Transfer of ownership in real estate purchases

At what point does one actually become the owner of a purchased property? Many people think that the transfer of ownership takes place as soon as the purchase agreement is signed at the notary's office. But that is not true.

What does signing the real estate purchase agreement mean?

The owner of the property only changes with the entry of the buyer in the land register. However, the buyer is often responsible for the property even before that. This article answers the most important questions regarding the transfer of ownership of real estate. By signing the real estate purchase agreement, buyer and seller enter into a binding agreement.

Essentially, this means that the contract establishes the seller's obligation to hand over the property to the buyer. Conversely, the buyer has also committed to purchasing the property. Therefore, they can no longer simply withdraw from the contract.

However, a transfer of ownership has not yet taken place. The seller is still listed as the owner in the land register. However, a so-called "Auflassungsvormerkung" (notice of conveyance) may be entered in the land register. As a result, the seller can no longer encumber the property with a mortgage or sell it to another interested party instead of the buyer. The notice of conveyance is therefore a protection for the buyer prior to the transfer of ownership.

When is someone a possessor of a property and when an owner?

By handing over the property (handover of keys), the buyer becomes the possessor of the property, but the transfer of ownership does not yet take place. The term “possession” is defined in Section 854 of the Civil Code (BGB), according to which possession of an item is acquired by “obtaining actual control over the item.“.

The owner of an item is defined in Section 903 of the German Civil Code (BGB) as someone who can „deal with it at their discretion and exclude others from any interference,“ „provided that neither the law nor the rights of third parties conflict with this.“.

As the owner of the property, the buyer already has rights and obligations. For example, they are allowed to occupy or rent out the property. At the same time, from this point on, they have the duty to pay expenses such as property tax. In the event of building damage, for example due to hail or storm, they bear the risk and are also obliged to perform winter maintenance if necessary.

When does the land register entry take place?

Generally, the notary initiates the transfer of ownership after the property buyer has paid the purchase price and the property transfer tax. From then on, it depends on the responsible land registry office how long it takes until the buyer actually becomes the owner of the purchased property. Depending on the land registry office, it can take several months for the transfer of ownership to be completed.

Why is a land register entry even necessary?

The land register is a publicly accessible office where any person with a legitimate interest can check who owns a piece of land. Creditors, among others, can have a legitimate interest. The land register creates legal certainty. In addition to ownership details, rights of way and any existing mortgages are entered in it.