What is the lowest bid (geringstes Gebot) in a compulsory auction?

The geringstes Gebot is the lowest bid the court admits. It covers the costs of the proceedings and all rights that rank ahead of the claim of the creditor pursuing the auction (§ 44 ZVG). It consists of a cash part, which you pay, and the rights that remain in place, which you take on. It is not derived from the market value. The court fixes it with binding effect only at the hearing.

Which rights remain in place after a compulsory auction?

The rights that were taken into account in the lowest bid remain in place (§ 52 ZVG). These are the rights that rank ahead of the creditor pursuing the auction, for example an older land charge, a right of residence, a usufruct or a right of way. The other rights lapse with the award (§ 91 ZVG); a registered Altenteil can survive under state law (§ 9 EGZVG). The court names them at the hearing.

Do I have to take over a right of residence after the award?

If it is part of the lowest bid, it remains in place after the award. The holder may then keep living there to the exclusion of the owner (§ 1093 BGB), and the award order is no eviction title against them (§ 93 ZVG). A lifelong right ends only with the holder's death. If it ranks behind the pursuing creditor, it lapses with the award. Registered as an Altenteil, it can still survive under state law (§ 9 EGZVG).

Lowest bid and rights that remain in place

At the hearing, the court announces the lowest bid (geringstes Gebot) before it calls for bids (§ 66 ZVG). First-time bidders easily take the market value for a starting price and their own bid for the purchase price. Neither is right. The floor for bids is the lowest bid, and it can contain rights that stay in the land register after the award. You take these rights on in addition to the amount you bid. The local court of Dorsten therefore warns bidders explicitly against paying twice („Doppelzahlung“) in its notes for bidders.

This guide shows how the lowest bid is made up, which rights remain in place, what they cost you economically and where to find them before the hearing. A worked example leads from your own budget to your highest cash bid.

What the lowest bid consists of

The court admits only a bid that covers the costs of the proceedings and all rights that rank ahead of the claim of the creditor pursuing the auction (§ 44 (1) ZVG). The floor therefore depends on who pursues the auction and from which rank. The market value plays no part in it.

The lowest bid is made up of two parts:

The lowest cash bid (geringstes Bargebot). It covers the costs of the proceedings, the claims of ranks 1 to 3 of § 10 ZVG, for example privileged service charges of a condominium owners' association or overdue property tax, and the costs and interest of the rights that rank ahead (§ 49 (1) ZVG). This part is paid in money.
The rights that remain in place (bestehen bleibende Rechte). They are not paid out. They stay in the land register and pass to you with the award (§ 52 (1) ZVG).

Bids are made on the cash part only. If you bid more than the lowest cash bid, you raise your cash bid. You transfer this cash bid so that it reaches the court cashier's office before the distribution hearing, and you pay interest on it from the award (§ 49 ZVG). Whoever bids in the courtroom names only this cash amount; the rights that remain in place are added under the conditions of sale.

According to the notes for bidders of the local court of Rotenburg (Wümme), even the court knows the amount of the lowest cash bid only at the hearing. If several creditors of different rank pursue the auction, the one ranking ahead counts only if its order was served on the debtor four weeks before the hearing (§ 44 (2) ZVG). If a creditor withdraws its application or consents to a stay, the basis can change up to the hearing.

Which rights remain in place

A right remains in place to the extent that it was taken into account in the lowest bid and is not to be covered by payment. All other rights lapse (§ 52 (1) ZVG), namely with the award (§ 91 (1) ZVG). Rank in the land register decides. What ranks ahead of the right of the creditor pursuing the auction stays. What ranks behind it falls away. Whoever loses such a right receives money from the proceeds instead, as far as they go; for a right of residence or a usufruct this is compensation for its value (§ 92 ZVG).

The Altenteil departs from this rank rule. It is the provision that, for example, parents reserve when they hand over a farm or a house, and it is also called Leibgedinge, Leibzucht or Auszug. If an easement or a charge for recurring payments (Reallast) is registered as such, it remains in place as far as state law provides, even if it is not part of the lowest bid (§ 9 (1) EGZVG). A party whose prior-ranking or equal-ranking right would be impaired can demand that the court sets its lapse as a condition of sale (§ 9 (2) EGZVG). If the land register shows an Altenteil, ask the court before the hearing whether it would remain in place under the law of the federal state.

Three typical situations show how differently this turns out:

The bank alone pursues the auction from its first-ranking land charge. No mortgage or land charge ranks ahead of it. At most, rights in section II that rank ahead of its land charge remain in place, for example an old right of way.
A lower-ranking creditor pursues the auction, for example from a judicial mortgage entered later, or as a personal creditor without an entry (rank 5 of § 10 ZVG). Then all rights ahead of it remain in place, including the bank's land charge. In this case the lowest bid can exceed the market value.
The condominium owners' association pursues the auction for service charges from rank 2. It ranks ahead of the registered rights of rank 4, and these generally lapse. § 52 (2) ZVG makes an exception for certain easements that burden the whole plot.

What each right means for you

Right	Section	What it means if it remains in place
Land charge, mortgage	III	You take over the encumbrance with its registered amount and its ancillary claims from the award. The creditor can go on enforcing against the property from it; economically, the amount is part of your price.
Right of residence (Wohnungsrecht)	II	The holder lives in the rooms to the exclusion of the owner (§ 1093 BGB). The award order is no eviction title against them (§ 93 (1) sentence 2 ZVG). A lifelong right ends only with the holder's death.
Usufruct (Nießbrauch)	II	The holder takes the benefits (§ 1030 BGB), so lives in the property or lets it and keeps the rent. You keep the ownership.
Right of way, utility right, other easement	II	Often of little economic weight, but it can restrict building or use. The exact content is set out in the grant of registration that the land register refers to (§ 874 BGB).
Right of pre-emption (Vorkaufsrecht)	II	It cannot be exercised in a compulsory auction (§ 471 BGB, for the registered right of pre-emption via § 1098 (1) BGB). If it remains in place, it can apply to a later sale by you.
Priority notice of conveyance (Vormerkung)	II	It secures a claim to the ownership. If the claim exists, the beneficiary can demand your consent to their registration (§§ 883, 888 BGB). Without legal advice, such a bid can hardly be calculated.
Ground rent for a heritable building right	II of the heritable building right's register	It remains in place even without being taken into account in the lowest bid if this was agreed under § 9 (3) ErbbauRG (§ 52 (2) ZVG), and it continues to be payable.

If a mortgage remains in place, you also take over the personal debt in the amount of the mortgage if the debtor is personally liable for it (§ 53 (1) ZVG). For a land charge this applies only if the debtor registered the claim at the latest at the hearing before the call for bids (§ 53 (2) ZVG).

A worked example from budget to cash bid

A detached house has a market value of €250,000. A personal creditor pursues the auction from rank 5. Ahead of it, the land register shows a land charge of €100,000 and a right of way for the neighbouring plot. At the hearing, the court finds that both rights remain in place. The lowest cash bid is €21,000; among other things, it covers the costs of the proceedings and interest on the land charge (§ 49 (1) ZVG). Your economic limit, ancillary costs excluded, is €220,000. Clarify beforehand with your bank how high it can be, as described in the guide on financing.

Item	Amount
Your economic limit	€220,000
minus the land charge you take over	€100,000
minus your estimate for the right of way	€5,000
Highest cash bid	€115,000

If you overlook the land charge and bid €220,000 in cash, you end up spending €320,000, not counting the right of way.

At €115,000 your cash bid is below half of the market value. For the value thresholds, however, what counts is the highest bid including the capital value of the rights that remain in place (§ 85a (1) and § 74a (1) ZVG). With the land charge, that is at least €215,000, so 86% of the market value and thus more than seven tenths.

The same sum counts for two ancillary costs. Real estate transfer tax is assessed on the highest bid including the rights that remain in place (§ 9 (1) no. 4 GrEStG), and the fee for the award on the bid including the value of these rights (§ 54 (2) GKG). Clarify in advance with the tax office or a tax adviser how the tax office values a right without a capital amount. Our cost calculator works with the amount you enter; enter your cash bid and the rights you take over together.

The additional payment amount is not a price for the right

For a right without a capital amount, such as a right of residence or a right of way, the court sets an amount when it fixes the lowest bid (§ 51 (2) ZVG). It is easily read as the value of the burden. Its purpose is a different one: if it turns out that the right taken into account does not exist, you pay this amount in addition to your cash bid, three months after notice and with interest from the award (§ 51 (1) ZVG). For a land charge or mortgage that does not exist, it is the capital amount taken into account (§ 50 (1) ZVG). The local court of Dorsten calls this case rather unlikely in practice and advises you to estimate the economic impairment of a burden you take over yourself.

How heavily a lifelong right of residence burdens you depends above all on the scope of the right, the rental value of the rooms concerned and the age of the holder. Whether the appraisal determined the market value with or without the rights in section II, and what value it attributes to a right, is stated in its valuation part. The guide Reading the appraisal for a compulsory auction shows where to find these passages.

Where to find the rights before the hearing

The court fixes the rights that remain in place with binding effect only at the hearing, naming each one (§ 66 (1) ZVG). You set your limit and your financing beforehand, however. Three sources help:

The appraisal shows the land register as it stood when the appraisal was written, usually with all entries in section II. Which of them remain in place is not stated there.
The court file holds a certified copy of the land register folio and of the deeds it refers to; the land registry sends them to the court after the order (§ 19 (2) ZVG). Anyone may inspect these communications and the claims filed at the court office (§ 42 (1) ZVG). For an extract of your own from the land register, by contrast, you would need a legitimate interest (§ 12 GBO).
At the auction court you can ask from which rank the auction is pursued and which rights would remain in place on the current state of the file. The answer is not binding: rights that were not in the land register when the auction notice was entered can still be filed at the hearing before the call for bids (§ 37 no. 4, § 45 (1) ZVG), and a creditor can withdraw its application.

Where an evaluable appraisal is available, ZVG Melder names critical findings such as a right of residence, a heritable building right or rights that remain in place on the object page; value, holder and rank are shown in the Premium view. Our evaluation relies on the published documents, not on the court file, and does not replace what the court fixes at the hearing. You can see which objects are currently up for auction in the overview.

At the hearing and afterwards

Listen closely when the lowest bid is fixed and note every right with its amount and its additional payment amount. Recalculate your limit before you bid for the first time. The bidding period of at least 30 minutes leaves room for that; how the hearing runs is described in the guide on the auction hearing.

Every party to the proceedings can demand different conditions before the call for bids, for example that a right remains in place that would otherwise lapse (§ 59 (1) ZVG). If it is unclear whether the deviation affects another party, the property is offered both with and without it (§ 59 (2) ZVG). Make sure you know which variant your bid is aimed at.

Conversely, a right that would lapse with the award remains in place if you agree this with the holder and the declarations are submitted in time (§ 91 (2) ZVG). Your payment then falls by the amount the holder would otherwise have received from the proceeds (§ 91 (3) ZVG). This can be an option if the holder of a land charge also finances your purchase. What else awaits you after the award is described in the guide After the award.

In a partition auction (Teilungsversteigerung), the lowest bid follows its own rules (§ 182 ZVG); more in the guide on the partition auction.

In brief

The lowest bid is the floor. It covers the costs and all rights that rank ahead of the creditor pursuing the auction.
You bid in cash only. Rights that remain in place come on top.
Deduct the rights you take over from your limit before you bid.
The rights count towards the value thresholds, real estate transfer tax and the award fee.
The court's additional payment amount is not the value of the burden.
You can inspect the land register entries and filed claims in the court file in advance (§ 42 ZVG); what the court fixes at the hearing is binding.

Note: General guidance, not legal advice. If a right of residence, a usufruct or a priority notice remains in place, expert advice for the individual case is worthwhile.

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The lowest bid (geringstes Gebot) and rights that remain in place: what you take on beyond your cash bid

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