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The Purchase Money Trust Deed is utilized in German property transactions where the purchase price is partially financed by either the seller or a third-party lender. While the concept originates from common law jurisdictions, this document has been adapted to function within the German civil law system, particularly conforming to the requirements of the German Civil Code (BGB) and Land Registry Act (GBO). It serves as a crucial security instrument that protects the lender's interests while facilitating property acquisition financing. The document must be notarized and registered in the Grundbuch (Land Registry), containing specific provisions about the property, secured obligations, payment terms, and enforcement mechanisms. It's particularly relevant in cases where traditional mortgage financing isn't the preferred option, offering an alternative security structure while maintaining compliance with German property law requirements.

1. Parties: Identification of the grantor (property purchaser/borrower), beneficiary (lender/seller), and trustee

2. Background: Context of the transaction, including reference to the purchase agreement and financing arrangement

3. Definitions: Key terms used throughout the deed, including Property, Secured Obligations, and Payment Terms

4. Property Description: Detailed legal description of the property as required for Grundbuch registration

5. Creation of Security Interest: Declaration of the security interest and its registration in the Grundbuch

6. Secured Obligations: Details of the purchase money debt being secured, including principal, interest, and payment terms

7. Grantor's Obligations: Ongoing obligations regarding property maintenance, insurance, taxes, and prohibited actions

8. Default Provisions: Events of default and consequences, including enforcement procedures under German law

9. Insurance and Tax Requirements: Specific requirements for property insurance and payment of property-related taxes

10. Representations and Warranties: Grantor's declarations regarding property ownership, authority to enter agreement, and absence of encumbrances

11. Enforcement Rights: Rights and procedures for enforcement in accordance with German forced sale laws (ZVG)

12. Notices: Requirements and procedures for all formal communications between parties

13. Governing Law: Confirmation of German law application and jurisdiction