You want to buy real estate?
Our checklist shows you what you need to know when buying real estate and explains your rights and obligations.
Formal provisions:
A purchase agreement for property must be publicly certified by a notary. The notary must check whether both parties understand the contractual provisions. To do so, they explain certain provisions and the situation in case a party does not understand one of the provisions. The notary then confirms that the purchase agreement reflects the will of both parties and has been reached in a lawful manner.
Contractual parties/representation:
The buyer and the seller must be listed in the contract. This requires their full name, date of birth, place of origin or citizenship, residential address, and civil status.
If one of the parties has a representative, then this person must be notified to the notary in advance and the representative must present a valid, certified power of attorney.
Object being purchased:
The property that is to be bought or sold must be discernibly indicated in the contract. It must be clear to both parties what is meant. Usually, the content of the entry in the land registry is entered here. At least the encumbrances and obligations mentioned there, for example builder’s liens, notes, easements, etc. should be mentioned.
Purchase price and payment:
The purchase price should be listed as a total amount or at least as an identifiable amount. Identifiable means that the price has been determined based on a formula, an index, or an estimate of the market value, for example.
Usually, the purchase agreement first shows the amounts that have been issued by banks as mortgages. It can be agreed that the buyer becomes the new mortgage debtor instead of the seller. This practice is known as replacement of mortgage notes.
The buyer replaces the seller as the new mortgage borrower.
Guarantees for the purchase price (e.g. for real estate gains tax) are also listed.
The total at the end is the amount that remains for the seller according to the abovementioned points.
Payment is usually made through a promissory note of a bank in which it undertakes to pay the purchase price, provided ownership is transferred.
You can find more details on this in our checklist for download.
Benefits and risks:
The term benefits and risks describes the rule for when which party must pay for damage to the property (e.g. storm damage) and who profits from a benefit (e.g. rental income, increase in value). According to law, the transition takes place at the time the contract is signed. However, oftentimes deviating arrangements are agreed so that the benefits and risks are transferred on a defined start date.
Warranty obligations:
A distinction is made between legal warranties and warranties of quality.
A legal warranty means that the seller was the legal owner and that no one else can revoke the sale through a better right.
A warranty of quality relates to the guaranteed or required characteristics of the property. Here, it concerns whether there are no defects or only the defects indicated.
Legal warranties expire within ten years, while warranties of quality expire within five years after transfer of ownership.
For more information, see the article on defect rights on acquiring residential property.
Assurances:
Here, features assured by the seller are listed, for example that the seller will paint the facade before the transfer of ownership, or that power and water connections have been completed.
Complaints/exemption from liability:
According to the law, the buyer must immediately check the object of purchase and report any defects discovered right away. Defects discovered at a later date must also be reported to the seller immediately. If the buyer does not report defects in good time, they lose their claim to warranty.
Oftentimes, the duty of legal warranty and warranty of quality is waived in part or in full. Then the buyer can no longer claim any defects. This has far-reaching consequences, which is why the notary must ensure that this provision has been understood by the buyer.
Easements:
An easement is, for example, the right of the neighbor or yourself to also use the access road of a property. Such encumbrances can also lead to construction constraints.
Contaminated sites/encumbrances:
A special warranty can be agreed so that no contaminated sites or contamination exist or such an issue is excluded entirely.
Insurance:
Existing property and liability insurance policies are transferred to the buyer, provided these are not rejected by the insurance companies within 30 days of the transfer of ownership.
Rental agreements:
Existing rental agreements are transferred to the buyer. However, the buyer can terminate the agreement(s) immediately after the purchase with a notice period of at least three months on the next legal date, even if this is not set out in the rental agreement. However, to do so, the buyer must prove urgent personal need.
Costs/fees:
The costs incurred as a result of the transfer of ownership (e.g. notary and land registry fees) are usually shared equally. However, a different cost distribution can be contractually agreed.
You can find a detailed checklist to download below.