Reservation

Priority Notice - A priority notice (priority notice of conveyance) is a protective entry in the land register that safeguards the right to a transfer of ownership or another change in the land register (Section 883 of the German Civil Code). It is entered as a matter of course when purchasing real estate: After the purchase agreement has been notarized, the priority notice of conveyance secures the buyer’s claim to transfer of ownership and prevents the seller from selling or encumbering the property to a third party.

Protective Effect

The priority notice has a strong protective effect: Any acts by the owner undertaken after the priority notice is entered that would frustrate or impair the secured claim are ineffective against the party entitled to the priority notice (Section 883(2) BGB). If the owner sells the property to a third party despite the priority notice, the buyer may demand the third party’s removal from the registry. The priority notice also provides protection in the event of the seller’s insolvency: The claim to transfer of ownership remains in effect, and the property does not become part of the insolvency estate.

The protective effect of the priority notice is relative: It applies exclusively to persons who acquire rights to the property after the priority notice has been registered. A right that already existed prior to registration (e.g., an older land charge) is not affected by the priority notice. The chronological sequence is therefore decisive: The buyer should ensure that the priority notice is registered as early as possible. In practice, the notary applies for registration on the very day of notarization-the date the application is received by the land registry establishes priority (journal number).

Types of Preliminary Notations

In addition to the preliminary notation for transfer of title (the most common form, securing the buyer’s claim to transfer of ownership), there are other types of preliminary notations: Priority notice of retransfer (secures a conditional right to retransfer), priority notice to secure an easement (e.g., future right of way), and priority notice to secure a right of cancellation. All priority notices are entered in Section II of the land register.

A special case is the notice of reversion: It is agreed upon, for example, when property is gifted to children to ensure that the property reverts to the parents in the event of certain occurrences (insolvency, divorce, predecease). In the context of purchases from the municipality (e.g., in the case of subsidized housing construction), cities such as Nuremberg often require a reversionary notice in the event that the buyer does not use the property themselves or resells it before the expiration of a commitment period.

Practical Tip for Property Owners in Nuremberg

We recommend that buyers in the Nuremberg metropolitan area ensure that the priority notice of conveyance is entered in the land register as soon as possible after the notary appointment. The notary applies for the entry immediately after the notarization. At the Nuremberg Land Registry Office, the entry currently takes approx. 2-4 weeks-during this time, your claim is already protected by the receipt of the application (priority based on the journal number). The priority notice remains in effect until the transfer of ownership is completed (typically 4-8 weeks after payment of the purchase price).

Important for buyers in Nuremberg: The time between the notarized purchase agreement and the transfer of ownership for existing properties in the Nuremberg land registry district currently typically takes 2-4 months. The priority notice of conveyance protects the buyer throughout this entire period. We strongly advise buyers against paying the purchase price before the priority notice of conveyance is registered-this would pose a significant risk, as there is no protection in the event of the seller’s insolvency. Exceptions are escrow account models, in which the notary releases the payment only after all security conditions have been met.

Frequently Asked Questions

How much does it cost to register a priority notice?

Registering the priority notice of conveyance at the land registry office costs half the standard fee under the GNotKG - for a purchase price of 400,000 euros, this amounts to approximately 400-500 euros (land registry fee). The notary fees for the application are included in the total notary invoice for the purchase agreement. The cancellation of the priority notice upon transfer of ownership occurs automatically and incurs no additional costs.

What happens if the seller becomes insolvent?

The priority notice protects the buyer in the event of the seller’s insolvency: The claim to transfer of ownership is protected against insolvency (Section 106 InsO). The insolvency administrator must fulfill the purchase agreement if the buyer pays the purchase price. The property does not form part of the insolvency estate. Without a priority notice, the buyer would be merely a general insolvency creditor and would have to file their claim with the insolvency table-often receiving only a minimal distribution.

How long does the priority notice remain in the land register?

The priority notice remains in the land register until the secured claim is fulfilled (transfer of ownership) or extinguished (withdrawal from the purchase agreement, expiration of the term). In practice, the priority notice is automatically deleted upon transfer of ownership. If the purchase agreement is rescinded, the buyer must issue a release authorization. The owner can have a priority notice without an underlying claim deleted by filing an application for correction of the land register.

Does the priority notice also protect against subsequently registered land charges?

Yes. Any land charge registered in the land register after the priority notice of conveyance has been entered is ineffective against the buyer to the extent that it impairs the claim to transfer of ownership (Section 883(2) of the German Civil Code (BGB)). If the seller encumbers the property with a land charge after the priority notice has been entered, the buyer may demand the cancellation of this land charge-even if the bank acted in good faith. This is an essential protective mechanism for buyers during the settlement phase.

What is the difference between a priority notice of conveyance and conveyance?

The notice of transfer merely secures the claim to transfer of ownership-ownership itself has not yet changed hands. The transfer of ownership (Section 925 of the German Civil Code) is the agreement in rem between the seller and the buyer regarding the transfer of ownership and is generally declared together with the notarized purchase agreement. The transfer of ownership in the land register takes place only after all requirements have been met: payment of the purchase price, a tax clearance certificate from the tax office (real estate transfer tax), and release declarations from any creditors. At the Nuremberg Land Registry Office, the final transfer currently takes four to eight weeks after all documents have been received. During this interim phase, only the already registered priority notice of conveyance protects the buyer-another reason why notaries and appraisers strongly insist that the purchase price be transferred only after the priority notice has been fully registered.

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