Careful with M&A Asset Deals in Germany

Pitfalls of German Contract Law (Part 3):  Many Asset Deal Purchase Agreements must be in Notarial Form to be Valid in Germany

German Law requires certain transactions to be recorded before a Civil Law Notary in order for these agreements to be valid and enforceable. The list ranges from pre-nuptial and marriage agreements, to any real estate related transaction, to the formation of German companies and stock corporations.

One aspect is, however, sometimes overlooked even by German corporate lawyers. Namely, the fact that even assets deals may have to be recorded before a German notary if the selling party in this M&A asset deal transfers its entire business operation (Geschäftsbetrieb) or a defined branch of its business, i.e. an entire sector of the business operation (Teilgeschäftsbetrieb).

The relevant statute is sec. 311 b para. 3 German Civil Code which states:

Section 311b BGB:

Contracts on plots of land, assets and an estate

(1) A contract by which one party agrees to transfer or acquire ownership of a plot of land must be recorded by a notary. A contract not entered into in this form becomes valid with all its contents if a declaration of conveyance and registration in the Land Register are effected.

(2) A contract by which one party agrees to transfer his future property or a fraction of his future property or to charge it with a usufruct is void.

(3) A contract by which one party agrees to transfer his present property or a fraction of his present property or to charge it with a usufruct must be recorded by a notary.

 

If, therefore a German company (GmbH) or corporation (AG) sells its assets and the agreement contains – which is often the case – a so called “catch all assets clause”, then the entire agreement must be recorded by a German Civil Law Notary, even if the assets do not consist of real estate (plots of land etc).

The statute does, however, usually not apply if the seller is a sole trader oder a partnership, i.e. a German Gesellschaft bürgerlichen Recht (GBR), a German Offene Handelsgesellschaft (OHG) or a German Kommanditgesellsachaft (KG), but the details are tricky.

If this formal requirement of German law is not observed in a German M&A assed deal, the entire agreement is null and void (nichtig) which may be found out even many years later. In which case, obviously, all hell breaks loose. This aspect should therefore not be taken lightly.

If the parties wish to avoid the involvement of a German Notary in the transaction, they can either do without a catch all clause or they can agree on English or US law to apply to the asset deal which may, however, create other legal problems. Please note that if the deal includes the transfer of German real property (immoveables in Germany), then the involvement of a German notary is necessary no matter what. The same is true if the shares of a German Limited Liability Company are to be sold and transferred.

For more on German business and corporate law see these posts:

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Experts on German-British and German-American Legal Matters

Since 2003, the German business and corporate law firm Graf Partners LLP specialises in British-German and US-German legal cases. Our German business and corporate lawyers are native speaker level fluent in English, have many years of practical experience with clients from Britiain and the USA and are part of a well established network of law, tax and accounting firms.

Managing partner Bernhard Schmeilzl was admitted as German Rechtsanwalt (attorney at law) to the Munich Bar in 2001 and specialises in international cases ever since, with a focus on German-American and German-English commercial, corporate and also probate cases. In addition to obtaining his German legal exams with distinction, he also graduated from the English University of Leicester where he obtained his Master of Laws degree in EU Commercial Law in 2003.

In 2014, Graf Partners LLP has set up the international litigation department GP Chambers which focuses on providing professional litigation services to British and US-American clients, both on a commercial and a private client level. The Graf Partners litigation lawyers regularly appear before German law Courts throughout the country and provide specialist legal advice, support and advocacy services in all commercial and civil law matters, ranging from contract disputes, corporate litigation and employment, to damage claims, divorces and contentious probate. If you wish us to advise or represent you in a German or cross border case, or if you need an expert report on German law, please call +49 941 463 7070.

Is there German Capital Gains Tax when you sell a German Property?

If you buy or inherit German property (whether it is a house, a flat or just a plot of land) and this property is then sold (by you or your heirs) before a period of ten full years has expired, the resulting profit (sale price minus purchase price minus certain related costs like notary fees) is subject to German tax, even if you are not a German tax resident. There are certain exceptions to this rule, e.g. if you have used the German property exclusively as your private residence. If you have inherited the German property, the years during which the legator had already owned the property does count in your favour.

The relevant statute for this capital gains taxation is section 23 German Income Tax Act (Einkommensteuergesetz). The wording of the tax statute is hard to digest even for a German, but in case you wish to try, here you go:

Einkommensteuergesetz (EStG) § 23 Private Veräußerungsgeschäfte

(1) 1Private Veräußerungsgeschäfte (§ 22 Nummer 2) sind: 1. Veräußerungsgeschäfte bei Grundstücken und Rechten, die den Vorschriften des bürgerlichen Rechts über Grundstücke unterliegen (z. B. Erbbaurecht, Mineralgewinnungsrecht), bei denen der Zeitraum zwischen Anschaffung und Veräußerung nicht mehr als zehn Jahre beträgt. 2Gebäude und Außenanlagen sind einzubeziehen, soweit sie innerhalb dieses Zeitraums errichtet, ausgebaut oder erweitert werden; dies gilt entsprechend für Gebäudeteile, die selbständige unbewegliche Wirtschaftsgüter sind, sowie für Eigentumswohnungen und im Teileigentum stehende Räume. 3Ausgenommen sind Wirtschaftsgüter, die im Zeitraum zwischen Anschaffung oder Fertigstellung und Veräußerung ausschließlich zu eigenen Wohnzwecken oder im Jahr der Veräußerung und in den beiden vorangegangenen Jahren zu eigenen Wohnzwecken genutzt wurden; 2. (… not relevant here); 3. (… not relevant here)
(2) Einkünfte aus privaten Veräußerungsgeschäften der in Absatz 1 bezeichneten Art sind den Einkünften aus anderen Einkunftsarten zuzurechnen, soweit sie zu diesen gehören.
(3) 1Gewinn oder Verlust aus Veräußerungsgeschäften nach Absatz 1 ist der Unterschied zwischen Veräußerungspreis einerseits und den Anschaffungs- oder Herstellungskosten und den Werbungskosten andererseits. 2(.. not relevant here) 4Die Anschaffungs- oder Herstellungskosten mindern sich um Absetzungen für Abnutzung, erhöhte Absetzungen und Sonderabschreibungen, soweit sie bei der Ermittlung der Einkünfte im Sinne des § 2 Absatz 1 Satz 1 Nummer 4 bis 7 abgezogen worden sind. 5Gewinne bleiben steuerfrei, wenn der aus den privaten Veräußerungsgeschäften erzielte Gesamtgewinn im Kalenderjahr weniger als 600 Euro betragen hat. 6 (… not relevant here).
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The profit is then considered to be part of your income in the fiscal year in which the German property is sold, more precisely in which the buyer pays the purchase price. As mentioned above, German income tax is levied on this profit even if otherwise you are not a German tax resident. Whether this profit is also considered to be taxable income in your home country (UK self assessment, US income tax or other) and whether there are double taxation treaties in place for such constellations must be assessed in each individual case.
The above does only apply for private property sales (private Veräußerungsgeschäfte). If the buyer is a business or if a private person buys and sells more than three properties in Germany within a period of five years, then the 10 year exemption is not applicable. In these cases any profit is from selling German real estate is always subject to German income or corporate tax.

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More information on buying or selling property in Germany, the German Land Registry, the conveyancing process and the rights and duties of tenants and landlords in Germany is available in these posts:

Or simply click on the sections “Property” or “Conveyancing in Germany” in the right column of this blog.

For more information on cross border probate matters and international will preparation see the below posts by the international succession law experts of Graf & Partners LLP:

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Solicitor_SchmeilzlThe law firm Graf & Partners and its German-English litigation department GP Chambers was established in 2003 and has many years of experience with British-German and US-German probate matters, including the representation of clients in contentious probate matters.

We also advise and represent foreign clients who wish to purchase, sell or lease property in Germany. In case you would like to obtain specific advice on a specific case or need assistance in buying, selling or leasing property in Germany, please contact German solicitor Bernhard Schmeilzl, LL.M. (Leicester) at +49 941 463 7070.

Purchase German Property by Online Auction?

Beware of buying German real estate through the internet. It does not work that way in Germany!

Our firm specalises in German-British and German-Amercian legal matters. Thus, we are sometimes contacted by non-German clients who proudly tell us that they have just successfully bought German property by way of online auction, for example from “MIDLAND ASSET MANAGEMENT LTD” or another online auction service provider.

There is just one small problem with this: In order to be valid, German law requires any agreement regarding property transactions (sale of real estate) to be recorded by a German notary (or a German consular officer abroad), see section 873 German Civil Code (Conveyancing):

Section 873 Acquisition of Property by Agreement and Registration in the German Land Registry

(1) The transfer of the ownership of a plot of land, the encumbrance of a plot of land with a right and the transfer or encumbrance of such a right require agreement between the person entitled and the other person on the occurrence of the change of rights and the registration of the change of rights in the Land Register, except insofar as otherwise provided by law.

(2) Before the registration, the parties are bound by the agreement only if the declarations are notarially recorded, or made before the Land Registry, or submitted to the Land Registry, or if the person entitled has delivered to the other person an approval of registration that satisfies the provisions of the Land Register Code [Grundbuchordnung].

 

Thus, any “only auction” of German real estate (plots of land, apartments, houses) is not legally binding at all. It can merely be regarded, at best, as a non-binding letter of intent. If the owner changes his mind, for instance because he found another bidder who is willing to pay more, the online buyer has zero rights.

However, the online auction service providers usually do not explain this non-binding nature of the auction at all. To the contrary, they make it sound as if the “online buyer” is legally entitled to demand property transfer or that the buyer even automatically becomes the owner upon completion of the auction.

Midland Asset Management, for example, only hints at “certain formal requirements” which need to be taken care of. Well, no kidding! The seller and the buyer must appear in person before a German notary (or a consular officer) to actually sign the real sale deed. Everything else is just an empty promise. Buyers usually are not aware of these formal conveyancing requirements and the travel costs, notary fees and translation costs connected with all that.

But, and this is the risky and potentially fraudulent aspect, the online auction service providers do require the “buyer” to pay the full purchase price for the German property up front, i.e. before the sale is officially recorded by a German notary. See, for example, the auction ad by Midland Asset Management on Bidspotter.co.uk:

If, for any reason, the actual sale at the notary’s office does not happen, then the buyer has only a rather weak “undue enrichment” claim against the online auction provider, unless fraud can be proven. Let alone the fact that these providers are often limited companies with virtual offices.

Therefore, do NOT try to purchase German real estate online. But if you absolutely must, do not pay the full purchase price upfront. Instead, inform the online service provider that you are aware of the German conveyancing laws and formal requirements of seeing a notary and discuss with the service provider how this can be effected. If the service provider then runs or tries to avoid this issue, you know that you deal with a shady or incompetent partner.

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More information on buying property in Germany, the German Land Registry and conveyancing process and the rights and duties of tenants and landlords in Germany is available in these posts:

Or simply click on the sections “Property” or “Conveyancing in Germany” in the right column of this blog.

How to sell inherited German Property

An English or American Executor finds that the Testator’s Estate comprises a Flat, House or Plot of Land in Germany. What now?

If the deceased owned real estate in Germany which the executor or the beneficiaries now wish to sell as soon as possible, this legal guide explains what needs to be done to sell an inherited home in Germany. The sale of the German property may be complicated further if the house or flat is currently leased to a tenant, because German law protects private tenants against termination of the lease agreement. But first things first:

(I) Obtain German Grant of Probate (Certificate of Inheritance)

From a German law perspective, the estate of the deceased is not administered by a personal representative. Instead, the estate passes directly to the heirs due to the principles of automatic inheritance (Vonselbsterwerb) and universal succession (Gesamtrechtsnachfolge). If there are several heirs, they form a community of heirs (Erbengemeinschaft) and must act unanimously. More on this here.

Unfortunately, due to the UK opting out of the EU Succession Regulation, an English Grant of Probate or a Scottish Letter of Confirmation are not accepted in Germany (and vice versa). Non-EU Grants of Probate are even less acceptable. Thus, in order to prove to the German Land Registry and to the potential buyers who is entitled to sell and transfer the German flat or house, the executors or beneficiaries will have to go through German probate. There are two options for this: (i) to apply for a Certificate of Inheritance (which is the standard approach) or (ii) to apply for a Certificate of Executorship (which is the exception in Germany). More on how to apply for German probate here.

However, since in most inheritance cases from Common Law jurisdictions the wills are usually very clear on the issue of who the executors are, but not necessarily very clear on who – in German terminology – the “heirs” are and what the heir’s respective shares and rights would be. Thus, in these Anglo-German or American-German succession cases, it is sometimes simpler to apply for a Certificate of Executorship. A Certificate of Executorship does, in contrast to the Certificate of Inheritance, not state who the beneficiaries are, but instead it only states who is entitled to administer the estate. Such a Certificate of Executorship is in most cases accepted as sufficient proof by German courts and the German land registry. However, there is a small risk that a Certificate of Inheritance (Erbschein) may be demanded to effect the sale. Still, in most international succession cases we suggest to opt for the Certificate of Executorship.

The application does involve a significant amount of paperwork and the Executor will have to swear an oath in the presence of either a German notary or – in the UK or the USA – before a German consular officer.

Our law firm prepares the necessary application wording, sends a list of required documents and arranges for certified translations of the English or American documents (wills, death certificates etc) into German. Once the executors have taken the oath, we shall send the application to the German probate court at the deceased’s last German residential address.

(II) Putting the Property on the Market / Resolve Tenant Issue

If the testator did not live in Germany himself then chances are that he or she has leased the property to tenants. Under German law, the flat can be sold even if it is currently being leased to a tenant. The lease agreement automatically transfers onto the new owner. The German legal buzz word is “Kauf bricht nicht Miete” (selling the property does not terminate lease). An investment buyer may even like the idea of the German flat being rented out. However, having a tenant inhabiting the German property does limit the number of potential buyers because, in reality, most buyers are looking to move in themselves, especially if it is a small apartment or small house in a rural German area, where no one is interested to purchase property for investment reasons.

Thus, executors and beneficiaries usually wish to end the lease agreement and remove the German tenant. Evicting such a tenant is, however, rather tricky in Germany, because private tenants are well protected under German civil law. Lease agreements are usually open ended in Germany and the owner (here the executor) needs a legitimate reason to terminate such lease agreement. The most common reasons being non-payment of the rent or a need of the owner to use the flat for himself or a family member.

The intention to sell a flat is, per se, not necessarily a reason to terminate the lease agreement, but if we can establish that with termination of the lease agreement, the owners cannot find a buyer, this should suffice. However, the burden of proof that this is indeed the case lies with the landlord.

This matter may prove difficult. The executor should therefore ask the tenants whether they would be interested to buy the flat or house themselves. If not, the best strategy is usually to simultaneously look for buyers (there may be a potential buyer who does not mind that the flat is leased out) and at the same time start the termination and eviction proceedings.

To find buyers for a German property the owners can either advertise the real estate themselves (the market leader on German internet for this is www.immobilienscout24.de), if the executor or a beneficiary is willing and able to show the flat to potential buyers. The more professional alternative will probably be to hire a local estate agent. The agent’s fees in case of a real estate sale in Germany are usually borne by the buyer. Our firm does assist with finding a reliable and English speaking German estate agent.

(III) Sale of German Property

The selling and transfer of any property in Germany must be effected through a German notary public who acts as a neutral (judge like) legal official ensuring that both parties are being protected (Legal guide to buying a house or apartment in Germany). We will be happy to find a bilingual notary and instruct him / her once we have a buyer. We will also be happy to assess the draft sale agreement and explain the content to you (Template of German Land Sale & Purchase Agreement).

The purchase price is usually paid into the notary’s fiduciary account and is distributed by the notary as soon as the new owner is registered in the Grundbuch (Local Land Registry). The sale deed also resolves any mortgage issues.

(IV) German Inheritance and possibly also Property Sales and Capital Gains Tax

Finally, there is the matter of German taxes. Whether “only” the German assets or the deceased’s global estate is subject to german Inheritance tax depends on the deceased’s nationality and residence at the time of death (The Perils of German IHT and Gift Tax). In addition, selling inherited German real estate may trigger capital gains tax (depending on how long the property had been held by the testator prior to his / her death) as well as property acquisition tax (usually only for the buyer).

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More information on buying property in Germany, the German Land Registry and conveyancing process and the rights and duties of tenants and landlords in Germany is available in these posts:

Or simply click on the sections “Property” or “Conveyancing in Germany” in the right column of this blog.

For more information on cross border probate matters and international will preparation see the below posts by the international succession law experts of Graf & Partners LLP:

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Solicitor_SchmeilzlThe law firm Graf & Partners and its German-English litigation department GP Chambers was established in 2003 and has many years of experience with British-German and US-German probate matters, including the representation of clients in contentious probate matters.

We also advise and represent foreign clients who wish to purchase, sell or lease property in Germany. In case you would like to obtain specific advice on a specific case or need assistance in buying, selling or leasing property in Germany, please contact German solicitor Bernhard Schmeilzl, LL.M. (Leicester) at +49 941 463 7070.

Received an Inheritance in Germany? Be ready for Taxes, Taxes, Taxes!

Check the German Capital Gains Tax situation before you sell your inherited property! Waiting a few years may avoid significant taxes.

If you have received an inheritance which comprises German assets, in particular German property, this inheritance may or may not trigger inheritance taxes in Germany and / or the UK. We have explained these IHT issues in detail in the following posts:

However, inheritance tax (Erbschaftsteuer) is not the only kind of tax you need to consider when you find yourself the beneficiary of a German estate. In many cases, the beneficiaries wish to sell their inherited German property (or other assets), especially if they do not have any ties to Germany and keeping the foreign property would create administrative hassle and force them to hire a German tax advisor and accountant.

Before putting the German property on the market (more here), the beneficiaries should, however, check how long the deceased had already owned the property. If that period was less than 10 years, the sale of the property may create German Income Tax dues in the form of Capital Gains Tax. The relevant German statute is section 23 Einkommensteuergesetz (Income Tax Act).

Solicitor_SchmeilzlEven if the beneficiary is a resident of and domiciled exclusively in the UK and has never had any dealings with the German tax office, selling an inherited asset triggers such German Capital Gains Tax if the ownership-period was less than 10 years (for immoveables) or less than 1 year (for other assets).

The Double Taxation Convention between Germany and the United Kingdom stipulates in article 13:

Article 13 Capital gains
(1) Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 and situated in the other Contracting State may be taxed in that other State.

The full German-British double taxation agreement (Doppelbesteuerungsabkommen Deutschland und UK), or to be precise, the Convention between the Federal Republic of Germany and the United Kingdom of Great Britain and Northern Ireland for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and on Capital, is available for download here: 2010-11-23-grossbritannien-abkommen-dba-gesetz

How is Capital Gains Tax Assessed?

Section 23 para. (3) EStG defines the “Gewinn” (capital gain) as: Selling price minus purchase price minus attributable costs (e.g. notary fees, estate agent fees, land registry fees, land tax, stamp duty, repair and renovation costs etc). Thus, in many cases the actual capital gain is not as high as it may initially appear to the beneficiary if one only considers the increase in property value itself. Whether and to which extent a British tax resident is entitled to these deductions is regulated in section 50 German Income Tax Act. The details, as the statute shows, are hellishly complicated.

In many cases, the actual amount of Capital Gains Tax due in such cross-border inheritance cases is not so high that it would justify keeping the property just for the reason of avoiding that tax. Yet, in expensive cities like Munich, the increase in property value may be significant and it may be a wise choice for the beneficiries to wait until a full 10 year ownership period is reached. Due to the German principle of universal accession, the ownership period of the deceased is not “lost” but the beneficiaries are entitled to claim this period for themselves. If, for example, the deceased had purchased the property 8 years prior to his death, then the beneficiary will only have to keep the property for another 2 years to avoid section 23 Capital Gains Tax.

And then, of course, there is the matter of German land transfer tax, also called property acquisition tax (Grunderwerbsteuer), which is similar to British stamp duty tax, but the tax rates differ from German state to state (a schedule with the respective property acquisition tax rates throughout Germany is available on the Wikipedia website). Thankfully, this tax only concerns the purchaser. Some more details are explained here.

More information on buying property in Germany, the German Land Registry, the German conveyancing process and the rights and duties of tenants and landlords in Germany is available in these posts:

– Legal guide to buying a house or apartment in Germany

– Template of German Land Sale & Purchase Agreement

– Apartment Prices in Germany: How to get a quick Overview

– Searching for Property Information in the German Land Registry

– Tenants beware of Waiver Clauses in German Property Lease Agreements

 

Or simply click on the sections “Property” or “Conveyancing in Germany” in the right column of this blog.

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gp_anz_mav_very_british_en_KOMPLETTE_LINKLISTEThe law firm Graf & Partners and its German-English litigation department GP Chambers was established in 2003 and has many years of experience with British-German and US-German probate matters, including the representation of clients in contentious probate matters.

We also advise and represent foreign clients who wish to purchase or lease property in Germany. In case you would like to obtain specific advice on a specific case or need assistance in buying, selling or leasing property in Germany, please contact German solicitor Bernhard Schmeilzl, LL.M. (Leicester) at +49 941 463 7070.

Is “Miteigentum” in a German Property the same as “Tenancy in Common”?

Well, it is quite close, if not identical. The German concept of Miteigentum (co-ownership) is regulated by the German Civil Code in sections 1008 to 1011. Each “Miteigentümer” has a direct, separately transferable interest in the property. However, where property is concerned, the rights of co-owners in Germany are usually individually defined in the notarial deeds and the German Land Registry (Grundbuch). In particular, the co-owners usually agree a right of first refusal (Vorkaufsrecht) or they even bind themselves in a way that no one can sell his/her share without the consent of the other co-owners. Thus, in order to really be certain about the rights and obligations that come with a property share in Germany, one must definitely inspect the Land Registry. The rights and obligations amongst the German Tenants in Common are regulated in section 741 ff German Civil Code, titled “Co-ownership by defined shares” (Gemeinschaft nach Bruchteilen). Very much simplified, the basic rule is: everything must be agreed by unanimous vote (section 744 BGB). This means that if the co-owners cannot agree whether (or to whom) the property shall be let or sold, whether it shall renovated (or by whom), then there is deadlock.

If all attempts to reach an amicable solution with the other co-owners has failed, the only way to break free for a tenant in common who is caught in such a situation, is to apply to the local German court (Amtsgericht) for a so called Teilungsversteigerung procedure (compulsory partition by public auction). This means that the entire property (not just one share) is then auctioned off through the court and the proceeds are divided between the co-owners according to the size of their shares. Each co-owner is allowed to participate in the auction. This Teilungsversteigerung should, of course, only be the means of last resort, because it triggers significant court fees, surveyor costs and stress. However, in practice, this happens fairly often in Germany, especially is the Miteigentümergeeinschaft has come into existence due to an inheritance. More on this Miterbengemeinschaft here.

More information on buying property in Germany, the German Land Registry, the German conveyancing process and the rights and duties of tenants and landlords in Germany is available in these posts:

– Legal guide to buying a house or apartment in Germany

– Template of German Land Sale & Purchase Agreement

– Apartment Prices in Germany: How to get a quick Overview

– Searching for Property Information in the German Land Registry

– Tenants beware of Waiver Clauses in German Property Lease Agreements

 

Or simply click on the sections “Property” or “Conveyancing in Germany” in the right column of this blog.

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Solicitor_SchmeilzlThe law firm Graf & Partners and its German-English litigation department GP Chambers was established in 2003 and has many years of experience with British-German and US-German probate matters, including the representation of clients in contentious probate matters.

We also advise and represent foreign clients who wish to purchase or lease property in Germany. In case you would like to obtain specific advice on a specific case or need assistance in buying, selling or leasing property in Germany, please contact German solicitor Bernhard Schmeilzl, LL.M. (Leicester) at +49 941 463 7070.

What is an Ausfertigung of a German Notary’s Deed?

German law requires important agreements and declarations to be recorded by a Notary (details here). Parties are sometimes confused or even annoyed that they do not receive the original signed document or even a certified copy of the signed deed, but “only” a so called Ausfertigung. According to the Beurkundungsgesetz (German Act on Notarial Deeds) the signed original (Urschrift) remains with the notary (section 45 I BeurkG). The parties are being handed either an Ausfertigung or an Abschrift. The two should not be confused.

German law distinguishes between a simple copy (Abschrift or Kopie) and what is called an “Ausfertigung” (section 47 BeurkG), the latter constituting a representation of the original document with the notarial certificate that there really exists a duly signed document with the same content as the Ausfertigung. While an Ausfertigung proves that there is a duly signed agreement, a simple copy does not.

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The law office Graf & Partners was established in 2003 and has many years of experience with British-German and US-German legal matters. If you wish us to advise or represent you please contact German solicitor Bernhard Schmeilzl, LL.M. (Leicester) at +49 941 785 30 53 or English solicitor Elissa Jelowicki in Munich at +49 89 55054676. Or simply write an e-mail to mail(at)grafpartner.com.

How to obtain German Documentary Evidence for a Criminal Case in England

We are sometimes approached by English criminal defense lawyers asking us to provide them with official extracts from the German Commercial Register, the German Land Registry or other German Registry (e.g. birth or death certificates, marriage certificates, car ownership registry, wills register etc). The former usually does not create any difficulties, since the Commercial Register is meant to provide publicly accesible information (see the posting: How to read a German Commercial Register Extract).

Obtaining information about the registered keeper of a German vehicle is already a bit more difficult, since a legitimate interest must be established, but a German lawyer will in most cases be able to get that information without having to go through a court.

The real problems begin when it comes to the German Land Registry (Grundbuch). We have explained here that in Germany property related information is in principle considered to be confidential. Thus, information about who owns property is only granted if and to the extent the enquirer can show legitimate interest to be informed.

This is also true for many other aspects of life. To a German it is, for instance, unthinkable that anybody should be able to ask for a copy of the Will of any deceased person. The fact that this is possible in the UK simply by way of probate record search, i.e. without having to show legitimate interest whatsoever, comes as a shock to German lawyers who learn about this for the first time.

The German notion is: “Das ist Privatsache!” (This is private business). In some cases not even close relatives have a right to be shown the will of their relative if they are not heirs (for details see: Basics of German Inheritance Law).

Data protection is a big issue in Germany and Germans are very sensitive about who shall have access to their personal data.

Now, what if the counsel for the defense needs to obtain such confidential data in criminal proceedings? Whenever the German defense lawyer is unable to obtain such information directly from the registry of other competent authority the standard approach in criminal proceedings under German law is this: The counsel for the defense will petition to the court for the judge to issue a “Beweisbeschluss”, i.e. an order to take evidence. Then the land registry file would be sent to the court (not the counsel for the defense).

The proceedings in England are very different. An English solicitor usually expects the authorities to provide such information when they ask for it by simple letter. Very often this does not work in Germany because German authorities will request to be sent a court order before they are allowed to disclose the documents. This can lead to significant frustration on the part of criminal defense solicitors.

And even if the English court would issue something comparable to a German Beweisbeschluss, the court order and all the documents would have to be translated. Furthermore, some documents are very technical and the content (e.g. the content of the land registry extract) would have to be explained by a German lawyer, because a simple translation will not help to understand the meaning. For example, this is what an extract from the German land register looks like (please scroll down). As with the Commercial Register, red underlining does not mean “very important” but does instead mean “outdated / no longer valid”.

Therefore, the pragmatic approach is sometimes not to go for the actual documentary evidence itself but to ask a German lawyer or notary to provide you with an official legal opinion instead. In other cases the authorities can be convinced to disclose the document when a German lawyers explains the legitimate interest.

Basic information on law enforcement and criminal prosecution in Germany: The German Criminal Code (in English language) and the Code of Criminal Procedure are available here. German judge Joachimski here compares the practical aspects of US and German criminal procedure and here is a very informative essay on the German criminal procedure produced by the NZ Law Commision (download here: GERMAN CRIMINAL PROCEDURE – german_criminal_procedure)

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Since its formation in 2003, the law firm Graf & Partners (Germany) specialises in British-German and US-German legal matters. Do not hesitate to contact us by calling German business and litigation lawyer Bernhard Schmeilzl on +49 941 463 7070 or send an email to: mail [at] grafpartner.com If you need to see an English lawyer in Germany, you can arrange for a personal appointment with English solicitor Elissa Jelowicki in Munich or we can arrange for a secure video or telephone conference if you are located elsewhere.

English Lawyers in Germany

mainimg_elissa_v2Whether you have been involved in a car accident in Germany, need advice on German labour law or other contract matters, plan to start a German business, want to buy a house in Germany or need to swear an oath before an English solicitor, the Munich based law firm Graf & Partners can provide the necessary legal advice and representation. The firm was established in 2003 and speciales in British-German legal matters. If you need to see an English lawyer in Germany, you can arrange for a personal appointment with English solicitor Elissa Jelowicki in Munich or we can arrange for a secure video or telephone conference if you are located elsewhere. To contact Elissa please call +49 (0)89 3539 6767 or write an e-mail to elissa (AT) grafpartner.com.

Searching for Property Information in the German Land Registry

Every week we get a number of enquiries regarding German property and how to obtain Land Registry information. Mostly from creditors who “have heard” that their debtor owns property in Germany. Or from a spouse entangled in divorce proceedings who fears that the other spouse is hiding property located somewhere in Germany. Or, of course, enquiries in connection with international succession and probate matters. Continue reading