What’s a conveyance notice?
If you want to buy a property, a simple sales contract is not enough. Rather, a real estate purchase is a multi-stage procedure for which a notary is needed. This concludes the notarial purchase contract between the buyer and the seller and also initiates the priority notice of conveyance. The priority notice of conveyance is regulated in the Civil Code (§ 883 BGB) and in the Insolvency Code (§ 106 InsO).
This is how the Conveyor reservation works
The priority notice of conveyance is a security for the buyer, it is registered in the land register in section II. With the entry in the land register, the entry is visible for everyone. The registration usually contains only the name(s) of the buyer(s). Which doesn’t make you an owner. As already mentioned, the reservation is a means of security. This means that the actual owner may not sell or lend his property and thus burden it with loans. It also offers the buyer protection, for example if the seller becomes insolvent. In such a case, the insolvency would have no effect on the sale. Insolvency proceedings have no access here any more. Also, the seller as the owner may not make any more changes to the property with the registration. Depending on the contractual provision in the purchase contract, all claims may pass directly to the buyer in advance upon conclusion of the purchase contract and registration of the priority notice of conveyance. In principle, the notice of conveyance is usually only a snapshot that only lasts a short time in a real estate purchase, namely until the purchase sum is paid and then the real estate property was completely rewritten. Especially since several weeks and months can pass here and the registration of the reservation takes place immediately, this is a good security. Where the reservation The property can also be used for other purposes in the purchase of real estate, for example in construction financing, to secure against the bank or when using a property developer. Here, of course, there is no complete transfer of ownership, rather it remains with the reservation.
Regulation under the Insolvency Code
It was mentioned at the beginning that the notice of conveyance is also an instrument of the Insolvency Code. Here, too, the priority notice serves to secure the claims, here the creditor. With the initiation of insolvency proceedings and the existence of real estate, such a reservation can be made in the land register. This means that the debtor in the insolvency proceedings cannot sell or lend on his property without the consent of the insolvency administrator and the court. This is intended to protect the value of the property for the creditors.
Depending on the application, the entry of the priority notice in the land register ends, for example, with the complete transfer of ownership of the real estate, the redemption of the construction financing or with the termination of the insolvency proceedings. However, it is also possible to request the cancellation of the registration, which would be the case in particular if, for example, the buyer does not fulfil his obligations such as the payment of the purchase price. Regardless of whether it is a purchase of real estate, financing or an insolvency order, the registration of a priority notice in the land register is of course also associated with costs. Depending on the value of the property, the full fee is charged by a notary public. The costs for the registration of the reservation must be borne by the buyer, who in principle bears all costs for a property purchase.