Don’t Get Ripped Off by “German Real Property Online Auctions”
The conveyancing process in Germany is very different from buying property in the United Kingdom or the USA. In Germany, as in France and other civil law jurisdictions, every property transaction must go through a civil law notary, who is a quasi court official and who must ensure that the rights and interests of both parties to the transaction are being protected. In other words: The parties do not necessarily need their own solicitors/lawyers. Instead, property transaction in Germany is goverened by mandatory statutory rules. Any “agreement” which is made prior to the notary appointment or “on the side” is null and void. If you don’t believe that, read section 311b para. (1) German Civil Code.
German Property cannot be bought outside a German Notary’s Office. Period!
Now, there are some UK estate agents or “property consultants” out there who “sell” or “auction off” German property on the internet (more here). Legally, this is all BS, because any agreement related to a German property transfer is only valid and binding if and when recorded by and before a German notary.
However, some agents, middle men, consultants and even lawyers create the impression they can sell German property or grant “binding option rights” with regard to such German real estate. They ask for an upfront payment, referral fee or comission payment. Once they received that payment, they tell the prospective buyer that the transaction must now just be “confirmed” before a German notary.
Well, no kidding. It is as if you tell 6 year old Jimmy, that his wedding vows made to 6 year old Nancy in the playground are “in principle” valid but that they “just” need to be confirmed before the proper wedding official once both Jimmy and Nancy have come of legal age.
Thus, do NOT make any upfront payments to anyone if you intend to buy a German property. It is the German notary’s job to draft the necessary deed and tell you when to pay. Any prior “agreements” are non binding letters of intent at best.
Property in East Germany? You better have done your Due Dilingence
Final word: Be extremely careful, if the roperty you are being offered is in the eastern part of Germany! Many parts of the former DDR / GDR (Deutsche Demokratische Republik / German Democratic Republic) are suffering from dire economic circumstances. Young people move away, cities and villages are dying. It is exactly such worthless plots of land in those problematic regions of otherwise thriving Germany which fraudsters use to make “tempting offers to buy property in Germany”. Sometimes, companies even buy such worthless land for close to nothing and then resell them to clueless foreigners, babbling about promising developments in that region. Be careful. Google the economic situation as well as the recent development with regard to population. All that information is available online these days.
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More 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
- How to sell inherited German property (German real estate)
- Tenants beware of Waiver Clauses in German Property Lease Agreements
- Buying German Property as Brexit Counter-Strategy
- Template of German Land Sale & Purchase Agreement
- 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.