REALWorld Law

Real estate finance

Real estate as security

Which assets and rights are considered to be real estate or real rights over which security can be granted to a lender?



Real estate includes the land, buildings erected on it, and fixtures which form part of those buildings. An indication whether a fixture is part of a building could be that the fixture and the building are specially fitted to each other.

If fixtures are not part of the building, it is also possible to take security over fittings, furniture and moveable objects by means of creating a right of pledge. A right of pledge can only be created in relation to transferable non-registered property (ie property which does not need to be registered in order to complete the transfer of that property).

Title to land can either be freehold or leasehold (erfpachtrecht). Note that for the purposes of Dutch law a 'lease' needs to be distinguished from a 'leasehold'. A lease is only a contract; a leasehold interest is a 'real right' or 'right in rem', and can only be created by means of a notarial deed.

Other real rights, apart from leasehold, are apartment rights, common ownership (mandeligheid), and right of superficies (opstalrecht).