Pledge of Notice of Ownership Transfer 

Definition

A legal document that serves as a notice on the transfer of ownership of a real estate as recorded in the land register. A financial insitution can collateralize the contractual claim of a third-party (buyer) on the basis of a notice of ownership transfer and an own real estate lien that is ordered for registration. The own lien can effectively be registrated after ownership of the real estate has been transferred.

 

In the standard system, you must enter the following details for the pledge of notice of ownership transfer:

·        Identification and type of the special arrangement

·        Status

·        Date of signing the agreement

·        Date on which the business partner signed the contract

·        Date until which the certificate is valid

·        Date when the special arrangement must be monitored for fulfillment of the obligation

·        Date of disclosure of the pledge

·        Purchase agreement identification and date

·        Business partner in partner function Notary, Borrower and Collateral taker.

 

Example for the scenario of a pledge of notice of ownership transfer:

Figure illustrating the scenario for a pledge of notice of ownership transfer:

The scenario illustrated in the figure can be explained as follows:

The buyer requires financing for the purchase of a real estate. The financial institution however, insists that the buyer must produce the charge on the real estate as collateral. Since the buyer is not yet the owner of the real estate, he can use a notice of ownership transfer (that conveys that a change of ownership is recorded in the land register in favor of the buyer) and an own land charge requested for registration in land registry, to secure the loan from the financial insitution.

 

If a pledge of notice of ownership transfer available, the respective internal lien has to be set to statuses legally active and calculation relevant. Figure 2 illustrates this scenario.

 

Figure2: Set system statuses legally active and calculation relevant for the pledge of notice of ownership transfer