EXAMPLE PAGE - REAL ESTATE - SAVILLS - Flipbook - Seite 9
SAVILLS
PROCESS IN DETAIL
In a nutshell, real estate is acquired
by entering into and executing a
purchase agreement and subsequently
registering the new owner in the Land
Registry. However, there are a number
of legal procedures to complete ahead
of a German property changing hands
and being registered in a new name.
Here are the steps in detail.
B U Y I N G
G U I D E
-
B E R L I N
LETTER OF INTENT
If an offer is accepted, usually a
Letter of Intent confirms the general
terms of the agreement. The Letter of
Intent should not be negotiated
carelessly. Although it is not legally
binding, it is German custom of not
changing the provisions of the Letter
of Intent later in the purchase
agreement without good reason.
However, an offer may be subject to
a condition that legal and technical
due diligence will not reveal any
material issues or effects. For the
exclusivity period agreed upon in the
Letter of Intent, the seller will take the
property off the market.
LEGAL AND TECHNICAL
DUE DILIGENCE
Whether you have arranged a
Letter of Intent or not, technical and
legal due diligence should be carried
out, to ensure that the purchaser is
sufficiently informed of the legal and
physical state of the property.
These documents evaluate e.g.
the legal situation of real estate,
lease agreements, risks with respect to
public law (such as building permissions,
situation under construction planning
law, contaminated sites) and
environmental risks such as asbestos,
lead content, termites, fungi, natural
risks (floods, etc.). Legal and technical
due diligence are not mandatory in any
case in Germany but are advisable in
all cases.
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009
PURCHASE AGREEMENT
Once an offer has been made and
legal and technical due diligence are
carried out, the purchase agreement
is typically drawn up between the
seller and the purchaser. For the
execution, usually, a number of closing
conditions have to be satisfied,
including the clearance of any
statutory or contractual rights of
first refusal belonging to third parties
or public-law entities and the
registration of a priority notice of
conveyance (Auflassungsvormerkung)
to protect the purchaser at early stage
and to place him in a position
equivalent to ownership.
Furthermore, all risks identified in the
legal or technical due diligence will,
as far as possible, be covered by the
purchase agreement. Lawyers must
ensure that any agreement secures
and contains provisions safeguarding
their clients’ objectives and
requirements. In general, two to three
months will elapse between the
purchase agreement and the transfer
of ownership in the Land Registry.
Please note that under German law,
purchase agreements regarding real
estates must generally be certified by
a notary in order to be valid. The
notary is usually chosen by the
purchaser. Please note that a German
notary should not be confused with a
notary public in some common law
jurisdictions. A German notary holds
a government appointment and bears
extensive responsibilities, far beyond
signature authentication.
