Number for the month of August: III

The land register extract is one of the most important documents relating to real estate. Before buying or selling a property, it's worthwhile for both sellers and buyers to review it. This is because the land register contains entries that influence a property's value. In addition to, for example, rights of residence, which are found in Section II of the land register, mortgages or liens can encumber a property. These are documented in Section III of the land register.

Section III of the land register contains entries for so-called real estate encumbrances. These can include, for example, land charges. These arise when a construction loan is taken out and the property is registered as security. Mortgages and annuities are also recorded here, along with any preliminary entries, objections, and changes relating to these rights.

For prospective buyers, the question arises whether purchasing a property for residential purposes makes sense if it is encumbered with a land charge or mortgage. This is because there is a risk that the house or apartment could be foreclosed upon, as land charges and mortgages are generally tied to the property itself and not to a person.

Encumbrances recorded in the land register are also important for the seller. Buyers will demand that the entries in Section III be deleted before the purchase. Or they will want to reach an agreement with the seller regarding the existing encumbrances. If they assume the encumbrances, the purchase price will have to be adjusted accordingly. Alternatively, the seller can also negotiate with the relevant bank to transfer these encumbrances to another property – if they own one.

In any case, it is advisable for both parties to know what the land register extract contains in all three sections. A notary can provide advice on this. If a land register extract is not available, a professional real estate agent will obtain it from the land registry office.

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