Notarial tasks and Purchase of German Property

Even for the native German, false ideas of the boundaries of notarial activity in a real estate purchase agreement exist.   The employer of the German notary is the chief justice of the respective court.  Notaries are appointed by their respective state when positions become available, and they conduct public functions assigned to them through the law.   These functions mainly pertain to tasks involving contracts, in which the involvement of the notary is mandatory.   The main task of the notary is with property purchase contracts, where the notary acts as a protector of the clients.   Another activity of the notary is in the establishment, finalization, and later amendments of contracts of corporate enterprises.   The notary advises the buyer and the seller in the real estate purchase impartially and comprehensively while leading both as a “neutral pilot” through the complex process of the real estate acquisition. All notaries have the same fees as they are assigned through law.  It is forbidden for a notary to use his or her position to gain an added benefit or to abuse their duty to the detriment of a client.    Property in Berlin is especially interesting to the foreigner, whether as an investment or only as a location for a second home.   The federal notary chamber, a legal public corporation, which all notaries are members of, supports the notaries and provides education through announcements. The following explanations originate from one such memorandum.   Since the purchase of real estate often involves a high investment, the explanations should offer aid, to clarify those questions which one would have before the certification of a purchase contract.  In this announcement, the standard case of the purchase of an already existing property is clarified.  In the purchase of a condominium or a newly built or yet to be built building, deviations arise, and the notary will gladly advise you further.

1.   Before the Notarisation

First, the contract participants inform the notary about their goals. This allows the notary to discuss regulation possibilities. At the same time, the notary examines the land register in order to assess the ownership data and contingent loans for the sales manager, who will need to consider the formation and the settlement of the real estate purchase contract. With this information, the notary creates, as required, the format of a proper and well-balanced purchase contract. The notary then advises the contract participants impartially and clarifies comprehensively, objectively and neutrally over all legal consequences of the purchase contract. The notary also has to ensure that the buyer and seller establish no unsecured advances in the finalization of the real-estate purchase. Based on the draft proposal, the seller and the buyer should ask for further clarification or ask any questions related to the document.

2.      During the Notarisation

In the subsequent recording of the deed, the notary will read the contract and its obligations to the parties. After this reading, a waiver is not possible and will lead to the nullity of the contract. In the reading, the notary clarifies the legal content and considers changes and supplements wishes of the parties. In the end, the notary announces that the result of the certification is an effective contract. This reading allows the contract parties, especially the buyer, the opportunity to ask questions of clarification about legal vagueness.

The participants can let themselves be represented through someone else. This is often the case when someone would not like to travel for the reading. This representation can act with or without authority. When acting without authority, the effectiveness of the contract depends on whether the participant specifically approves the contract. A representation without authority is advantageous if no confidant is available to appear for the participant. The participant can then later examine the contract explanations delivered in his or her name in this case once more in quiet, and react if the contract deviates from the previously agreed on terms.

3. After the Notarisation

After the notarisation, the notary applies for a reservation for the property and for the buyer in the land register. Furthermore, the notary provides the documents, that are for the law required and load-free acquisition required through the buyer. These documents include: certification of the community over the renunciation of the legal pre-emption, cancellation documents with respect to registered reason liens for the creditors of the seller, etc.. Concurrently, the notary reports the purchase contract to the revenue office, at the property transfer tax department, whereupon the buyer gets sent the property transfer tax reply. If the buyer requires a bank loan for the payment, then it must be protected by reason liens, the notary must then notarize its order and apply for its entry in the land register. The required documents should have already been transmitted, as far as the financing institute firmly stands, before the certification at the notary to the further preparation so that the order can conclude directly after the certification of the purchase contract. So that delays in the settlement can be avoided. The purchase price becomes either paid directly to the buyer and/or its loaning banks, because of the relief of loans, or on a Notary’s trust account. The notary provides that the buyer first pays the purchase price and/or the deposit. If there are no legal hindrances standing contrary to the real estate acquisition. Then the notary divides the payment date of the total price and takes first the deposit. As soon as the seller receives the purchase payment and the document of compliance from the revenue office (certification of the payment of the real estate transfer tax through the buyer), the notary will apply for the property in the land register. In the end, the notary reviews the entry at the land registers office. Then, the notary ensures that there are no other entries (of expenses of the seller), or any further issues which the buyer did not agree with, or that impair his or her rights.