date | theme

23. December 2019 | Tax treatment of real estate in company assets

5 November 2020 | The advantages of a GbR when buying a commercial property

24. February 2021 | Rental income tax-free: Debt financing reduces profit

25. May 2021 | Transfer of rented property to partnership – What needs to be considered?

27. December 2021 | Notary fees save possible but only in individual cases makes sense! Is this your property purchase? (this contribution)

According to § 311b (1) sentence 1 BGB, the purchase of land must be notarized. Therefore, in addition to the costs of the real estate transfer tax and land register registration, notary fees are incurred. These are often very high, because they depend on the purchase price. What hardly anyone knows is that the BGB provides a possibility, how it can come even without a notary to a legally effective conclusion. But respect for this possibility has its pitfalls, which is why we generally advise against it. We explain the regulation of the BGB and why or when it is dangerous.

If you have already sold many properties, it is clear to you that notary fees arise. But even if you are not before the first property purchase, you may not realize why the notary fees arise at all. This is due to the legal form for the purchase of land. According to § 311b (1) sentence 1 BGB, the purchase of land is to be notarized. Therefore, both parties must go to the notary. This then reads the purchase contract to the parties and, if both parties agree with the purchase contract, makes a seal on it. For this notarial deed, of course, high notarial fees arise.

Therefore, the possibility of saving notary fees is of course interesting. However, it must first be recognized that a lack of form according to § 125 sentence 1 BGB leads to nullity. Since the notarial deed is provided here and this was not carried out, there is actually a corresponding defect in form that leads to the nullity of the real estate purchase contract.

This nullity even leads to the fact that according to § 139 BGB the entire purchase contract is null and void, although only part of the contract was not notarized. The prerequisite for this is that it cannot be assumed that the purchase contract would have been made without the null part. As a rule, the contract is therefore null and void. This means that the Treaty is ineffective.

An exception to the principle of nullity is the so-called healing provision of § 311b (1) sentence 2 BGB. Accordingly, the effective disposition of the property and the registration as owner of the property in the land register according to §§ 873, 925 BGB cures the defect of form. This healing extends to the whole content of the contract. Accordingly, oral and written subordinates are also covered by healing. The result of the healing rule is that the purchase contract takes effect without you having been with the notary and paying corresponding notary fees. Nevertheless, a treaty that has been concluded in this way has its drawbacks. These are explained below.

The formal provision of § 311b (1) sentence 1 BGB of course has its raison d'être and therefore also meaning. The obligation to notarize is intended to protect both parties from ill-considered legal transactions. The corresponding warning function is intended to ensure that the parties in front of the notary carefully consider whether they actually want to sell or buy at these conditions. A possible negotiating overweight on the one hand should thus be compensated and ensured that the parties pay the fairest purchase price.

In addition to the warning function of the notarization, there is the proof function. It should legally prove that the purchase contract has been concluded and on what conditions. Precisely this function of the shape rule has a high priority.

Problems arise, however, in the question of which standards, in addition to the formal provision of § 125 in conjunction with § 311b (1) sentence 1 BGB, could still oppose the claim to transfer ownership and transfer of the land. For the time being, § 134 BGB in conjunction with § 370 AO is addressed. § 134 BGB is the norm for the nullity of a legal transaction that violates a legal prohibition, here possibly § 370 AO.

This would require tax evasion. However, this can only be considered if a lower purchase price is notarized before the notary than actually agreed in order to save the real estate transfer tax and only the reduced purchase price is indicated to the tax office. But even then, the main focus of the contract is the sale and purchase of the property. A possible saving in real estate transfer tax was only a mere side effect. Thus, the main purpose of a contract with (partially) missing notarial deed is not tax evasion. Therefore, the transaction cannot be invalid under § 134 BGB in conjunction with § 370 AO.

In order not to experience any criminal tax consequences, you must pay the full property acquisition tax that falls on your acquisition. You must not conceal a cent. However, you can reduce the property tax through clever legal tax arrangements. We have shown possibilities for this in other contributions. Under certain circumstances, you can also sell tax-optimized with a real estate GmbH or after a gift to your child.

Immorality exists when the transaction violates the sense of decency of all those who think cheaply and rightly. Non-payment of notarial fees could be considered as possible grounds for immorality. However, since the non-payment of notarial fees is not the main purpose of the contract, morality is also excluded. § 138 (1) BGB therefore does not preclude the effectiveness of the contract.

If only a lower purchase price has been agreed before the notary, there are actually two contracts. Once the notarized contract and also the mutually agreed contract with higher conditions. In this case, the parties did not want the legal consequences of the notarized contract at all. It is therefore a mere sham business within the meaning of § 117 (1) BGB. According to § 117 paragraph 2 BGB, the really intended and hidden legal transaction applies in this case. The other sham business, on the other hand, is null and void. Therefore, only the contract with the higher purchase price is effective.

In addition to the lack of proof of a notarial deed, there is another problem. Of course, the purchase contract is not void due to the lack of form only if the property was actually transferred according to §§ 873, 925 BGB. This means the abandonment and entry in the land register as owner. If the seller does not transfer the property, the healing provision of § 311b (1) sentence 2 BGB does not apply. The Treaty is therefore null and void because of the lack of form.

This void purchase contract does not, of course, give rise to any claim to transfer ownership of the property. The invocation of the defective form on the part of the seller is contrary to the principle of fiduciary behavior according to § 242 BGB only in rare exceptional cases. Accordingly, it can only be untrue if the seller fraudulently urges the buyer to non-compliance with the form in order to then invoke the form defect.

In summary, this means that you are not entitled to transfer ownership of the property without a notarized deed.

Then, of course, the question arises whether, if you have already paid the purchase price and a transfer of ownership of the property does not take place, you can claim it back again.

A claim for repayment from § 812 (1) sentence 1 Alternative 1 BGB would be conceivable. In the case of the so-called power conditioning, a power must be present. This is defined as a conscious, purposeful increase in foreign assets. Then, however, from the point of view of the recipient of the service, it would have to have been made for the purpose of fulfilling an alleged liability. This can only exist if the payer did not know that the contract is actually ineffective.

If, on the other hand, the payer knew that the contract was null and void due to lack of form, he merely wanted to arrange for the property to be transferred by payment. On the other hand, however, he does not perform for the purpose of fulfilling a particular debt, since, as explained above, there is none at all and this was also known to him.

However, the payment has a very specific purpose, which is to cause the other party to transfer the property and therefore to bring about healing in the case of a formally null land contract. Since this purpose, which was pursued with the payment, did not occur, the case of misconduct of purpose of § 812 (1) sentence 2 Alternative 2 BGB is relevant. The buyer who knew the invalidity of the transaction can therefore also reclaim his purchase price.

Although civil law knows a way to save notary fees. The result, however, is that one is not entitled to transfer ownership of the property. Without this, the formal healing rule does not apply, so that the purchase contract is null and void.

Should, on the other hand, be transferred, the purchase contract is effective pursuant to § 311b (1) sentence 2 BGB and therefore constitutes a legal ground for the transfer of ownership. Thus, if you trust your counterpart sufficiently, you could save the notary fees. Of course, this should always be treated with caution. It would also be possible to optimize the purchase contract with corresponding clauses, which must of course be effective.