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Registration of Property, s. 1(2)). Secondly, the estate in bankruptcy may adopt all synallagmatic contracts made by A, or by customary or reasonable notice, terminate long-term contracts whether irrevocable or not (Law on Bankruptcy, s. 61).27 If B is protected against termination under the Law on Private Housing or under the Law on Commercial Premises Rent, this protection cannot be set aside.

Any prior mortgage must respect the rights of B, even if granted later, due to the provisions mentioned in Case 2. If B is granted extraordinary rights, these will only stand if B in good faith registered his/her right before the mortgage deed was registered in the Land Register.

England

The basic position in respect of the bankruptcy of the landlord is that the reversion of the lease vests in the trustee in bankruptcy, and is subject to all the liabilities which bind the bankrupt.28 The rights of B, being a separate estate, are not included in these procedures. Further, it is also possible for creditors to seek a charging order against the reversion on the basis of a judgment debt. Again, however, this is limited to the reversion – the rights of B are entirely separate and not included in the procedure.

As to the right to lease mortgaged property, it is acknowledged by statute29 that both mortgagor and mortgagee have the right, subject to contrary agreement, to lease the property which has been mortgaged. If, contrary to such an agreement, the property is leased, the lease will be void as between tenant and mortgagee, but valid as between tenant and landlord/mortgagor.30

France

Under Civil Code, art. 2284 and 2285 (Ord. no. 2006–346 of 23 March 2006) (ex arts. 2092 and 2093 Civil Code), the creditors of A may attach to sell the movable and immovable property owned by A to satisfy their debts from the proceeds of the sale. Civil Code, art. 2193 (Ord. no. 2006–461 of 21 April 2006) provides that, in the absence of specific legislative provisions, attachment and sale in execution of immovable property can extend to all real rights that pertain to the property,

27Consolidated Act No. 1259 of 23 Oct. 2007 and later amendments.

28See Berry, Bailey and Shaw Miller, Personal Insolvency, para. 25.3; Insolvency Act 1986, ss. 283, 306 and 436.

29See Law of Property Act 1925, s. 99. 30 Rust v. Goodale [1957] ch. 33.

including their accessories deemed immovable. The attachment of an immovable includes its fruits other than those covered by a previous attachment (Civil Code, art. 2194, Ord. 21/04/2006). Thus a distinction is made according to whether B’s time-limited right with regard to A’s property is a personal or a real right.

If B has a personal right with regard to the land which is prior in time to the attachment, for example, where B is a tenant, A’s creditors can attach and sell the land in execution only subject to the lease. In fact, the creditor who attaches the property, as well as the new purchaser, will find that the lease is enforceable against them (Civil Code, art. 2199, Ord. 21/04/2006). Whatever their length, leases concluded by the landowner/ debtor (A) after the attachment, however, cannot be enforced against the creditor or against the new purchaser who attaches the property. Proof that the lease was prior in time may be supplied by any means.

The provisions on attachment do not cover other contracts such as a loan for use and a precarious loan, which are rarely used in practice. By analogy, the answer to Case 2 will also apply in this case.

Where B has a real right such as a usufruct on the property prior in time to the attachment, A’s creditors only have rights with respect to the nude ownership of the property (namely the entitlements of ownership which A retained). The landowner/debtor (A) is not entitled to alienate or burden his/her property with other real rights after attachment as attachment renders the property unavailable and limits the debtor’s rights of enjoyment and administration (Civil Code, art. 2198, Ord. 21/ 04/2006). The attachment of land can, however, be enforced against third parties from the time of its publication in the Land Register (Civil Code, art. 2200, Ord. 21/04/2006). Real rights which were not registered prior to the registration of the attachment cannot be enforced against the creditor or the purchaser at the sale in execution (whether under judicial authority, by private agreement or by auction). Thus B’s real right can be enforced against A’s creditors if it was registered in the Land Register prior to the attachment.

The above also applies in the case of the insolvency of A.

If A has created a prior mortgage (hypothe`que)31 over the property, B as a usufructuary will not be able to enforce the usufruct against the

31Please note that for this answer the word ‘mortgage’ has been used although there is an essential difference between the traditional mortgage and the French hypothe`que: the latter is not a transfer of the legal title to the mortgagee, defeasible on payment of the debt, but only a real right in the property owned by another, securing a debt. Thus it has similar features as the charge by way of legal mortgage.

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mortgage creditor. B will, however, be entitled to pay A’s debt secured by the mortgage in order to prevent the attachment and sale of the property, in which case he/she will then have a right of recourse against the nude owner (Civil Code, art. 611). It may also be noted that the purchaser of a real right (whether time-limited or not) who is not entitled to enforce this right against a creditor who attaches the property to which the right pertains because the right was not registered or only registered after the attachment, can nevertheless prevent the attachment by depositing a sum sufficient to discharge the principal debt, interest, and costs incurred due to the attachment creditor and to the registered mortgage (hypothe`que) creditor (Civil Code, art. 2200, para. 2, Ord. 21/04/2006). Where A had previously granted a mortgage (hypothe`que) in favour of a creditor and this security in the immovable had been registered prior to the granting of a time-limited right to B, B cannot enforce his/her right against the mortgage creditor.

Germany

A’s property may only be attached and sold in execution by his/her execution creditors subject to B’s lease (Gesetz u¬ber die Zwangsversteigerung und die Zwangsverwaltung (Law on Forced Sale and Forced Administration), § 57). However, the person acquiring the property in the forced sale is entitled to give notice of termination to B without having to show a justified interest (Law on Forced Sale, § 57a). Certain limitations are applicable in the case of the forced sale of property subject to a residential lease (cf. Civil Code, § 573).

The same considerations apply in insolvency proceedings against A (Insolvenzordnung (Insolvency Code) § 111).

In the case of personal servitudes, the ranking (Rang) of B’s right as registered in the Land Register is the key in attachment proceedings against A. The ranking or order of precedence among several competing rights is determined by the sequence of entries in the Land Register unless all holders of rights concerned agree otherwise (Civil Code, § 879).

If B’s right has been registered prior to the creditor’s right, or if the creditor has initiated the attachment proceedings merely on the basis of a personal right, the acquirer of the property put on forced sale (Zwangsversteigerung) acquires the property burdened with B’s right. If, however, the creditor has a prior mortgage, B loses his/her right (Law on Forced Sale, § 52(1) and, § 91(1)). B is limited to a claim for compensation

to be satisfied out of the remaining proceeds of the forced sale (Law on Forced Sale, § 92(2) and, § 121).32

The agreement creating a permanent right of habitation (Dauerwohnrecht) may stipulate that the right-holder will retain his/her right even in a forced sale initiated by a creditor with a prior registered mortgage. It must be noted, however, that such a provision will require the consent of the mortgage creditor (Law on Apartment Ownership, § 39).

In insolvency proceedings against the landowner (A), B has a remedy (right of vindication) by which he can isolate his/her right from the insolvency assets according to Insolvency Code, § 47 (rei vindicatio in insolvency). B’s right is not included in the insolvency assets if he makes use of the remedy.

Since a hereditary building right must always be ranked first to be validly created and subsequent changes of this ranking will be excluded (Regulations on Hereditary Building Rights, § 10), it will always survive attachment proceedings against the owner of the property (Regulations on Hereditary Building Rights, § 25).

In insolvency proceedings against the landowner (A), the Insolvency Code (§ 47) provides B with a right of vindication against the insolvent estate to protect his/her right in the property. By using this remedy, the holder can ensure that his/her right is not included in the insolvency assets of A.

Greece

The Greek Code of Civil Procedure (CCP, art. 1009) provides that if property subject to a lease is sold at a forced sale, Civil Code, arts. 614 and 616 are applicable by analogy. This means that if A’s creditors attach the property only a lease which can be evidenced by a deed bearing a certified date or, in the case of a lease for more than nine years, a lease which is notarially executed and transcribed in the conveyance records of the Land Register can prevail (Civil Code, art. 618).33 It has been pointed out34 that the said CCP, art. 1009 must be interpreted in correlation

32See Petzold, Mu¬nchener Kommentar, § 1030, no. 34 (usufruct). See also ibid. no. 33 regarding the usufructuary’s right to prevent a forced administration (Zwangsverwaltung) of the property.

33See Case 2.

34Nikolopoulos, in Kerameus, Kondylis and Nikas, Code of Civil Procedure, vol. 1, p. 1009, no. 5; Yessiou-Faltsi, Forced Execution, p. 127.

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with CCP, art. 997, para. 1. Accordingly, it applies to leases that have been entered into before the attachment.

The consequences of a lease executed after attachment are stated in CCP, art. 997, para. 1, as amended by Law 2298/1995, art. 4, para. 22. CCP, art. 997, para. 1 sents. 2 and 3 provides that if the property is leased after its attachment the bidder can terminate the lease within three months from the transcription of the summary of the adjudication report. In such a case, the lease ends after six months and the execution provided in CCP, art. 1005, para. 2 follows. The right of the bidder to terminate a lease which cannot be evidenced by a deed bearing a certified date (Civil Code, art. 615 in combination with CCP, art. 1009) is not affected (CCP, art. 997, para. 1, sent. 4).

On A’s bankruptcy some time after the creation of the lease, the lease, as a rule, being a contract that has a continuous character, continues to be valid, unless otherwise stipulated in the law or the contract (Law on Bankruptcy 3588/2007, Πτωχευτικός Kώδικας, art. 31). Consequently, the property must be sold subject to the lease in a forced sale. It must be checked, however, if the lease was concluded during the so-called ‘suspect’ period, that is, between the date when the debtor stopped making any payments and the official declaration of the bankruptcy by the court (Law on Bankruptcy, art. 41).35 A lease concluded during the ‘suspect’ period is obligatorily revoked by the court if the rent is disproportionately low (Law on Bankruptcy, art. 42) or if the tenant knew on conclusion of the lease that the landlord had stopped all payments to creditors and that the lease was detrimental to them (Law on Bankruptcy, art. 43). A court decision is needed for the revocation (Law on Bankruptcy, art. 48). If the lease is concluded after the declaration of insolvency, it would be inoperative, as are all acts of administration of the insolvent’s property made without the approval of the insolvency administrator (Law on Bankruptcy, art. 17, § 1).

Where property subject to a registered personal servitude of usufruct or habitation is attached, the personal servitude will prevail in a forced sale if it was created before the attachment and eventual forced sale of the property. This means that the property will be sold subject to the usufruct or right of habitation. The position will presumably be the same in the case of A’s insolvency unless the usufruct or habitation has been registered during the ‘suspect’ period.

35The term ‘suspect period’ follows the French term ‘pe«riode suspecte’, suggesting the influence of French models on Greek commercial law.