How a prohibition on encumbrance and sale under section 364c ABGB blocks the sale: conditions for registration, consent of the beneficiary and deletion.
BRANDAUER Rechtsanwälte
Salzburg law firm for real estate, property and corporate law
Every matter is handled by a coordinated team of lawyers, legal staff and specialists. In property purchase matters we look at the contract, land register, escrow and tax consequences together.
Sometimes a prohibition on encumbrance and sale appears in sheet C of the land register. It forbids the owner from selling or encumbering the property without the consent of a beneficiary. Anyone who wants to buy or sell then finds that the land register status seems to block the sale.
This post explains what a contractual prohibition on encumbrance and sale under section 364c of the Austrian Civil Code is, under which conditions it is registered in the land register and whose consent the sale requires. The deletion of the prohibition and the difference from a judicial or enforcement prohibition are also addressed.
From a lawyer perspective the question at this point is whether the purchase can be registered at all. As long as the prohibition exists and no consent is in place, the land register court rejects the registration. The contract must therefore secure the consent or deletion before the purchase price payment.
Answer one or two questions on the entry in sheet C and on the consent. You receive an initial classification of whether the sale is secured.
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A registered prohibition appears in sheet C and names the beneficiary whose consent the sale requires.
If no prohibition on encumbrance and sale is registered in sheet C, this encumbrance does not block the sale. Still check with an up-to-date extract whether other encumbrances such as mortgages or easements exist. Our encumbrances and land register check offers initial guidance.
Make sure the contract secures unencumbered conveyance as a duty of the seller, in case entries appear after all.
As long as the land register status is not checked, it cannot be said whether a prohibition blocks the sale. Obtain a current extract and read sheet C. How to do this is shown by the post on reading the land register extract correctly.
If a prohibition appears, clarify early who is entitled and whether the consent can be obtained. This decides the timetable of the purchase.
If the consent of the beneficiary is in place or the deletion of the prohibition is prepared, the sale can be settled effectively. Make sure the consent is declared in the form required for registration and that the order of the steps fits the purchase price payment.
A short legal review ensures that consent, deletion and registration interlock cleanly. The term is explained by the entry on the prohibition on encumbrance and sale.
If the consent of the beneficiary is missing and no deletion is prepared, ownership cannot be transferred effectively to the buyer. The land register court rejects the registration as long as the prohibition exists. Obtain the consent or have the conditions for a deletion clarified before you sign.
A contract clause that makes effectiveness conditional on consent or deletion is sensible. This way the buyer does not pay before the barrier is removed. Booking an initial consultation (72 euro) helps to find the right path.
A contractual prohibition on encumbrance and sale operates in favour of a specific person. If that person has died, the prohibition may have lapsed and remain only as a moot entry in sheet C. The deletion is then obtained with proof such as the death certificate.
Before the sale, have it checked whether the prohibition has actually lapsed and how the deletion in the land register is done. This avoids the registration failing because of an outdated entry.
A contractual prohibition on encumbrance and sale is a restriction created by agreement. The owner undertakes not to sell or encumber the property without the consent of a beneficiary. It often serves to secure interests within the family, for example when parents transfer a property and reserve control over later dispositions.
The statutory basis is found in section 364c of the Austrian Civil Code. Such a prohibition operates against third parties, and is therefore effective in rem, only if it is registered in the land register and was created between close relatives. The law names a specific circle, for example spouses, registered partners, parents and children. Outside this circle, an agreed prohibition only operates between the contracting parties and does not block the sale against third parties.
If the prohibition is effectively registered, the owner cannot validly sell the property alone. The buyer only acquires ownership once the beneficiary consents or the prohibition is deleted. We explain the individual terms in the entry on the prohibition on encumbrance and sale.
If an effective prohibition is in sheet C, the path to the sale runs through the consent of the beneficiary. The beneficiary declares consent to the sale and thereby enables the registration of the buyer. The consent belongs given in the form the land register requires for the entry, that is with a certified signature.
Alternatively, the prohibition can be deleted if the beneficiary consents to the deletion. With a deletion declaration the entry disappears from sheet C and the owner can dispose freely. The contract should govern whether consent to the specific sale or the full deletion of the prohibition is sought.
The order of the steps is important. The purchase price payment belongs tied to proof that the consent or deletion is in place and the registration is secured. This way the buyer money does not flow before the barrier is removed. How payment and registration can interlock is shown by the post on the discharge of encumbrances in the contract.
These points decide whether the sale succeeds despite the prohibition. Check each one before you sign.
| Point | Recommended | Possible risk |
|---|---|---|
| Entry in sheet C Checked precisely | Prohibition and beneficiary are recorded | An overlooked prohibition blocks the registration |
| Effectiveness Close relative | A prohibition between relatives operates in rem | Assuming an effect that does not hold in law |
| Consent In certified form | The beneficiary consents to the sale | Consent is missing or formally invalid |
| Deletion Secured by declaration | The prohibition is deleted from sheet C | A moot entry remains in place |
| Order of steps Payment step by step | Purchase price only after the barrier is removed | Payment before secured registration |
A prohibition agreed only between the contracting parties, without registration or without a close family relationship, does not operate against third parties and does not block the sale against the buyer.
Caution before signing: A registered prohibition on encumbrance and sale can prevent the registration of the buyer as long as the consent of the beneficiary is missing. Clarify this barrier before you pay. Booking an initial consultation (72 euro) can quickly bring clarity.
Not every prohibition in the land register goes back to a private agreement. A judicial or enforcement prohibition on sale is ordered in the course of proceedings, for example to secure the claim of a creditor. It follows different rules from the contractual prohibition under section 364c of the Austrian Civil Code and cannot be removed by the consent of a private person.
If such a prohibition is in sheet C, caution is required. Here the prohibition must be lifted by the court or the underlying proceedings settled before a sale is possible. Anyone who does not classify the entry correctly risks concluding a contract that cannot be registered.
Before the purchase, therefore, have it clarified which type of prohibition is present. The land register status and the underlying deeds provide information. Our checklist on the land register and encumbrances and the focus page on the land register and encumbrances offer guidance.
Yes, but only with the consent of the beneficiary or after deletion of the prohibition. As long as an effective prohibition is in sheet C and no consent is in place, the land register court rejects the registration of the buyer. Clarify the consent before signing.
A contractual prohibition on encumbrance and sale operates against third parties under section 364c of the Austrian Civil Code only if it is registered in the land register and was created between close relatives, for example spouses, registered partners, parents and children. Outside this circle it operates only between the contracting parties.
The prohibition operates in favour of a specific person. If that person has died, the prohibition may have lapsed and remain only as a moot entry in sheet C. The deletion is then obtained with proof such as the death certificate before the registration of the buyer takes place.
Our focus page on how the land register is structured and which encumbrances can affect your ownership.
How the deletion of encumbrances is secured step by step with the purchase price payment.
What sheets A, B and C mean and how you recognise a registered prohibition.
Which entries you should check sheet by sheet before you buy.
When buying property, the contract and the land register decide. Call us directly or send an email, callback within one business day.
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BRANDAUER Rechtsanwälte GmbH Giselakai 51 5020 Salzburg
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