Apartment purchase contract

I'm in the process of buying an apartment, and the notar sent me the standard contract to review. It all seems very standard and reasonable except for the last paragraph below, which I have no idea if its reasonable or not, as to me, it's completely indecipherable.

Anybody got any experience in these matters and can tell me if its correct and standard, and ideally what the hell it means?

Congrats on being in, surviving the process.

Get a lawyer to explain it to you.

They'll prob. want to see the entire contract (if they're good), but you can prob. get a good one to check the contract w/in an "Erstberatung" which puts you at ca Euro 250 w/ tax. It might be worth doing.

Or the quick-and-dirty approach is to mail the paragraph to a few lawyers and tell them what you're willing to pay to explain it to you.

If you like, I can give you a couple of e-mail addresses - let me know which take you favor.

There's one part I don't like, but I'm a whiny hyper-anal American and I'm not a lawyer, so I'll crawl back under my rock now.

What the hell? Get a lawyer and pay 250 euros to understand a paragraph in a rental contract? That's insane! I'm sure a good German speaker could translate that into understandable English quite easy..

Actually its a purchase not a rental, and my German girlfriend couldn't understand it either! I could understand the rest of the contract myself, but was stumped by that paragraph.

Pick your poison, mate ...

What percentage of purchase price is Euro 250? Everyone I know who's skimped on lawyers when doing real estate deals ends up stuck with unexpected costs galore, to the tune of 300 USD lawyer vs. 7K USD extra costs, but the lawyer was "too expensive." I hate lawyers, so don't think I'm jigging for them, but if you think that translating legalese into another language's non-legalese is going to give any reflection of the actual legal situation, then do it your way.

Actually I believe (no proof) that the Notar is obliged to explain the contract to you.

One tip though ... the section I especially don't like is of direct benefit to the notary, so don't expect him to clean that up for you.

Ok, I thought it was for rental. I would see a lawyer for a purchase, but aren't you required to have a Notar anyway when buying a house/apartment? If so, isn't it their job to explain to you this stuff? You're paying them a damn fortune, they should be able to.

Now this is an extremely difficult text (esp. without context). Although Im german and used to deal with legal bullshit, Im absolutely not sure what it means. So this are only guesses:

It seems to regulate how you are allowed to "put" a charge on the property, although it is still not yours. (Maybe you are paying in rates ?) So you get a mandate to act in the (soon to be former) owners name. But only in cooperation with this specific notary. I think it´s understandable that they want to make sure, that your actions are controlled by a notary they trust.

But Im no lawyer and I might have misunderstood the text completely.

I have a Notar recommended by the finance company. This contract is from him.

You're right I should probably ring him and ask him to explain it. However I was warned that at the signing, you have no time for these discussions. I'll ring him tomorrow morning and ask what it means.

My understanding is that this is essentially making sure that any third party involved in the purchase, in this case the mortgagee (e.g bank) is formally involved in the contract in collaboration with the same Notary and sets out charges in the light of their involvement going pear-shaped.
Note that it is the Notary's job to ensure you understand the contract prior to signing. That doesn't necessarily mean he is required to explain it to you, but often they do. If an explanation may be in any way contentious, they may prefer not to explain it to you, especially if your failure to understand stems from language issues, as in doing so they may take on an additional element or responsibility which they may want to avoid.

It looks to me to be a standard confirmation of the execution of the document at hand and that everything is done in good faith. It also plainly states that the Notar, by executing the document, takes no responsibility for the loans and associated costs. Basically you can't blame him/her if you don't bother to know what you are signing or know what all the costs will be. It also states the signatory needed to make it legal and binding, namely the Notar that wrote it or an official substitute.

*I am not a lawyer, but I have watched an actor play one on TV.

It`s about the contribution of the alienator. Your allowed to register a charge on real property in the cadestral register.

You can ask the notary or your bank.

@ MaM, I posted my experiences here about having my contract checked by a lawyer last year. The lawyer charged me a % of the house price which turned out to be ca. 6k for work that took him max 2 hours (that was his reply time). If you do use a lawyer make sure that it is on a time basis (or "Ersteberatung") and not on the default which is the %. He claimed that by checking the contract he was personally liable if he missed something important and so justified his price. He ended up suing me to get his money, but he got it in the end . I just needed someone, like you seem to do, to check that all was above board...

A notar is by German law obliged to be neutral and should not have clauses built in to the detriment of either party. Our notar translated everything on the day into English (these guys are pretty well educated - must graduate with a 1 and then get invited to be a notar) so the money we spent on the lawyer was wasted...

Thanks for posting that Corcaigh. It sounds like you were royally ripped off. I don't understand how why you couldn't have just signed away his personal liability, and then payed him for the hours involved. Anyway I'll make really sure this does not happen to me.

BTW the notar asked me if I needed a translator.

Pustekuchen as i have no idea what an alienator, or a cadestral is your post really makes as much sense as the notar's paragraph.

Yes, I could have had I known in advance. If nothing else is agreed then the default is a %. Hindsight is a great thing...

I'd go with the translator (on a time basis!!). When we were at the notar, the were a few changes made whilst reading through (they are obliged to read the entire text in your presence). They then changed the documents, before signing, so if there is something you don't like then you have a chance to have it changed or not sign as the case may be.

I'm not that good with translating all this legal mumbo-jumbo, but I hope this helps a bit.

As long as you are not Grundbuch registered owner the property is legally not yet yours. The seller will only authorize the Grundbuch to change the registered owner once he got his money. However, you won’t be able to get a mortgage secured loan to pay for the purchase without the mortgage being secured on the property, to do that though the property owner has to authorize it. The part you don’t understand is the way to solve this problem.

The seller commits to authorize securing a mortgage on his property in order to finance the purchase. The buyer commits to cede his claim against the mortgage company to the seller up the sum of the buying price. The seller declares that he is personally not liable.

In the last part the seller authorizes the buyer to act in his name to secure a mortgage of unspecified value with up to 20 % interest and a one off payment of up to 15 % on his property and to give all necessary statement to do so. The buyer can only use this power of attorney through the specified notary.

p.s. it's a standard clause by the way

Thanks Bob Loblaw, that was very helpful. What you say makes perfect sense, I can see that getting a property/mortgage is a chicken/egg scenario. Obviously I'm looking at 5.05% interest but if its a generic clause I guess they have a rate (20%) that cannot conceivably be exceeded.

I'm not sure about the 15% bit. I'm looking for a 90% mortagage, so I'd have to pay 10% plus another 5% in Notar costs, taxes. There's no makler BTW. However 70% and even 50% mortgages are more common, so where does the 15% come from.

The contract BTW is littered with clauses that I cannot change notar after I sign him up. I assume this is standard, but now is a good time to warn me if it isn't and the notar is taking advantage!!!

The mortgage incl. the interest rate and the one-off payment rate are abstract and don't necessarily (und usually won't) correspond with the actual secured loan terms.

Eventually the contract will be read out loud in the presence of all concerned, and everyone *must* understand every clause for the contract to be legally completed and signed.

Get a certified translation of the whole contract (i.e the translator must be certified for this kind of translation and provide a certificate to the lawyer) and hire the same translator, or better still an interpreter, to sit in on the day.

We were glad we did - as "stuff" came up which we couldn't possibly have made decisions about without our interpreter.

Even if one of you is German-speaking, a house purchase is too important to cut corners - peace of mind is priceless.

YorkshireLad6's comment about the obligation of the notary to ensure that both parties (or their representatives) undertand the contract that they are signing is important here. My advice is: read carefully, and get translated if necessary, the draft contract that the notary's office should send you by email/fax in advance of the signing sesion. When you come to sign, if you don't speak fluent enough German - or you are not at ease with the terminology - go along with someone who does/is. Ask the questions that you need to ask, you won't get another opportunity.
Bear in mind that the notary won't answer any queries outside his area of competence, for example tax liability issues (if you are buying a property with a rental income).
The system of a notary who is independent of buyer and seller is, imho, a sound basis for property purchase. Getting a lawyer on board for a second opinion of the contract is an extra expense that you should think carefully about and - in any case - add to the total cost of buying. I wonder, too, if it is a sure-fire way of avoiding unexpected hitches. For instance, I recently completed on an apartment in Magdeburg, but it was delayed for an age because the condominium manager (Verwalter) took so long to formalise my purchase - a step not set out in the contract.

I have recently concluded an apartment buying contract in Frankfurt and I can understand that there are a lot of Clauses which are difficult to understand. The Clause which you are refferring is a very standard Clause and but make sure that you ask the Notar and he is obliged to clarify it to you. (Even if it takes a second meeting with Notar, make sure he clarifies to you everything before you sign - normally the seller will not like it but you can demand more time to get it translated / for your thorough understanding to Contract).