Freigabe von Sicherheiten bei Übersicherung – Ihre Rechte als Kreditnehmer

Marco Rogert — Wed, 12 Feb 2025 13:49:14 +0000

Granting loans or credits usually requires the borrower to have a good credit rating and a secure income. If these requirements are not met, banks often require additional collateral to protect themselves against possible risks. But what happens if this collateral exceeds the actual loan requirement? Over-collateralization can place an unnecessary burden on the borrower and also have legal consequences for the lender.

Find out under which conditions collateral can be released and what rights you have as a borrower.

Security agreement and overcollateralization risk – What borrowers should know

A security agreement specifies which collateral exists between lender and borrower. However, problems arise when this collateral exceeds the actual loan requirement - a case of so-called over-collateralization. This can have financial disadvantages for the borrower and should therefore be carefully checked.

Initial Overcollateralization – Limits and Legal Consequences for Borrowers

Initial over-collateralization occurs when the value of the collateral exceeds the actual credit risk when the loan is granted. The Federal Court of Justice (BGH) specifies that this limit may not exceed 110% of the loan amount. If this value is exceeded, the loan agreement may be invalid, as this constitutes a violation of common decency in accordance with Section 138 Paragraph 2 of the German Civil Code. A significant disproportion between the service and the consideration may render the loan agreement invalid and should be examined at an early stage.

Subsequent overcollateralization and release clauses – rights and options for borrowers

Over the course of the loan term, there may be subsequent over-collateralization if the value of the collateral provided exceeds the outstanding claim. According to the Federal Court of Justice (BGH), the limit is 150 %. If this limit is exceeded, the collateral provider has the right to release the excess collateral.

To avoid over-collateralisation, release clauses can be agreed in the loan agreement. These allow the bank to regularly check the collateral and release it if the collateral value exceeds 150 % of the claim or the realisable value is more than 10 % above the remaining debt. This ensures that the remaining collateral corresponds to the outstanding loan amount.

Banking and capital market lawyers can assist borrowers in such cases to enforce claims and reach a fair solution.

Legal consequences of refusal to release collateral – options for borrowers

If a bank refuses to release collateral despite over-collateralization, this can have serious legal consequences. In this case, borrowers have the right to claim damages. Refusal to release collateral can be viewed as an impermissible appropriation of an owner-like position, which leads to a breach of the contractual obligations under the security agreement.

Affected borrowers can claim compensation for losses incurred or unnecessary expenses. Compliance with overcollateralization limits and the agreement of transparent release clauses are crucial for legally secure loan processing. A balanced collateral strategy ensures the protection of both the interests of the bank and the financial flexibility of the borrower - a right guaranteed by the Basic Law.

If banks do not release collateral despite over-collateralization, you are entitled to legal claims. Our specialist lawyers for banking and capital market law will enforce your rights - competently, purposefully and with many years of experience. Get advice now and secure your financial balance!

FAQs – Frequently Asked Questions

According to the case law of the Federal Court of Justice (BGH), when does over-collateralization exist?

According to the established case law of the German Federal Court of Justice (BGH), over-collateralization exists if the value of the pledged collateral permanently exceeds 150% of the outstanding claim. The security provider can then demand its release.

What does "subsequent over-collateralization" mean for borrowers?

Subsequent over-collateralization occurs when the value of the collateral significantly exceeds the outstanding debt during the loan term. In this case, the security provider can demand an adjustment or release of the collateral.

What role does the German Civil Code (BGB) play in the release of collateral?

The legal basis arises from Section 138 Paragraph 2 of the German Civil Code (initial over-collateralization) as well as from general rules on security agreements, which are specified by German case law.

Can collateral from a security assignment also be released?

Yes. Security interests arising from a security assignment must also be released if they disproportionately exceed the value of the secured claims or exceed the 150 % limit of the German Federal Court of Justice (BGH).

What is a security agreement and why is it important?

The security agreement governs the relationship between the bank and the security provider. It determines which security protects which claim and under what conditions a release must be made.

When is an initial over-collateralization inadmissible under the German Civil Code (BGB)?

An initial over-collateralization of approximately 110,% of the loan amount may be considered unconscionable under Section 138 Paragraph 2 of the German Civil Code (BGB). In such cases, the entire loan agreement may be void.

Can borrowers demand release even without a contractual release clause?

Yes. Even without a contractual agreement, a claim arises from the security agreement and the case law of the Federal Court of Justice (BGH) if the realizable value of the security significantly exceeds the outstanding debt.

What collateral must banks release in cases of over-collateralization?

Basically, all securities – whether land charge, guarantee, pledge or security assignment – are subject to seizure if they unreasonably exceed the value of the outstanding claim.

What can borrowers do if the bank refuses?

If the release of the security is refused, the bank risks being liable for damages. A specialized lawyer can enforce the release of the security from the guarantee agreement or pursue this claim through legal action.

What significance does the bank's legal notice have in disputes over collateral?

The bank's legal notice is important to identify the correct legal representative or responsible legal entity – for example, when claims arising from a security agreement need to be asserted in a formally correct manner.