Legal guide to buying a house or apartment in Germany

Schmeilzl
May 29, 2013

Compared with the UK and the USA, relatively few Germans own their own home. To rent an apartment or even a house is much more common in Germany, especially since a tenant (lessee) is extremely well protected by German law. A landlord cannot simply terminate a residentialrental agreement but must have legitimate cause (Sec 573 German Civil Code). These protection against eviction laws are sometimes abused by unfair tenants to delay their move for months or even years. The relevant statutes of the German Civil Code are available here in English translation. So, in short, being a tenant in Germany is quite attractive from a legal perspective.

Having said that, many Germans of course still dream about owning their own home, the proverbial “die eigenen vier Wände” (meaning “my own four walls”). Traditionally, buying property is seen as a once in a lifetime investment. The idea of buying a house and then to resell it for a larger one a few years later is a strange concept. The typical German approach is to buy a family home and take out a loan / mortgage which is then repaid over 30 to 40 years. To use the term “first time buyer” in the UK estate agent’s parlance (i.e. a buyer who is looking for a first property that he or she will sell again after a while) therefore makes no sense in Germany. In practice, almost all German buyers are “first time buyers”. And at the same time last time buyers for that matter.

In Germany, the legal procedure of conveyancing is also quite different. Unlike in the UK, where the sale mostly involves two solicitors, in Germany a house sale must take place before a civil law notary, who is a neutral and highly qualified German lawyer (details are explained here). The notary (Notar) does not represent either party but must instead be independent. His duty is to draft the agreement, inform both parties about the risks and then oversee the entire transaction. He must, in particular, make sure that the new owner will not be entered in the official land registry (Grundbuch) until the agreed price is paid to the seller in full. The technicalities are quite complicated. For the actual sale, both parties (or their empowered representatives) must appear in person before the notary and the notary reads the entire agreement aloud before the parties are allowed to sign. If either party does not speak German, then the document must either be bilingual (we can recommend notaries who are capable of drafting such bilingual contracts) or the non-German speaking party must bring an interpreter.

In case you would like to obtain specific advice on a specific case or need assistance in buying, selling or leasing property in Germany, feel free to contact the lawyers of the German firm Graf & Partners who specialise in British-German legal issues. Attorney Bernhard Schmeilzl has years of experience acting in cross border cases.