Due Date of the Purchase Price

Due Date for Payment of the Purchase Price - The due date for payment of the purchase price refers to the date by which the buyer of a property must pay the agreed-upon purchase price. It is specified in the notarized purchase agreement and generally does not take effect until certain conditions are met-in particular, the registration of the priority notice of conveyance, the receipt of official approvals, and the release of encumbrances. The notary notifies the buyer of the due date via a so-called notice of due date.

Conditions for the Due Date

The notary determines the due date for the purchase price only once all conditions specified in the contract have been met:

• Registration of the priority notice of conveyance in the land register in favor of the buyer: This protects the buyer from the seller selling or encumbering the property to a third party in the meantime
• Availability of any required official approvals: e.g., waiver of the municipality’s right of first refusal under § 28 BauGB; without this, no transfer of ownership can take place
• Declaration of release from encumbrances from the seller’s financing bank: commitment to cancel the existing land charge upon receipt of the purchase price
• Consent of the WEG administrator for condominium ownership (if required under the declaration of division)

Only once all these points have been completed does the notary send the notice of due date. This protective system ensures that the buyer pays without assuming any risk: they receive a property free of encumbrances and secured by a priority notice.

Payment Deadline and Consequences of Default

Upon receipt of the notice of due date, the buyer generally has 10 to 14 days to transfer the purchase price-usually to a notary escrow account or directly to the seller and their bank. If the buyer fails to pay by the deadline, they are in default. The seller may then demand late payment interest (legally 5 percentage points above the base rate) and, after setting a deadline, withdraw from the contract.

Conversely, the buyer may not be pressured to pay before the due date-the seller cannot demand payment before the notice of due date is issued. Anyone who pays before the notice of due date (e.g., under pressure from the seller) has no guaranteed protection and bears the full risk of insolvency.

Early Payment

Some purchase agreements provide that the buyer may pay the purchase price even before the notice of due date (early payment), provided certain conditions are met or both parties agree. In such cases, the notary escrow account protects the buyer: The notary holds the money in trust until all conditions are met and only then pays it to the seller. Without a notary escrow account, prepayment is risky and should only be agreed upon if the buyer has excellent creditworthiness and has sought legal advice.

Purchase Price Due Dates in Developer Contracts

A special rule applies to purchases of new construction from a developer: The MaBV (Real Estate Broker and Developer Ordinance) stipulates that the purchase price becomes due in installments only after certain construction milestones have been reached. For example, the first installment is due only after the priority notice of conveyance has been registered and construction has begun; further installments are due after the shell is completed, interior work is done, etc. This installment schedule protects the buyer from making advance payments without corresponding construction work.

Practical Tip for Buyers in Nuremberg

We recommend that buyers in the Nuremberg metropolitan area organize their financing so that the bank can disburse the purchase price within the payment period. Inform your bank immediately after notarization of the expected due date and ensure that all documents required for disbursement (mortgage deed, proof of insurance, bank statements) are submitted on time.

In Nuremberg, the registration of the priority notice of conveyance with the land registry currently takes several weeks-use this time to clarify the disbursement requirements with your bank and submit any missing documents. A smooth payment creates good conditions for a smooth handover process.

Frequently Asked Questions

When will I receive the notice of due date?

The notice of due date comes from the notary as soon as all contractually agreed conditions have been met. In practice, 4 to 12 weeks elapse between notarization and the notice of due date-depending on the processing time of the land registry office and the seller’s bank.

Can I pay the purchase price in installments?

For existing properties, payment in installments is uncommon-the purchase price is usually paid in a single lump sum. For new construction projects from a developer, however, payment is made in up to seven installments based on construction progress, in accordance with the MaBV (Real Estate Brokerage and Developer Ordinance). Individual installment payment agreements are possible but must be specified in the purchase contract.

What is a notary escrow account?

A notary escrow account is a trust account managed by the notary into which the buyer pays the purchase price. The notary only transfers the funds to the seller once all conditions for payment have been met. Notary escrow accounts offer additional security, but they incur fees and are used less frequently today-direct payment to the seller has become the standard.

What happens if the purchase price is not paid after the notice of due date?

Once the payment deadline has passed, the buyer is automatically in default. The seller may demand late payment interest and, after setting a reasonable grace period, may withdraw from the purchase contract. In the event of withdrawal, the seller may claim damages (e.g., for lost rental income, repeat brokerage fees, or the price difference upon resale). The priority notice of conveyance must then be deleted.

What role does the municipality’s waiver of the right of first refusal play upon maturity?

In real estate sales, the notary verifies whether the municipality is entitled to a statutory right of first refusal under § 24 of the German Building Code (BauGB)-for example, in redevelopment areas, land readjustment areas, or areas subject to social preservation statutes. The municipality has two months after receiving the notice to exercise or waive the right of first refusal. As long as no written waiver from the municipality is available, the notary will not issue a notice of due date. In Nuremberg, this particularly affects properties in neighborhoods with neighborhood preservation statutes, such as Gostenhof. The waiver of the right of first refusal is thus a critical milestone in the closing process; buyers should factor this into their timeline. Typically, the process in Nuremberg takes two to four weeks, but may be extended if the municipality requests additional information.

Due Date of the Purchase Price for Partial Payments and Installment Purchases

Although a traditional real estate purchase typically involves a single lump-sum payment, there are situations where installment payment agreements are made-for example, among family members or in special financial circumstances. Such agreements must be detailed in the notarized purchase contract: the amount and due dates of the individual installments, provisions for late payment interest, safeguards for the seller (e.g., through a priority claim on the remaining purchase price or a right of withdrawal), and provisions governing the transfer of ownership. Banks generally do not finance installment purchase models, as they require a full land charge for the initial valuation. Anyone planning such agreements should coordinate this early on with the notary and, if necessary, a tax advisor to avoid unintended tax consequences.

Back to the Real Estate Glossary.