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REINDERS Notary Services: Real Estate Property2018-09-02T14:28:03+00:00

Notary Services: Real Estate Property

THE ROLE OF THE NOTARY

In these difficult times characterized by financial crises, more and more investors in Germany are turning to the security implied by the “concrete gold” of the housing market. Acquiring real estate, however, should involve careful consideration, regardless of whether it is for one’s own use or as an investment.

Assuming a loan can mean being subject to debt for decades. According to the German Civil Code, German law therefore requires that real estate sale and purchase agreements must be notarized. Otherwise, the purchase agreement will be invalid.

As the holder of a public office, Notary Delia Reinders is neutral and independent. She therefore does not represent the interests of one but neutrally advises both parties. Her exceptional qualifications allow her to provide legal counsel and advice at the highest level and, in so doing, secure the creation of a fair and balanced contract. This process prevents later disputes at the outset.

Additionally, Notary Reinders helps facilitate that the purchase agreement is concluded smoothly and soundly. In Germany, a notary plays an especially important role when a contract is to be concluded between a consumer and a company. Notary Reinders thereby ensures that those who are not as contract savvy are not disadvantaged and will not unknowingly enter into any unilateral risks.

We advise non-German speaking parties in English. Dual language notarization (English/German) is available, and translators can be involved for notarization in other languages.

BEFORE NOTARIZATION

The most significant commercial aspects of the given transaction are usually discussed before notarization. These include, for example, the purchase price, the condition of the property, the timing of construction or moving and whether or not any movable assets will be sold alongside the real estate. Thereafter, the contractual parties will approach a notary with the request to draft the sale and purchase agreement. As pursuant to § 448 (2) of the German Civil Code it is the buyer who bears the costs of notarization, it is usually the buyer who will determine the notary.

Notary Reinders will first review the subject matter and then determine how the desired agreement may best be given legal form. She will review the respective excerpts from the land register to determine if there are any liens or encumbrances on the property or any other obstacles that might inhibit the conclusion of the agreement. Additionally, where necessary, she will advise the parties regarding different ways of structuring their agreement as well as pointing out potential risks.

The purpose of this is to ensure a secure bargained-for exchange, meaning that the buyer will not transfer any money until it has been duly ensured that he or she is actually the owner of the property. A notary, however, is not involved in any of the commercial details of the contract, such as whether or not the purchase price is appropriate. Similarly, a notary does not provide any tax advice. Should the parties wish to clarify tax matters before entering into their agreement they should consult a tax advisor or the financial authorities.

Finally, the notary will transpose the desires of the buyer and seller into an exacting, legally valid contract and will provide a copy thereof to each of the parties with due time before the notarization. (In the case of contracts between companies and consumers that means at least two weeks.) That way, the parties have the opportunity to review the contract beforehand. The notary is available at the parties’ convenience to answer any questions they may have.

To the extent that the buyer requires financing of the transaction, it is recommended that the financing bank be contacted as early as possible, in particular as in most cases the bank will require a land charge as collateral and the notary will need to know the details thereof.

NOTARIZATION

During the notarization of the purchase agreement, Notary Reinders will read the entire agreement out loud to the parties and will then explain the content and clarify the legal implications of the transaction. The Seller and Buyer have the opportunity to ask questions and address any open issues. When all questions have been answered, and after any desired amendments have been made, the parties sign the agreement in the presence of the notary. To the extent that the notary has received the data regarding the land charge, it can be notarized immediately after the purchase agreement. Otherwise, a separate date is scheduled.

AFTER NOTARIZATION

During the following weeks after the purchase agreement has been signed, Notary Reinders will assist the parties to ensure that the purchase agreement is smoothly executed. The parties are thus free to devote more time to important practical issues such as moves or planning. The notary will acquire the necessary permits and other officially required documents and deal with all official correspondence with courts, authorities and the land register.

The notary will also take care of the oftentimes complex issue of dealing with the former and currently financing banks. By registering a notice of conveyance in the land register, the notary protects the buyer against losing any rights from the purchase agreement, as well as registering any land charge required for financing.

Once it has been determined that there are no more obstacles to acquiring the property, the notary will inform the buyer that it is now safe to pay the purchase price amount. In instances where a transaction proves to be especially complex, buyers often choose the option of paying their money into a notary escrow account where the notary will act as the buyer’s trustee until the transaction is fully completed.

This process gives the buyer additional security.
After paying the purchase price, the notary will request the entry of the transfer of title at the land register and monitor to ensure it takes place. Afterwards, the notary will inform the buyer that he or she is now the official owner of the contractual property.

FEES

For their services, all notaries receive the same fees according to a fixed-rate fee system that is based exclusively on the commercial value of the matter being dealt with. Every notary will charge the same amount for the same contract. In most cases, notary fees are much less than 1% of the given purchase price amount.

For example, if a purchase price were EUR 200,000 then notary fees (including expenses and VAT but without registration of a land charge) usually amount to approximately EUR 1,600, which also includes the notarization of the purchase agreement as well as all consultation, all drafting and the entire conclusion and execution of the contract.

The notary will be happy to advise you of fees to be expected in regard to a specific real estate purchase agreement.

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