• WHAT IS TRANSFER OF PROPERTY IN GENERAL?

• GENERAL PRINCIPLES OF GERMAN PROPERTY LAW

• TRANSFER OF MOVABLES ACCORDING TO BGB

• TRANSFER OF IMMOVABLES ACCORDING TO BGB

TRANSFER OF PROPERTY IN GERMANY

1. CONSENSUAL TRANSACTION

2. OBTAINING AN INTEREST IN PROPERTY UNDER

A TRUST ESTABLISHED FOR THE BENEFIT

3. PASSING FROM ONE PERSON TO ANOTHER

INDEPENDENTLY

Transfer of property

German property law

Bürgerliches Gesetzbuch (or BGB)

The Property Law ("Sachenrecht"), sections 854 -

1296, describing:

1. possession,

2. property,

3. other rights persons have relating to property

(movable property and real estate),

4. how those rights can be transferred

General principles

numerus clausus,

absolute effect,

publicity,

specification,

so-called Abstraktionsprinzip – principle of

abstraction

DISTINCTION

contract containing theobligation to

transferthe property

the transfer itself

Principle of abstraction

German transfer system – tradition system

Art. 929 BGB requires a transfer of possession

1. the will of the transferor to make the acquirer possessor

2. corresponding will of the transferee to acquire possession

from the transferor

Possession in not only a fact but also a right legal

act

Art. 854 subs. 2 BGB

In practice - transfer of possession is seen as no

more than a factual act

German transfer system – tradition system

Valid transfer the transferor should be privileged to

dispose

No longer is the person privileged if he is declared

bankrupt (non-owner may, by law or by legal act, be

given the privilege to dispose though)

Valid transfer acquirer is in good faith, and all other

requirements for third party protection are met

This ability to transfer - ‘the power to dispose’

‘Identity of defect’ - between contract and conveyance

• SECTION 929

AGREEMENT AND DELIVERY

• SECTION 930

CONSTRUCTIVE DELIVERY

•   SECTION 931

ASSIGNMENT OF CLAIM FOR POSSESSION

• SECTION 932

GOOD FAITH ACQUISITION FROM A PERSON NOT

ENTITLED

Transfer of movables

Agreement and delivery

The owner is required to deliver the thing to

the acquirer

They both need to agree that the ownership

is to be passed

If acquirer possesses the thing – the transfer

is valid.

Constructive delivery

delivery may be replaced by a legal

relationship

agreed between the owner and the

acquirer

the acquirer obtains indirect possession

Assignment of claim for possession

delivery may be replaced by the

owner assigning to the acquirer the

claim to delivery of the thing.

Good faith acquisition from a person not entitled

The acquirer becomes the owner even if the thing

does not belong to the alienor, unless the acquirer

is not in good faith at the time when under these

provisions he would acquire ownership

The acquirer is not in good faith if he is aware, or

as a result of gross negligence he is not aware,

that the thing does not belong to the alienor.

• SALE OF REAL ESTATE AMONG PRIVATE

PERSONS (CONSUMERS)

PROCEDURE IN GENERAL

REAL ESTATE SALES CONTRACT

TRANSFER OF OWNERSHIP AND PAYMENT

Transfer of immovables

German immovables transfer – in general

Two parts: a contract obligation to transfer ownership of

the property (Kaufvertrag) and disposition activity

(Auflassung)

German principle of separation

The validity of disposition activities (transfer of property) is

not dependent from a validity of transfer of ownership

agreement

"The contracting parties agree that the ownership of the

property above is transferred to the buyer in its exclusive

meaning."

Sale of real estate among private persons

Procedure in general Main steps of a real estate sale

– The parties ask a notary to draft the contract. The sales contract is

concluded in an oral hearing at the notary’s office in the presence

of both parties and laid down in a notarial document.

– Notary applies for registration of a priority notice (Vormerkung) in

the land register (Grundbuch).

– Now, the buyer pays the purchase price to the seller.

– After payment, the seller allows the buyer into possession and the

notary has the transfer of ownership registered in the land

register. The registration entails the transfer of the property.

Time frame The time necessary varies according to the time needed by the land

register.

– On average, the priority notice is registered within several days.

Normally, the notary or the parties receive the information about the

registration of the priority notice about two weeks after the demand.

– The registration of the transfer itself might take longer, up to some

weeks

– However, some land registers have a serious backlog. There, even

the priority notice might take some months, the registration of

transfer half a year or even a year, in some cases even longer.

Sale of real estate among private persons

Real Estate Sales ContractForm

In Germany, the real estate sales contract has to be concluded by notarial

instrument; otherwise it is invalid (§ 311b BGB)

– If the sales contract is formally invalid, the formal defect is cured, if the transfer of

property has been declared and has been registered (§ 311b BGB). However, the

registration does not cure any material defects of the sales contract. Also the

transfer of property has to be declared to a notary (§ 925 BGB)

– The declaration of transfer requires a German notary.

– The transfer has to be declared with both parties present at the same time (§ 925

BGB). Offer and acceptance must not be notarized separately. However, the transfer

is valid, even if the notarial instrument has not been validly notarized (§ 925 BGB).

Sale of real estate among private persons

Transfer of Ownership and PaymentRequirements

– valid obligation contract (causa) - no

– payment of the purchase price - no

– consent on the transfer of ownership (Auflassung) - yes

– registration with the land register (Eintragung) – yes

In the German system, transfer of ownerhsip requires only a

declaration of consent and the registration with the land

register.

Sale of real estate among private persons

Payment due

It is impossible to make the transfer contingent on the payment of the

purchase price . The transfer of property is split up in two steps:

– First, the priority notice is registered - buyer is secured that nobody else

can acquire property validly against him - buyer now may pay the

purchase price to the seller.

– After payment, the seller allows the buyer into possession and the

notary has the transfer of ownership registered in the land register .

– An escrow account is necessary to secure the seller, if the parties agree

to transfer possession before payment is due. In Germany, no insurance

is used for the risks of the payment.

Sale of real estate among private persons

Sale of real estate among private persons

Ways of enforcing the payment

A notarial instrument is enforceable only if the debtor

explicitly declares submission to direct enforcement in

the contract. In almost all contracts on the sale of real

estate, such submission is declared by the buyer.

Transfer of possession to the buyer

The seller declares submission to direct enforceability

concerning his duty to vacate the premises and to

transfer possession to the buyer.

• NO SPECIAL RULES

• PRINCIPLE OF SUCCESSION – THE HEIRS BECOME

OWNERS AFTER THE DECEDENT’S DEATH

• HEIRS NEED TO PROVE THEIR TITLE OF

SUCCESSION

• SECTION 943 – 945 BGB

Inheritance

Principle of succession

Acquisition by prescription and succession in title

If as a result of succession in title the thing enters the proprietary possession of a third party, the prescription period that has passed in the possession of the predecessor in title benefits the third party.

Possessor of an inheritance The prescription period that has passed for the benefit of a possessor

of an inheritance counts in favor of the heir.

Extinction of third party rights On the acquisition of ownership by prescription, the third-party

rights in the thing that arose before the acquisition of possession are reduced, unless the proprietary possessor is not in good faith with regard to these rights or he learns of their existence only later.

Bibliography (all checked 27/11-06/12)

http://www.globalpropertyguide.com/Europe/germany/Landlord-and-Tenant

http://www.eui.eu/Documents/DepartmentsCentres/Law/ResearchTeaching/

ResearchThemes/EuropeanPrivateLaw/RealPropertyProject/Germany.PDF

http://en.wikipedia.org/wiki/Law_of_Germany

http://www.doingbusiness.org/data/exploreeconomies/germany/registering-property/

http://www.iuscomp.org/gla/literature/rahmatian.htm

http://www.google.pl/url?

sa=t&rct=j&q=&esrc=s&source=web&cd=9&ved=0CGgQFjAI&url=http%3A%2F

%2Flaw.huji.ac.il%2Fupload

%2FSchutte.doc&ei=yJ6FVOnnLYj1UOishNgJ&usg=AFQjCNHiOvLQGOJ7pZvfjuwsD

kAnaZN2zQ&sig2=cLIr5wVaeQMVDx3-5tOL0w&bvm=bv.80642063,d.d24

ALEKSANDRA MIERZEJEWSKA

THANKS FOR THE ATTENTION