Prior notice of conveyance when buying real estate

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The priority notice of conveyance has its roots in 19th century German land register law and was introduced to protect buyers from loss of ownership. To this day, it secures the right to transfer ownership before it is finally entered in the land register. Anyone intending to buy or sell a property or plot of land should be familiar with the priority notice of conveyance, its significance and its advantages. We explain this key instrument for buying real estate in Germany.

What is a priority notice of conveyance?
Advantages of the priority notice of conveyance in detail
Is the priority notice of conveyance mandatory when buying real estate?
Difference to conveyance: meaning in comparison
Entry of the priority notice of conveyance in the land register - procedure
What does it cost to secure the land register?
Summary of the priority notice of conveyance
Notarized purchase agreement with priority notice of conveyance - our estate agents can help
FAQ on the priority notice of conveyance and its requirements

What is a priority notice of conveyance?

If a real estate purchase agreement has already been notarized, but the buyer has not yet been entered in the land register as the new owner, there is a certain residual risk. The seller could still sell the land or the property on it to a third party or encumber it. To counteract this risk, the priority notice of conveyance is entered in the land register.

As a result of the registration, no dispositions can be made regarding the land or the property during the transitional period that conflict with the rights of the buyer. All subsequent dispositions that affect the buyer's rights become ineffective. Once the transfer of ownership has been completed and the buyer has been entered in the land register as the new owner, the priority notice of conveyance has fulfilled its protective purpose and can therefore be deleted.

Important

Sections 883 to 888 of the German Civil Code contain a precise description of the priority notice of conveyance and its definition. The special agreement on the transfer of ownership (conveyance), on the other hand, is regulated in Section 925 BGB.

Advantages of the priority notice of conveyance in detail

In the context of transactions, you should therefore be familiar with the priority notice of conveyance if you are selling a property - in Munich or anywhere in Germany. It offers the buyer the following specific advantages:

Securing the buyer's claim
Protection against legal risks during the transition process
Prevention of unwanted sale of the land or property
Protection against encumbrances such as a land charge or mortgage
Minimization of conflicts through clearly defined legal regulations

Are there any disadvantages to the priority notice of conveyance?

Even though the priority notice of conveyance offers many advantages, there are certainly prerequisites and challenging points that you should be aware of. Registration can delay the purchase process somewhat, as it only takes place after notarization. Notary and land registry fees also incur additional costs. In rare cases, legal ambiguities may arise in the event of incorrect or delayed entries.

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Is the priority notice of conveyance mandatory when buying real estate?

A priority notice of conveyance is not prescribed by law and is therefore not mandatory. In practice, however, it is almost always registered because it reliably protects the buyer. Without this priority notice, the buyer bears a high risk of losing their ownership rights if something unexpected happens. This even applies to real estate sales for developers. This is why we also recommend the priority notice of conveyance for a secure real estate purchase.

Difference to conveyance: meaning in comparison

The conveyance and the priority notice of conveyance are two closely related terms, but they refer to legally different steps in the purchase of real estate.

Conveyance refers to the actual agreement between the buyer and seller in which it is made clear that ownership of the property is to be transferred. It is usually declared at the notary's office.
The priority notice of conveyance, on the other hand, is entered in the land register to secure this claim until the final transfer of ownership. It protects the buyer from the seller selling or encumbering the property to someone else in the meantime.

At the same time, the conveyance is a central moment in the purchase of real estate and a prerequisite for a priority notice of conveyance. Only with this is the transfer of ownership prepared in a legally binding manner. It must therefore be declared before a notary in order to create legal certainty. Verbal agreements or private contracts - for example when selling a house in Munich - are not sufficient.

Important

The notary's office will only ask you as the buyer to transfer the agreed purchase price to the seller once certain requirements have been met. One of these requirements is confirmation from the land registry that the priority notice of conveyance has been entered in the land register.

Entry of the priority notice of conveyance in the land register - procedure

The entry in the land register also follows a fixed procedure for the priority notice of conveyance. We would like to explain the exact procedure to you step by step.

1. notarization

First of all, the purchase of a plot of land or property must be notarized. This is a prerequisite for the registration of the priority notice of conveyance.

2nd instruction

At your request, the notary's office will then take care of the application for registration of the priority notice of conveyance at the relevant land registry office.

3rd test

The land registry checks this application and the notarization to ensure that all requirements for the priority notice of conveyance have been met.

4th entry

After a successful check, the priority notice of conveyance is entered in the land register. Only when you are entered in the land register as the new owner is the deletion usually carried out automatically.

What does it cost to secure the land register?

The costs of the priority notice of conveyance are based on the purchase price of your property and result from the fees for the notary and the land registry. As a rule, they are between 0.5% and 1% of the purchase price. These expenses are part of the usual additional costs when buying a property. However, the exact amount varies depending on the federal state and the costs incurred by the land registry. Nevertheless, many buyers opt for entry in the land register as it offers a high degree of security. The costs are low in relation to the total purchase price, but the benefits are considerable.

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Summary of the priority notice of conveyance

Before you get into the details of buying a property, we would like to summarize the most important facts about the priority notice of conveyance.

The priority notice of conveyance protects the buyer between the notarization of the purchase contract and the entry in the land register.

It prevents the seller from selling or encumbering the land or property to third parties, as it secures the buyer's claim to transfer of ownership and minimizes legal risks.

The priority notice of conveyance is defined by law in Sections 883 to 888 BGB. Conveyance, on the other hand, is described in more detail in Section 925 BGB and does not mean the same thing.

As soon as the buyer is registered as the new owner, the priority notice of conveyance is usually automatically deleted from the land register.

Do you have further questions about legal security when transferring ownership? Then get in touch with our estate agents and let us advise you without obligation.

Black and white portrait of Christian Dürr, founder of Isar Estate.

Notarized purchase agreement with priority notice of conveyance - our estate agents can help

Do not hesitate and send us your inquiry. Isar Estate is your real estate agent for Munich and the surrounding area. We would like to accompany you step by step in achieving your real estate goals - often with a priority notice of conveyance.

Dipl.-Kfm. Christian Dürr
Founder Isar Estate

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FAQ on the priority notice of conveyance and its requirements

When is the priority notice of conveyance entered in the land register?

The registration follows a fixed procedure and is applied for via the notary after the notarization of the purchase contract and is checked and carried out by the land registry. The entire process usually takes a few days to weeks. From the time of registration, your claim to transfer of ownership is legally secured. We at Isar Estate will be happy to assist you in setting everything in motion for a successful real estate purchase.

How long does a priority notice of conveyance remain in place?

It remains in the land register until the final transfer of ownership has taken place. Once the purchase price has been paid and the final conveyance has taken place, it is automatically deleted. In exceptional cases, it can also be deleted manually - for example, if the purchase contract is rescinded.

Who arranges the registration?

As a rule, your notary will take care of this step. He will submit the application for a priority notice of conveyance to the land registry as soon as the purchase contract has been signed. This means that you do not have to take care of this yourself - the priority notice is automatically initiated as part of the purchase process if required. We recommend this step, but it is not mandatory.

Can a priority notice of conveyance be deleted before the purchase has been completed?

Yes, this is possible if the buyer and seller reach an amicable agreement or the purchase contract is canceled. In this case, the deletion takes place by means of a notarial application to the land registry. However, the priority notice cannot be removed without the consent of the buyer.

Is the priority notice of conveyance also necessary in the case of a gift or inheritance?

In these cases, the land register entry is usually not really relevant, as there is no purchase agreement with consideration. Nevertheless, it can be useful if a transfer of ownership is delayed or needs to be legally secured. Our experts at Isar Estate will be happy to explain to you in detail when the priority notice of conveyance also makes sense in the case of family agreements or partial transfers.

Disclaimer

Despite careful research and checking of the sources, the author assumes no liability for the accuracy and completeness of the information presented. In case of unclear legal and tax questions, it is advisable to consult a lawyer and/or tax advisor for clarification.

Author: Dipl.-Kfm. Christian Dürr