Challenge of rent payments to mortgagees — BGH decides

The Federal Court of Justice (BGH) has ruled in favor of the insolvency administrator and determined that all creditors suffer harm if and when rental payments that fall within the joint liability of a mortgage are effected to a mortgagee if the attachment of the rent claims on which the payments were based was not insolvency-proof.

The consequence is that the insolvency administrator may demand return of the payments from the creditor by challenging the payments under insolvency law to the benefit of all insolvency creditors. However, the mortgagee may plead that there is no intention to disadvantage creditors if a silent receivership in compliance with the provisions of the Act Regarding Forced Sale and Receivership [ZVG] has been agreed. The case has been referred back to the Frankfurt am Main Higher Regional Court (OLG), which will now have to decide on the concrete realization of this decision in the specific case.

The decision (BGH IX ZR 162/16) was obtained by BRRS partner Dr. Stephan Schlegel.

Bild: © Patrick Daxenbichle, Adobe Stock