	Unregistered Land Charge
Transfer	Only via land registry entry	Possible without land registry entry
Time required for transfer	Greater (land registry involved)	Less (only transfer of certificate)
Risk of loss	No physical object can be lost	Certificate can be lost or stolen
Transparency	Creditor always visible in the land register	Current creditor not always visible in the land register
Priority for banks (2026)	Yes (standard for new registrations)	Only in special structures
Reactivation after repayment	Possible as an owner’s land charge	Possible as an owner’s land charge
Loss of certificate	Not applicable	Publication procedure required (time-consuming)

Source: WEG Act (as of WEG Reform 2020 + 2026 amendments), BGB, GNotKG table, Bavarian Justice Portal, Nuremberg/Fürth/Erlangen Land Registry, as of Q1/Q2 2026.

Practice: Mortgage Deeds for Existing Properties in Nuremberg

Numerous mortgage deeds can still be found in existing properties in Nuremberg that were financed between the 1970s and 1990s. These can lead to problems during a sale or when refinancing:

Problem of a lost deed: If the land charge deed has been lost-a common problem after decades-a public notice procedure must be initiated at the Nuremberg Local Court (Section 1162 BGB in conjunction with Section 946 ZPO). In practice, this procedure takes six to twelve months and incurs court fees as well as costs for public notices.

Unknown current creditor: With a land charge certificate, the current creditor is not necessarily registered in the land register. If the land charge has been assigned multiple times, the current holder may be unclear. In such cases, the owner must reclaim the land charge certificate and trace the chain of assignments. This is particularly relevant when banks have sold loan portfolios to other financial institutions or funds.

Securitization and Resale: Especially during the 2008/2009 financial crisis, numerous land charge deeds were sold to investors along with the secured loan receivables. Owners who had real estate loans during this period may be faced with land charge deeds where the current creditor is no longer the original bank, but rather an investment fund or a special purpose vehicle.

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Conversion Before the Sale: To avoid these issues, it is advisable to convert any existing registered land charges into book land charges before the notary appointment when selling a property. This significantly simplifies the process: Immediately after an agreement is reached, the notary can use the land registry extract as reliable proof without having to request the registered land charge document.

Costs of Land Charge Registration and Administration

Transaction Value (Land Charge Amount)	Notary Fee for Registration (0.5x)	Land Registry Fee	Total (approx.)
€100,000	approx. €137	approx. €200	approx. €337
€200,000	approx. €218	approx. €310	approx. €528
€300,000	approx. €272	approx. €390	approx. €662
€500,000	approx. €468	approx. €610	approx. €1,078

Note: According to Table B of the GNotKG, the notary fee for the creation of a land charge is 0.5% of the transaction value. In addition, there are fees for the execution of the transaction and, if applicable, the notarization of the declaration of purpose. Transaction value €100,000 → basic fee €273; transaction value €500,000 → basic fee €935 (as of GNotKG 2026).

For a registered land charge, additional costs are incurred for the issuance of the certificate (approx. €20-30). Converting an existing registered land charge into a book land charge typically costs half the fee under the GNotKG at the land registry office, plus an execution fee.

Owner’s Land Charge: Practical Use After Repayment

After the loan has been fully repaid, the land charge continues to exist as an owner’s land charge (Section 1196 BGB). This is not an error, but a deliberate structural option: The owner’s land charge can be reactivated for future refinancing by assigning it to a new bank-without incurring new registration costs and without a new land registry entry (for a land charge in the form of a certificate) or with a simple deed of assignment (for a book land charge).

In Nuremberg, many property owners take advantage of this option for follow-up financing: Instead of canceling an existing land charge and creating a new one, it is simply assigned to the new bank. This saves notary and land registry fees amounting to several hundred euros. The new bank issues a new declaration of purpose linking the new loan to the assumed land charge.

On the other hand, those who do not plan to take out further financing can apply to have the land charge deleted, thereby removing the encumbrance from the land register. This can be more advantageous for buyers, both visually and psychologically, in the event of a planned sale-although informed buyers and their banks know that a land charge can be deleted or transferred upon sale anyway.

Local Nuance: Nuremberg Real Estate Market and Financing Structure

Nuremberg is one of the largest real estate markets in Bavaria. According to the Nuremberg Appraisal Committee 2025, the price range for condominiums was €3,200-5,800 per square meter of living space, depending on location and amenities. The upper price limits are reached in popular locations such as the Old Town, the Burgviertel, Wöhrd, or the Südstadt neighborhoods near Lake Wöhrd.

With standard financing, these prices require mortgage amounts ranging from €200,000 to €500,000. For this price range, the registered mortgage is the standard-banks typically require it; the unregistered mortgage has largely disappeared from the market for new financing in this range.

For existing properties in Nuremberg’s Wilhelminian-style neighborhoods or in housing developments from the 1960s, registered land charges from earlier financing arrangements are still in place. Anyone purchasing and modernizing such a property will often encounter a registered land charge that has not yet been discharged by the seller. The notary clarifies during the purchase agreement discussion whether the registered land charge should be discharged or transferred.

Conclusion for Property Owners in Nuremberg

Registered and book-entry mortgages differ in terms of transferability, transparency, and administrative burden. The book-entry mortgage is the current standard for new financing and the safer option for property owners. For existing properties with registered mortgages, a proactive review is recommended: Is the registered mortgage still in place? Is the current creditor known? If a sale or debt restructuring is pending, it is worth converting to a book mortgage.

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Mortgage Deed: Loss and Public Notice

The loss of a mortgage deed creates a serious legal problem: Without the deed, the mortgage cannot be transferred or discharged-at least not through regular proceedings. However, the law provides a solution: the so-called public notice procedure under Sections 1162 et seq. of the German Civil Code (BGB).

In the public notice procedure, the certificate is declared null and void by a court. The competent court-in Nuremberg, the Nuremberg Local Court (Land Registry)-publishes a notice calling on all potential holders of the certificate to assert their rights. If no one comes forward, the certificate is declared invalid by a public notice order. The land charge can then be discharged without the certificate.

The costs and duration are significant: The process typically takes four to twelve months and costs several hundred euros in court fees plus attorney’s fees, depending on the value of the claim. It is therefore strongly recommended to keep the land charge certificate in a safe place-ideally in a bank safe deposit box or with a notary.

Conversion of a Certificate-Based Land Charge to a Book-Based Land Charge

Owners in Nuremberg who still have an older certificate-based land charge from past financing can have it converted into a book-based land charge. The process is as follows:

Step	Who acts	Costs
Request the certificate from the bank (if held there)	Owner	Free of charge
Notarized declaration of conversion	Notary	According to GNotKG Fee Schedule No. 21200
Registration of the registered land charge in the land register	Nuremberg Land Registry	According to GNotKG Fee Schedule No. 14150
Destroy the deed (officially)	Land Registry	included

The conversion does not change the priority of the land charge and does not affect the bank’s loan security. However, it creates transparency in the land registry and eliminates the risk of losing the deed in the future.

Value Date and Nominal Amount: A Common Misunderstanding

Many property owners confuse the nominal amount of the land charge (the amount entered in the land register) with the current outstanding loan balance (value date). The land charge secures the nominal amount-even if the loan has already been largely repaid. Example: Land charge €300,000, current outstanding balance €45,000. In the event of foreclosure, the bank can only claim the actual debt (€45,000), not the land charge amount.

This difference is particularly relevant during a sale: The buyer sees the €300,000 land charge in the land registry extract and is alarmed-even though only €45,000 is actually outstanding. The notary clarifies this during the purchase discussion; a cancellation of the land charge or a so-called release statement from the bank provides clarity for the buyer.

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Prepared by the my-home.de editorial team in collaboration with regional real estate analysts. Data as of: Q1/Q2 2026.