Land registry: What to do when buying and selling property
German land register: structure, content and costs
It is the pillar of real estate ownership and contains all information about encumbrances as well as rights that exist with regard to a property: Without the land register, no purchase or sale of a property is feasible or legal. In order to understand its function, it is important to know exactly about its structure, sections and their contents. In addition, registration in the German land register is always accompanied by costs, which, for example, must be included as ancillary costs when buying real estate. Anyone wishing to take out a mortgage on a plot of land or property must also have a corresponding entry made for this purpose.
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Land register and land register entry: definition
Land registers in Germany function as directories of all properties existing in a land register district. According to land register law, this is a public register that is kept for each plot of land. The respective land registry office is responsible for this. All plots of land belonging to one owner are listed separately on one land register sheet, and the collected land register sheets are summarized. The book provides information on the location and size of a plot of land and also contains details of heritable building rights and ownership of the property. If the owner changes, this must be entered accordingly. It comprises a total of three sections. Section I contains information on owners, leaseholders and ownership. Section II regulates encumbrances and restrictions, such as hereditary building rights, usufructuary rights and rights of use. Land or annuity debts and mortgages are entered in Section II.
Requirement of an extract from the land register
Anyone who owns real estate or a plot of land and plans to sell it needs an extract from the land register. It serves to prove that the person selling is indeed the legal owner. Such an extract is also required for taking out a mortgage as well as for mortgaging the real estate or land property. In these cases, the extract must be certified. The uncertified extract from the land register, on the other hand, is sufficient if, for example, the ownership of the rented apartment is to be proven to a tenant. The application for the land register extract is made at the responsible land registry office. There must be a justified interest for the land register information. This is given if there are factual or understandable reasons. The owner himself may inspect the land register at any time. The application may require a paper copy, but it is now possible and also common to apply for land register extracts online, as in principle there is always an electronic land register.
When a property is sold, the notary arranges for the land register entry to record the new owner there. Before this happens, a conveyance is first required. This is the agreement between buyer and seller. Not only the change of ownership can require a land register entry, but also the so-called right of first refusal. This serves to provide the buyer with security before he obtains ownership. The right of first refusal is also initiated by the notary. If all prerequisites and possible approvals are present, the notary applies for the land register entry at the land registry office. For the land register entry in section II or III, the consent of the owner is also required. The costs incurred for the land register entry must be borne by the applicant. They are settled by the notary through his fee.
Duration, costs and subsequent changes
The transfer of ownership of a property is accompanied by the deletion of the previous owner or its removal. There are costs for both procedures. These include 1.5% to 2.5% of the purchase price of the property. For a written extract 10 Euros are to be estimated, if this is to be certified, the costs increase to 20 Euros. Several weeks or even months can pass between the conclusion of the contract and the registration. In addition, the entry may be amended at a later date, for example if the original entry was incorrect or if property rights need to be changed, transferred or removed.