unternehmensnachfolge-anwalt.at
Mag. Bernhard Brandauer, Rechtsanwalt
Section 1367 ABGB: when an unsecured guarantee expires after the guarantor's death and what demand the creditor must make on the heirs.
A guarantor's death can be decisive for an unsecured guarantee securing business debt. Section 1367 of the Austrian General Civil Code, the ABGB, provides that the guarantee expires within three years after the guarantor's death if the creditor has failed during that period to demand the due debt from the heir, either in court or out of court.
The rule applies where the guarantee is secured neither by a mortgage nor by a pledge. The documents must therefore be checked together for security, date of death, maturity and every demand made on an heir. General limitation rules for a loan answer a different question.
This article explains that focused issue for business debt. The articles on severance pay and occupational pension in a business transfer and buy-out rights after a shareholder's death or withdrawal address different succession questions.
The check classifies security, the date of death and the creditor's demand. It does not replace a review of the credit and estate documents.
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Review the guarantee, land register and documents concerning any pledge.
Identify the mortgage or pledge, its scope and the outstanding business debt. Section 1367 ABGB addresses, by its wording, a guarantee without those forms of security. The creditor's other rights follow from the agreements and applicable rules in the individual case.
Place the letter, delivery evidence, recipient, date of death and maturity next to each other. A demand must identify the due debt owed by the heir. Only then can the statutory requirement under section 1367 ABGB be assessed.
Record the date of death, the absence of a demand, the security position and the maturity of the business debt. If the creditor did not demand the due debt from the heir in court or out of court within three years, section 1367 ABGB may cause the guarantee contract to expire.
Collect the guarantee and credit agreements, security schedule, date of death, estate documents, maturity notices, demands and delivery evidence. Mark when each heir learned of which debt. This makes the section 1367 ABGB assessment traceable.
Identify whether the issue concerns the principal debtor, a business purchaser, a former shareholder or another security. Section 1367 ABGB is directed at the guarantor's death and the unsecured guarantee contract covered by that provision.
Section 1367 ABGB connects the guarantor's death with the absence of security. Where there is neither a mortgage nor a pledge, the contract expires within three years after the death if the creditor has not demanded the due debt from the heir in court or out of court during that period.
The provision concerns liability under the guarantee contract. It does not decide whether the principal business debt remains owed by the principal debtor. A different security or an independent undertaking also requires its own legal analysis.
The initial review therefore needs four fixed points: the guarantee, the security position, the date of death and the creditor's demand for the due debt. Without one of them, the legal classification remains incomplete.
The date of death is the starting point for the time review. During the following three years, the creditor must demand the due debt from the heir in court or out of court if the guarantee contract is to avoid expiry under section 1367 ABGB. The date of receipt belongs in the chronology.
Internal processing by the creditor does not replace a demand. A general notice of the death or of the existence of a loan is also not automatically enough. The letter and its receipt must relate to the due debt and the correct recipient.
The demand is separate from court proceedings against the principal debtor. The statute accepts a court or out-of-court demand. A provable out-of-court letter can therefore be relevant if it demands the due debt from the heir.
Section 1367 ABGB begins with a specific limitation. It applies to a guarantee that is secured neither by a mortgage nor by a pledge. A land register entry or a validly created pledge can therefore change the legal analysis.
The label in a credit agreement is not enough. Review the security agreement, its creation, the secured amount and whether the security attaches to the guarantee contract. An intention to create a pledge is different from a documented pledge that has been created.
Business debt may involve several forms of security. Keep a mortgage, pledge, other security interests and personal liabilities separate. This shows which part of the exposure may fall within section 1367 ABGB and which part rests on another basis.
Section 1367 ABGB refers to the due debt. The review must therefore establish which business debt arose under the credit agreement or another arrangement and when it became due. An amount that is not yet due cannot simply be treated as a due debt.
Relevant documents include the credit agreement, account statements, acceleration notice, repayment schedule and correspondence with the business. For an overdraft or working-capital facility, the specific event making the balance due needs careful documentation.
Maturity of the principal debt and the demand under the guarantee are connected but separate questions. The file should show when the debt became due, when the creditor demanded it from the heir and which amount each document addressed.
The demand must be made to the heir. After the guarantor's death, record the status of the probate proceedings. Include the available evidence of heirship and the receipt of the statement by which the creditor demanded the due debt.
A letter addressed to the deceased does not perform that function. A letter to a person whose position in the estate was not established or cannot be shown at the relevant time also requires separate assessment. Receipt and content remain decisive.
Where there are several heirs, the recipients must be identified individually. A general statement about the family does not replace a review of whom the creditor demanded payment from and which documents prove receipt.
Start with the guarantee, credit agreement and security schedule. Then add the death certificate, probate documents, evidence of heirship, maturity notices and every court or out-of-court demand.
Build a dated chronology from those documents. Record the date of death, maturity, dispatch, receipt, recipient and content of each demand. Also state whether a mortgage or pledge was created and how much of the debt it secured.
This prevents a general reminder, a letter to the business or a later conversation from being treated too quickly as a demand to the heir. The connection between the debt, heir and time period remains essential.
Possible expiry under section 1367 ABGB answers a narrow question. It does not determine whether a business purchaser is liable for business debt, whether a former shareholder remains personally liable or whether a loan is time-barred under general rules.
The transfer of a business or a company interest also does not automatically connect the purchaser to the deceased owner's guarantee. The transfer, personal liability and security must each be assessed under the agreement, statute and actual completion steps.
For the succession file, keep a separate role map. Identify the principal debtor, guarantor, heirs, business purchaser, shareholders, security providers and creditor letters. That makes clear which issue section 1367 ABGB can resolve.
No. Section 1367 ABGB concerns a guarantee secured neither by a mortgage nor by a pledge. The creditor must also have failed to demand the due debt from the heir in court or out of court within three years.
Section 1367 ABGB refers to three years after the guarantor's death. The review should document the date of death, maturity of the business debt, content of the demand, recipient and receipt.
That cannot be assumed. The statutory rule concerns a demand for the due debt from the heir. A letter to the business or the deceased must therefore be distinguished from a demand to the heir.
Section 1367 ABGB is worded for a guarantee without a mortgage and without a pledge. The creation, scope and connection of the security must be checked against the credit and security agreements.
No. Section 1367 ABGB addresses possible expiry of the unsecured guarantee after the guarantor's death. The principal business debt and general loan limitation are separate issues.
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