As far as laws are concerned, Germany is a pretty strict country. One wrong move and you'll get into a whole lot of trouble. This applies to purchasing real estate in Germany as well. Though many would say that it's pretty easy to buy your own place here, it will ultimately depend on your situation. If you're not a resident, for instance, will you be allowed to buy a
property in Germany? How about when it comes to signing the legal documents? What do you need to know about this part of the process? To prepare you for the long road ahead, here are some common legal concerns surrounding real estate in Germany.
Are You Allowed to Buy Property in Germany?
First things first, is it even legal for you to purchase real estate in Germany? What if you're not a citizen or a resident of the country? Even more so if you're from outside of the EU. Will you be allowed to buy a property in Germany? The answer is yes! As of this writing, there are no laws that prohibit non-residents from buying real estate here. The only time your residency status may pose an issue is when you're applying for a mortgage. But other than that, you are free to buy as many properties as you can in this country.
The Costs You Need to Pay
When you buy a property in Germany, it will be your legal obligation to pay a few costs. From taxes to fees and other important charges, they're a vital part of the process. Some of them are paid through a percentage of the property value. While for a few others, you'll need to pay them on top of the final price. All in all, these costs include the property transfer tax, registration fees, notary fees, and your
real estate agent's commission. With regards to the property transfer tax, the rate depends on the location of the property.
Hiring a Notary
Hiring a notary can pose a major concern since their role is vital to the whole process. When you purchase real estate in Germany, you will have to gather up important documents, sign contracts, and the like. You will need the help of a notary to do all that, particularly when it comes to the contracts. Though you can draft the contracts yourself, as well as include some terms and conditions for your own, it's better to have the notary draw it up for you. Either way, they'll have to notarize it to make it a legal and binding document. And if you're not in Germany yourself, you can authorize your notary to sign the contract on your behalf.
The Ownership Structures in Germany
According to the
International Comparative Legal Guides, there are three types of ownership structures in Germany. When you decide to purchase real estate here, you'll have to determine which one of these structures you'll apply. The first is full ownership, wherein one listed owner retains all the rights to the property.
Miteigentum, or co-ownership, on the other hand, is when two or more people share the ownership and the rights to the real estate. And then there's
Wohneigentum, which is condominium ownership. In this structure, the owner of the apartment shares the ownership with the Association of Owners of the residential building/ complex.
Dealing with The Land Registry
Throughout the process of buying a property in Germany, you (as well as your notary) will have to deal with the Land Registry. Firstly, you need to make sure that the seller is, in fact, the listed owner of the real estate. If you discover otherwise and it's already too late, it will automatically make the sale null and void. Afterward, once you've finished the process and you are now the new owner of the property, you'll need to transfer the ownership from the seller to you. You can let your notary handle this in the Land Registry.
Signing The Sale & Purchase Agreement Contract
Although signing the deed of sale is what officially makes you the brand new owner of the property in Germany, the sales& purchase agreement contract is just as important. Why? Because it essentially serves as your reservation to the real estate. Signing it means you're fully committed to seeing the sale through to the end. You'll even be required to pay a deposit of around 10% to 30% of the final property price. And if you ever decide to bow out of the agreement after signing, you won't ever see that deposit again! Consequently, you can include certain terms and conditions that will allow you to exit the agreement under specific situations. This allows for the refund of your deposit.
The Liability of Misrepresentation
Let's say you
moved to Frankfurt and bought a new home here. But upon entering your new property, you find that there are many problems with it, even ones that might affect the community. Does this make you liable for them? Well, it depends. If the seller can prove that they were unaware of the problems before and during the sale, then you, as the real estate's new owner, will be liable for them. However, if you can prove that the legal documents the seller showed misrepresented the property and excluded these problems, then the legal responsibility falls to the seller.
Dealing with real estate in Germany comes with a few legal issues. And if you're not careful, you can easily get into big trouble. Avoid that by learning more about the legal matters surrounding this process and what not to do!
