Customs

Customs - Customs (also known as trade practices or commercial customs) are unwritten, industry-standard behaviors and business practices that have become generally accepted in the real estate industry. They supplement contractual agreements and legal provisions where gaps exist. Although customs do not have the force of law, they are taken into account by courts when interpreting contracts (Section 157 of the German Civil Code (BGB) - interpretation in good faith and in accordance with customary practice).

Typical customs in the real estate business

The most important customs include: Transfer of ownership - The property is usually handed over on the day the purchase price is paid in full. Key handover - All keys (front door, basement, garage) are handed over upon transfer in exchange for a receipt. Condition Report - Upon handover, a handover report is prepared with meter readings (electricity, gas, water). Broker’s Commission - The standard market commission in Bavaria is 3.57% including VAT per party. Choice of Notary - The buyer usually proposes the notary. Due Date for Purchase Price - The purchase price is typically due 2-4 weeks after receipt of the notary’s notice of due date.

In addition, there are standard practices regarding the presentation of the energy performance certificate: Since 2014, the seller has been legally required to present a valid energy performance certificate to the buyer before the contract is signed. It is standard practice to advertise the energy performance certificate in the property listing and to have it available during viewings. There is also a standard practice regarding the inclusion of defects in the purchase contract: Known defects are listed in the contract and excluded from the warranty; unknown defects generally fall under the agreed disclaimer of liability (“sold as is”).

Customary Practices Regarding Brokerage Agreements and Marketing

The relationship between the owner and the broker is also shaped by customary practices. It is standard practice for the broker to present a written brokerage agreement before beginning marketing efforts and to clearly disclose the commission. Since the introduction of the “buyer pays” principle for residential rentals (2015) and commission sharing for purchases (2020), the legal framework has become clearer-but the custom of openly disclosing the commission in the property listing and not waiting until asked to provide it remains a professional standard.

Different customs apply to the marketing of commercial real estate: Here, a commission of 4-6% of the purchase price (net) per party is customary, and the buyer typically bears the lion’s share. Since commercial real estate is often marketed to experienced investors, the transparency of commission structures is less strictly regulated compared to the residential real estate market, but is equally expected as standard practice.

Finally, there are customs regarding the handling of competing prospective buyers: We always conduct bidding processes or parallel negotiations transparently and provide all interested parties with the same essential information. The custom of not favoring any prospective buyer without an objective reason protects both the seller (optimal purchase price) and the integrity of the brokerage process.

Legal Significance

Customary practices are taken into account by courts in the interpretation of contracts (Section 157 BGB) and may constitute supplementary contractual terms (Section 242 BGB). If a purchase contract contains no provision regarding handover, the industry-standard practice (handover upon payment of the purchase price) is deemed to have been agreed upon. Customary practices can be waived by explicit contractual provisions-the contractual agreement takes precedence over the customary practice. In case of disputes, an expert opinion from the Chamber of Commerce and Industry (IHK) regarding commercial custom can be obtained.

For private individuals without industry experience, it is important to know that invoking customary practices in a dispute can be difficult if the industry standard of a practice is contested. In such cases, the customary practice must be proven-often through expert opinions or witness statements from industry experts. Anyone relying on specific practices should therefore always agree to them in writing.

Practical Tip for Property Owners in Nuremberg

We recommend that buyers and sellers in the Nuremberg metropolitan region not rely solely on customary practices, but rather set out all essential points explicitly in the contract. Anything not set out in writing leads to uncertainty in the event of a dispute. The purchase contract should contain clear provisions, particularly regarding handover procedures, the condition of the property, fixtures and fittings, and deadlines.

In Nuremberg and Middle Franconia, there are regional peculiarities: For example, it is customary for the seller to bear the costs of canceling existing land charges, even if the purchase contract does not explicitly stipulate this. We guide buyers and sellers through the entire transaction process and point out deviations from market customs in a timely manner to prevent any unpleasant surprises.

Frequently Asked Questions

Are customs legally binding?

Customs are not laws, but they are taken into account in the interpretation of contracts and the determination of good faith. A court may view a custom as a tacitly agreed-upon part of the contract if both parties are experienced in the industry and the custom is generally known. A custom is more likely to be considered binding between an experienced real estate agent and a private seller than between two private individuals.

Can I challenge a custom?

Yes, through an express contractual agreement. If you wish to have a different provision (e.g., handover before payment of the purchase price), this must be clearly agreed upon in the purchase contract. The explicit agreement always takes precedence over customary practice. In the case of surprising or unusual clauses, the notary has a special duty to inform-they must point out if a provision deviates from standard practice.

Do customary practices vary by region?

Yes, customary practices can vary from region to region and even from city to city. In Bavaria, for example, it is customary for real estate transfer tax to be levied at the lowest rates in Germany (3.5%), while higher rates apply in other federal states. The commission amount, the allocation of costs, and the settlement procedures also vary. In Nuremberg and Middle Franconia, customs are based on the recommendations of the IVD Süd and the regional notary chamber.

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