Real Property Law

In this area of law, we provide legal services related to real estate, including:

• Preparation and assessment of contracts
• Acquisition, conveyance, right to use, encumbrance, and sale
• Compulsory purchase
• Heritable building right
• Security provided for loans (e.g. land charge, mortgage)
• Tax law (e.g. property tax and property transfer tax)
• Encumbrances on real property (easement, usufruct, real servitude, land charge)
• Land register
• Rights securing a claim (priority notice, right of first refusal, option to repurchase)
• Foreclosure action against real property and forced sale
• Forced administration and insolvency

Property Development

In a contract for property development, the developer undertakes to transfer to the buyer ownership and title to the land or a co-ownership interest in the land, and to build a specific building or structure on the land.

Since the sale of land is part of a contract for property development, such a contract usually requires notarization.

Irrespective of § 14 BNotO, which provides that notaries have to be independent and unbiased, it is strongly recommended that the buyer has the contract examined by a lawyer who is specialized in construction law and architects law prior to the notarization. This is also recommended for the declaration of condominium and the rules applying to all owners if you acquire a condominium.

When drafting a contract for property development, you have to make sure that the mandatory provisions of the Makler- und Bauträgerverordnung (MaBV) are complied with, and that the contract clearly provides for any special requirements of the buyer, the delivery date, acceptance, and liability for defects. Furthermore, it is in the buyer’s best interests to agree on a clause providing for a penalty or liquidated damages in case the developer is in default on the delivery date/completion. In that case, the buyer does not have to provide evidence of actual damages.

In order to avoid disputes during or after completion of the project, it is absolutely essential to agree on a detailed and clearly defined scope of work.

A contract drafted by a legal expert, which clearly defines the developer´s scope of work as well as the obligations of the buyer, usually reduces the risk of litigation considerably.

Should disputes arise at any stage of construction, or after completion, in particular about special requirements, default, defects, repair work, reduction of the purchase price, or damages, your counsel will have to examine what claims the parties involved may have and which claims may or have to be asserted by the buyer himself or by the condominium owners association. Furthermore, the buyer should seek legal advice immediately in case the developer goes bankrupt.

Klaus Sauerbier provides legal advice for private clients and medium-size developers on property-related due diligence, contracts for the sale of real estate, as well as property development and tenancy law.