Location of the security

(1) The mortgages must encumber land, rights equivalent to land, or rights of a foreign legal system comparable to rights equivalent to land under German law. The encumbered land, and the land to which the encumbered rights relate, must be situated in a Member State of the European Union or another contracting state to the Agreement on the European Economic Area, in Switzerland, in the United Kingdom of Great Britain and Northern Ireland, in the United States of America, in Canada, in Japan, in Australia, in New Zealand or in Singapore; the total amount of loans in states not belonging to the European Union, for which it is not ensured that the priority right of the Pfandbrief creditors under section 30(1) extends to the Pfandbrief bank's claims from those loans, may not exceed 10 per cent of the total amount of the loans for which the priority right is ensured.
(2) Lending against time-limited rights is permitted only where the scheduled repayment of the mortgage ends at least ten years before the right expires, and does not last longer than is necessary for the building's book depreciation on sound economic principles.