Authority to dispose of

Right of Disposal - The right of disposal is the right to legally dispose of a parcel of land or a property-that is, to transfer ownership, create liens, grant easements, or establish other rights in rem. As a general rule, the owner listed in the land register has the right of disposal. Restrictions on the right of disposal apply in cases of preliminary inheritance, insolvency, guardianship, and marital community of property.

Who has the right of disposal?

As a rule, the owner registered in the land register has sole right of disposal. In cases of co-ownership (e.g., spouses), all co-owners must consent to a disposition. In the case of communities of heirs, the heirs may only dispose of the property jointly (Section 2040 BGB). In the case of legal entities (GmbH, association), the legal representative (managing director, board of directors) acts on their behalf. In the case of a preliminary heir, the right of disposal is restricted: Without an exemption, they may not transfer the property free of charge and may not encumber it without the consent of the reversionary heir.

A frequently underestimated situation is the civil law partnership (GbR): If a property belongs to a GbR, all partners must consent to the transfer, and the representation relationships must be proven to the land registry office. Since 2024, GbRs can be entered in the commercial register, which significantly simplifies the process of proving the right of representation. Buyers of GbR properties should insist on current shareholder resolutions and, if applicable, the commercial register entry.

Restrictions on the Right of Disposal

There are various cases of restricted right of disposal: Restriction on the right of disposal of the preliminary heir (Section 2113 BGB). Requirement for consent in the case of community of property - the spouse must consent (Section 1424 BGB). Prohibition on Disposal in the event of insolvency - upon the opening of insolvency proceedings, the right of disposal passes to the insolvency administrator (Section 80 InsO). Guardianship - the guardian requires approval from the guardianship court for real estate transactions (Section 1850 BGB). Estate administration - the estate administrator may only make dispositions with court approval.

The insolvency situation is particularly relevant for buyers: If the seller is in ongoing insolvency proceedings, it is not the seller but the insolvency administrator who is authorized to dispose of the property. In this case, the purchase agreement must be concluded with the insolvency administrator. The insolvency court may need to approve it. For buyers, such situations sometimes offer price advantages but are accompanied by more complex settlement processes. We recommend seeking legal advice in such cases.

Restrictions on Disposal in the Land Register

In addition to the cases regulated by law, the right to dispose of the property may also be limited by restrictions entered in the land register. Typical entries to be aware of:

A notice of priority for transfer of ownership in favor of another buyer indicates that the property has already been sold and the transfer of ownership has been noted. Although the owner can still formally dispose of the property, the person for whom the priority notice is registered is protected-a second disposition would be void. Buyers should therefore always check whether a priority notice for another purchaser is already registered in the land register.

A note regarding the executor indicates that an executor is managing the estate and that the heir does not have sole authority to dispose of the property in this regard. Without the executor’s cooperation, a disposition by the heir is invalid. Similarly, a right of reversion significantly restricts the preliminary heir’s freedom to dispose of the property-dispositions and encumbrances made without consideration, and encumbrances without the consent of the reversionary heir or the probate court, are generally invalid.

Although easements, real encumbrances, or registered rights of first refusal do not directly limit the right to dispose of the property, they must be taken into account in every transaction, as they directly bind the buyer and can influence the value of the property.

Practical Tip for Property Owners in Nuremberg

We recommend that buyers in the Nuremberg metropolitan area verify the seller’s right of disposal before the notary appointment. Although the notary checks this during the notarization process, early clarification helps avoid delays. Common issues in Nuremberg: In cases of communities of heirs, the consent of a co-heir is missing; in divorce cases, an ex-partner is still listed in the land registry; for properties held by a GbR (civil law partnership), shareholder resolutions are missing.

Request a current land registry extract (no older than 4 weeks) and compare the registered owners with the parties to the contract. If there are any discrepancies or irregularities-such as a priority notice entered in the land registry, a right of reversion, or insolvency proceedings-clarify this with the notary before taking any further steps.

Frequently Asked Questions

What happens if a person without the right to dispose of the property sells it?

A disposition by an unauthorized person is generally invalid-unless the buyer is protected by the public faith in the land register (Section 892 of the German Civil Code (BGB)): Anyone who purchases in reliance on the accuracy of the land register is protected if they acted in good faith and the land register contains no contradictions. The land registry office checks during registration whether the person disposing of the property is authorized-in practice, this generally prevents unauthorized dispositions.

Does my spouse have to consent to the sale?

Under community of accrued gains (statutory matrimonial property regime): Yes, if the property constitutes substantially the entire assets of one spouse-in which case the disposition requires the consent of the other (§ 1365 BGB). Under community of property: Yes, always (Section 1424 BGB). Under separation of property: No, each spouse may freely dispose of their own assets. In practice, the notary verifies the matrimonial property regime and obtains the necessary consent.

How do I prove my authority to dispose of the property?

Proof is provided by: land registry extract (proof of ownership), certificate of inheritance or executor’s certificate (for heirs), commercial register extract (for a GmbH-authority of the managing director to represent the company), shareholder resolution (for GbR or partnerships), court-ordered guardianship approval (for persons under guardianship). The notary reviews the evidence and documents it in the deed.

What to do if the authority to dispose of assets is unclear?

If the seller’s authority to dispose of the property is in doubt, the buyer should make the conclusion of the notarized purchase agreement contingent upon clarification. One option is to agree to a purchase agreement subject to a condition precedent: The agreement is concluded but only takes effect once the authority to dispose of the property (e.g., through a certificate of inheritance or court approval) has been proven. The notary can structure the transaction so that the purchase price is deposited with the notary and paid out only after full clarification and agreement-an effective tool to protect both parties.

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