The Law of the Residential Property Credit Directive and the amendment of commercial law require the lender to perform a creditworthiness check (§§ 505a-505d BGB). These rules apply to all consumer contracts concluded after 20 June 2016.

In the future, a distinction will be made between general consumer loan agreements and real-estate consumer contracts, but the scheme applies to both types of consumer contracts, as well as to pay-for-money financing and free lending and financial assistance.

Importantly, the lender must be an entrepreneur and the borrower must be a consumer. Entrepreneurs include not only credit institutions and financial service providers, but also entrepreneurs whose lending business is non-commercial or has a scope requiring commercially-based business operations. With regard to the information obligation, a distinction must be made between real estate and general consumer contracts.

In the case of real consumer contracts, the lender has a duty to inform the consumer what information and evidence is required and to set a deadline for it, as well as that the timely disclosure of the information and evidence is indispensable. A breach of the obligation to inform has the consequence that no loan agreement may be concluded. There is no specific information requirement for general consumer loan agreements. A general consumer credit agreement may only be concluded if there are no significant doubts as to the fulfillment of the consumer’s obligations, whereas a real estate consumer loan agreement may only be concluded if it is likely that the consumer will fulfill its obligations. The yardstick is the credit check, which can not be based solely on the current or speculative appreciation of the property to be encumbered, but primarily on the ability of the credit applicant to fulfill its contract, using internal and external sources.

If a loan agreement is concluded between the lender and the consumer, even though the lender has carried out no or a faulty credit assessment or despite negative creditworthiness, the contract is not void under § 134 BGB, but rather leads to a change in the agreed interest rate, the termination rules and Elimination of claims for non-performance.

Elen Braatz (Hamburg, July 2017)