Waiver of Right of First Refusal

Declaration of Waiver of Right of First Refusal - The declaration of waiver of right of first refusal (also known as a negative certificate or negative attestation) is a statement by the municipality that it will not exercise its statutory right of first refusal under Sections 24-28 of the German Building Code (BauGB) in connection with a specific property sale. Without this declaration, the notary cannot initiate the transfer of ownership in the land register - it is therefore a mandatory prerequisite for the execution of the purchase agreement.

Municipality’s Statutory Right of First Refusal

Under the BauGB, municipalities have a statutory right of first refusal in certain cases: within the scope of a development plan (Section 24(1)(1) BauGB), in formally designated redevelopment areas (Section 24(1)(3) BauGB), in areas with a preservation ordinance (Section 24(1)(4) BauGB), and in areas for which the municipality intends to draw up a zoning plan (Section 25 BauGB). Upon exercising the right of first refusal, the municipality takes the place of the original buyer as the purchaser under the terms agreed upon in the purchase agreement. Exercise of this right is only permissible if it serves the public interest.

In addition to the statutory right of first refusal under the BauGB, a contractual right of first refusal may also exist, which, for example, was agreed upon in the context of estate settlements or between shareholders and entered in the land register. This is governed by § 463 et seq. BGB. Such a contractual right of first refusal must also be taken into account when executing the purchase agreement-the notary checks the land register and the purchase agreement for relevant entries. In this case, the municipality’s waiver of the right of first refusal does not cover the contractual right of first refusal; here, the entitled party must separately waive their right.

Procedure and Deadlines

The notary is legally obligated to provide the municipality with a copy of the purchase agreement. The municipality then has 2 months to decide whether to exercise the right of first refusal. If it does not exercise it, it issues the declaration of waiver of the right of first refusal (negative certificate). Only then does the notary issue the notice of payment due for the purchase price and arrange for the transfer of ownership. In practice, municipalities rarely exercise their right of first refusal-in most cases, the negative certificate is issued within 2-6 weeks.

Overview of the process: After the purchase agreement has been notarized, the notary forwards a copy of the contract to the relevant real estate office. This office checks whether the property is located in an area subject to a right of first refusal and whether exercising it serves the public interest. If no right of first refusal applies or if the municipality waives its right to exercise it, it issues the negative certificate. In Nuremberg, this process is handled by the City of Nuremberg’s Real Estate Office. Buyers should factor this waiting period into their financing plans, as banks will not disburse the loan until all notarial requirements have been met.

When does the municipality exercise the right of first refusal?

In practice, the exercise of the municipal right of first refusal is rather the exception. Typical scenarios in which municipalities actually exercise their right include: the acquisition of land for social housing, securing infrastructure areas (schools, daycare centers, green spaces), preventing luxury renovations in neighborhood preservation zones, and implementing urban development goals in redevelopment areas. In Nuremberg, this primarily affects designated redevelopment areas in neighborhoods such as Gostenhof or St. Leonhard, as well as areas with a social preservation ordinance.

Practical Tip for Property Owners in Nuremberg

We recommend that buyers and sellers in the Nuremberg metropolitan region factor the waiting time for the waiver of the right of first refusal into their timeline planning. In Nuremberg, the processing time at the Real Estate Office is currently approximately 3-6 weeks. In redevelopment areas (e.g., parts of Gostenhof, St. Leonhard), the municipality may actually exercise its right of first refusal-in such cases, it is advisable to inquire in advance with the Real Estate Office whether the municipality plans to exercise this right. The fees for the negative certificate range from approximately 50-150 euros and are typically borne by the buyer.

We also recommend checking before the notary appointment whether the property is located in a redevelopment area or a preservation zone. This information is available from the City Planning Office or via the Nuremberg Geoportal. A positive finding should not necessarily prevent the purchase, but both buyer and seller should be aware of the associated uncertainty. In individual cases, an informal inquiry can be made to the Real Estate Office to determine whether the exercise of the right of first refusal is being considered for a specific property-this can increase planning certainty.

Frequently Asked Questions

Can the municipality simply buy my property?

Only if a statutory right of first refusal exists and its exercise serves the public interest. The municipality then steps in as the buyer under the terms agreed in the purchase contract-meaning it pays the agreed-upon purchase price. The original buyer walks away empty-handed. In practice, the right of first refusal is rarely exercised-in Nuremberg, this occurs only for individual properties in redevelopment areas or for sites of particular urban planning importance.

How much does the waiver of the right of first refusal cost?

The fees are regulated by the municipality and amount to approximately 50-150 euros in Nuremberg. As a rule, the buyer bears the costs as part of the incidental purchase costs. The notary automatically applies for the negative certificate after the purchase agreement has been notarized-the buyer does not need to take any active steps.

What happens if the municipality exercises the right of first refusal?

The municipality notifies the seller of its exercise of the right within the 2-month period. The purchase agreement between the seller and the original buyer is then replaced by the municipality with respect to the buyer-the municipality pays the agreed-upon purchase price. The original buyer is entitled to reimbursement of costs incurred up to that point (e.g., appraiser fees). The buyer may file an objection to the exercise of the right of first refusal and bring a lawsuit-but only if the exercise does not serve the public interest.

Does the waiver of the right of first refusal also apply to contractual rights of first refusal?

No. The municipal waiver of the right of first refusal applies exclusively to the statutory right of first refusal under the German Building Code (BauGB). Contractual rights of first refusal held by third parties (e.g., co-heirs, shareholders, tenants under Section 577 of the German Civil Code (BGB)) must be handled separately. The notary will point out such rights and clarify whether a waiver must be obtained.

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