Act on the Pledging of Real Estate (Mortgage Note Act; ZeG) (Zeddelgesetz; ZeG) (ZeG)

1. With respect to the types of payment, there are

1. Irrevocable notes;

2. Bearer notes;

3. Term notes;

4. Callable notes (payable on demand); and

5. Notes with a contingent call option (payable "upon the death of the creditor").

1. Non-terminable (standing) Notes, whether they adhere to homesteads, houses, or pastures, cannot be terminated by the creditor; however, they can be paid off in whole or in part by the debtor at any time (according to Art. 19).

1. Capital notes, which are payable upon change of hands, must be paid off after the sale of the collateral and following a lawful termination, otherwise the creditor has the right to initiate proceedings against the new owner of the property.

2. If the creditor does not exercise this right, either because they do not seek payment or have reached an agreement with the debtor in this regard, they may only demand payment subsequently following a prior written notice of termination with six months' notice or maintain the change of hands note effective until a subsequent transfer of ownership.

1. For notes payable at fixed terms, prior notice is not required; instead, they may be collected immediately after maturity, if necessary through legal enforcement. If the creditor does not take any steps to collect a promissory note (or due amount) within three months from the maturity of a note, a subsequent notice period of six months shall apply.

1. For capital letters that are payable upon demand, repayment can be requested after a prior six-month notice and, if necessary, collected through legal enforcement proceedings.

1. For all notes existing before this law, the wording of the document remains protected with regard to their payable status.

1. The termination of capital notes remains binding for the new owner in the event of a possible transfer of the collateral, as well as any debt collection initiated for a capital claim.

1. If capital certificates have been redeemed at less than 100 centimes per franc, the subsequent titles advance into the gap thus created.

1. Creditors and debtors may request that the agreed interest rate be recorded in the capital deed; however, the same shall not exceed 5%.

2. Interest payable at the feast of St. Martin (Martinmas interest) can only be legally collected in the interior parts of the country starting from St. John's Day of the following year, unless two interest payments become due together, in which case proceedings may be initiated for both, or in case the capital is being paid off.

3. The collection of so-called rata interest is only permissible on non-callable notes.

1. Any aggravation of existing capital notes (change of currency, increase of interest rate, or making non-callable or limited-callable notes callable) is impermissible without the consent of the other mortgage creditors who might be impaired or otherwise disadvantaged in their proceedings as a result.

1. A note can be redeemed by the debtor with the same amount that is registered on the note. In the case of payment, the creditor can require that notes be paid off up to 500 francs at once, and for notes amounting to several thousand francs, at least 1,000 francs must be paid.

2. When paying off unmatured fixed capital at the full value of 100 centimes per franc, the fixed interest is to be compensated at 5%, and the current or pro rata interest according to the regular interest rate.

3. For older notes established up to St. Martin's Day 1884, however, when paying off redeemable capital and such that is issued at less than 100 centimes per franc and can be paid off according to the wording, the fixed interest is only to be compensated at 4½%, and unless a special written agreement has been made in this regard, no pro rata interest is to be paid from the last interest due date until the payment day.

1. Each partial payment must be noted on the relevant note.

2. A note can only be nullified through land registry cancellation.

1. The pledge shall never be diminished to the detriment of the pledgee.

2. If parts of the pledge are sold, the creditor has the right to lay claim to the proceeds or to terminate the note.

3. Upon division of a note pledge, the creditors may demand payment of their notes.