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Rights and registration

Rights

What types of holding right over real estate are acknowledged by law in your jurisdiction?

German law recognises:

  • land ownership;
  • heritable building rights;
  • condominium ownership;
  • partial ownership (legally identical to condominium ownership but reserved to non-residential use);
  • heritable condominium building rights;
  • heritable partial ownership; and
  • ideal co-ownership by fractions.

Are rights to land and buildings on the land legally separable?

No. Rights to land and buildings on the land are not legally separable, except in relation to heritable building rights and structures connected to the ground for a temporary purpose only (eg, wind turbines).

Which parties may hold and exercise rights over real estate? Are there restrictions on foreign ownership of property?

Any natural and legal person may hold real estate. There are no special restrictions on foreign ownership; however, for reasons of legal practicality, foreign entities should not acquire land with an unusual legal form (ie, a legal form which has no equivalent under German law).

How are rights, encumbrances and other interests over real estate prioritised?

Rights to land (eg, easements, limited personal servitudes and liens such as land charges, mortgages and real charges) must be entered in the land register. The date of entry and the order of entry in the corresponding section of the land register generally determine their rank.

Registration

Must real estate rights, interests and transactions be registered in your jurisdiction? What are the legal effects of registration?

In general, any change to a right in a property will become effective only after its registration in the land register.

What are the procedural and documentary requirements for entry into the national real estate register(s)? Can registration be completed electronically?

There is no central land registry for the whole of Germany. Rather, the land registers in most federal states are kept by the local courts for their respective district. All entries and legal changes regarding property rights must be applied for with notarised deeds or documents certified by a notary public. Registration cannot be executed electronically.

The importance of notaries’ offices in Germany differs considerably from the position of notaries in the legal systems of many other countries. German notaries must be strictly neutral towards the respective contracting parties (eg, the notarisation of a contract must not be executed by the same law firm that represents one of the parties to the contract). German law assigns key tasks in the administration of justice to notaries. Therefore, notaries are lawyers with additional notary training. In some federal states, only the top 3% to 10% of graduates are admitted to the notary's office.

What information is recorded in the national real estate register(s) and to what extent is such information publicly available?

The land register provides information about, and the respective entry is constitutive for, the rights to:

  • ownership (entered in Section 1 of the land register);
  • easements or servitudes, preliminary reservations and priority rights (Section 2); and
  • real estate liens, such as mortgages and land charges (Section 3).

Information on the land register is available only to persons with a legitimate interest (eg, a neighbour) or to those with an enforceable title against the owner. A potential buyer will need the written consent of the seller to inspect the land register.

Is there a state guarantee of title?

There is no state guarantee for the accuracy of entries in the land register. However, the register enjoys so-called ‘public faith’. This means, for example, that the buyer of a plot can rely on the fact that the person registered as the owner in the land register is entitled to sell and transfer ownership of the plot.

The acquisition of land is also effective if the person registered as the owner in the land register is objectively not entitled to the disposition (eg, because the land register has become incorrect due to an error or a change in law outside the register, and the buyer is not aware of this mistake). The accuracy of entries in the land register is construed in favour of the bona fide acquirer.

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