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Glossary
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Glossary
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Buying real property is a long-term investment in the future. So it is even more important to be well prepared for this step. But who knows what is behind terms like ‘Creation of a land charge’, ‘Priority notice of conveyance’ or ‘Maintenance reserve fund’? We at the David Borck Real Estate Company are specialists in our field – and we have a large network of notaries, experts, lawyers and banks at our disposal. As trustworthy partners we will guide you through the complex sales process and see to it that your investment is actually profitable. And if you need information about the most important special terms of the real estate industry beforehand, our glossary will be a valuable guideline.

Land Register
Every piece of real estate has its separate land register folio at the relevant district court. It documents the ownership structure and also registers possible encumbrances, such as a mortgage loan or a land charge.
PRIORITY NOTICE OF CONVEYANCE
This is entered in the land register upon request by the buyer and it protects the buyer from fraud until the conveyance to his or her name is finally completed. This way, the seller cannot sell the property twice or create subsequent encumbrances.
Notary
Every real estate purchase must be notarized by a notary. His task is usually to ensure that the property is unencumbered. For this purpose, he requests information about open claims from registered creditors, which the buyer can then settle.
NOTARY TRUST ACCOUNT
The account in the name of the notary ensures that the amount of the purchase price is managed securely. At a predefined date, the buyer transfers the money into this account. It is only paid out to the seller after all contractual obligations have been fulfilled.
PROPERTY ACQUISITION TAX
The tax authorities also want their share when a piece of real estate is sold. The buyer has to pay a kind of purchase tax, the Property Acquisition Tax. Its amount varies between federal states. Six percent of the purchase price is due in Berlin.
CREATION OF A LAND CHARGE
Should a buyer be unable to pay back a loan, the die bank requires the real property as security. In this case, a Land Charge is registered in the land register. This way, the bank can seize the property if the owner does not pay in due time..
TAX CLEARANCE CERTIFICATE
This is included in the notice of sale that the notary sends to the tax authorities. Following this, the tax authorities bill the buyer for the property acquisition tax. The registration in the land register is only possible after this has been paid.
CLOSING COSTS
For a real estate sale, the closing costs must be included in the calculation. In Berlin they amount to about 15 percent of the purchase price. 1.5 to 2 percent is for the notary and the land register fees and 6 percent for the property acquisition tax. In addition to this, there will be a brokerage fee of 7.14 percent in most cases.
PRE-NOTARIZATION PERIOD
Since the end of 2013, real estate purchase agreements must be made available to the parties involved two weeks prior to notarization, at the latest. This way, the buyer has sufficient time to thoroughly examine the text of the agreement and the condition of the property before to the purchase.
TERMINATION DUE TO PERSONAL NEEDS
The following applies to Berlin since October 2013: if an apartment is converted into property and sold, there may be no termination of the tenancy due to the owners own need for the next ten years. The period begins with the registration of the buyer in the land register.
TENANT PRE-EMPTION RIGHT
If a tenancy agreement exists prior to partitioning into property ownership, the tenant is entitled to a pre-emption right. If a purchase contract is already at hand, the tenant is allowed a time period of two months (six months for social housing) to decide whether he or she wants to buy.
MAINTENANCE RESERVE FUND
This is paid by the property owners on a monthly basis in order to finance repairs or modernisation measures. The amount almost always depends on the size of the living space. Should the reserve fund be insufficient, a special allocation may possibly become due.
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