German property Sales and Purchase Agreement

German property Sales and Purchase Agreement

German property sale and purchase agreements require notarisation by a German public notary – just having it in writing is not sufficient for a legally binding transfer of real estate. The sale and purchase agreement shall contain a precise description of the object of purchase, i.e. the land to be sold and transferred. In addition, any fixtures (wesentliche Bestandteile) and fittings (Zubehör) of the building and encumbrances are also part of the description of the object of purchase.

Most of the points in the purchase agreement are citations from the civil law book (BGB).

What is in the sales contract?

• Who is the notary?

• Who are  the contracting parties (buyer, seller)?

• Date of the sales contract

• Property Details

• Current land register

• What rights and obligations does the buyer have?

• Purchase price

• Terms of payment

• Notice of conveyance

• Condition and guarantees

• Encumbrances

• Attachments (declaration of division)

Transfer of title/registration of owner Under German law the transfer of title to land is subject to two substantial criteria:

Conveyance of property

Entry into land register

The conveyance of property is a mandatory agreement between seller and purchaser regarding the transfer of ownership of the real estate. It is required in addition to the sale and purchase agreement and must be declared by both parties in the presence of a notary. Commonly, the conveyance of ownership is declared within the sale and purchase agreement and hence does not require a separate notarisation.The entry into the land register completes the sale and purchase of a real estate and makes the transfer of property effective in rem. By entry of the purchaser’s name in section I of the land register the transfer of title is completed and the purchaser becomes the owner of the property.

In order to protect the purchaser and its contractual claim, the parties to the sale and purchase agreement usually provide for the registration of a priority notice (Auflassungsvormerkung). The priority notice is a special German law focused security right which is registered in section II of the land register and protects the purchaser’s claim to obtain title to the real estate and to a correctly ranked entry in the land register. The registration process of a priority notice takes much less time than the actual transfer of title and can usually be obtained within a few days. The priority notice is valid until it is deleted from the land register.

The registration process of the land register usually takes several weeks or even months to complete.

Notarization in Germany