Property developer law
A property development contract provides that the property developer obliges itself in relation to the buyer to obtain an ownership or a co-ownership title in and to the building lot concerned and also to build a certain structure on such a building lot.
Considering the fact that the sale of real estate property is naturally one of the elements of any property development contract it so to speak goes without saying that such a transaction necessarily calls for notarization.
Notwithstanding the Notary’s independence and impartiality which are defined and specified in Section 14 of theGerman Federal Notaries Code(BNotO) it must be strongly recommended to any buyer to have the property development contract verified by a lawyer who is a certified specialist in building and architects’ law before actually proceeding to such a notarization. The same holds also true – in case of a purchase of condominium property - for the Partitioning Deed and the Condominium Rules.
In elaborating the wording of such a property development contract care must be taken that the mandatory provisions of German Brokers’ and Property Developers’ Regulations are complied with and that clear provisions are stipulated especially where it comes to the implementation and realization e.g. of any of the buyer’s special wishes, the date of readiness of the structure for occupancy, acceptance and liability for defects and deficiencies. From the buyer’s point of view the provision of a contractual penalty in case of the developer’s delay or default concerning readiness for occupancy/completion ought to be taken into consideration. If such a provision is made part of the contract, this will be helpful in avoiding the necessity of providing specified proof of loss or damage.
Another point which is essential for avoiding future disputes is a comprehensive and unmistakeable specification of all structural elementsof any one building or structure.
A contract which is so prepared by our certified specialist lawyers for building and architects’ law and which as comprehensively as possible specifies the planning and construction work which is to be provided by the developer on the one hand and which also unmistakeably describes the buyer’s obligations on the other hand will normally considerably reduce the risk of eventual disputes and litigation.
If and when there will nevertheless differences of opinion will be coming up between the contracting parties in the course of the realization of the building measures or with respect to warranty issues even though legal advice was given all the way along with the progress of the project, more particularly as far as buyer’s special wishes and their remuneration, as wellas detected defects or deficiencies, delay or default, remedy of defects or deficiencies, price reduction or claims for damages are concerned, it must be verified whether there are any claims and if so which of such claims can or must be asserted either by the buyer itself or by the community of the owners of the condominium property concerned. Another case where a buyer should immediately obtain counsel and advice from a lawyer is the case of insolvency of the developer company.