Real estate purchase contract audit

When buying a property, the long-awaited dream of owning a home finally comes true for buyers. However, there are some important aspects and risks to consider when buying and concluding a contract for real estate: Purchase contracts in the real estate sector, be it an undeveloped plot of land, a developed plot of land, a condominium, apartment building or even a commercial unit contain a multitude of legal peculiarities. If you already have a draft notarial purchase contract, you will quickly realise that many questions arise here simply from the legal terminology used. Moreover, if the notarial contract is not individualised or if it originates from the other contracting party, certain contractual clauses are often disadvantageous or only superficially addressed.

Be aware that the obligatory accompaniment of a notary in a real estate purchase is by no means a guarantee that a purchase contract actually contains everything that is important to you. In addition, you should be aware that the notary regularly only provides a standard contract without taking into account the specifics of the individual case. As a result, this leads to legal risks, which should be avoided in view of the high investment sums involved in a real estate purchase.

This concerns in particular hidden risks within the following documents and records:

• Land register extract (easements, land charges).
• cadastral map (plots of land, location of the property, parcels, etc.)
• Declaration of partition and partition plan (co-ownership shares or special ownership)
• Building specifications (scope of building obligations, special requests, sampling)
• Community regulations (sub-accounting units, rights and obligations of the condominium owners)
• Current leases and tenancy agreements (time limits, owner’s needs, potential for rent increases)
• Collection of resolutions (rights and obligations based on resolutions of the WEG)

Look out for hidden costs

If you or the estate agent commission the notary on your behalf, notary fees will also be incurred if the contract negotiations are broken off. These are to be paid by the notary’s client, i.e. by you. If you are not yet sure whether the property is to be acquired, do not commission this! Sometimes such a power of attorney of the estate agent is hidden in the reservation agreement.

Commission technically experienced experts.

The commissioning of a technically experienced third party to inspect your property is strongly recommended, as a warranty exclusion is regularly agreed with regard to various raw and hazardous materials. This applies in particular to mould, asbestos and other possibly occurring pollutants within the building fabric.

*In the case of financing: consider the possibility of revoking your loan agreement.

As a rule, property sellers and property buyers are not liable because of broken contract negotiations. This applies to all cost-triggering measures (notary fees, inspection costs, futile financing costs, etc.). In the case of financing, the possibility of revoking the loan agreement should always be ensured until the notary appointment in order to avoid high early repayment penalties.

You want to buy a house, a condominium or a building plot? Such purchase contracts must be notarised by a notary. The buyer then receives a long and often difficult to understand draft contract. Have the purchase contract for the property checked! We look through the contract documents for you, check whether the purchase contract contains any disadvantageous clauses for your property. We answer your questions and give you tips on how to protect yourself from problems and disputes. The review of your real estate purchase contract is carried out competently by one of our experienced lawyers at a cost-effective fixed price. With comparatively low review and consultation costs, you can thus avoid long-term and costly problems.

*Rapid review and processing of your real estate purchase contract

Send us the contract documents with the form below without obligation. We will review the documents and contact you. A binding contract is only concluded when you send us a binding order in response to our message. Within two working days (Mon-Fri) you will then receive from us either a written statement or an appointment for a personal consultation, on site or by telephone – if possible, even faster!

Long-standing experience and competent advice on real estate purchases.

For more than 10 years, we have been working specifically in the field of reviewing real estate purchase contracts. In the past years, we have examined hundreds of contracts and advised buyers and sellers nationwide. Due to our many years of experience, we know exactly which clauses can lead to problems and advise you on which aspects are relevant for you in a purchase. We will review your contract and advise you whether, in our opinion, you can sign the contract in this form. If we find gaps in the contract, disadvantageous or problematically formulated clauses, we will immediately point out the respective problems and work out proposals for amendments which you can easily pass on to the notary. In order to minimise the potential for conflict in advance, we will give you general advice on the points to which you should pay particular attention during the purchase process.

What we cannot offer you at a fixed price

We offer our services at a very reasonable price. For a large part of the contracts, the processing effort is kept within a reasonable range in which we can work economically. However, a small number of contracts require very intensive processing. We ask for your understanding that in such cases we cannot carry out any processing at a fixed price. If, when reviewing the contract documents, we determine that comprehensive advice at the fixed price is not possible, we will inform you immediately. You then decide whether to continue to instruct us with an individual agreement.

If you would like us to review your contract, please send us your request with all relevant documents. This is only a non-binding enquiry. You are under no obligation to pay, nor are we obliged to process the matter. We will first examine the documents and then contact you. If the matter is not suitable for consultation, we will inform you of this and suggest an alternative.

Otherwise, we will let you know whether we have all the necessary documents and let you know by when we will send you a result or at what date we can carry out the consultation. With the notification, we will send you all the necessary information for the counselling contract. You can then use this information to decide at your leisure whether you would like to commission us. After a written confirmation, the contract becomes binding. We will also be happy to answer any queries you may have, provided they are within the scope of the contract review.

*Which documents and information are required for further processing?

• Preliminary draft of your purchase contract as well as extract from the land register, cadastral maps, etc.
• Rental and lease agreements for your property
• Existing building permits
• An overview of the objects and assets which will be taken over in the event of a sale (e.g. fitted kitchen, fixtures, etc.).
• Declaration of partition and community rules of your desired property
• Overview of additional services provided by the seller
• Description of special features in the purchase of condominiums / partial condominiums
• Current resolutions, in particular the collection of resolutions (to be requested regularly from the WEG administrator by the seller)
• Partition plan and certificates of seclusion (these can usually be requested digitally from the notary).

Questions that you should clarify with the seller in advance:

*Are there any housing benefit arrears?

• Are there any housing benefit arrears?
• Is there a current need for maintenance / renovation?
• Are there any special charges planned for the future?
• What is the proportionate maintenance provision for the property?
• Is the property rented out or do other third parties have rights to it?

Tasks of a notary in the purchase of real estate

The core tasks of a notary include in particular: The warning against a too quick conclusion of the contract, the securing of evidence as well as a general clarification of possible legal risks. You should always keep this in mind: A notary is the holder of a public office and is supposed to protect buyers and sellers by observing certain formal requirements. In addition, a notary is obliged to be neutral in all official acts and does not, as a matter of principle, give advice on the economic aspects or legal structuring possibilities of a real estate purchase; this is often misunderstood.

Watch out when buying real estate: a notary is not a lawyer

You must carry out the legal and factual examination yourself. Neither the seller, the estate agent nor the notary will help you with this according to your requirements. The seller and the estate agent have only one interest: to sell the property in the best possible way and to bring about a conclusion. The notary is obliged to remain neutral. In larger real estate projects, however, the notary will regularly coordinate the purchase contract with the seller and, in case of doubt, protect the interests of the seller.

A notary only superficially checks your contract documents

Put simply, the notary is supposed to ensure that you have really understood the text of the contract with the regulations and consequences contained therein. However, the notary only takes your interests and risks into account in general terms. The notary does not carry out an examination of all contract documents and/or the property for you and is also not allowed to advise you on a contract design that is favourable for you.

Once you have agreed on the terms of the contract with the seller and the notary contract has been prepared accordingly, a notary appointment is arranged. Depending on the notary’s schedule, this is possible within 24 hours, but usually within a week. It is important that you prepare yourself accordingly and that the purchase contract of your real estate has been thoroughly checked.

Which documents must be brought to the notary appointment?

All contracting parties must be able to prove their identity with valid identification papers. The notary verifies the personal details to ensure that the contract is signed by the correct person. As a rule, the notary requires copies of the identification documents. The buyer can also already take the documents for the financing to the appointment. The notary also needs your tax identification number to record the land transfer tax. However, you can usually submit this later.

Which parties are present at a notary appointment?

Normally, only the buyer, the seller and the notary are present at a notary appointment. However, the parties can also be represented by a lawyer or a third party. However, only if all parties agree to this. When representing a contracting party, it is mandatory to have a notarised power of attorney. Otherwise, the representative acts without power of representation and the contract becomes officially effective only after obtaining the consent of the represented party.

Reading and conclusion of the contract of sale of your property.

The contract of sale is read out after the personal details have been established. You should make sure that the contract of sale is the latest version that you have agreed with the seller. You will receive a copy of the contract from the notary. Always compare this with the last draft of the contract known to you. If the notary reads too quickly or if you have questions, do not hesitate to interrupt the notary. If you have any ambiguities, you should address them immediately. It is possible that changes were made to the contract at short notice that were not communicated to you. This is usually the case if the notary or the seller forgot to include important points in the contract. In the case of major difficulties and ambiguities, a further reflection period can usually be agreed with the notary. After the reading is completed, the contract is signed. This concludes the contract. For safety’s sake, always have a copy handed to you by the notary. The notary will inform you of the further steps to be taken after the appointment.

Your legal obligations as a buyer after successful conclusion of the contract

Your main obligation as a buyer is to pay or settle the purchase price and the ancillary purchase costs. If the property purchase is financed, you must submit the purchase contract to your bank. The bank will hand over its documents and data for the creation of the land charge to the respective notary. As a rule, the notary takes over all further necessary steps. Important: You should not pay the purchase price before receiving the due date notice, unless this was explicitly agreed in the purchase contract (e.g. exception when using a notary’s escrow account). In order for the transfer of ownership to you to take place as quickly as possible, the costs of the land registry office in particular should be paid immediately. After the payment has been made, the transfer of benefits and encumbrances (handover) takes place.

Purchase of real estate: Obligations of the seller after conclusion of the contract

Normally, the sale of a property takes place “free of encumbrances”. This means that encumbrances are deleted from sections II and III of the land register. However, encumbrances are only deleted with the official consent of the creditor. The deletion consent is only given to the notary by the creditor when all contractual obligations of the seller have been fulfilled. In the case of a land charge, the discharge is effected by payment. As a rule, the deletion authorisation simultaneously contains a payment instruction to the buyer or notary. If payment is to be made directly to the seller, the latter must confirm receipt of the purchase price to the notary. After all requirements for the transfer of ownership have been met and the purchase price has been paid, the transfer of benefits and encumbrances (handover) takes place.

Property purchase: Duties of the notary after successful conclusion of the contract

In principle, the notary bears the main responsibility for the execution of the contract and the purchase. He ensures the transfer of ownership from seller to buyer. To this end, you as the buyer must be entered as the owner in section I of the land register and the old encumbrances that have not been taken over must be deleted in section II/III of the land register (this is particularly the case with land charges). In this regard, the notary must ensure that all parties are secured in accordance with the contractual provisions. First of all, a priority notice is entered in the land register in favour of the buyer. In addition, the notary also obtains all necessary approvals and confirmations and reports the necessary information to the land registry and tax office. The tax office’s clearance certificate is required for a transfer of ownership. This is only issued after payment of the land transfer tax by the buyer. After the transfer of ownership, all parties are informed about the successful conclusion of the contract. As a rule, a current extract from the land register is sent to all contracting parties at the same time.