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Collateral enforcement for maintenance/works contractors

Pursuant to Section 647 of the German Civil Code (BGB), the contractor is privileged by law with a pledge of rights to the items brought in as part of service and maintenance work as long as they are in his possession. This pledge of rights serves to secure his contractual claims.

Instead of time-consuming and costly dunning or legal proceedings, the legislator provides the option of efficiently realizing outstanding claims by publicly auctioning the pledged items. Any postponement of the realization of claims leads to avoidable loss of value — please note § 43 para. 1 GmbHG: Managing directors are obliged to minimize damages.

We have been providing professional and legally compliant collateral realization services for many years — with special expertise for industrial maintenance companies, automotive companies, repair service providers, aircraft and boatyards and other sectors.

Advantages of the realization of liens:

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We specialize in the enforcement of liens for contractors:

Legally compliant implementation

Recycling is carried out in compliance with legal requirements and compliance regulations — even for embargoed goods.

Identification and selection

Commercial expertise in generating suitable prospective buyers, nationally and internationally, for higher sales proceeds

Pool of prospective buyers

A circle of interested parties for objects of all kinds built up over many years

Maximum legal certainty

Reduction of liability due to statutory provisions in the case of realization by publicly appointed, sworn auctioneers by way of public auction.

Many years of experience

For more than fifteen years, we have been called in to realize on the basis of § 647 BGB (German Civil Code) (contractor’s lien).

Time and cost savings

No time-consuming and cost-intensive dunning and legal proceedings necessary.

We perform due to:

§ Section 647 BGB Contractor’s lien

In accordance with Section 647 BGB , the contractor has a statutory pledge of rights to the customer’s items brought in or repaired by him on account of his claims arising from the contract if they came into his possession during manufacture or for the purpose of repair.

Your client does not pay? We enforce your pledge of rights.

We offer legally compliant and efficient solutions for the realization of receivables for companies in the industrial maintenance, automotive, aircraft and boat building and related sectors.

Legally secure enforcement of claims by public auction

As a generally publicly appointed, sworn auctioneer, we are authorized to realize claims based on statutory and contractual pledges of rights by public auction — legally compliant, quickly and economically efficient.

Unbureaucratic and efficient processing

Your claims are enforced without lengthy legal proceedings. Our expertise guarantees a structured and rapid realization of your collateral.

Implementation usually within 4 to 5 weeks

Early commissioning eliminates significant delay factors:

No dunning or legal proceedings required
No court appointments or enforcement proceedings necessary
No waiting times for bailiffs

Cost-efficient enforcement — without any other upfront financial outlay

Your statutory pledge of rights arises immediately when the debtor defaults on payment. By instructing us, you avoid

Costs for debt collection agencies
Fees for debtor investigation, reminder notices and court proceedings
Advances for bailiffs and experts.

Remuneration: Our remuneration is mainly based on the buyer’s premium — you only incur the expenses for the legally required public announcement; as a rule, there are no further costs or financial advance payments.

Conclusion

The realization of collateral by way of public auction is a legally secure, fast and economically sensible alternative to lengthy and cost-intensive court proceedings. Contact us at an early stage to enforce your claims efficiently.

Questions about:

Costs

Manageable costs

We are obliged to carry out the valuation and realization at reasonable costs, taking into account the rights of all parties involved. The amount is based on the type of pledge and the effort required to achieve adequate realization proceeds in the interests of the debtor. As remuneration for his expenses and activities, the auctioneer receives a lump sum from the client and a so-called premium on the hammer price from the buyers. In order to avoid any accusation of squandering, the pledge should be advertised in an appropriate form. The greater the demand for the pledged item, the lower the flat fee.

Important to know: The debtor bears the costs of the proceedings. Unrealizable costs can be claimed as expenses for tax purposes by the creditor.

The Auctioneer shall have unlimited and personal liability for culpable breaches of duty. The client cannot release the auctioneer from this liability for damages. The auctioneer’s remuneration is therefore always also a liability remuneration.

Special situation insolvency

Quick guide to the contractor’s lien
Debtor’s insolvency — act correctly

Immediate situation picture

Services after opening only with express continuation order = debtor-in-possession liability → to be paid with priority.
Communication after filing for insolvency only with the (provisional) insolvency administrator, no longer with the customer.
Time is critical: the earlier the ownership and exploitation position is secured, the higher the chances of realization.

Contractor’s lien — origin and scope

Arises by operation of law in the manufactured or repaired movable item as soon as it comes into the possession of the contractor (§ 647 BGB).
Prerequisites in practical form: Contract for work, claim for remuneration for work, item is the property of the customer, item is (still) in the direct possession of the contractor.
Pledge of rights is tied to possession: the lien position practically ceases to exist when the item is handed over (exceptions only in very special cases).

Decisive in the event of insolvency (priority = possession)

As long as the item remains with the contractor: Pledge of rights exists, segregation position is strong, realization lever lies de facto with the contractor.
If the insolvency administrator obtains direct possession, the administrator generally realizes the assets in accordance with §§ 166 et seq. InsO; the contractor remains entitled to separate satisfaction of the proceeds.
Remember: whoever has direct possession controls the utilization.

Do’s — concrete roadmap

Retain the item / refuse to hand it over until payment for the work has been secured; make consistent use of the pledge of rights.
Immediately in writing to the (provisional) insolvency administrator: reference to the contractor’s lien, clear description of the item, amount of the claim, short deadline for decision (payment / release / realization).
Create as-built and condition documentation: Photos, serial numbers, accessories, location, work and acceptance logs, list of receivables with due dates.
Prepare the method of realization: public auction as a rule; propose immediate realization with a schedule in the case of goods that have lost value.
If continuation by the administrator is desired: Work only against clear, written confirmation of the assets and cost coverage; otherwise, performance is stopped if the matter is secured.

Don’ts — typical mistakes

Surrender “as a gesture of goodwill” → Pledge of rights effectively lost.
Only verbal agreement → risk of evidence and enforcement.
Continued work without a promise of mass → new total loss possible.
Own power outside the scope of the lien → risk of liability.

When to escalate?

No reaction / blockade / loss of value threatens: written reminder + very short grace period.
Then involve the insolvency court (supervision of the administrator) and apply for a speedy liquidation decision or release if the delay is in breach of duty.
Argumentation anchors for time criticism: imminent loss of value, storage costs, obligation for the best possible and speedy realization.

How we support

Quick valuation / lien realization appraisal to secure the segregation position.
Legally compliant public auction by a publicly appointed, sworn auctioneer.
Fire sale for time criticality: immediate buyer activation for the practical implementation of better utilization.

Important for your actions

The contractor’s lien depends on possession. No surrender without payment or a written undertaking to pay, clean documentation, swift and legally compliant exploitation control.