Foreclosure on Real Estate in Germany

If a debtor does not fulfil their obligation to pay, the creditor can enforce their claim using state force. This takes the form of compulsory enforcement. The lawyers at Schlun & Elseven will advise you on the different types of enforcement in Germany, explain the requirements and the procedure and illustrate the measures you can take as a debtor, third party or creditor.

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Legal advice for Creditors

To ensure that you choose the appropriate enforcement action when collecting debts and comply with the relevant legal requirements, creditors should consult an experienced enforcement lawyer.

Legal assistance for Debtors

Whether you want to act as a debtor or third party to defend yourself against enforcement – we advise you to contact a legal expert to get detailed advice and representation in or out of court.

Legal assistance in Foreclosure Law for Creditors

If a debtor does not fulfil its obligation to pay, the creditor has the option of initiating enforcement proceedings. The creditor can collect the outstanding debt as soon as an enforceable title exists against the debtor. In such cases, creditors have various enforcement measures at their disposal. Each measure has its advantages and disadvantages. To find the most suitable form of debt collection for your case, consult one of our lawyers for enforcement law.

Types of Compulsory Enforcement

A creditor may enforce his pecuniary claim against the debtor by means of compulsory execution against

  • movable property,
  • immovable property or
  • claims of the debtor.

The creditor is free to choose the form of debt collection. Since the form chosen usually covers the entire monetary claim, execution against immovable property is usually only used for very high claims. Enforceable immovable property includes land and the real estate located on it. Such execution against immovable property is also called real estate execution.

Pursuant to Section 830 (1) Sentence 1 of the German Code of Civil Procedure, execution against movable property is carried out by attachment. Pursuant to Section 866 (1) ZPO the creditor may take the following measures during execution against immovable property:

  • Registration of security mortgage for the claim,
  • foreclosure sale and
  • compulsory administration.

If the conditions for enforcement are met, the creditor has a right of choice. The creditor does not have to commit to one measure. It is possible to execute only one or several measures (cf. Section 866 (2) ZPO). A combination of these can also be carried out. For further information contact our lawyers.

Judgment Creditor’s Mortgage

The judgment creditor’s mortgage is regulated in Section 867 ZPO. It does not directly satisfy the creditor’s claim. This type of compulsory enforcement is a security right in rem. The security mortgage is entered into the land register at the creditor’s request by Section 867 (1) Sentence 1 of the German Code of Civil Procedure. The land registry is responsible for this entry and acts as the enforcement body.

The judgment creditor’s mortgage is possible under the following conditions:

  • Fulfilment of the requirements for enforcement (see below),
  • application by the creditor,
  • existence of an enforcement order of more than €750 (cf. Section 866 (3) ZPO),
  • pre-registration of the debtor in the land register (Sections 39, 40 of the German Land Registry Code (GBO)).

Under Section 867 (1) Sentence 2 of the German Code of Civil Procedure, the mortgage exists upon registration. This leads to the applicability of Sections 1186 et. seq. of the German Civil Code (BGB), which regulates the security mortgage.

Since the forced mortgage only secures the creditor, the question arises as to how the creditor’s claim can be satisfied. In order to satisfy these claims, realisation is required, which occurs through forced administration or auction.

Compared to the other types of foreclosure, the compulsory mortgage offers some advantages. The costs of the procedure are usually manageable. In addition, the security mortgage offers the creditor a secured rank compared to other creditors. This becomes particularly relevant in a forced sale. The creditor’s secured position puts him in a better position than creditors without a previously asserted security interest.

Our foreclosure law practice group advises you on whether the compulsory mortgage is the optimal legal solution for your case. We will explain your options and advise you on how to proceed.

Compulsory Administration

The purpose of compulsory administration is to satisfy the creditor from the debtor’s current income, such as rental income. This type of compulsory enforcement measure is often used if the debtor has current liabilities that must be paid to the creditor. In this case, the debtor loses the right to manage and use the property, i.e., the real estate (cf. Section 148 (2) German Act on Enforced Auction and Receivership (ZVG)). The court appoints a receiver who then takes over these tasks.

The duties of a forced administrator include:

  • Performing acts necessary to maintain the economic existence of the property (cf. Section 152 (1) ZVG),
  • ensuring proper use (cf. Section 152 (1) ZVG),
  • assumption of the duties arising in connection with tenancies and leases,
  • payment of all dues, taxes, etc.

Foreclosure administration is possible if the following prerequisites are met:

  • Fulfilment of the requirements for compulsory execution (see below),
  • application by the creditor to the responsible court,
  • proof of the debtor’s status as owner of the property (cf. Section 17 ZVG).

The termination of the proceedings takes the form of discontinuation or annulment.


Through a foreclosure sale, the creditor’s claims are satisfied. In this compulsory enforcement measure, the debtor’s property is sold at auction. The proceeds of the sale are then used to satisfy the outstanding claims. The auction of an object is carried out by the German court responsible for execution (Section 35 ZVG).

The prerequisites to be fulfilled within a forced sale correspond to those of forced administration. First of all, the requirements for the foreclosure sale must be fulfilled. Then an application by the creditor to the responsible court is required. The compulsory auction is ordered by the German court responsible for execution under Section 15 ZVG. Evidence of the debtor’s status as owner of the property (cf. Section 17 ZVG) must also be submitted.

If the responsible court issues the order, it is recorded in the land register under Section 19 (1) ZVG. In addition, the property to be auctioned is seized (cf. Sections 15 and 20 ZVG). Subsequently, the value of this object is determined by an expert appointed by the competent court. If no appeal is lodged against the determined value of the object, the auction takes place.

Since compulsory auctions of real estate mainly involve the sale of one’s own four walls, the prospect of a possible auction often causes the previously unwilling debtor to pay voluntarily. However, this is not the case if the debtor is insolvent.

Partition Auction

The partition auction is a particular variant of the classic compulsory auction. Under Section 180 ZVG, it is intended to dissolve the community. In contrast to the other enforcement measures, the purpose of the partition auction is not to satisfy a claim. This form of compulsory auction is often used if the parties involved cannot agree on the whereabouts of their joint property. If a dispute has arisen between the parties about the whereabouts of a property in which each party has co-ownership, the partition auction serves to dissolve the community of owners.

An application by an entitled person to the competent court is required for the partition auction. All co-owners are entitled. If the competent court issues an order, the property is seized. Under Section 23 (1) Sentence 1 ZVG, this also has the effect of a prohibition of sale.

The following information/document must be attached to the application:

  • Details of all co-owners,
  • description of the property in question,
  • extract from the land register,
  • certificate of inheritance, if applicable.

An enforceable title is not required here (cf. Section 181 (1) ZVG).

After the competent court has approved the application, the property’s value is determined utilising an expert opinion. Then the value limit that must be outbid at the auction of the property is determined. After the auction, the sum paid, minus the costs still to be offset, is distributed among other owners. The distribution of the proceeds is the responsibility of the original co-owners.

Cases in which a partition auction often occurs are those in which, for example, a partnership under civil law (German Partnership Agreement (GbR)), marital communities or communities of heirs are involved.

If you have any further questions about the various foreclosure measures, please do not hesitate to contact our German law firm. Our enforcement practice group answers your questions comprehensively and shows you the advantages and disadvantages of each type.

Prerequisites for Enforcement

To be able to pursue enforcement, the following prerequisites must be fulfilled:

  • Enforcement order,
  • enforcement clause,
  • service of the title.

The Enforcement Title

The essential prerequisite for any enforcement measure (except a partition auction, cf. Section 181 (1) ZVG) is the existence of an enforcement title. Such a title can be obtained, e.g., through the judicial dunning procedure. If a debtor does not comply with the creditor’s request to pay and out-of-court efforts are unsuccessful, the creditor may apply for a dunning order (cf. Section 688 et seq. ZPO). If the debtor still does not pay after the demand for payment has been issued and served within two weeks, the creditor can apply for an enforcement order. If the debtor does not file an objection, the responsible court will issue the write of execution, which constitutes an enforceable title and thus forms the basis of compulsory enforcement proceedings (cf. Section 794 (1) no. 4 ZPO).

Other enforcement titles that may serve as the basis for enforcement include (cf. Section 794 (1) ZPO):

  • Settlements,
  • cost assessment orders,
  • court judgments
  • certificates.

The Enforcement Clause

As a rule, the enforceable title must be accompanied by a clause. Section 725 ZPO reads:

The court certificate of enforceability:

“The above execution copy is issued to (designation of the party) for the purposes of compulsory enforcement “

is to be added to the execution copy of the judgment at its end, it is to be signed by the records clerk of the court registry, and is to be furnished with the court seal.

Bodies that provide a title with such a clause are the records clerks (Section 724 (2) ZPO), judicial officers (Sections 726 et seq. ZPO in conjunction with Section 20 (1) no. 12 of the German Act on Senior Judicial Officers (RPflG)) as well as notaries (Section 797 (2) no. 2 letter a) ZPO).

Service of the Title

The enforcement measures may only commence on the condition that the enforcement order has been served on the debtor. The creditor serves the title. Service by a court bailiff is also possible. However, this must be applied for.

Remedies for Refusal of an Enforcement Clause

If the creditor’s application for an enforcement clause has been rejected, the creditor has the following legal remedies at his disposal:

Legal assistance in Foreclosure Law for Debtors

If a debtor is threatened with foreclosure, they have various legal protection options. Third parties can also take measures to defend themselves. Our lawyers for enforcement law explain which options are available to you as a debtor to protect yourself against enforcement and represent them accordingly to implement your interest.

Legal protection options: Measures against enforcement

The debtor, as well as a third party, have the following measures at their disposal to defend against enforcement:

Action to Defend against Enforcement

One way of defending against an enforcement action is the enforcement defence action or enforcement counterclaim. The action is directed against the enforceability of the title but not against the enforcement order itself.

According to Section 767 (1) of the German Code of Civil Procedure (ZPO), objections concerning the claim itself established by the judgment must be asserted by the debtor by way of action. This refers to objections that only arose after the oral proceedings and can no longer be stated using an objection (cf. Section 767 (2) ZPO). Typical objections are, for example, the fulfilment of the claim or a deferment agreement.

The action must be filed with the competent court and adequately. Under Section 767 (1) ZPO, the court of the first instance is competent, i.e., the court that issued the enforcement order. The action has been adequately brought if it is

  • sufficiently specific (cf. Section 253 ZPO),
  • the execution has not yet been terminated, and
  • the claimant’s right is asserted in the application.

Third-Party Action

Other parties affected by execution also have rights to defence. The third-party action under Section 771 ZPO allows a third party to assert its right. This right is related to an item that has been seized from the debtor. If, for example, an object owned by a third party has been taken, the third party can enforce its right to the object through the action under Section 771 ZPO.

Under Section 771 (1) ZPO, the court in whose district the execution took place has jurisdiction over the third-party action. The statement of claim must also be filed appropriately (see above).