Legal basis when buying


Legal basis when buying

In the following, we have explained the most important terms relating to the legal basis when buying a property for you.

Notice of conveyance

With the notice of conveyance, the potential buyer secures the right to be entered in the land register as the final owner. It is entered in Section II of the land register. This protects the buyer from the seller selling the property on to a third party, for example, or putting a mortgage on it, etc. When the purchase price has been paid, the notice of conveyance is deleted and at the same time the buyer is registered as the new owner.


To be on the safe side when purchasing a property, you should only pay the purchase price once the notice of conveyance has been entered. Therefore, when negotiating the purchase contract, make sure that the purchase price is only due after the entry.


Whoever wants to build a property does not necessarily have to be the owner of a piece of land. The heritable building right is a transferable and inheritable right to a property (usually limited to 99 years). It enables its owner to erect or own a building on unfamiliar land.

The leasehold is therefore an alternative to the expensive purchase of land. Of course, this right is not free. Instead, ground rent is agreed as payment, which is to be paid on the value of the property over the entire useful life. This interest rate is adjusted in contractually agreed periods of time.

Against the background of a long-term investment, the advantages and disadvantages of the leasehold should be carefully weighed. For example, the property buyer is usually the debt-free owner of the property after 30 years, while the leaseholder has to pay the agreed interest, which can increase over time, for the entire duration of the leasehold. Any obligations and restrictions contained in the leasehold contract that a property owner does not have should also be carefully checked in advance. The heritable building right is a special burden on the property and is therefore entered in Section II of the land register. The leasehold itself can in turn be encumbered.

Land register

The land register states who owns a property, where it is located, how big it is and whether it is encumbered. It is managed by the land registry at the local court. Every private property has its own land register sheet there.

A land register sheet consists of the inventory in which the property is listed – including a serial number, the parcel (place or district), the land number and the size and type of use. It also lists the so-called departments I, II and III.

  • Section I lists the owner and the reason and date of the release. Conclusion is the agreement between seller and buyer about the transfer of ownership.
  • In section II encumbrances and restrictions of the property such as rights of first refusal, easements, notices of conveyance, permanent residence and usage rights, real encumbrances, usufruct and also foreclosure notices are entered.
  • Section III contains mortgages, i.e. mortgages, land charges and pension debts.

All entries are made in the order in which the application is received at the land registry and are then given a ranking. This rank is decisive for the value and security of a right. For example, in the event of foreclosure, the higher-ranking mortgage claims will be satisfied first.

Anyone who has a “legitimate interest” and can prove this can inspect the land register. Every prospective buyer or tenant, for example, has a legitimate interest.


If two properties are located one behind the other and the owner of the second property can only reach his floor when he crosses the first property, then the person in front may not forbid his neighbor to use it.

Because: In the land register of the man in front it is recorded that the man behind is allowed to use the street (easement). A distinction is made between easements of use and easements to cease and desist. Easements of use include, for example, rights of way, grazing rights, the routing of lines across the property, etc. Injury easements include, for example, a construction ban on the property in question.

Easements are a burden on the property and are therefore entered in Section II of the land register.

Real estate lien

Banks secure their real estate loans with mortgage liens. The rights allow them to foreclose the property if the borrower fails to pay their installments.

The land charge is the most important form of loan protection today. As the remaining debt decreases, the financing institute’s right to have the entire property auctioned off in an emergency also decreases.

The issue of the sale of receivables has been discussed intensively in the media and has caused uncertainty and has found its way into legal regulations. The Risk Limitation Act has been in force since August 2008, which aims to provide consumers with early and better information on the sale of loans and more protection against foreclosure. In principle, borrowers who pay their installments properly have nothing to fear under the current legal situation. Those who meet their credit obligations do not have to expect that a financial investor will suddenly appear at the door and demand repayment, threaten with foreclosure or carry out foreclosure.

Your personal financing advisor at Interhyp can clarify how the individual banks deal with the issue of the sale of receivables and thus ensure transparency.

Purchase contract

A watertight sales contract is essential to ensure that a transaction of this magnitude is on a safe footing. In the purchase contract, the seller undertakes to transfer ownership and the buyer to pay the purchase price.

The deed of purchase agreement usually contains the names of the contracting parties, the designation and location of the property, the purchase price and a possible assumption of mortgages. It also contains the declarations of conveyance (i.e. the agreement of the parties to transfer ownership), conditions, approval and often the application for a notice of conveyance. If necessary, pre- or repurchase rights and long-term claims such as pensions and ground rent are noted here.

Ultimately, ownership of the property passes to the buyer when the entry has been made in the land register. This must be requested first. In addition, a clearance certificate and possible deletion permits (with regard to the encumbrances entered for the seller) must be available at the land registry. All of these required documents are prepared by the notary and submitted to the land registry. Since some time can pass before the final entry in the land register, a notice of conveyance is agreed to protect the buyer and entered in the land register.

Neighbor protection

Everyone has the right to be able to use their apartment or property undisturbed. If there is a smell, noise, fruit from a neighbor’s property falls onto one’s own belongings or other branches overhang, the private law of the neighbor is required (regulations of §§ 906-924 BGB). Because: If neighboring properties impair the right to undisturbed use, the Civil Code grants a right to omission, remedial measures or compensation through money.

Insignificant impairments have to be accepted. This also applies to significant impairments – insofar as they are caused by the customary use of other properties and cannot be prevented by economically justifiable measures.

The protection of neighbors in building law is largely regulated by the building planning regulations in the BauGB (public neighboring law). Zoning plans and the issuing of building permits are covered by requirements and conditions (for example, spacing areas, number of floor areas, building limits, etc.) and are intended to ensure good cooperation. In some federal states there are additional neighboring laws.


In the usufruct, the owner owns the property, but someone else benefits from it. This person is entered in Section II of the Land Register.

Example: An apartment building with rented apartments belongs to one person, but the rental income is due to the beneficial owner. This right is applied, for example, to anticipated inheritance. In this case, the house will be transferred to the children while they are still alive. However, the rental income is due to the parents during their lifetime. In the event of the death of the parents, the entitlement to the income from the property also passes to the heirs. However, the building itself is not part of the inheritance and is therefore not subject to inheritance tax.


No real estate (property, house or apartment) is sold in Germany without a notary. He must notarize the sales contract. Its task is to mediate neutrally between both parties and to point out the consequences of the contractual conditions to both sides.

The notary receives fees for this activity, which are based on the Court and Notary Fees Act (GNotKG). On August 1, 2013, the law replaced the cost regulations that had been in force until then. How high the notary fees are depends solely on the importance and value of the transaction. Depending on the federal state, there are lawyer notaries or notaries only. Legal notaries (approx. 6,000) can be found in the states of Baden-Württemberg, Berlin, Bremen, Hesse, Lower Saxony, Westphalia and Schleswig-Holstein. In all other parts of Germany there are only notaries-only (approx. 1,500).

Right of first refusal

When buying a property, you should pay attention to whether other people have a right of first refusal to this property. Information on this can be found in Section II of the land register.

If another person has a right of first refusal, they will come first in a sale of the property. In this case, the purchase contract is concluded on the terms agreed with the person entitled to pre-emption. In addition to contractually agreed rights of first refusal, statutory rights of first refusal are also conceivable, for example rights of first refusal of the municipality. These public rights of first refusal are regulated in the Building Code.

Clearance certificate

As soon as you as the buyer of a property have paid the real estate transfer tax, the tax office will issue you with a clearance certificate.

This must be submitted to the land registry together with the other documents. This prevents you from being burdened with a possible tax liability of the seller. You will only be entered in the land register if you pay the real estate transfer tax.

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