Key Points at a Glance
- To delete a land charge, the holder of the charge must grant their consent, the property owner must agree to the deletion, and an application must be submitted to the land registry.
- If you plan to take out another loan with the same bank in the near future, for which a land charge will again serve as security, the deletion of the existing land charge should be avoided for cost reasons.
What is the deletion of a land charge?
When a land charge is removed from the land register, this is referred to as the deletion of the land charge. A land charge generally serves as security for the bank that grants the property owner a loan to finance the purchase of the real estate. If the owner fails to repay the loan, the bank can enforce the land charge and satisfy its claim from the proceeds of the property’s sale. Once the borrower has repaid the loan, however, the land charge does not automatically expire. It must be formally deleted from the land register to ensure that the creditor is no longer legally entitled to enforce claims against the encumbered property.
How is a land charge deleted?
To delete a land charge, both the cooperation of the property owner and the consent of the holder of the land charge are required. The following conditions must be met for the deletion to take place:
- Deletion approval: The deletion of a land charge requires the notarised consent of the holder of the land charge — usually the bank that granted the loan to the property owner. This approval generally presupposes that the loan has been fully repaid. Some banks automatically send a deletion approval once the loan has been repaid in full; in other cases, it must be requested separately.
- Owner’s consent: The deletion of the land charge also requires the property owner’s consent to the deletion. This consent must likewise be notarised.
- Application: An application for deletion must be filed with the land registry. To submit this application, property owners should contact a notary, who will first certify the owner’s consent and then submit the deletion request electronically to the land registry.
The deletion itself is recorded in the land register by entering a deletion note. This means that the original entry is not completely removed but marked — typically by underlining — to indicate that the entry has been deleted.
Is it advisable to delete a land charge?
Deleting a land charge is not always advisable. This is because the deletion process incurs costs. If a new land charge for the same bank is to be registered shortly afterwards, costs would arise both for the deletion and for the new registration. Property owners should therefore carefully consider whether deletion is appropriate in their situation.
In the following cases, deleting a land charge may be advisable:
- Sale: If the property is to be sold in the near future, it is usually sensible to have the land charge deleted. Many buyers prefer properties that are free of encumbrances. To simplify the sale process, it can therefore be advantageous to delete the land charge in advance.
- Other creditors: The land register may contain several land charges or other encumbrances. These are ranked according to priority — the higher the rank of a lien, the stronger the creditor’s security position.
By contrast, deleting the land charge is not advisable for property owners who plan to use the property again as collateral for a new loan in the near future. In such cases, deletion and subsequent re-registration would generate additional costs without offering any practical benefit.
How to Proceed with the Deletion of a Land Charge
Before a land charge can be deleted, the declaration of cancellation must be obtained. As outlined above, some banks issue this document automatically once the loan has been fully repaid, while in other cases it must be requested separately. Once the property owner has received the declaration of cancellation, a notary should be engaged to notarize the necessary documents and handle the communication with the Land Registry (Grundbuchamt). If the land charge is issued in the form of a certificate-based charge (Briefgrundschuld), the owner must also provide the original land charge certificate for the deletion process.
How Much Does It Cost to Delete a Land Charge?
The cost of deleting a land charge is approximately 0.3% of the land charge amount and is legally regulated. The notary’s and land registry’s fees are calculated based on the value of the land charge.
The most relevant cost components for deleting a land charge are:
- Land Registry: 0.5 fee (No. 14140 KV GNotKG) – for example, for a land charge of EUR 500,000, the fee amounts to EUR 467.50.
- Notary: The notary’s fees cannot be determined as a flat rate and depend on the individual case. The fee amount is influenced by the type of services the notary provides. If the notary only performs a certification — as is usually the case — the fees are very low (typically no more than approx. EUR 100).
How Long Does It Take to Delete a Land Charge?
Deleting a land charge typically takes several weeks. A more precise estimate is difficult, as processing times vary between different land registry offices.
