Guidebook Residential Property

The individual freehold property includes, inter alia, all rooms of the respective flat, non-load-bearing interior walls, floor coverings, wallpapers, fitted furniture, electric and sanitary installations inside the flat as well as other rooms outside a self-contained flat, such as a basement room or an attic section.

The common property includes all the things necessary for the continued existence and safety of the building, such as structural walls and building parts, windows, roof, staircases, lifts, wiring, water and gas pipes outside the individual freehold property and the outside facilities. All condominium owners hold a co-ownership interest in the common property. The co-ownership interests are essentially calculated according to the floor area of each condominium, and allocated to each flat/partial ownership in the condominium declaration. In most cases, the co-ownership costs are settled on the basis of the co-ownership interests held in the condominium owners’ association.

The maintenance reserve is governed by Art. 21, Sec. 5, No. 4, German Condominium Act (WEG). According to this law, the members of a given condominium owners’ association must pay an adequate sum of money into a collective pool whose funds are used to pay for reinstatements and maintenance or possibly a modernising reinstatement of the commonhold property that become necessary from time to time.

Under the German Condominium Act, it is mandatory that every condominium owners’ association appoints a manager. The condominium owners’ association and the manager sign a management contract that governs the main tasks and powers of the manager.

The land register is a public official register of land plots in which the status of ownership along with any rights and encumbrances attached to a given land plot are recorded. In addition to the inscription (name of the district court hosting the land registry, while also stating volume and folio), the land register contains an inventory (register), in which the location and size of each plot is recorded in accordance with the designation in the cadastre (drilled down by local sub-district, cadastral district, and parcel).

In keeping with this structure, Section I of a German land register lists owners or ground lessees, including, where applicable, their respective shares of the plot, the community or corporate relationships (e.g. identifying a “community of heirs” or a “civil law partnership”), and the basis underlying a given register entry. Section II of the land register identifies all encumbrances and restrictions: Listed here are mainly easements and restrictive easements, priority notices of conveyance and restraints on disposal (insolvency notices and executors’ notes, rights of first refusal, rights of abode, endorsements concerning redevelopment, etc.). Section III, finally, lists all the mortgage liens, such as mortgages, land charges and (very rarely) annuity charges.

With the transfer of possession, all the property’s rights and duties pass from the previous owner to the buyer. The time of the transfer of possession is usually agreed to follow the payment of the acquisition price, and therefore tends to take place as soon as a property’s buyer paid the purchase price in full to the seller. Legally, it also tends to be tied to the replacement of the priority notice of conveyance with the buyer’s title to the property in the land register, and to the deletion of the seller’s land charges, if any. As of the transfer of possession (transfer of benefits and burdens), the buyer is entitled to the right of use and enjoyment of the property acquired, and the keys to the properties are handed over to the buyer. In case the acquired property is tenant-occupied, the buyer’s rights (e.g. to the rental income) is matched by duties (e.g. payment of condominium fees, property levies, etc.) after the transfer of possession.