There are a few things to take into account to ensure that a property transaction is concluded properly. If your mind has turned to the purchase contract, then you have presumably concluded the negotiations and will soon be visiting the notary. But what arrangements and details in the contract should you be aware of to ensure you don’t incur any disadvantages?
The purchase contract forms the basis for concluding every property transaction. When a house or apartment changes owner, the seller and buyer enter a binding agreement.
What is the role of a notary?
In order to be legally valid, the contract must be notarised. The fee charged by the notary for this service is based on the value of the property and is roughly 1.5 percent of the purchase price. The fee is usually paid by the purchaser. The notary is obligated to remain neutral to both parties and is available for both the buyer and seller to consult.
By when should you have access to the purchase contract?
Both parties should be provided with a copy of the draft contract at least two weeks before the appointment with the notary so that there is the opportunity for it to be critically reviewed, possibly by a lawyer where desired.
What should the purchase contract contain?
Purchase contracts are usually standardised contracts. Along with the necessary information about the buyer and seller, including their bank details, the contract must contain a description of the property (floor plan) and a current excerpt from the land register. If the sale involves a used property, the clause “sold as seen” is commonly adopted. In contrast to new-builds, where the purchase contract is often drawn up by a developer and the contract itself offers the buyer a five-year warranty on the structure, there is no warranty obligation for a used property. Instead, any faults on a second-hand property are explicitly referenced in the purchase contract to additionally safeguard the seller. The agreed deadlines for completion of the sale are also included in the contract. In many instances, the buyer takes over additional items from the previous owner, such as fitted kitchens, garden furniture or heating oil still left in the tank. These separate arrangements should also be included in the purchase contract. When calculating the real estate transfer tax (‘Grunderwerbssteuer’), however, these separate items are not included.
Do you have questions concerning the correct contract content for the sale of your property? Get in touch with us! We are happy to advise you.
Disclaimer: This article does not constitute tax or legal advice in individual cases. Please consult a solicitor and/or accountant to clarify the circumstances of your specific case.
Photo: © Gerd Altmann / Pixabay