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Tag Archive: Purchase apartment in Germany

  1. The recognition of foreign divorce judgments and the enforcement of foreign alimony judgments in Germany

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    A. Recognition of Foreign Divorces in Germany

    Regarding the recognition of foreign divorces in Germany, one always has to distinguish between the recognition of divorce judgments from EU Member States and the recognition of divorce judgments from states that are not covered by the Regulation (EC) No 2201/2003 (hereinafter referred to as „third countries“).

    I. Recognition of foreign divorce judgments from third countries in Germany

    Pursuant to s 107 para 1 sentence 1 FamFG (Act on the Procedure in Family Matters and in Matters of Non-contentious Jurisdiction) divorce judgments from third countries will be recognized in Germany if the department of justice of the relevant German federal state (Landesjustizverwaltung) decides, that the requirements of the recognition are met.

    This means, that divorces from third countries will not be recognized automatically in Germany, nor can the question of the recognition be decided as a preliminary issue by a German court (for examle in an alimony case).

    As said before, responsible for the recognition of divorces in Germany is the department of justice of the relevant German federal state (Landesjustizverwaltung). This is the German federal state, where the spouse applying for the recognition ist habitually resident.

    According to s 107 para 3 sentence 1 FamFG the departments of justice of the German federal states can transfer their authority to recognize foreign divorces in Germany to the presidents of the Higher regional Courts (Präsidenten der Oberlandesgerichte).

    However, in most federal states of Germany the departments of justice have exercised their right to transfer their authority to recognize foreign divorces to the presidents of the Higher regional Courts (Präsidenten der Oberlandesgerichte).

    The recognition of a divorce takes place only on request by one of the spouses.

    Together with the application the following documents need to be submitted to the competent authority:

    – Valid passport or identity card

    – Foreign divorce certificate

    – Marriage certificate

    – Proof of income of the applicant

    – Certificate of residence of the applicant

    – Legalization of the foreign documents

    – Certified Translation of the foreign documents

    The competent authority will then examine, if there are any obstacles to the recognition of the divorce (§ 109 FamFG).

    According to s 109 FamFG the foreign divorce will for example not be recognized, if the divorce judgment violates German basic law (the German constitution).

    If the divorce judgment has been made by a court of a foreign state of which both spouses were nationals at the time of the decision (so called „Heimatstaatentscheidung“) it is exempt from the formal recognition according to s 107 FamFG.

    II. Recognition of divorces from EU Member States in Germany (according to Regulation (EC) No 2201/2003 – (hereinafter referred to as „EheVO“))

    Divorce judgments from member states of the EU (for example Belgium, Finland, France, Greece, Ireland, Italy, Luxembourg, Netherlands, Austria, Portugal, Spain, Sweden, UK, Estonia, Latvia, Lithuania, Malta, Poland, Slovak Republic, Slovenia , Czech Republic, Hungary, Cyprus, Bulgaria or Romania) are recognized in Germany without any special procedure being required (pursuant to Article 21, section 1 EheVO).

    This means that such divorces are recognized automatically as long as the automatic recognition is not excluded from because of any of the grounds mentioned in Article 22 EheVO.

    Despite the automatic recognition under Regulation (EC) No 2201/2003 a party may nevertheless exert a recognition procedure if the party can show probable cause that the party has a special interest in that procedure.

    Responsible for this recognition process is then the local family court.

    B. The Enforcement of foreign alimony judgments (spousal support or child support orders) in Germany

    The enforcement of foreign alimony judgments from courts of EU Member states in Germany is governed by the Council Regulation (EC) No 4/2009 on jurisdiction, applicable law, recognition and enforcement of decisions and cooperation in matters relating to maintenance obligations („the Maintenance Regulation“).

    Important Note: This article has been prepared by mth Tieben & Partner for general information purposes only. Mth Tieben & Partner does not accept any liability to any person or organisation for the use or reliance of the information contained in this article. On any specific matter, kindly contact us by dialing 0221 – 80187670 or sending us an email to info@mth-partner.de

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  2. German Law: Sample agreement to purchase real estate in Germany

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    The preparation of the agreement to purchase real estate is the most important part of the acquisition process regarding real estate in Germany. The agreement should generally contain the following major components:

    – the exact description of the character, location, size and usability of the object of purchase.

    – the exact price of the object of purchase (inclusive of all duties, etc.).

    – the payment terms (payment date etc.).

    – priority notice of conveyance (in order to secure the buyer’s title in the real property).

    – the conditions of the change of ownership and possible risks of liability.

    – costs of the land survey (if land survey is necessary).

    – development and adjoining property charges.

    – the declaration about any governmental restrictions imposed on the object.

    – the declaration about any liens/encumbrances.

    – the declaration about required municipal decisions.

    Sample Agreement:

    (1) Land Registry data

    a) After instruction by the notary, the parties agree that none of them is acting as part of a professional or commercial activity (regarding s 14 BGB).

    b) The seller is registered as the owner of the immovable property in the land register described as follows:

    District Court of XXX, Land registry of XXX, Journal XXX,
    Local Subdistrict XXX, Field XXX, Land parcel XXX

    connected with the severalty ownership of the apartment Type XXX, ground floor, in the partition plan named No. XXX

    The notary reviewed the land register and found:

    Division II: XXX
    Division III: XXX

    The burdens in Division XXX are not accepted by the buyer and will be deleted, which is hereby approved and applied for by both parties.

    (2) Purchase

    The Seller hereby sells to the buyer the property described under No. (1) together with all components and accessories.

    (3) Purchase Price

    The purchase price is EUR XXX (In words: Euro XXX).

    The purchase price is due at the XXX with no interest accruing until then.

    However, the price is not due before the maturity conditions agreed upon in No. (4) are fulfilled.

    The payments shall be paid:

    a) an amount of ……. (in words ……) shall be paid to the court cashier of the district court XXX in order to delete the burdens listed in Division XXX

    b) an amount of ……. (in words ……) shall be paid to the notary for the settlement of his invoice regarding the enforcement of this purchase agreement and the safekeeping of the cancellation documents regarding the burdens in Division XXX

    The seller warrants that the purchase price reduced by the amounts described under a) and b) will be sufficient for the property to be released from encumbrances.

    (4) Maturity conditions

    The maturity of the purchase price depends on the written notification of the buyer by the notary that
    a) the approvals and certificates are available which are necessary for the validity of the purchase contract (except the tax clearance certificate).

    b) the existence of a priority notice in the land register in order to secure the title of the buyer in the land, ranking after the loads described in No. 1 of this dead or other loads, the buyer was involved.

    c) the exemption of the Object of Purchase from any and all mortgages and other rights entered into the land register, which are of higher rank than the priority notice for conveyance, is assured with purchase price funds, because the notary is in possession of all necessary documents.

    (5) Delay of payment, withdrawal

    a) The buyer is in delay of payment, if he doesn`t pay the purchase price within one week after receipt of the notice of the notary that the payment is due. The notary has pointed out, that the interest rate in case of delay of payment is five percentage points above the base interest rate for one year and the base rate can change at the 01.01. and 01.07. of each year. Claims for further damages because of the delay of payment are not excluded by the payment of the interest.

    b) If one of the parties of the agreement withdraws from the agreement because of contractual or statutory rights, the resulting costs will occur to that party which is responsible for the withdrawal.

    […..]
  3. Acquisition of real estate in Germany/Real estate purchase in Germany

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    The acquisition of real estate in Germany follows a course that is very different from the acquisition of movable property. This article seeks to examine the legal and tax issues that are arising or could arise on real estate transactions.

    There are no restrictions regarding the acquisition of real estate by foreigners. However, foreign companies must prove their legal existence and the power of representation of those persons acting for the company.

    Generally two steps are necessary in order to purchase real estate in Germany. The first step will be the conclusion of the real estate contract, the second step will be the conveyance of the property, i. e. the transfer of the interest in the real property from the seller to the buyer through the registration of the interest in the land register.

    A.) Real estate contract

    The preparation of the real estate contract is the most important part of the acquisition process. The real estate contract should contain the following major components:

    – the exact description of the character, location, size and usability of the object.

    – the exact price (inclusive of all duties, etc.)

    – payment terms (payment date etc.)

    – priority notice of conveyance (in order to secure the buyer’s title in the real property)

    – the conditions of the change of ownership and possible risks of liability

    – costs of the land survey (if land survey is necessary)

    – development and adjoining property charges

    – declaration about any governmental restrictions imposed on the object.

    – declaration about any liens/encumbrances

    – declaration about required municipal decisions

    Pursuant to s 873 (2) German Civil Code (Bürgerliches Gesetzbuch), the parties of the real estate contract are bound by the contract only if the declarations are recorded by a notary, or made before the Land Registry, or submitted to the Land Registry, or if the person entitled has delivered to the other person an approval of registration that satisfies the provisions of the Land Register Act.

    Thus, the parties to the real estate contract have to express their will to sell and buy in front of the notary, in this way binding themselves to their own statements.

    The notary will then proceed by concluding the contract, which has to be in written form, under penalty of nullity.

    B. Conveyance of the real estate by registration in the Land Registry

    The transfer of the ownership of the real estate will be accomplished, when the contract of the parties and their will of conveyance is entered in the land registry.

    The formalities and requirements for registration in the land registry are the same throughout Germany and there is a land register in every local district.

    However, in order to secure the vendee’s land title in the time period between the conclusion of the contract in front of the notary and the entry into the land registry, the vendee has got an expectancy right if the vendee has presented a formal request for registration or if a priority notice has been entered into the land register.

    For the registration of the title transfer or the priority notice of conveyance a registration fee must be paid to the local court.

    C. Tax

    1. Real property transfer tax

    When domestic real estate is sold or changes owner, a one-time real property transfer tax (land transfer tax) of 3.5 percent of the purchase price is levied if the purchase price or consideration exceeds EUR 2,500. Real property transfer tax is usually paid by the buyer. In Hamburg and Berlin, the rate is 4.5%.

    2. Real estate tax

    German property is subject to a real estate tax, levied annually. The tax base is the ‘assessed value’ and the tax depends on several factors like location, size, use and the local municipal coefficient, etc.

    3. Value Added Tax (VAT)

    Real property transactions are generally not subject to the German VAT. However, an entrepreneurial seller is entitled to treat the transaction as taxable.