Key considerations when finalizing a residential property purchase:
In the world of real estate, navigating the complexities of a property purchase in Germany requires careful attention to detail. A **real estate purchase agreement** in Germany is a legally binding contract that follows a specific process and includes essential elements.
The process begins with the notary preparing an initial draft of the purchase contract, known as the Kaufvertrag. This draft is based on completed forms with buyer, seller, and property details, and is sent to both parties at least two weeks before signing to allow proper review and any requested amendments.
The contract must clearly identify the contracting parties and provide a precise description of the property being sold, including technical details. If the property is part of an apartment or condominium, documents such as the Declaration of Division (Teilungserklärung) are important. This includes the Allocation Plan (Aufteilungsplan), the Certificate of Completeness (Abgeschlossenheitsbescheinigung) verifying separateness of units, and the Community Order (Gemeinschaftsordnung) regulating ownership relationships.
The agreed purchase price and payment plan have to be included in the contract. Signing the mortgage contract before the purchase contract is customary to ensure financing is secured. The contract might also reflect rights and obligations regarding common property and special exclusive usage rights.
The notary acts as a neutral intermediary, organizing, checking, and securing the transfer of ownership according to the wishes of the contracting parties. The contract must be signed in the presence of a notary, who ensures the agreement complies with German law and records it officially.
In Germany, after signing a mortgage contract but before final purchase contract signing, the buyer has a 14-day cancellation period without penalties, which provides legal protection before finalizing the property purchase.
The transfer of ownership is finalized once the buyer has made the following payments: real estate transfer tax, land registry fees, notary costs, and the purchase price. The notary's escrow account serves as an additional security for the buyer when the land register entry has not yet been made.
The German Civil Code stipulates that a purchase contract for a house, apartment, or property must be concluded in notarial form. The notary fees are regulated by law and determined by the business value of the property. The notary can be chosen freely by the contracting parties, usually by the buyer who bears the costs.
It is crucial for buyers to pay attention to certain details in the real estate purchase agreement, such as exclusive ownership, right of use of common property, special usage rights, community rules, and co-ownership share. Unmarried couples who purchase an apartment or house together should be registered in the land registry as 50% owners of the property.
In summary, the required elements in a German real estate purchase agreement include the full identification of buyer and seller, detailed property description, the agreed purchase price and payment plan, references to relevant property documents, and the contract must be notarized to be legally binding.
Upon reviewing the real estate purchase agreement, it's essential to ensure that the investment details, such as the agreed purchase price and payment plan, are clearly stated. Additionally, investing in a property in Germany might call for understanding certain aspects, like exclusive ownership, rights to common property, and special usage rights, which are crucial elements in a real-estate finance perspective.
