Notarial Execution of Transactions — A Legal Requirement
If, after completing the full Due Diligence process and negotiating an acceptable final price, the investor decides to acquire a commercial property, both parties instruct their legal teams to finalize the wording of the Purchase Agreement, select a state-licensed Notary (under German law, the Buyer has the priority right to choose the Notary) and agree on the date of the notarial signing.
During the procedure, the Notary acts as an impartial arbitrator, ensuring that the content of the Purchase Agreement strictly complies with the letter and the spirit of German law and that none of its clauses create an undue advantage for either party.
In the presence of the Buyer’s and Seller’s representatives, the Notary reads the full text of the Agreement aloud, making final adjustments when necessary — but only with the explicit consent of both sides.
The Importance of Proper Preparation
Thorough preparation for the notarial signing is essential.
This is because the notarized Agreement is accompanied by a substantial appendix called the Bezugsurkunde, which includes:
While the Purchase Agreement typically runs 30–35 pages (70–100 pages on large projects), its Appendix may easily total 150–200 pages or more.
Under German law, the Notary must read aloud both the Agreement and the entire Appendix.
To avoid a marathon reading session, both parties usually issue a power of attorney to the Notary, authorizing his staff to read the Appendix the day before the official signing.
This internal reading session can last up to six hours with breaks.
An Illustrative Example
During a transaction between a Top-5 German developer and major clients of Gordon Real Estate Group, a nearly retired Notary admitted — right at the signing table — that he had forgotten to have his staff read the Appendix the previous day.
The room froze.
Representatives of both parties groaned in disbelief.
But nothing could be done:
after 1.5 hours spent reading the Purchase Agreement aloud, everyone had to sit through an additional four-hour reading of the full Appendix — start to finish.
Legal Consequences of the Notarial Signature
Once the Purchase Agreement is notarized:
Interim Protection: The Priority Notice of Conveyance
Between signing the notarial Agreement and the actual transfer of ownership, the Buyer’s financial security is ensured through the Auflassungsvormerkung (Priority Notice of Conveyance).
This entry in the Land Register confirms that a notarized Purchase Agreement has been signed and blocks any attempt by a bad-faith Seller to resell the property to another party.
A Key Advantage of the German System
German Notaries are connected to the centralized national Land Registry system and can instantly verify the current, legally registered owner of any property in real time.
This significantly reduces fraud risks and ensures the highest level of transactional security.
During the procedure, the Notary acts as an impartial arbitrator, ensuring that the content of the Purchase Agreement strictly complies with the letter and the spirit of German law and that none of its clauses create an undue advantage for either party.
In the presence of the Buyer’s and Seller’s representatives, the Notary reads the full text of the Agreement aloud, making final adjustments when necessary — but only with the explicit consent of both sides.
The Importance of Proper Preparation
Thorough preparation for the notarial signing is essential.
This is because the notarized Agreement is accompanied by a substantial appendix called the Bezugsurkunde, which includes:
- the Construction Permit
- the Lease Agreement for the food retail property
- architectural plans and site layouts
- the full construction specification, detailing — quite literally — every element of the building’s technical infrastructure, from the smallest screw and cable (with manufacturer and technical parameters) to the water supply, heating and ventilation systems.
While the Purchase Agreement typically runs 30–35 pages (70–100 pages on large projects), its Appendix may easily total 150–200 pages or more.
Under German law, the Notary must read aloud both the Agreement and the entire Appendix.
To avoid a marathon reading session, both parties usually issue a power of attorney to the Notary, authorizing his staff to read the Appendix the day before the official signing.
This internal reading session can last up to six hours with breaks.
An Illustrative Example
During a transaction between a Top-5 German developer and major clients of Gordon Real Estate Group, a nearly retired Notary admitted — right at the signing table — that he had forgotten to have his staff read the Appendix the previous day.
The room froze.
Representatives of both parties groaned in disbelief.
But nothing could be done:
after 1.5 hours spent reading the Purchase Agreement aloud, everyone had to sit through an additional four-hour reading of the full Appendix — start to finish.
Legal Consequences of the Notarial Signature
Once the Purchase Agreement is notarized:
- the Buyer becomes legally obligated to pay the contractual purchase price in accordance with the payment schedule defined in the Agreement;
- the rights of use — meaning the right to receive rental income — transfer from Seller to Buyer;
- the transfer of ownership is completed upon the Buyer’s registration as the new owner in the Land Register (Grundbuch).
Interim Protection: The Priority Notice of Conveyance
Between signing the notarial Agreement and the actual transfer of ownership, the Buyer’s financial security is ensured through the Auflassungsvormerkung (Priority Notice of Conveyance).
This entry in the Land Register confirms that a notarized Purchase Agreement has been signed and blocks any attempt by a bad-faith Seller to resell the property to another party.
A Key Advantage of the German System
German Notaries are connected to the centralized national Land Registry system and can instantly verify the current, legally registered owner of any property in real time.
This significantly reduces fraud risks and ensures the highest level of transactional security.
Credits: Getty Images