GERMANY Law and Practice Contributed by: Wolfram H. Krüger, Barbara Rybka, Markus Wollenhaupt and Alexander Zitzl, Linklaters
In addition, newly created debt is subordinated by law to outstanding debt to public authorities. 3.8 Lenders’ Liability Under Environmental Laws A lender holding or enforcing security over real estate cannot be held liable under environmental laws due to its position as lender/security beneficiary. Under the Federal Soil Protection Act, the polluter, all current and former users, and all current and former owners of a property can be held liable for contami - nation. The lender can, therefore, be held liable in the unlikely circumstances that they were in possession of the property or that they are themselves the polluter. 3.9 Effects of a Borrower Becoming Insolvent In certain circumstances, a borrower’s insolvency administrator may challenge agreements entered into by the borrower between one month and ten years prior to the filing for the opening of insolvency pro - ceedings. The following are valid reasons for challeng - ing security interests granted by the borrower: • the creditor had knowledge of the borrower’s illi - quidity, or the borrower had already applied for the opening of insolvency proceedings, or the creditor was aware of circumstances leading directly to the conclusion that the borrower was illiquid or had applied for insolvency proceedings; • the creditor is a shareholder of the borrower; • the borrower provided the security intending to dis - criminate against the rights of other creditors and the creditor was aware of this intention; • the creditor did not have a valid right to obtain the security that he or she was not due to receive, or was not yet due to receive, or was due to receive in a manner that was otherwise inconsistent with the original agreement between the borrower and the creditor; • the interests of other creditors were directly preju - diced at the time the security was granted (it not being sufficient that they might have been preju - diced as a result of granting the security); or • the security interest was granted gratuitously. If immediate and adequate consideration was received by the borrower for the transaction for which
the security was granted, it can only be challenged by the insolvency administrator if the transaction was undertaken wilfully to discriminate against other credi - tors’ rights. If a transaction is successfully challenged, the secured creditor must repay any amounts already received or release the respective security interest. 3.10 Taxes on Loans There are currently no taxes or levies in connection with real estate secured mortgage loans or mezza - nine loans in Germany nor are there any proposals to impose those. Statutory notarial and land registry fees apply to any recordings in the land register, relevant for mortgages (see 3.4 Taxes or Fees Relating to the Granting and Enforcement of Security ). In Germany, strategic planning and zoning are gov - erned by federal and state statutory law, as well as regional and local development plans. Key legislation includes the Federal Planning Act ( Raumordnungsge- setz ), the Federal Building Code, the Federal Land Use Ordinance and the building codes of the respective federal states, which regulate building safety mat - ters. The Building Energy Act ( Gebäudeenergiegesetz – GEG) imposes additional requirements regarding energy efficiency and heating systems. The federal states adopt comprehensive plans ( Raumordnung- spläne ) binding on all subordinate planning authori - ties. Municipalities exercise their planning functions at two levels: the development plan for the entire municipal territory ( Flächennutzungsplan ), setting out the main features of permitted land use, and the detailed zoning plan for individual areas ( Bebauung- splan ), which designates specific permitted uses and building restrictions. 4.2 Development Process, Challenges and Enforcement To obtain entitlements to develop or substantially refurbish a property, an application must be submitted to the competent authority. The authority reviews com - pliance with planning law and, if no relevant objections 4. Planning and Zoning 4.1 Planning and Zoning Framework
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