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Real Estate Due Diligence in Germany

Real Estate Due Diligence in Germany

Updated on Monday 14th September 2015

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Real-Estate-Due-Diligence-in-GermanyReal estate legislation in Germany

Germany has a very specific legislation that protects an individual or a corporation when purchasing a real estate property. Among these, the German Civil Code, the Notarization Act, the Land Register Ordinance and the Act on Transfer of Real Estate Property are the most important. For German companies the Capital Investment Act represents one of the key legal frameworks when investing in real estate. Germany is also very strict about constructions and this is where the Federal Building Code and the Federal Town Planning Regulation play an important role in the safety of properties to be built.

The real estate due diligence procedure in Germany

Considering all regulations a building and sale-purchase contracts must comply with, due diligence is a necessity in Germany. Foreign investors and citizens are strongly advised to contact a German law firm before making a real estate purchase in order to clarify all legal aspects of the contract but also to make sure all regulations are respected. Our law firm will conduct a thorough real estate due diligence process with the German Land Register in order to gather all important information about the property title, if any encumbrances exist on the property to be bought and will also expand the process to verify the seller’s reputation. Furthermore, clients are advised to require the expertise of an architect that will verify the construction.

How many types of real estate due diligence procedures can be conducted in Germany?

Even if real estate due diligence is not specifically regulated by the law, the procedure is carefully considered in Germany. German real estate due diligence can be a very complex process comprised of legal, tax and financial due diligence. Commercial due diligence will require an in-depth due diligence procedure that comprises loan documents, employee agreements, insurance policies, business licenses and environmental and engineering inspections according to the activity to be carried out in the building.

Our attorneys in Germany will carry real estate due diligence procedures for their clients and will also help them find the suitable property according to their need. You can also contact us for information about investment opportunities in Germany.

 

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