When you wish to sell or buy a house or apartment in Germany the agreement must be signed before a German notary (see sections 873 and 925 German Civil Code) because the German Land Registry will only accept instructions from such notary (details). We have explained the legal procedure of conveyancing in Germany here.
The parties must be extremely careful that the notarial agreement does contain the entire understanding between the parties. There must be no verbal side agreements as far as the land transaction is concerned because this would lead to (i) the contract being void and (ii) tax fraud investigations. An example: the parties have actually agreed on a sale price of 400,000 EUR but they tell the notary 300,000 EUR to reduce legal fees and property acquisition tax (the remaining 100,000 EUR are paid by the buyer outside of the agreement). If this comes to light – even decades later – the entire land transfer is void, i.e. the property still belongs to the vendor. And German tax authorities will not consider this a laughing matter.
Because of this, and because the technicalities of payment, mortgages, registration are described in detail, the notarial deed is usually quite long. A typical example of such a real estate sale and purchase agreement under German law regarding private property is available here: Template_German_House_Sale_Agreement
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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:
- Legal guide to buying a house or apartment in Germany
- Tenants beware of Waiver Clauses in German Property Lease Agreements
- Buying German Property as Brexit Counter-Strategy
- How to sell inherited property in Germany
- Is “Miteigentum” in a German Property the same as “Tenancy in Common”?
- Apartment Prices in Germany: How to get a quick Overview
- Searching for Property Information in the German Land Registry
Or simply click on the sections “Property” or “Conveyancing in Germany” in the right column of this blog.