Land purchase agreement

Real Estate Purchase Agreement - A real estate purchase agreement is a notarized contract for the purchase of land or a property. According to Section 311b of the German Civil Code (BGB), any contract by which a party undertakes to transfer ownership of land must be notarized; without this formality, the contract is void.

Essential Contractual Provisions

A real estate purchase agreement contains a series of standard provisions that the notary drafts based on the agreements between the buyer and seller.

The contracting parties are listed with their full personal details. The subject matter of the contract describes the property, including the cadastral district, parcel, and parcel number, as well as the buildings on the property and any included fixtures. The purchase price and payment terms are specified-typically, payment is processed upon fulfillment of certain conditions for due date, following a notice of due date from the notary.

The transfer of title (legal agreement regarding the transfer of ownership) is usually declared in the purchase agreement, but is only released for entry in the land register after full payment of the purchase price. To protect the buyer, a notice of transfer is entered in the land register immediately after notarization, ensuring that the seller does not sell or encumber the property elsewhere.

Other provisions concern the transfer of possession (economic transfer of benefits and encumbrances), the exclusion of warranty (standard practice for used properties, limited for new constructions), the release from encumbrances (discharge of the seller’s existing land charges), and the allocation of costs (notary and land registry fees are generally borne by the buyer, while cancellation fees are borne by the seller).

Contract Execution Process

After notarization, the notary handles the entire contract execution process. He arranges for the registration of the priority notice of conveyance, obtains the cancellation authorizations from the seller’s mortgage creditors, checks for any necessary approvals (such as the municipality’s right of first refusal under Section 24 of the German Building Code), and, once all requirements are met, issues the notice of due date to the buyer.

Once the purchase price has been credited to the seller’s account, the notary arranges for the transfer of ownership in the land register. The entire settlement process typically takes six to twelve weeks. The buyer only becomes the legal owner upon entry in the land register.

Practical Tip for Nuremberg and the Metropolitan Region

We recommend that buyers in the Nuremberg metropolitan region request the draft contract from the notary at least two weeks before the notarization date and review it carefully. The notary is legally required to provide the draft 14 days before the appointment if a consumer is involved. Use this time to clarify any open questions with the notary and, if necessary, request changes.

Especially with pre-owned properties, the warranty exclusion should be critically reviewed: Despite the exclusion, the seller remains liable for defects fraudulently concealed. We recommend having an expert appraisal prepared before the purchase and explicitly documenting known defects in the purchase agreement.

Frequently Asked Questions

Can I withdraw from the real estate purchase agreement?

Withdrawal after notarization is only possible under strict conditions-for example, if a right of withdrawal was contractually agreed upon, the buyer fails to pay the purchase price on time, or the seller fraudulently concealed defects. A general right of withdrawal, as exists for online purchases, does not apply to real estate purchases. The notarization is specifically intended to ensure that both parties understand the implications of their declaration before the contract is finalized.

Who chooses the notary when buying real estate?

In principle, the parties are free to choose a notary of their choice. In practice, the notary is often suggested by the buyer, as the buyer bears the costs. However, it is common and permissible for the seller or the broker to recommend a notary as well. Since notary fees are set by law, the choice of notary does not affect the total cost.

What documents do I need for the notary appointment?

Both the buyer and seller need a valid ID card or passport. The notary typically obtains the current land registry extract independently and verifies the ownership structure. If financing is involved, the notary requires the mortgage deed from the financing bank. If represented by a third party, a notarized power of attorney is required. We also recommend bringing the energy performance certificate and-if available-construction plans and the declaration of division to the appointment.

Special Cases and Specifics Regarding the Purchase Agreement

Certain purchase agreement scenarios require special attention. For new construction or developer contracts, the provisions of the Real Estate Broker and Developer Ordinance (MaBV) apply in addition to the standard purchase agreement clauses: The developer may only call for payments in specified installments and only after construction work has been completed. This protects the buyer from pre-financing risks.

For properties with multiple owners (community of heirs, fractional co-ownership), all co-owners must sign the purchase agreement or be represented by a notarized power of attorney. If even one co-owner’s consent is missing, the contract is invalid. This is a frequent cause of delays, particularly for inherited properties in the Nuremberg metropolitan region.

For purchase agreements subject to a condition precedent (e.g., the granting of a building permit or municipal approval), the condition should be clearly formulated, and a right of withdrawal should be agreed upon in the event that the condition is not met. We guide our clients in Nuremberg and the metropolitan region through the entire purchase agreement process and ensure that all relevant points are reviewed before the notary appointment takes place.

Right of First Refusal in Real Estate Purchases: What Buyers Need to Know

A frequently underestimated aspect of real estate purchase agreements is the municipality’s statutory right of first refusal under Sections 24-26 of the German Building Code (BauGB). In certain areas-redevelopment zones, urban development areas, areas with local resident models, or within the framework of infill development concepts-the municipality has the right to enter into the purchase agreement on the same terms within two months of the contract’s conclusion. The notary is obligated to submit the purchase agreement to the municipality for a right of first refusal review. Only after receipt of the negative certificate (confirmation that no right of first refusal is being exercised) or after the deadline has expired can the transfer of ownership take place.

In Nuremberg and the metropolitan region, the city’s right of first refusal is actually relevant for inner-city conversion areas and in redevelopment zones-such as parts of Gostenhof or in the Nordstadt. Checking whether a right of first refusal exists is part of the standard due diligence process before any property purchase in the region and is carried out by the notary as part of the purchase agreement process.

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