Property Registration

Fulfill the pre-conditions for the maturity of the purchase price – the priority notice

Agency: Land Registry ‘Grundbuchamt’

The following pre-conditions must be fulfilled for the maturity of the purchase price:

  • Registration of the priority notice in the Land Register (not mandatory but usual practice to secure the purchasers rank in the land register and avoid a third party purchasing the property in good faith);
  • Consent to the cancellation of existing encumbrances; (iii) Waiver of statutory preemption rights or negative certificate.

The priority notice prevents a purchase by a third party of good faith between the conclusion of the purchase agreement and registration of the purchaser; it usually ranks after the existing encumbrances and prior to any future encumbrances at the time of notarization. This notice provides a very high level of legal and economic security and certainty. Upon registration, the notice protects against all intervening interests (including seller’s insolvency) pending completion of the transaction and actual change in registered ownership. By use of this notice, a purchaser is legally protected against potential risks at an extremely early stage of the conveyancing transaction. Therefore, such notation is generally entered in the public register by the notary immediately following the authentication of the purchase contract. From that moment onward, the purchaser can rest assured that he can acquire title to the property if all prerequisites to maturity of the purchase price are fulfilled.

Time and cost: 20 days, EUR 1,667.5 (Registration fee of priority notice, 0.5 base fee)

Obtain the waiver of preemption rights from the Municipality of Berlin

Agency: Muncipality of Berlin

The consent or negative attest of the competent authority regarding any statutory pre-emption rights is required and applicable to all properties in Berlin. The civil council (“Bezirksamt”) issues the consent or a negative attest to the transaction. The time limit given by the statute is that the civil council may exercise the right of pre-emption two months (preclusion period) after the delivery of a copy of the notarized sale and transfer agreement. The respective preemption right for the public authorities/civil council mentioned in the survey is regulated under Section 24, 25 and 28 German Federal Building Code (Baugesetzbuch) and Section 66 German Federal Nature Conservation Act (Bundesnaturschutzgesetz). Under specific circumstances the public authorities could have a statutory preemption right to coordinate the urban land-use planning. These rules are applicable to all properties in Berlin. It is necessary therefore to provide the land register with either a consent of the public authorities to the transfer or an attest that the statutory right of preemption either does not exist or is not exercised.

Time and cost: 14 days, EUR 100

Obtain the land extract from the Land Registry

Agency: Land Registry ‘Grundbuchamt’

The notary obtains the information referred to the property, e.g. from the land registry to “name” the object in the contract and to see if it is free of burdens and mortgages. A notary has a privileged access to the land register to obtain the extracts. Notaries have on-line access to such land registers which are already converted to electronic land registers. They are in the position to review the extracts very shortly before the notarization from their own offices. The land registry in Berlin is entirely computerized, and so extracts can be obtained online.

If all pre-conditions to the maturity “Fälligkeit” of the purchase price, usually collected and examined by the notary, have been fulfilled, the notary issues a statement of maturity “Fälligkeitsmitteilung” to the purchaser. If the respective declarations in rem have already been provided for in the sale and transfer agreement, the notary is usually bound by an escrow agreement not to forward them to the land register until the purchase price has been paid.

Time and cost: 1 day, EUR 10 (EUR 10 (single copy) or EUR 20 (certified copy))

Notarize and sign the purchase sale agreement between the parties

Agency: Civil Law Notary Office

In case of real property the German law says the agreement has to be notarized (Section 311b German Civil Code). The signature between the parties must happen in front of the notary.

The notary is obliged to notify the responsible tax authority of each sale and transfer agreement effected by them. A certified copy of the act is transmitted along with the notification. Even if the transaction is exempt from taxation, the obligation to notify must be fulfilled. This notification is considered as a tax declaration. The notary must proceed to the notification within at least two weeks after the authentication.

Time and cost: 2 days, EUR 8,337.5 (Authentication =2 base fee + Support of 0.5 base fee.)

Payment of the transfer tax and obtaining the statement of innocuousness (Unbedenklichkeitsbescheinigung)

Agency: Tax Authority ‘Finanzamt’

The responsible tax authority will then issue a real estate transfer tax assessment and send it immediately, but at the latest within six weeks upon notification, to the buyer. In practice, this usually takes about one week. After full payment of the real estate transfer tax, the tax authority issues a statement of innocuousness (Unbedenklichkeitsbescheinigung) and sends it immediately, but at the latest within the following ten days, to the notary. In practice, this usually takes about two days.

Time and cost: 15 days, EUR 125,816.46 (6% of purchase price)

Apply for the registration of the new owner and delete the priority notice at the land registry

Agency: Land Registry ‘Grundbuchamt’

After receiving the statement of innocuousness, the notary applies for the registration of the new owner in the land register, if all other prerequisites for the transfer of ownership have been fulfilled and deletion of the priority notice is submitted. A registration fee is paid depending on the property value. The deletion fee for the cancellation of the priority notice also depends on the value. It is important to note that there is a possibility to register the title through an expedited Procedure, whereby the notary acts as a Trustee and the client can pay through a trust account (Notartreuhandkonto). This makes it possible to obtain the legal title faster, possibly in 2-5 days. However, this occurs only with a small proportion of property title transfers.

The documentation shall include:

  • Clearance Certificate (obtained in Procedure 3)
  • Consent of public authority/civil council to the transfer or attest that the statutory right of pre-emption either does not exist or is not exercised (obtained after Procedure 2)
  • Consents to the cancellation (obtained in Procedure 2 and sent to the notary)
  • Declarations in rem “dingliche Erklärungen” for the registration of the purchaser as owner

Time and cost: 15 days, EUR 3,360 (Registration Fee = 1 base fee + EUR 25 (flat fee for the deletion of the priority notice))