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Guarantors Covenant Mortgage Deed for Germany

Guarantors Covenant Mortgage Deed Template for Germany

A formal legal document governed by German law that creates a mortgage security interest over real property provided by a guarantor to secure the obligations of a principal debtor. The deed must comply with German property law requirements, including mandatory notarization and registration in the German Land Register (Grundbuch). It establishes the terms of the guarantee, the scope of the mortgage, enforcement rights, and the guarantor's ongoing obligations regarding the mortgaged property.

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Guarantors Covenant Mortgage Deed

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What is a Guarantors Covenant Mortgage Deed?

The Guarantor's Covenant Mortgage Deed is a crucial security document used in German financing transactions where a third party (guarantor) provides real estate collateral to secure another party's debt obligations. This document is commonly used in corporate financing, real estate development, and family business contexts where related entities or individuals provide property security for group borrowings. It must comply with strict German legal requirements, including notarization under the German Notarization Act (Beurkundungsgesetz) and registration in the Land Register. The deed combines elements of both guarantee law and property security law, requiring careful drafting to ensure enforceability under German law while protecting the interests of all parties involved.

What sections should be included in a Guarantors Covenant Mortgage Deed?

1. Parties: Identification of all parties: Lender, Principal Debtor, Guarantor(s), and any other relevant parties

2. Background: Context of the mortgage deed, reference to the principal debt agreement, and purpose of the guarantee

3. Definitions: Definitions of key terms used throughout the deed

4. Property Details: Detailed description of the mortgaged property, including land registry information and encumbrances

5. Creation of Mortgage: Legal provisions establishing the mortgage, including amount, ranking, and registration requirements

6. Guarantee Obligations: Scope and extent of the guarantor's obligations and liabilities

7. Representations and Warranties: Guarantor's confirmations regarding their capacity, authority, and property ownership

8. Covenants: Ongoing obligations of the guarantor regarding property maintenance, insurance, and other requirements

9. Enforcement Rights: Lender's rights and procedures for enforcing the mortgage in case of default

10. Duration and Release: Terms regarding the duration of the guarantee and conditions for release

11. Costs and Expenses: Allocation of costs related to the deed, registration, and enforcement

12. Notices: Communication procedures between parties

13. Governing Law and Jurisdiction: Confirmation of German law application and jurisdiction

What sections are optional to include in a Guarantors Covenant Mortgage Deed?

1. Multiple Guarantors Provisions: Additional provisions when there are multiple guarantors, defining joint and several liability

2. Spousal Consent: Required when the guarantor is married and the property is part of matrimonial assets

3. Priority Agreement: Required when there are multiple mortgages on the property

4. Cross-Default Provisions: Optional provisions linking default under this deed to other related agreements

5. Foreign Currency Provisions: Required when the principal debt is in a currency other than Euro

6. Insurance Requirements: Detailed insurance obligations beyond standard requirements

7. Special Purpose Vehicle Provisions: Additional provisions when the guarantor is an SPV

8. Change of Control Provisions: Required when the guarantor is a company and ownership changes need to be restricted

What schedules should be included in a Guarantors Covenant Mortgage Deed?

1. Property Description Schedule: Detailed technical description of the property, including plans and land registry excerpts

2. Payment Schedule: Details of any payment obligations, including interest calculations and payment dates

3. Existing Encumbrances: List of existing mortgages, charges, or other encumbrances on the property

4. Form of Notice: Template forms for various notices required under the deed

5. Insurance Requirements: Detailed specifications for required insurance coverage

6. Related Security Documents: List and copies of related security documents

7. Power of Attorney: Form of power of attorney for registration purposes

8. Land Register Excerpts: Current land register information and historical excerpts

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Germany

Publisher

Ƶ

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions




































Clauses






























Relevant Industries

Banking

Real Estate

Commercial Property

Residential Property

Construction

Infrastructure

Manufacturing

Retail

Hospitality

Healthcare

Agriculture

Industrial

Energy

Telecommunications

Relevant Teams

Legal

Real Estate

Finance

Risk Management

Compliance

Credit Administration

Property Management

Corporate Treasury

Securities Administration

Banking Operations

Relevant Roles

Legal Counsel

Real Estate Lawyer

Banking Lawyer

Notary

Property Manager

Finance Director

Corporate Treasurer

Risk Manager

Compliance Officer

Credit Manager

Real Estate Director

Mortgage Specialist

Securities Administrator

Property Rights Registrar

Banking Relationship Manager

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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