Real estate—Germany—Q&A guide
Real estate—Germany—Q&A guide

The following Property practice note provides comprehensive and up to date legal information covering:

  • Real estate—Germany—Q&A guide
  • 1. How would you explain your jurisdiction’s legal system to an investor?
  • 2. Does your jurisdiction have a system for registration or recording of ownership, leasehold and security interests in real estate? Must interests be registered or recorded?
  • 3. What are the legal requirements for registration or recording conveyances, leases and real estate security interests?
  • 4. What are the requirements for non-resident entities and individuals to own or lease real estate in your jurisdiction? What other factors should a foreign investor take into account in considering an investment in your jurisdiction?
  • 5. If a non-resident invests in a property in your jurisdiction, are there exchange control issues?
  • 6. What types of liability does an owner or tenant of, or a lender on, real estate face? Is there a standard of strict liability and can there be liability to subsequent owners and tenants including foreclosing lenders? What about tort liability?
  • 7. How can owners protect themselves from liability and what types of insurance can they obtain?
  • 8. How is the governing law of a transaction involving properties in two jurisdictions chosen? What are the conflict of laws rules in your jurisdiction? Are contractual choice of law provisions enforceable?
  • 9. Which courts or other tribunals have subject-matter jurisdiction over real estate disputes? Which parties must be joined to a claim before it can proceed? What is required for out-of-jurisdiction service? Must a party be qualified to do business in your jurisdiction to enforce remedies in your jurisdiction?
  • More...

This Practice Note contains a jurisdiction-specific Q&A guide to real estate in Germany published as part of the Lexology Getting the Deal Through series by Law Business Research (published: September 2020).

Authors: McDermott Will & Emery—Dr. Maximilian Clostermeyer

1. How would you explain your jurisdiction’s legal system to an investor?

Germany has a civil law system, where the law is predominantly based on a series of separate statutes, which are interpreted and supplemented by case law.

The most important statute in German civil law is the German Civil Code, which contains, inter alia, the basic rules for sale and purchase agreements, lease agreements and all other forms of agreements as well as rules on the acquisition, use and encumbrance of (real) property. Although the German Civil Code and various other regulations contain the most important provisions on German real estate law, the interpretation of these provisions in the jurisprudence of the German Federal Court of Justice is in practice very important in some areas of real estate law (eg, the law of commercial tenancy). Contract law in Germany is governed by the principle of freedom of contract. However, several rules are binding for the parties to a contract, which means that a deviation through a contractual provision is void. Oral contracts are possible and valid; however, as regards real estate law, some transactions require a specific form. For

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